If you’ve already heard all about the (not-so) soft opening of Michigan’s recreational marijuana businesses in early December, you may not be champing at the bit to get a recreational marijuana business license.
It was something of a debacle – now serving as the nation’s model of what NOT to do when introducing recreational marijuana.
Then again, by the time you potentially get a license, things will surely be better, right?
We hope so.
Whatever the case, if you’re serious about getting a license, we’ll take a look at some of the most frequently asked questions and give you our best answers.
How Do I Get a Recreational Marijuana Business License?
Very well then. We’ll start with the most obvious question first.
Get familiar with the state’s Marijuana Regulatory Agency – the MRA. Because you’ll be seeing a lot of them.
There are multiple steps in the application process. The first of which is paying a $6,000 application fee and completing the pre-qualification phase that involves a heavy-duty background check.
It’s like the bathing suit competition in the Miss America pageant – except not gross and sexist. (At least one can assume.)
Then the second step focuses on your type of business and requires you to supply information about the operational plan, facilities, projected sales, and employee information.
Your business has to be inspected within 60 days of submitting the completed second step application. If approved, get ready to shell out some cash. The licensing fee could cost up to $40,000 for the first year.
Here’s another obstacle.
Unless you’re getting a license for a marijuana event, class A grower, or micro-business, you must already be licensed under the medical marijuana laws.
Do Most Recreational Licenses Require a Prior Medical License?
Yep. For now.
While this requirement expires on Dec. 6, 2021, it’s in place now just to provide for a smoother licensing process (if there is such a thing).
The thinking is – the MRA will already have a ton of your important information on file. There’s also some political motivation behind this though.
Those who created the ballot initiative wanted support from the medical marijuana industry – the business owners of which were already heavily invested in marijuana activity.
This requirement would ensure that those businesses could stay out ahead of competitors who may be newly dipping into the market.
Of the current 350 businesses that hold medical marijuana licenses, it’s expected that the majority will also apply for recreational licenses.
So Then What Is a Micro-Business?
There are recreational licenses for a variety of activities. A grower will have one license while a processor, tester, and event organizer will each have another.
The micro-business license, on the other hand, is a small business license that allows for multiple activities.
It allows the owner to grow, process, and sell up to 150 plants from a single business as long as it’s self-contained and the owner doesn’t sell or transfer product to other retailers.
It’s rather like the microbrewery of marijuana.
But with this license, you are unable to hold other licenses for growing, processing, testing, transporting, or retailing. So there.
Is There a Difference between Medical and Recreational Marijuana?
Recreational marijuana comes with a djembe drum, a bag of Cheetos, and a Mexican blanket autographed by Snoop Dog.
No, not really.
Honestly, there is no physical or chemical difference between the two. There is a price difference though.
That’s because recreational marijuana is subject to a 10% excise tax.
The main distinction has nothing to do with strain or potency, but rather lies with the license under which the marijuana is grown and sold.
A medical marijuana dispensary may not sell marijuana grown under a recreational license any more than a recreational-only retailer can sell products grown under a medical license.
For now, it is possible for a business to be licensed to grow or sell both. But the MRA requires these businesses to separate medical from recreational product on the shelves.
How Is Money from the Excise Tax Allocated?
There’s a marijuana regulation fund that pays for the cost of the MRA’s activities.
Once those expenses are covered, the law requires that $20 million per year until 2022 be spent on medical trials to test marijuana health applications.
The remainder is broken down into the following:
- 15% to counties, proportioned based on the number of micro-businesses and retailers
- 15% to communities that allow recreational business, proportioned based on the number of micro-businesses and retailers
- 35% to the Michigan Transportation Fund for road and bridge repair
- 35% to the School Aid Fund for K-12 education
Looks like we’re going to “fix those damn roads” after all. Well, maybe.
Feeling More Informed?
The world of recreational marijuana is still in its Wild West phase.
But if you feel you’re well-positioned to get a recreational marijuana business license, then by all means, have at it!
We wish you the best of luck.
And when you’re ready for top-notch cannabis marketing and public relations, we’re here for you. It’s not just our specialty – it’s our passion.
Contact us today to learn more.