Michigan Microbusiness Licensee Opportunities
The opportunities are endless! A marijuana microbusiness license could allow you to open up a Cannabis lounge with direct-to-consumer sales, or utilize the microbrewery model that has spread like wildfire throughout the State of Michigan. Other more imaginative ideas include Marijuana-themed restaurants with Cannabis-infused food, or simply adding Cannabis sales to an already existing business model—such as movie theaters, arcades, escape rooms, and more!
While the recreational marijuana law allowing for microbusinesses has been passed, there is still much that is as of yet unknown about the microbusiness license. The biggest unknown is whether the State of Michigan will require the licensee to have its facilities all under one roof, or if a microbusiness licensee will be allowed to sell from a different location from where they grow and process.
In addition to waiting on the rules regulating microbusinesses to be issued by the Michigan Department of Licensing and Regulatory Affairs (LARA), we will also need to see which municipalities allow marijuana microbusinesses and which ones don’t. Before you start worrying too much about whether your municipality with allow them, know that each municipalities’ cut of the state’s excise tax on recreational marijuana is determined by how many dispensaries and microbusinesses operate in the municipality. Since many municipalities are not keen on having numerous dispensary storefronts within their boundaries, we expect many cities and townships to jump on the microbusiness concept since it will allow them to obtain a greater share of the recreational marijuana tax revenue without the nuisance of numerous dispensaries.
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What’s a Marijuana Microbusiness?
Proposition One legalized recreational marijuana in the State of Michigan and created new license types for cannabis companies in Michigan. While most recreational cannabis licenses require the applicant to first have a Michigan medical marijuana license, one license type did not—the Marijuana Microbusiness.
A Michigan microbusiness license allows the holder to grow up to 150 plants, process those plants into a variety of cannabis extracts and edibles, and sell those products directly to the consumer. There are limits to what the microbusiness can do, however, as well as limits to who can be a licensee.
Microbusiness licenses are initially limited to Michigan residents, and licensees cannot hold any other recreational marijuana license. Microbusinesses also cannot sell to other licensees—they can only sell directly to consumers over the age of 21. While these requirements do restrict what a microbusiness licensee can do with the license, they also serve to protect the Michigan microbusiness market from large “big cannabis” companies that will eventually swallow up much of the Michigan market as they have done in other states such as California and Colorado.
Microbusinesses in Michigan will also be subject to two sets of regulations. First, they will be subject to state-level regulations from the Department of Licensing and Regulatory Affairs—or “LARA”. These regulations have yet to come out and are expected to be released by the end of 2019. Another potential set of regulations are municipal regulations. Municipalities are able to place additional regulations and requirements on Michigan microbusinesses that operate within their municipality, as long as such regulations are not considered to be unreasonably impractical.
So what can you do with a Michigan cannabis microbusiness license? The possibilities are endless! One of the business models we have seen that has attracted the most attention are cannabis lounges, also sometimes called Amsterdam-style coffee shops. Other business models include “tour-and-taste” operations, which are popular in California, as well as Cannabis-themed arcades, movie theaters, restaurants, and more!
Our attorneys are able to guide you through the legal and compliance process, help you hone your business model, and put you in the best possible position for success! Our managing attorney, Scott F. Roberts, has spoken at industry conferences about the microbusiness model and is one of the state’s foremost experts on Michigan microbusinesses. He has worked with small to medium sized businesses almost his entire career, is an entrepreneur himself, and is able to provide not just legal services, but business consulting and advice as well. Contact us today to schedule a free legal and business consultation!
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Michigan Marijuana Legalization News
The Marijuana Regulatory Agency recently put out new rules that will initially govern Michigan’s “adult use” cannabis market. Included in these rules was
The Emergency Rules issued by the Marijuana Regulatory Agency under the Michigan Regulation and Taxation of Marijuana Act (“MRTMA”) were released on July