Michigan’s Marijuana Regulatory Agency Introduces Tier-Based Fee System

Regulators in Michigan announced on Thursday that license fees for legal medical marijuana businesses in the state will be transitioning to a tier-based system beginning on October 1. Under the plan, most businesses would see a reduction in fees or no change, although some companies will end up paying more.

Andrew Brisbo, the director of the Marijuana Regulatory Agency, said that medical marijuana companies will now pay license fees based on their size.

“We want to make the fees reasonably related to the size of the operation, so businesses are paying an equitable share,” said Brisbo.

Under the regulations currently in place, small cultivation operations can apply for a Class A license, which carries a fee of $10,000 once the grower has been approved by the state. Other medical marijuana businesses pay $66,000, up from the original $48,000 fee that went into effect in July 2018. Cannabis testing labs are not required to pay a license fee.

Under the new tiered system that goes into effect on October 1, the Class A growers license fee of $10,000 will not change. Other businesses will pay fees based on a three-tier system. New licensees will pay the middle-tier fee when they are initially approved by the state.

Class B growers will pay license fees of $24,000, $30,000, or $36,000 based the size of the operation. Class C growers and processors will pay $45,000, $56,000, or $67,000. Provisioning centers (dispensaries) and secure transporters will pay $36,000, $44,000, or $52,000.

Brisbo said that the new fees were set to cover the costs of regulating the state’s medical marijuana industry.

“We try to set the fees simply to offset the fees of our agency and the other costs built in from the MMFLA (Medical Marihuana Facilities Licensing Act),” Brisbo said.

Recreational Pot License Fees Lower

State regulators have also released the license fees for businesses to participate in Michigan’s legal recreational pot marketplace, which launches later this year. Those license fees will actually be lower than the fees for medical marijuana businesses. For example, medical marijuana provisioning centers will pay $36,000 to $52,000 to renew their license while a similar license for a recreational cannabis shop will cost $20,000 to $30,000 to renew.

Brisbo said that the discrepancy in fees for recreational cannabis and medical marijuana businesses is due to state rules that require some medical marijuana licensing fees to be diverted to external programs. The funds go to the state health department to support substance abuse programs, to the Michigan State Police for standard field sobriety testing and police training, and to the Department of Licensing and Regulatory Affairs for licensing substance use disorder programs.

The Marijuana Regulatory Authority will begin accepting license applications for recreational cannabis businesses on November 1.