First license for recreational pot business expected by end of month

Beth LeBlanc | The Detroit News

Lansing — The first license for a recreational marijuana business is expected by the end of the month as licensing for legalized pot facilities appears to be moving at a faster clip than those for the medical marijuana market.

The Marijuana Regulatory Agency received 58 applications for pre-qualification and 43 for operating licensing applications for adult use facility licenses in the week after opening the application process on Nov. 1.

The agency has since approved 41 applications for pre-qualification and is expected to approve the first commercial recreational license by the end of the month.

The speedier turnaround is due in part to the removal of the licensing board that oversaw the medical marijuana licensing process, said Regulatory Agency spokesman David Harns. The elimination freed up staffers, who would usually package application and investigation materials for board members and then wait for the board’s decision, Harns said.

In addition, the recreational marijuana law is simpler than the laws governing medical marijuana, he said. The first applicants for recreational marijuana are ones that have already been through the rigorous medical marijuana vetting process.

During medical marijuana licensing, the application process opened in December 2017 and issued its first prequalification approval in April 2018 and the first state operating license in July 2018.

Michigan — through the board and, since May, through the Marijuana Regulatory Agency — has issued 357 state operating licenses for medical marijuana facilities and denied 50. As of early November, there were 276,253 registered medical marijuana patients in Michigan and 37,476 caregivers.

Even if the state issues the first adult use facility license by the end of November, it could be another few months before shops begin selling adult use marijuana product.

The emergency rules issued earlier this year allow the agency to authorize recreational shops to transfer medical product in the early stages of licensing, but Executive Director Andrew Brisbo has not yet given that authorization.

“If the MRA doesn’t allow for that transfer, it will take a grower to go from seed to sale to start the process,” Harns said.

While many hope for a speedy startup of the recreational market, the industry isn’t sold on the idea of transferring medical product to the recreational market, said Robin Schneider, executive director for the Michigan Cannabis Industry Association.

“It would have been nice if we had an abundance of product available to be transferred over to the adult use market, but we need to make sure the patients get their marijuana first and foremost,” Schneider said.

As the medical marijuana market continues to struggle with a shortage, the idea of transferring product to the recreational market is less appealing, she said.

Instead, the association is hoping the state will ease testing regulations that some businesses are finding “burdensome” and may be contributing to the shortage, Schneider said.

Otherwise, the adult use license application system is a much smoother ride than the medical marijuana roll-out, Schneider said, a desired result for drafters of the adult use ballot initiative in 2018 who included clauses requiring a 90-day deadline for processing applications.

“Our members are reporting that the online applications are really user friendly,” Schneider said. “It is very different from what we saw with the rollout of the medical program.”

There is no state-imposed cap on the number of adult use marijuana facilities that can be licensed in Michigan. Local communities can set limits on the location or number of facilities or opt out from allowing commercial recreational marijuana businesses within their jurisdiction.

Nearly 1,400 communities across the state have informed the state that they will not allow recreational marijuana shops within their boundaries. Several ballot initiatives seeking to overturn those community bans have been defeated at the ballot box.

eleblanc@detroitnews.com