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How to Open a Dispensary in Michigan
To open a dispensary in Michigan is subject to strict compliance with state regulations and laws. In 2018 Michigan became the 10th state to legalize the recreational use of marijuana.
Despite the difficulties, Midwesterners may find it beneficial to open a dispensary in Michigan. The steps to open a dispensary legitimately in the Great Lakes State are detailed further in this article.
The Michigan Compassionate Care Initiative was adopted by state voters in 2008, legalizing medical marijuana in the state. With a physician’s prescription, the new law allowed qualifying patients to possess up to 2.5 ounces of cannabis for specific medical conditions.
For the record, we want to point out that the state legislatures of Michigan use a different spelling to refer to cannabis. Thus you may see the term “marihuana” instead of the more popular “marijuana” in the laws and regulations. This spelling was adopted from the federal Controlled Substance Act, which had previously utilized the Marihuana Tax Act of 1937 as its model. Despite its outdated spelling, it cannot be changed without a congressional act. According to Michigan legislation, dispensaries are also known as “provisioning centers.”
How Can I Get a Cannabis Dispensary License?
Another issue in this article about how to open a dispensary in Michigan is how you may get a cannabis dispensary license. The Michigan Medical Marijuana Act (MMMA), the Medical Marijuana Facilities Licensing Act (MMFLA), and the Michigan Regulation and Taxation of Marijuana Act (MRTMA) are the three primary marijuana legislation in Michigan. The MMMA permits caregivers to grow 72 or 12 plants for each registered patient. Contrarily, the MMFLA allows the registration of medicinal marijuana businesses and permits dispensaries to sell to any registered patient, often even those from outside the state. The MRTMA, often known as the “adult-use” licensing law, permits the licensing of recreational marijuana businesses and the sale of marijuana to anybody 21 years of age or older.
In Michigan, there are primarily two types of marijuana businesses: recreational and medicinal marijuana dispensaries (provisioning centers).
If you wish to sell marijuana and other marijuana-related products in an adult-use marijuana retail store you should apply for a retailer license. The law also permits you to apply for the following licensing types:
- Recreational marijuana cultivation (Classes A, B, and C);
- Safety compliance facilities;
- Secure transporters;
- Designated consumption establishments;
- Marijuana event organizers/temporary event licenses;
- Marijuana retailers.
If you wish to sell marijuana to a qualified patient or primary registered caregiver, you should apply for a Provisioning Center License for a medical marijuana dispensary. According to the MMFL Act, medicinal marijuana licenses can be of the following types:
- Cultivation and growing (Classes A, B, and C);
- Extraction and processing;
- Secure transporters;
- Provisioning centers;
- Safety compliance facilities.
The Social Equity Program
The Michigan legislature has put in a lot of effort to improve the lives of underprivileged communities by providing them with growth possibilities. In July 2019, the Marijuana Regulatory Agency announced the details of its Social Equity program for Michigan. This program enables people from diverse backgrounds, including those with prior marijuana offenses, to work in the marijuana industry. They are able to acquire licenses for adult-use facilities and establishments.
42 cities in Michigan that have at least 30% of their residents living in poverty are included in the Social Equity program. Participants in the program receive a range of fee reductions on their new application, license, and renewal fees. How many criteria are met will determine how much of the discount is given.
Additionally, program participants will have access to industry educational resources and easier access to governmental agencies that regulate taxes, environmental laws, business registration, health and human services, and occupational safety.
How Much Does It Cost to Open a Dispensary in Michigan?
If you have decided to step into the cannabis business, It’s natural to ask: How much does it cost to open a dispensary in Michigan? Despite having a higher-than-average Dispensary license cost of $6,000, Michigan is one of the best states for dispensary owners due to the low local excise tax of 10% and the 6% sales tax on medical marijuana.
A 3,000 dollar non-refundable application fee is required in Michigan. Cannabis establishment licenses have an initial/annual fee. This fee in Michigan is $15,000 for permits for retail dispensaries. It should be mentioned this is a hefty cost by state licensing standards.
Additionally, all cannabis businesses are required to contribute to the $500,000 yearly fund for initiatives to treat substance abuse disorders (MMFLA Section 333.27603). In Michigan, total licensing fees range from $10,000 to $66,000.
Consider Your Location Before You Open a Dispensary
One of the following essential topics in this guideline on how to open a dispensary in Michigan is the selection of your dispensary site. To get licenses from the city government, you must choose the appropriate location, building, or lot. Your building of choice must be at least 1,000 feet away from alcohol stores, other dispensaries, or gathering places for children, such as playgrounds, daycare facilities, or public parks.
State prequalification is frequently required by municipalities first. Depending on the city, the procedures for acquiring your municipal permit can differ substantially. Every municipality has unique zoning regulations. Certain towns have “Green Zones” where marijuana facilities are permitted to operate.
Choose the Right Cannabis Partner
Given the intricacy and challenges associated with how to open a dispensary in Michigan, another significant step is a point of sale (POS) system that is linked with and customized for your dispensary. The system is intended to assist you in managing your inventory, transactions, and state compliance.
Michigan Dispensaries must cooperate with Metrc as the primary trace and tracking system. Metrc software must be integrated with your POS systems. All you need to do is adopt POS software explicitly tailored to your company. With 11 years of experience in the cannabis industry, IndicaOnline POS software possesses all of the abilities required for a successful business.
Government requirements demand 100 percent reporting accuracy and a thorough inventory audit as part of the setup process for Metrc. By using IndicaOnline, you will avoid headaches by dealing with restrictions and regulations; we receive all the new requirements and updates directly from Metrc and set your operations straight. Our Metrc integration is an excellent way for cannabis companies to navigate the industry confidently, remain compliant, and avoid missteps.
By signing up with IndicaOnline, you also get access to our e-commerce platform for cannabis dispensaries – Sweede.io. This will help you launch your store online, where you can promote your business to thousands of interested customers by utilizing the platform’s integrated marketing tools. Therefore, if you want to make your business visible to and accessible to online customers, this is your chance to do so.
Please keep in mind that as a dispensary owner, compliance should be your top priority since failure to stay in line with regulations can lead to closure or license revocation.
How To Get Funding To Open a Dispensary In Michigan
The traditional banking system remains largely off-limits to the cannabis industry since marijuana is still illegal on a federal level. For this reason, legacy banks and lenders won’t work with dispensaries. And despite Michigan having seen an increase in banks and credit unions that allow cash deposits from marijuana-related businesses, they do not offer funding.
Therefore, most dispensary owners rely on working with either cannabis-specific financial institutions or private equity and venture capitalists. For non-dilutive financing, some companies in Michigan offer many different types of cannabis business loans, including real estate loans. Another option for getting a loan to open a dispensary in Michigan is Seed To Sale Funding, which offers real estate loans, real estate sale-leasebacks, equipment loans and leases, and unsecured business loans to cannabis business owners.
Additionally, you can always get in touch with private equity companies or individual investors. These investors may provide better connections and more knowledge of the cannabis industry. If you decide to pursue this option, you will need to give up a large portion of your equity to open a dispensary and start a cannabis business in Michigan.
Do Dispensaries Share Information with the Government of Michigan?
In Michigan, no laws requiring scanning IDs to enter either recreational or medical dispensaries have yet been passed, even though the state has legalized cannabis for medical and recreational purposes. In addition, Michigan law does not regulate a dispensary’s right to keep any personal data discovered during a scan if it does scan an ID.
Without the individual’s permission, it is illegal in Michigan for anyone who is not a party to a transaction to electronically capture, record, distribute, or transmit personal information related to that transaction. In the regular and legal course of business, the provision does not forbid the capture or transmission of personal identifying information (PII). In Michigan, retail dispensaries are required to request a photo ID to verify the age of each customer. Many retail locations scan IDs, though it is not required. Only the date of purchase, weight of cannabis, price, and product are shared with the government.
Michigan Dispensary Security Regulations
Like other states, Michigan has established rules for cannabis dispensaries in terms of security standards. The main thing that dispensaries must consider is that all entry points need to be locked, and cash and product access needs to be controlled.
Additionally, the security statute specifies requirements for camera surveillance, such as the need to cover every area of the dispensary facility and the storage of digital video files. As part of the application process, you must present your security plan.
The IndicaOnline team is dedicated to make the process of starting and managing a marijuana dispensary in Michigan easier for you while also giving you all the technical assistance required for the business’s proper operations.
Our trained team, who collectively have 11 years of experience, can help you secure and streamline the operations of your cannabis dispensary. We are focused on developing software that is specific to the requirements of your company and addresses all relevant requirements, from development through delivery.
Sign up for a free cannabis POS software demo today and discover how we can help you establish a successful dispensary business in Michigan.