The answers to these questions will decide what type of company you want to form, how it will be managed, and what tax selections you will want to make. It is important that you put sufficient time and energy into this step since incorrectly structuring your company can lead to headaches, lost profits, and potential litigation down the road.
Before forming your business, you want to first put together a solid cannabis business plan with a start-up budget and pro forma numbers. Even if you are self-funding and don’t need investors or financing, it is still a good idea to put your business plan to paper and fully flesh out your business model.
Step 3: Form Your Business and Choose Your Team
While your prequalification is in process, it’s usually a good idea to start looking for property to locate your cannabis facility. Under the MMFLA and MRTMA, whether and where you can locate your cannabis business is up to each individual municipality. Unfortunately, most Michigan municipalities do not allow licensed cannabis companies to operate within their borders.
Many municipalities “cap” the number of licenses they allow for specific facility types, and there may be a limited window to apply for these limited number of municipal licenses. Most municipalities will cap the number of dispensary (also referred to “provisioning center” and “retailer”) licenses they allow, though some also cap the number of growers, processers, and other license types. Thus, even if you find a property in a municipality that allows cannabis and is properly zoned, you also need to make sure the municipality is actually accepting applications for your license type.
Now that you are prequalified and have a municipal license, the next step is to build out your facility and apply for a state operating license. MRA recommends waiting until you are less than sixty days from being fully built out for operations before applying for the “Step 2” or “Part 2” cannabis facility licensing step with the state.
LARA offers the following explanation for why you may see the department refer to marijuana as “marihuana,” substituting the “j” for an “h”:
An act of the Michigan Legislature would be required in order to change the spelling of marijuana in the Michigan statutes, such as the Public Health Code or the newer marijuana laws.
The state’s Department of Licensing and Regulatory Affairs (LARA) needs to issue the appropriate licenses for anyone who wants to start a recreational marijuana business.
What do you have questions about in Metro Detroit or Michigan that you’d like us to investigate?
By the way . here’s why you may see the state spell marijuana as ‘marihuana’
If you’re looking to grow some plants at your house for you, then you’re looking for the Class A license.
That makes Michigan’s household marijuana cultivation law the least strict out of all of the states.
Meanwhile, medical marijuana caregivers in Michigan are still allowed up to five patients registered to him or her and can grow up to 12 plants for each of them. If the caregiver is also a patient and has five patients, he or she can grow up to 72 marijuana plants. Medical marijuana growers will emphasize the importance of having enough plants to serve a patient, or multiple patients, adequately with the correct strains at the correct times. This is where it can get complicated. Moreover, if you ever hear a grower use the term “cloning,” then you know they’ve been through the process extensively.
For more coverage of marijuana in Michigan, go here.
That means you’re going to want to be growing indoors, or outside in a shed or grow house. Keep in mind this is Michigan — the weather changes rapidly.
Michigan is one of only two states, the other being Alaska, where households are allowed to grow 12 marijuana plants. Most of those states listed above allow only six plants per household.