MI sets recreational marijuana legalization date, will take business apps in late 2019

(This story has been updated to clarify the state’s position regarding the transition of the medical marijuana program to a new regulatory structure.)

Possession and adult use of marijuana will be legal in Michigan starting Dec. 6, but the launch of  what is expected to be a billion-dollar-plus commercial industry is still more than a year away.

Earlier this month, Michigan became the first Midwestern state to approve a full-fledged adult-use program when voters approved a recreational cannabis initiative.

The election results were certified Monday, which set into motion the Dec. 6 legalization date and a deadline to develop the regulatory framework within a year.

The recently updated Marijuana Business Factbook 2018 projects Michigan will become one of the country’s largest rec MJ markets, generating $1.4 billion-$1.7 billion in annual sales within several years of its launch.

David Harns, spokesman for the Michigan Department of Licensing and Regulatory Affairs (LARA), wrote in an email Tuesday to Marijuana Business Daily that the agency already is discussing implementation issues with a variety of groups and looks forward to meeting with the state’s new administration, led by incoming Gov. Gretchen Whitmer.

Harns wrote that “all indications point to our ability” to have business license applications available before the statutory deadline of Dec. 6, 2019.

Here are some key business aspects of Michigan’s rec program:

• The state won’t restrict the number of rec marijuana licenses. Municipalities, however, may control the number or prohibit MJ businesses in their jurisdictions.
• Michigan will accept adult-use applications only from licensed medical marijuana businesses for up to two years. The state can make an exception to this and offer licenses to other applicants if it is determined that more businesses are needed to ensure adequate supply and access in rural areas or to counter the black market.
• The state will accept microbusiness applications only from Michigan residents for up to 24 months – except for circumstances as noted above.

Meanwhile, the state said it won’t close existing, unlicensed MMJ businesses before Dec. 31, as part of an agreement related to a court case challenging the deadlines to transition to a new, stricter regulatory regime.

Harns said the Dec. 31 date shouldn’t be seen as a new deadline, but it “does offer some degree of certainty” to 98 MMJ facilities that are temporarily operating with local approval while pursuing permanent licenses. The state said it will wait for final resolution in the court case.

So far, the state has approved only 40 dispensaries under the new regulatory framework and some activists are concerned there won’t be adequate supplies when the state transitions to the new system.

But lawmakers, in approving permanent medical cannabis rules, have agreed to a provision allowing dispensaries to deliver MMJ to cardholders’ homes, the Associated Press reported.