But generally, all states require what is listed below: *Again, this can differ state by state. The first step to starting your Michigan startup is finding the right business idea. Once you file, youre free to run your business, but you must renew the assumed name certificate every five years. A(n) Marijuana Edibles business doing business under an assumed business name in San Diego County i.e. Unfortunately, most Michigan municipalities do not allow licensed cannabis companies to operate within their borders. There are many different routes you can take to acquire a municipally licensed cannabis property. These include, a loan from the U.S. Small Business Administration. Opening a bank account for your business is crucial because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier. After confirming your name is free to use, visit your local county clerks office to fill out, notarize, and submit an assumed name certificate. Many of the brands that you see when walking into a Michigan dispensary are not actually licensed companies. Social media and other digital outlets will be key then (including advertising with PotGuide, if thats something your business is interested in). Ive had my bank accounts and credit cards shut down and had competitors pouch employees. QuickBooks keeps everything organized in one place. (2021, January 11). Uduak Eyo is a law clerk for Scott F. Roberts Law, a boutique business and real estate law firm focusing on the medical marijuana and hemp industries. Prequalification status is valid for two years. Business insurance. Open a Business Bank Account & Credit Card. There are three ways to finance a new business: bootstrap it with your own money, get a small business loan or find one or more investors. Get the Necessary Permits & Licenses for . Once paid, MRA will issue you an MMFLA or MRTMA license and you can begin operations! Your business plan should include a detailed estimate of the funds youll need to cover expenses for at least a year, so now its time to acquire the money. Corporations Division Lansing, Michigan 48909, Michigan Department of Licensing and Regulatory Affairs Colorado has one of the most mature and established legal cannabis markets in the world. A retail dispensary with little to no foot or car traffic is likely to struggle, and a building not well-suited for cultivation can increase your build out and equipment costs and dampen your yields well into the future. The more detailed the plan can be, the better it is for your overall strategic planning. 4. Step 5: Identifying and Municipally Licensing Your Cannabis Real Estate in Michigan. https://mjbizdaily.com/edibles-outperform-cannabis-industry-growth-in-2020-on-covid-spurred-sales-surge/, Kovaceich, N. (2019, February 1). The cost of sourcing materials yourself vs. buying from other retailers will be heavily impacted by the cost of starting up cultivation or extraction operations in your area, so consider that when planning. Start for $0 + state fees. Organization is key here. For plant-touching companies, the biggest obstacle and biggest bottleneck in opening a licensed cannabis business in Michigan is finding cannabis real estate, getting it licensed, and getting it built out and properly equipped, especially when it comes to cultivation facilities and dispensaries. Setting up your finances starts with getting a federal employer identification number (EIN) from the IRS. If you plan to use cannabis oils in your products, youll need to hire an extractor or find a wholesaler, or, if you do these things on your own, you will have to get a separate cultivation or extraction license, which means more regulations and more money. Michigan.gov. For plant touching companies, maintaining compliance with the ever-changing regulations and guidance applicable to the Michigan cannabis industry is tough. While non-plant touching businesses generally have it easy when it comes to taxes, plant-touching businesses need to familiarize themselves with whats commonly referred to as 280E. 280E is a section of the federal tax code that prevents plant-touching cannabis businesses from taking most of your standard business deductions. Gather information related to the persons and entities who will be listed on the license and who will have control over the business. Start an edible cookie dough cafe by following these 10 steps: Plan your Edible Cookie Dough Cafe. Alaska's online application for a marijuana business license became available on February 24, 2016. Some lease agreements may require you to take care of all building maintenance, including HVAC systems. Globally, the edibles market makes up 11% of sales in the industry and is currently worth 1.23 billion. The cannabis industry is unlike any industry you have ever worked in, and the regulatory, supply chain . Its also a wise idea to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages. Do existing businesses in Michigan offer a similar product/service? An angel investor is a wealthy individual who invests their personal finances in a startup, typically in the beginning stages, whereas a VC is a group of investors that will fund a business throughout its existence. The state is also no longer hyper-focused on criminal matters as it once was. Cannabis [26000 - 26260] https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=10.&title=&part=&chapter=15.&article=. Marijuana microbusiness: This license will allow the owner to grow up to 150 plants, process the marijuana and sell it to individuals 21 and older. The company has a strong reputation and great reviews online too. There are now at least 5 Michigan banks and credit unions that will openly bank licensed, plant-touching cannabis businesses. P.O. This demonstrates that Michigan has worked hard to be a . Open a Business Bank Account & Credit Card. Luckily for cannabis business owners, the state has been loosening up on the qualifications for owning a Michigan cannabis business. Do you want to open a dispensary? As the registered agent on dozens of prequalified or licensed cannabis businesses, my mailbox is absolutely inundated with insurance agents offering insurance to cannabis businesses. This also has the advantage of making it easier to raise capital, since growing companies with a good operational history are much more attractive to investors than pie-in-the-sky start-ups. Cannabis cultivation facility, initial issuance - 30,000; renewal - 10,000. 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. If you are leasing a location, make sure that you understand the terms and conditions of the lease agreement. This was the path that I initially chose. There are thousands of opportunities to break into the Michigan cannabis industry via ancillary services and products. The filing fee varies depending on the municipality. If you enjoy baking and want to get creative in the kitchen, this could be a fun business opportunity for you. https://www.viridiansciences.com/blog/maine-cannabis-regulations-license-applications-forms-links-and-other-resources. But the business opportunities the Michigan cannabis industry presents are especially attractive not because its an easy business to get into, but because its can be quite difficult. If you rent or lease a space, you likely want commercial renters insurance. Michigan finally opened applications for recreational marijuana businesses on November 1 st, 2019. ). From there, Incfile will aid with documentation and filing procedures and demystify terms like registered agent, articles of organization, and EIN. Raising capital from investors is not an easy task, even with the outsized returns some opportunities in the industry can offer. Congrats to Gigi Diaz High Times Top Cannabis Chef for her runner-up place in the Best Cannabis Chef in Michigan 2021 poll. Instead, they have licensing / white labeling agreements with a Michigan licensed cannabis processor to manufacture their products. Individual listings provide a brief bio including professional history, a sum of total investments, and areas of interest. Many people dislike the idea of smoking marijuana and would prefer to eat the plant in baked goods or consume it as tea. In order to register for taxes you will need to apply for an EIN. There are a lot of requirements that one is expected to meet to obtain a license and the requirements vary by state. Edible Michiana is a magazine and website that celebrates the abundance and flavor of local foods across our nine-county region in Northern Indiana and Southwest Michigan. Dont register your company until you have chosen an entity or business structure. Regulations for licensing any type of cannabis business may vary, but here were going to focus on obtaining a processing license. 1 - 2.5 mg THC edibles (microdose) Effects: Mild relief of symptoms like pain, stress, and anxiety; increased focus and creativity. Between January 2020 and January 2022, Michigan saw a 24% small business revenue increase compared to 6.9% for the rest of the country. Before getting started, it its important to talk about what laws actually govern legal cannabis businesses in Michigan. Start the licensing process and know cannabis kitchen regulations. Consider how the business will be funded. As with many other licensed businesses you should complete any application for a marijuana license in the entities name. You can also purchase the property on a land contract, which is generally referred to in the industry as terms. Unlike other industries, land contracts are wildly popular in the cannabis industry, given the lack of banking and lending options for cannabis businesses. To form a corporation in Michigan, you must file Articles of Incorporation. Lets be honest, if it was easy to start a legal cannabis business in Michigan, everyone would do it. Similar to banking, insurance is also widely available for cannabis businesses. For this reason, many new cannabis businesses prefer to start small and then gradually scale up by reinvesting their profits back in the business. Equipment loans for start-ups are particularly hard to come by, as are operating loans. Main applicants must submit a non-refundable $6,000 application fee. You can do this online for free by going to the IRS website. Next, perform a search to see that your businesss name is available for use in the state. Make sure your edible photos are printed on top-quality materials and equipment to . If you arent wealthy enough to self-fund your business, you can choose from a number of other funding options. Most users do not feel any intoxication at this dose. LAST UPDATED APRIL 20, 2021. The very first decision you will have to make is what exactly you want to do in the industry. Licensing fees start at $4,000 and top out at $40,000, depending on the type of business. You will certainly face obstacles, some of which are outlined below, and you almost definitely wont be an overnight success. Keep these factors in mind when selecting your kitchen location. Michigan Department of Licensing and Regulatory Affairs https://mjbizdaily.com/edibles-outperform-cannabis-industry-growth-in-2020-on-covid-spurred-sales-surge/, https://www.forbes.com/sites/nickkovacevich/2019/02/01/the-hidden-costs-of-the-cannabis-business/?sh=4dc5c1fb7da3, ://www.thompsoncoburn.com/docs/default-source/blog-documents/ranking-of-state-cannabis-regulations.pdf, https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/CDPH%20Document%20Library/AnnualApp_Checklist.pdf, https://www.michigan.gov/mra/0,9306,7-386-83994-454561--,00.html, https://www.oregonlegislature.gov/bills_laws/ors/ors475B.html, https://www.3ccannabis.com/2020/01/2020-maine-recreational-marijuana-establishment-licensing, https://www.viridiansciences.com/blog/maine-cannabis-regulations-license-applications-forms-links-and-other-resources, https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=10.&title=&part=&chapter=15.&article, California Legalizes Hemp-Infused Products, All products must be manufactured in a licensed, commercial kitchen, Applicant must be over the age of 21 to apply for a facility license, Proof of business structure (corporation, LLC, sole Proprietor, etc. A complex legal structure that is a separate entity (providing legal protection to owners) from the owner and comprises directors, officers, and shareholders. Especially in the food industry, quality and hygiene are paramount. Forming a business entity doesnt cost a lot, making it easy to start your business. We will go through several common obstacles faced by cannabis businesses below. Selling Marijuana Edibles. Cassie is a deputy editor, collaborating with teams around the world while living in the beautiful hills of Kentucky. Between January 2020 and January 2022, Michigan saw a 24% small business revenue increase compared to 6.9% for the rest of the country. Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. You need to consider other relevant costs. Visit, for more information on the Michigan Business Tax (MBT) and head to the. A recently-launched investment group dedicated to funding early-stage tech and digitally scaling companies in the Detroit area. All cannabis businesses help pay the $500,000 annual fee for substance abuse disorder programs ( MMFLA Section 333.27603) Licensing fees cost between $10,000 and $66,000. There are three main marijuana lawsthe Michigan Medical Marihuana Act, or MMMA; the Medical Marihuana Facilities Licensing Act, or MMFLA; and the Michigan Regulation and Taxation of Marihuana Act, or MRTMA. The MMMA authorizes caregivers to grow up to 12 plants per registered patient, for a maximum of 72 plants, but does not authorize the sale of marijuana except to the caregivers registered patients. Of the 2,500 large, succulent mushroom varieties in Michigan, only 60-100 of them are good to eat. The state no longer requires financial statements, real estate deeds, or three years of taxes. View information by type. Its a common misconception that the cannabis industry is an all cash business. A state license is necessary to operate any kind of marijuana business in Michigan. You will have to file an Articles of Organization to the state which is your official application for forming an LLC. In order to initiate your cannabis business in Michigan, you must register an entity with the Department of Licensing And Regulatory Affairs ( LARA ). Nearly a year after Michigan voters approved the ballot proposal that legalized the use, possession, and sale of marijuana to adults 21 and older in November 2018. Identify your brand positioning and create a list of your ideal consumers. Michigan cannabis banks and credit unions will generally charge a hefty due diligence fee, thousands of dollars in monthly maintenance fees, and sometimes an additional fee based off the percentage of total deposits. Instead, you will need an attorney with corporate formation, structuring, real estate and contracting experience who also has experience representing cannabis businesses. When you are ready to submit your application, you must include identifying . Required in certain states such as California, New York, and Hawaii. Check here for more information on filing fees. Licensing costs for a cannabis business Nevada include a nonrefundable application fee, plus an additional fee if the company is awarded a license: Cannabis retail store, initial issuance - 20,000; renewal - 6,600. Known throughout the world as a top producer of dry edible beans, the Great Lakes State works hard to grow and market beans that reflect the place from which they come and the passionate commitment of the . Next, you will need to obtain the proper licensing and permits required by the state. The owner must be a Michigan resident and can . All Rights Reserved. This will ensure your company is properly structured and protected from the beginning. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business. Some of them are Morel mushrooms, Oyster mushrooms, Chanterelle mushrooms, Maitake, and a host of others. Step 1. You will also need to submit to inspection by MRA as well as the Bureau of Fire Services, or BFS. Once your Step 2 packet is approved, and you have passed MRA and BFS inspection, the last step in the process is to pay the licensing assessment fee, which varies by license type. For properties that do not already come with a license, you should be able to tie up the property with a purchase agreement or contingent lease while you obtain your municipal license. A network of business incubators and accelerators located throughout the state. We will also include cannabis lounges and cannabis events in this category due to the fact that Michigan requires them to obtain an MRTMA license. Congratulations Enid you are Michigan's favorite cannabis chef of 2021! There are many considerations to take into account when selecting your business structure. This should include your plans for recordkeeping, security, advertising, staffing, and others. 2020 State of Oregon. It is important to note that not all municipalities are the same. The big winners are not always the ones who are first to market. Michigan Medical Marihuana Act Caregivers, Cannabis Merger and Acquisition Attorneys, Michigan cannabis license under the MMFLA or MRTMA, lawyer with experience in negotiating cannabis licensing and white label deals, safety testing labs, secure transporters, and microbusinesses, for property to locate your cannabis facility, purchase property with a municipal cannabis license or existing cannabis business, tie up the property with a purchase agreement or contingent lease while you obtain your municipal license, Step 2 or Part 2 cannabis facility licensing step, maintaining compliance with the ever-changing regulations and guidance applicable to the Michigan cannabis industry, ancillary businesses still have to be careful, insurance is also widely available for cannabis businesses, obtain financing from a private, non-bank institutional lender, Private lending is also available to cannabis businesses. Niles culinary incubator helps food businesses get off the ground. The most common entities are: You may want to consult a tax advisor and business lawyer to make sure that you choose the entity that provides you with the best tax advantages and liability protection for your business. EGLE: Cannabis Environmental Regulatory Information. The Great Lakes state ranks 12th overall in Tax Foundations 2020 State Business Tax Climate Index based on its low corporate and individual income tax rates, while US News named it the 5th most affordable state in the nation on the strength of its cost of living and housing affordability, both of which are top ten in the nation. For every quality contractor or architect in the industry, there is one that overcharges and underdelivers. AKA Limited Liability Company, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. In phase one, the compost is prepped. You will need to register for a variety of state and federal taxes before you can open for business. Its important to note that even if you arent required to get insurance, it is a wise idea to get the protection it offers for what can be devastating financial losses. Before starting Green Foods Marijuana Edibles, Inc., Mr. Jerry Hamilton worked with some of the leading food and fruit processing companies in the United States of America. That means that anyone who can pass the states background check and obtain a municipally licensed property can receive an MMFLA or MRTMA cannabis license. Important Updates. Plenty of both types of investors are operating in Michigan. This projection comes at a time when cannabis remains federally . A broad directory of nearly 5,000 angels seeking funding opportunities in the Great Lakes State. How does your business idea refine an existing product or service? Dont be afraid of this sort of competition, just be prepared. Like any business, a formal business plan should be made, and in the cannabis industry, most municipalities require it before you can apply for a license. The State has authority to authorize licenses for several types of cannabis businesses, ranging from cultivation centers to dispensing organizations. Choose a Business Location. Step 2. See also: How to Start an Edible Business in Michigan. For LLCs, LPs, LLPs and corporations, youll need to file articles of organization, certificate of partnership, application to register an LLP or articles of incorporation with the Department of Licensing and Regulatory Affairs (LARA), respectively. Are you splitting up responsibilities within the company with your team? You can also purchase property with a municipal cannabis license or existing cannabis business, or obtain your own license. The Hidden Costs of Cannabis. Taxwise, they operate more like a sole proprietorship. Your financial situation is unique and the products and services we review may not be right for your circumstances. But when you think of Michigan, you might think of beans. Consult with a commercial insurance agent to fully understand insurance requirements. On January 22, 2016, the State adopted final cannabis industry regulations, which began enforcement on February 21, 2016. hosted by the Michigan government to find out whether youll need one or more special licenses, permits, or certifications to operate your business legally in the state. https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/CDPH%20Document%20Library/AnnualApp_Checklist.pdf, Michigan Department of Licensing and Regulatory Affairs. Register a domain name for a company website (You can use. to register your business online for taxes. Businesses. The stakes are high, and the competition can be fierce. With this article, hopefully you now understand the path you will need to go down to start a legal cannabis company in Michigan. Annual License Application Checklist For Cannabis Manufacturers.Cannabis.ca.gov. Are you sure you want to rest your choices? Most require a $5,000 non-refundable application fee, just to start with, and that can vary widely by state. 1. Please try again later. Starting a medical marijuana business needs a good planning and structuring. You may also need to pay to get certain business licenses in the state. Retrieved July 22, 2021, from https://www.3ccannabis.com/2020/01/2020-maine-recreational-marijuana-establishment-licensing, LaVia. On a personal note, entering the cannabis industry, and pivoting my existing business and real estate law firm to focus on working with Michigan cannabis companies, was probably the best career decision Ive ever made. You will probably want to set up consultations with several professionals and companies providing these or other services before choosing the right attorney or accountant for your project. Google Workspace helps with email addresses, team collaboration, productivity, and more. Register your Mushroom Farm for Taxes. We are a full-service Marijuana Business Law Firm with dedication to helping both start-ups and established businesses make their mark on the Michigan Marijuana Industry. In states where advertising is legal, here are some of the typical regulations: It's clear to see that starting any kind of cannabis business is easier said than done, but its important to note that the edible business is particularly difficult because it is so saturated. I had worked in business, real estate and healthcare law prior to 2017, and saw the opportunity to pivot my law firm to servicing cannabis companies. At Scott Roberts Law, weve submitted well over a hundred prequalifications, and can help you identify and overcome potential licensing issues. that is what i seem to hear. You need to account for this fact from the beginning, especially since cannabis projects, particularly cultivation facilities, are notorious for going well over budget. Those selling products or services may need to get a sellers permit, while certain professionals, such as those in the medical industry, may require state licensing to operate.