Michigan increases marijuana license fees amid rising operational costs and declining medical sales

The Appropriations Subcommittee on LARA and Insurance and Financial Services convened on April 17, 2025, to discuss critical issues surrounding marijuana licensing and regulation in Michigan. The meeting focused on the current state of marijuana businesses, license fees, and the financial implications of these regulations.

The session began with a discussion on the rising number of break-ins at marijuana businesses, highlighting a national trend exacerbated by the lack of adequate banking options due to the federal illegality of marijuana. As more licenses are issued, complaints regarding security and financial access are expected to increase.

The committee reviewed the current license fees for both adult use and medical marijuana businesses. It was noted that while Michigan's fees are higher than those for other industries, they remain competitive compared to other states. For instance, Georgia charges $40,000 for grower and retailer licenses, while California's micro business license can reach $300,000. In contrast, Michigan has reduced its fees over the years, with medical license fees dropping from $66,000 to current rates, and adult use fees decreasing from $40,000 to $24,000.

The discussion also addressed the unique challenges faced by the medical marijuana sector, particularly the funding of various programs through medical license fees. The committee emphasized the need to adjust these fees annually to cover rising administrative costs, including those related to the Michigan Commission on Law Enforcement Standards. This year marked the first increase in fees after several years of stability, driven by a decrease in fund balance and rising operational costs.

The committee highlighted the significant decline in medical marijuana sales, which now account for less than 1% of total marijuana sales in Michigan. This decline has prompted policy changes, particularly regarding the grower class C licenses, which allow larger operators to grow under medical licenses at lower costs. The committee aimed to distribute the fee increases primarily to larger operators while minimizing the impact on smaller businesses struggling in the current market.

In conclusion, the meeting underscored the ongoing adjustments in Michigan's marijuana regulatory framework, reflecting both the challenges and opportunities within the industry. The committee plans to continue monitoring these developments and their implications for businesses and consumers alike.