November 18, 2019 Andrew Ward
Michigan Micro Cannabis Licenses & Solventless Processing
Michigan voters approved adult use cannabis legislation through a November 2018 vote of 56 percent to 44 percent. Since making the decisive decision to legalize marijuana, the state has been abuzz with activity while the country speculates on a market that could reach a value of $1.7 billion in annual sales.
Looking at this past fall, we can see a significant bit of activity in Michigan. A mixture of news has flooded into the state. Notable setbacks have included 79% of municipalities, including Detroit, banning cultivation and dispensary operations. Businesses were also pivoting from vape cartridges to e-cigs in light of the recent controversy.
The setbacks are worth considering. However, Michigan’s market potential is already on display. In recent weeks, the state has seen a reported uptick in jobs in the sector. And despite the hurdles processors and cultivators face, adult use sales are slated to begin December 1, 2019. Though other reports have suggested Spring 2020 as the start.
In late October, the Michigan began accepting adult use license applications. 52 applications had been submitted on the first day. It is strongly expected that this number could grow once would be business owners examine the market’s potential.
Michigan’s MMRA application page.
As Michigan’s market matures, you very well could find yourself rife with the opportunity to capitalize on a state with nearly double the population of Colorado. With a demanding market and a restrictive local policy across much of the state, businesses could see a rush of interest in their products.
With applications now open, you can consider the six possible options that fit you best. Today, we’ll be highlighting why we’re so fond of one in particular: the microbusiness license. Plus, whether you’re jumping in now, or waiting it out a bit longer, consider what a solventless extraction could do for your business.
Explaining What’s in a Michigan Microbusiness License?
State officials have allowed applicants to apply for a microbusiness license. Per its stipulations, a cannabis microbusiness in Michigan enables a business or individual to conduct the following activity:
- Cultivate 150 plants or less
- Process infused cannabis products, including concentrates, oils and edibles
- Package your processed products
- Sell all its created products
It needs to be noted that the fourth parameter does not allow businesses to sell or transfer its products to other adult use companies.
Think of a Michigan microbusiness license as a vertically-integrated license. The license allows producers to create and sell their products from their sole location. This is an ideal opportunity for businesses in Michigan hoping to further the state’s legacy in the craft space, following in the footsteps of numerous excellent breweries.
Michigan residents may want to get in on the action now while they have exclusive access for now. For the first two years, only residents can apply for a Michigan microbusiness license, with the state able to grant up to one license to any person or business. After two years, non-residents will be able to apply for microbusiness licenses as well.
Applicants should also be aware of local ordinances. If you or your business is in a municipality opting out of the program, no applications can be submitted. Those operating in towns with an uncertain stance should take extra precautions. While you can still apply, local municipality permits and approvals could still snag you in the process.
The Application Process
To obtain a Michigan microbusiness license, applicants must follow a multi-step process. Applicants for any business license, including a microbusiness, must first pass a pre-qualification process. During this phase, an applicant’s criminal and financial background will go under scrutiny. To satisfy specific demands, an applicant must include one year of financial documents, statements and other pertinent information.
If an applicant is approved during phase one, they must have their facility approved. To be approved, the applicant must have the approval of the municipality they are operating in. In addition to local approval, the applicant needs to submit detailed drawings of their proposed facility.
With the drawings, they must include an establishment plan detailing the company’s proposed operations to verify its compliance. Some details recommended for inclusion include estimated open date, projected income and the number of employees that will be hired.
An initial application fee of $6 thousand is required, which compared to many cannabis business license applications, is quite affordable. If approved for both phases, the applicant must pay an addition $8 thousand licensure fee before being awarded the license. From there, annual renewal fees fall into three categories. Ventures in the top 33% of the market pay $10 thousand, the middle 33% pays $8, and the bottom pays $6 thousand per year.
The Case for a Solventless Michigan Cannabis Extraction Venture
The want for concentrates is abundant, and could continue to rise. Market demand across legalized states shows that consumers have a growing interest in concentrated cannabis products. So much so that a November 2019 report forecasted that the global cannabis concentrate market is slated to total $13.78 billion by 2026.
The growth in the US is expected to be staggering, as well. A September 2018 report from Arcview Market Research and BDS Analytics projected cannabis concentrates reach $8.4 billion in sales by 2022, falling just behind the $8.5 billion projection for flower.
Previously, it would be fair to assume that a concentrates producer would have to use solvents to produce commercial-scale products. As we’ve discussed in previous entries, that isn’t the case anymore. Today, solventless products are rising in market demand as capabilities to produce at a level needed for a business to profit. Combined with a low cost of entry compared to other processes and it’s clear why a company should consider making some made in Michigan rosin.
Despite early setbacks, Michigan’s market is still poised to be a significant player in the US cannabis market. Whether you decide to apply now or wait a bit, consider the microbusiness license and solventless processing. Both appear to worthwhile investments for a range of entrepreneurs.