Michigan: Guide to Cannabis Laws & Licensing

Executive Summary (TL;DR)

• Michigan’s adult-use framework under the Marijuana Regulation and Taxation Act (MRTMA) is mature and competitive, with hundreds of licensed retailers and consistent wholesale throughput. Primary keyword: Michigan cannabis licensing.
• Local control drives outcomes: municipal opt-ins/opt-outs, buffers, and zoning dictate siting and time-to-revenue more than state-level rules.
• Expect rigorous seed-to-sale (METRC) compliance, video surveillance (minimum 30-day retention), and financial transparency; underwrite leases to DSCR targets and confirm TI scope before LOI.
• For buyers and landlords, power capacity, HVAC/dehumidification, secured storage, and parking ratios remain top valuation drivers.
• If you are actively sourcing assets or storefronts, start with Michigan-ready inventory on 420 Property’s for lease marketplace and refine by city ordinance status.

Table of Contents

• Michigan Market Overview for Michigan cannabis licensing
• License Types, Timelines, and Operating Standards
• Land Use & Local Control: Zoning, Buffers, Permits (CUP analogs)
• Security & Compliance: Vaults, Access, Video, Seed-to-Sale
• Site Selection & Due Diligence: Power, Utilities, Environmental
• Financing & Deal Structures: TI, Sale vs. Lease, DSCR
• Risk, Sequencing, and Permitting Pathways
• Terminology Crosswalk (LUCS, EFU, Goal 3, OWRD → Michigan equivalents)
• Seller & Buyer Checklists
• FAQs (Michigan-specific)
• Call to Action

Michigan Market Overview for Michigan cannabis licensing

Michigan is among the most active adult-use markets in the U.S. After voters approved MRTMA in 2018 and adult-use sales launched in late 2019, retail density has steadily expanded. CRA (Cannabis Regulatory Agency) monthly statistical reports show a large, stable base of active licenses across the supply chain, and recent reports track application throughput, enforcement, and retail activity. Cities and townships hold decisive authority to authorize or prohibit adult-use establishments, creating uneven opportunities—and outsized premiums—for compliant sites in “yes” jurisdictions.

How to use this guide:

• Investors/operators: Focus on municipalities with predictable entitlement paths, practical buffers, and industrial/retail stock with adequate power (kVA) and parking.
• Landlords/brokers: Align proposed lease structures with tenant credit quality, build-out realities (TI), and DSCR covenants that can withstand price compression.

When you’re ready to evaluate inventory aligned to Michigan cannabis licensing requirements, scan Michigan listings by state (use the Michigan state hub on 420 Property to filter for current opportunities) and short-list assets that already meet local siting criteria.
(Note: Use the Michigan state hub on 420 Property when browsing; link above routes to our state hubs.)

License Types, Timelines, and Operating Standards

Michigan offers a full stack of adult-use license types, including Retailer, Grower (Class A/B/C), Processor, Microbusiness (and Class A Microbusiness), Secure Transporter, Safety Compliance Facility, Designated Consumption Establishment, and Event Organizer. Medical equivalents remain available (e.g., Provisioning Center), but most new entrants target adult-use.

Application process and timing. CRA monthly reports publish Step 1 (prequalification) and Step 2 (facility) application metrics with typical Step 2 initial timelines in the ~30–50 day range during mid-2025. Processing time varies by completeness of submittals, background checks, local approvals, and inspections.

Taxes. Adult-use products are subject to 10% state excise tax plus 6% sales tax. Pricing models and rent coverage (DSCR) must reflect these statutory headwinds and local fee regimes.

Local authorization. Even with an approved state license, operations cannot commence without municipal approval where required. Cities may cap license counts, regulate hours of operation, impose buffers (often from K-12 schools), and set additional conditions.

Seed-to-sale. Michigan mandates METRC statewide for inventory tracking, transfers, and compliance reporting. Operators should budget time for onboarding, training, and API integration where applicable.

Security standards. The administrative rules require continuous video surveillance with minimum retention of 30 days, secure storage, restricted access, and documented SOPs. Processors and extraction areas must meet hazardous location standards (e.g., C1D1/C1D2 when using volatile solvents), with clear coordination between the Authority Having Jurisdiction (AHJ), building officials, and fire marshals.

Land Use & Local Control: Zoning, Buffers, Permits (CUP Analogs)

Michigan does not use a statewide CUP (Conditional Use Permit) for cannabis; instead, local ordinances set the entitlement path. Common elements:

• Zoning districts: Retailers are commonly sited in commercial or mixed-use districts; cultivation/processing in light industrial.
• Buffers: Many municipalities establish setbacks from schools and sometimes parks, churches, or daycares. Distances vary (e.g., 500–1,000 ft), measured parcel-to-parcel or door-to-door depending on the ordinance.
• Caps & separation: Some cities cap licenses or require minimum distances between retailers.
• Administrative vs. legislative approvals: Certain jurisdictions issue administrative approvals if criteria are met; others require public hearings similar to a CUP process.

Action step: Before drafting an LOI, request a zoning verification letter from the municipality and ask planning staff to confirm buffers, parking ratios, signage, drive-through restrictions, and any odor/noise performance standards.

Security & Compliance: Vaults, Access, Video, Seed-to-Sale

Video surveillance & retention. Michigan rules require continuous surveillance covering ingress/egress, point-of-sale, storage, and any area where cannabis is handled—recorded and retained for at least 30 days. Keep written SOPs for camera maintenance, incident response, and footage retrieval.

Vaults & secure storage. Retailers must secure inventory after hours in a locked safe or steel-reinforced room. Processors and cultivators should design caged or hardened storage for bulk flower, trim, distillate, and any controlled chemicals.

Access control. Badge readers or coded locks on limited-access areas; visitor logs and escort policies. Align door schedules with surveillance zones to maintain chain-of-custody evidence.

Seed-to-sale (METRC). All inventory movements require METRC tags and compliant transfer manifests. Discrepancies trigger enforcement actions; schedule periodic internal audits.

Extraction (C1D1/C1D2). If volatile solvents are used, enclose operations in C1D1-rated rooms with gas detection, interlocks, and emergency ventilation per the adopted building/fire code.
Tip: Include C1D1 scope in the architectural and MEP basis-of-design before bidding TIs to avoid change orders.

Site Selection & Due Diligence: Power, Utilities, Environmental

Michigan’s climate and existing building stock shape TI budgets and time-to-commissioning:

• Power (kVA) & distribution. Cultivation requires stable, redundant power; target 3-phase service and room for gear. Indoor facilities often need 1,000–4,000+ amps at 480V depending on canopy and HVAC strategy.
• HVAC & dehumidification. Winter heating loads and summer latent loads require upsized DX or chilled-water systems. Build condensate management and drainage into the plan.
• Water & wastewater. Coordinate with the local utility for capacity fees; in rural settings, confirm well yield and discharge limits.
• Stormwater & wetlands. If adding paved parking or canopy structures, confirm stormwater requirements and whether any wetlands delineation is needed on or adjacent to the parcel.
• Environmental history. Order a Phase I ESA early. Light industrial corridors can have legacy contaminants; plan for Phase II if recognized environmental conditions (RECs) surface.

Decision Matrix: Lease vs. Purchase

Explore lease ready industrial or retail properties and for sale opportunities on 420 Property as you refine target submarkets.

Financing & Deal Structures: TI, Sale vs. Lease, DSCR

TI budgeting. Indoor cultivation TIs commonly include switchgear upgrades, HVAC (tonnage + latent removal), dehumidification, water treatment, and C1D1 rooms for extraction (if applicable). Retail TIs prioritize vaulting, camera coverage, access control, and POS wiring. Confirm prevailing wage or union requirements in larger cities.

Lease structures.

• NNN leases are common; ensure landlord and tenant responsibilities for TI, roof, and base-building systems are explicit.
• Add a permit contingency and a CUP-style (local authorization) contingency where public hearings or notice are required.
• Tie rent commencement to CO (Certificate of Occupancy) or “substantial completion,” with outside dates and termination rights if approvals fail.

Underwriting to DSCR. Lenders and sale-leaseback providers typically target 1.35–1.50x DSCR on normalized margins given the 10% excise + 6% sales tax headwinds. Build pricing scenarios with conservative wholesale assumptions and monitor CRA reports for volume and price trends.

Sale-leaseback. For operators needing expansion capital, sale-leasebacks trade cap rate for speed and non-dilutive funding. Use maintenance covenants to protect mission-critical TI (chillers, dehumidification).

Risk, Sequencing, and Permitting Pathways (Roles of AHJs; Sequencing)

Sequence your milestones to avoid stranded TI:

1. Zoning confirmation (local planning staff email + zoning letter)
2. Site control (LOI/PSA with entitlement contingencies)
3. Security plan & floorplan (align with CRA rule text and local PD feedback)
4. Building permits (architectural + MEP; include C1D1 where needed)
5. CRA Step 2 submittal (facility + local authorization where required)
6. Inspections & CO (building/fire sign-offs; camera verification)
7. METRC onboarding (inventory SOPs; mock traceability)
8. Soft opening (limited hours; stress-test cash handling and loss prevention)

Common pitfalls

• Assuming a state approval alone authorizes occupancy. Localities may require separate approvals.
• Under-specifying security camera coverage or storage space; 30-day retention is the floor—many operators keep 60–90 days.
• Ignoring parking minimums; some retail corridors require 4–5 stalls per 1,000 sf.
• Overlooking stormwater triggers when expanding impervious area.

Terminology Crosswalk (Why you’ll see LUCS, EFU, Goal 3, OWRD in other guides)

You’ll encounter planning terms from other states—especially Oregon—that don’t apply in Michigan. Use this quick mapping:

This crosswalk is included because multi-state teams often recycle diligence lists. In Michigan, always revert to the local ordinance and CRA rules.

Seller & Buyer Checklists (Concise)

For Sellers/Landlords

• Provide as-builts with power (amps/voltage), panel schedules, HVAC tonnage/latent, and drainage layouts.
• Share security camera coverage map, retention capacity (≥30 days), and access control devices.
• Deliver zoning verification and any prior approvals (special land use).
• Disclose parking counts, ADA compliance, and loading access.
• Retail: document vault construction and after-hours storage SOPs.
• Industrial: disclose neighbor use (odor/noise exposure), roof age, and floor loading.

For Buyers/Operators

• Confirm municipality opt-in status and retail/cultivation caps.
• Validate buffers (schools, parks, daycares) with a current GIS map.
• Pre-scope C1D1 (if extraction), MEP upgrades, and budget TI.
• Build METRC SOPs and schedule staff training.
• Underwrite to 1.35–1.50x DSCR, sensitized to excise/sales tax and price compression.
• Calendar a Phase I ESA and, if needed, wetlands review or stormwater submittals.

FAQs (Michigan-Specific)

Q1: How many dispensaries (retailers) does Michigan have?
A: CRA monthly statistical reports document hundreds of active adult-use retailers statewide. Counts change monthly as licenses open/close; rely on the latest CRA report when underwriting.

Q2: Does Michigan require a state-level CUP?
A: No. Local ordinances govern siting and approvals. Some cities require a hearing-based special land use approval similar to a CUP.

Q3: What is the mandatory video retention period?
A: At least 30 days under CRA rules. Many operators retain 60–90 days to support investigations and insurance.

Q4: Is METRC optional?
A: No. METRC is the mandatory seed-to-sale system for Michigan.

Q5: What taxes apply to adult-use sales?
A: A 10% excise tax plus 6% sales tax at retail.

Call to Action

If you’re advancing a Michigan cannabis licensing plan this quarter, compress diligence by short-listing assets that already align with local siting and power requirements:

This article is for educational purposes only and does not constitute legal, engineering, financial, or tax advice. Always consult qualified professionals and your local Authority Having Jurisdiction before making decisions.

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