Michigan’s adult-use cannabis market off to a good start, despite legal sales not having launched yet


Bethan Rose Jenkins, Cannabis News Writer/Editorial

Of the 11 U.S. States that have legalized cannabis for recreational purposes, Michigan is one of the most recent ones. Residents of the state voted to legalize adult-use cannabis back in November 2018.

Following a successful vote, the Michigan Regulation and Taxation of Marihuana Act (MRTMA) was established. In addition to this, the Michigan Department of Regulatory Affairs (LARA) was created to oversee legal adult-use cannabis in Michigan.

In spite of the fact that preparations are underway for the launch of Michigan’s legal cannabis market, state lawmakers have not yet revealed when consumers will be able to get their hands on regulated, lab-tested weed, not to mention the plant’s derivative products.

Agency to begin accepting recreational cannabis business license applications in November

Emergency administrative rules for Michigan’s recreational cannabis industry were published in July by LARA’s Marijuana Regulatory Agency (MRA). Based on the details of the published regulations, commercial cannabis business license applications will be open as of November 1. 

A number of different license types will be offered to applicants who are keen to launch a business and capitalize on Michigan’s recreational cannabis market. Applicants must abide by rules pertaining to the transfer of cannabis goods, regardless of which license category they fall into.

Applicants should be prepared to pay the hefty application cost of $6,000. This fee is required for all license categories, including cultivation, retail and processing. 

In addition to paying the $6,000 application fee, the Detroit Free Press reported in early September that business owners hoping to play a part in Michigan’s recreational cannabis market will also need to fork out between $1,000 and $40,000 for an adult-use license. Holders of an existing medical cannabis license will be fast-tracked for the license review process. 

It should be noted that, unless the applicants of adult-use cannabis licenses in Michigan can provide a social equity plan outlining how they intend on supporting communities worst affected by prohibition, their application will be overlooked by the MRA. 

Sales of recreational cannabis in Michigan anticipated to bolster economy

With the application process for cannabis retail business licenses in Michigan set to commence in November, sales are anticipated to bring in much-needed revenue for the state.

Of the 33 U.S. states that have legalized medical cannabis, Michigan boasts the second-largest population of registered patients; approximately 283,770 patients had registered for enrollment in the program by mid-August.

Bloomberg Tax recently revealed that Michigan has the lowest recreational cannabis tax rates imposed on retail sales, which will significantly bolster the economy. State lawmakers believe that lower tax rates could help dismantle the black market, which is known for undercutting the legal market on price. 

When the market is fully established next year, annual revenue gleaned from recreational cannabis sales in Michigan could top $949 million. This is based on estimates drawn up by the House Fiscal Agency.

In addition to strengthening the economy, legal recreational cannabis sales in Michigan will also produce an influx of new jobs, thus helping to tackle unemployment rates.

Which other U.S. states have legalized recreational cannabis?

Recreational cannabis is currently being sold in Alaska, California, Colorado, Main, Massachusetts, Nevada, Oregon and Washington. 

Since Colorado legalized recreational cannabis in 2014, legal sales have surpassed the $1 billion mark, indicating just how lucrative legalization can be.

On January 1, 2020, Illinois will kickstart adult-use sales. Vermont is also set to launch its adult-use market during the middle of 2021.