The marijuana industry in Michigan is getting more popular by the day. Investors recognize the potential it holds to create massive business opportunities. Among the many possible business ideas, a commercial growing company is one of the top picks. With this idea, you’ll start a Michigan marijuana business that grows marijuana and can also distribute it.

If this type of business interests you, then it’s crucial to understand some of the rules and regulations behind it. Primarily, you will have to apply for a Michigan Commercial Grow license – or to give it the technical name; a Marijuana Growing Operation license. With this under your belt, you’re fully licensed to run a commercial business in the state of Michigan which cultivates and distributes marijuana to licensed processors or provisioning centers. You will have three different types of license; Class A, B, or C. Your class will depend on how many plants your business aims to grow, with Class A being up to 500 plants, B accommodating up to 1,000 and C 1,500.

There are numerous requirements for this license, and there are also some costs. Below, we’ve detailed the major expenses that you’ll have to deal with during the application phase:


License Costs

In total, there are three separate costs that you’ll have to pay; the application fee, an annual municipality fee, and a yearly state fee.


License Application Fee

No matter what Class license you wish to apply for, there is an upfront cost of $6,000 to submit your application. This fee is nonrefundable, and you must submit it before your application is processed.


State Annual Regulatory Assessment

You will be forced to pay an annual state fee that goes towards the yearly regulatory assessment. As of right now, there is no exact fee for the fiscal year of 2018, but you will find out about it soon. However, licenses have been capped at specific figures – which means you won’t be charged more than that amount per year.

Class A license holders are capped at a $10,000 state fee, while Classes B-C could expect anywhere between $10,000 and $57,000 as their annual charges.


Municipality Annual Fee

Depending on the municipality that your Michigan marijuana business operates from, you may be charged an additional fee every year. This is said to be up to $5,000, and it essentially helps the local government cover the additional admin costs that marijuana businesses generate.

These are all of the costs that you will face when applying for a commercial grow license for a Michigan marijuana business.

Lastly, it’s also important to point out that there are certain financial requirements you need to meet to qualify for this license. To get a Class A license, you need to show a total of $150,000 in assets ($37,500 being liquid assets), for Class B it’s $300,000 ($75,000 liquid) and Class C is $500,000 ($125,000 liquid). While these don’t represent any costs, it’s useful to know how much capital you need to raise if you want to apply for a license.