Proposed Michigan Medical Cannabis Costs Spark Concern

In an effort to ensure Michigan’s medical cannabis market stays afloat, individuals hoping to gain licenses may have to provide proof of substantial financial backing.

On Tuesday, Michigan’s Department of Licensing and Regulatory Affairs (LARA) announced its recommendations for the financial requirements of residents seeking to obtain licenses for cannabis. Although applicants already face regulatory and licensing fees ranging from $5,000 to $57,000, under new recommendations they may also have to provide liquid assets of up to $500,000.

Andrew Brisbo, director at LARA and the Bureau of Medical Marihuana Regulation, said the requirements are intended to ensure business success and longevity.

“There are significant costs in setting up a business,” Brisbo said according to a report by the Detroit Free Press. “We wanted to ensure that businesses can thrive, but also ensure that they can stay in business and be successful.”

However, many residents are displeased by the new recommendation and feel it is an effort to prevent small and minority business owners from entering the cannabis market.

“These numbers will bar minority business owners and mom and pop operations,” said Board Member David LaMontaine in a statement. “These kinds of discussions lead to significant outside forces coming in and monopolizing this marketplace, and I think that’s a mistake.”

Despite residents’ concerns, Brisbo says his department’s figures are largely based on the asset requirements of states like Arizona and Nevada, which require upwards of $150,000 in assets for cannabis businesses.

“We looked at other state requirements and known costs of acquiring a license,” Brisbo said. “We looked at the data we had and put it out there as a starting point for discussion. We want to have input and understand the concerns of interested parties and the board’s perspective on things before a final decision is made.”

With LARA’s recommendations, applicants would need to show the following proof of assets before receiving licenses:

• $300,000 for a license to open a dispensary
• $150,000 for a Class A license to grow 500 cannabis plants
• $300,000 for a Class B license to grow 1,000 cannabis plants
• $500,000 for a class C license to grow 1,500 cannabis plants
• $300,000 to be a processor
• $200,000 to provide secure transport
• $200,000 to open a testing facility