Michigan takes emergency steps to regulate recreational cannabis market

Michigan will take radical measures to allow the expansion of the recreational cannabis market. Although it was legalized in November 2018, the law has not yet come into force. The regulations were created to mirror those governing the medical cannabis market, which has been legal in the state since 2008. These measures will boost the sector by removing some of the constraints imposed on the medical cannabis market, with the aim of opening up more opportunities for entrepreneurs.

Thus, recreational cannabis companies will not have to have a minimum capital to start up, unlike medical cannabis companies, which currently have to have between 200,000 and 500,000 dollars. Recreational cannabis will be able to be sold in the same stores as medical cannabis, as long as they are physically separated, on different shelves for example. The state will also allow the creation of in-store lounges where consumers can smoke. These establishments will not, however, be allowed to sell food or alcohol. Licenses may be granted for specific events, such as outdoor festivals. The measure also provides for an increase in the number of plants an entrepreneur can grow.

As in other US states, municipalities will have to decide locally whether to grant sales licenses to companies. For the time being, 600 cities have chosen to ban recreational cannabis. The Marijuana Regulatory Agency will begin to issue licenses from November 2019, so municipalities have until then to decide.

According to Michigan regulations, only medical cannabis companies already approved will be able to apply for a license throughout the first year of the program. This reassures medical cannabis producers, who were worried about the arrival of new competition. Indeed, Rick Thompson, a member of Michigan NORML and editor of the Michigan Cannabis Industries Report, points out that «the supply of recreational cannabis will lead to market disruption».

The law should come into force next spring, with the first sales scheduled for March 2020.