Extras on Excise: Michigan Finalizes Licensing Rules for Medical Marijuana Program


On Sept. 22, 2016, Michigan enacted H.B. 4209, which aimed to license and regulate medical marijuana—spelled “marihuana”—in Michigan. On May 30, 2018, that Michigan’s Department of Licensing and Regulatory Affairs (LARA) promulgated its second iteration of emergency regulations, helping to provide a regulatory structure for Michigan to actually license medical marijuana facilities.

Most importantly, Emergency Rule 7 establishes a nonrefundable application fee of $6,000 for any entity desiring to be a medical marijuana grower, processor, provisioning center, secure transporter, and/or safety compliance facility. Applicants seeking multiple types of licenses (e.g., a grower and a processor license) must only pay one application fee.

Already in effect via H.B. 4209, § 603(3), is the required annual “regulatory assessment” for licensed growers, processors, provisioning centers, and secure transporters. The amount of the assessment varies vary by year, depending on regulatory expenses, among other things. 

Also already in effect is the medical marijuana gross receipts tax on provisioning centers (similar to medical marijuana dispensaries in other states). Specifically, provisioning centers are subject to a 3 percent tax on their gross retail receipts, as required by H.B. 4209, § 601(1). When medical marijuana sales begin, this tax must be paid quarterly to the Michigan Department of Treasury.

Now that application fees, regulatory assessments, and the gross receipts tax are finalized, LARA is actively accepting applications for licensure from interested parties. More information regarding licensing can be found on LARA’s website.

For additional news on both the medical and recreational marijuana industries, be sure to follow Bloomberg Tax’s products.

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