Cannabis Legalization and Regulation in Michigan
Michigan legalized adult-use cannabis in November 2018 through Proposal 1, with retail sales beginning in December 2019. Adults 21 and older may legally possess up to 2.5 ounces of cannabis flower in public (up to 15 grams may be concentrates) and up to 10 ounces at home. Adults may also cultivate up to 12 plants per household for personal use, provided they are kept out of public view. Public consumption is prohibited except in licensed consumption establishments, and impaired driving remains illegal.
The Cannabis Regulatory Agency (CRA), under the Michigan Department of Licensing and Regulatory Affairs (LARA), oversees adult-use and medical cannabis programs. Licenses are issued for cultivators, processors, retailers, microbusinesses, testing labs, transporters, and consumption establishments. Municipalities retain the authority to allow or ban cannabis businesses, creating varied local market conditions across the state.
Michigan’s medical cannabis program, established in 2008, continues to operate alongside adult-use. Registered patients and caregivers may purchase larger amounts than recreational users and benefit from tax exemptions. Medical patients may also cultivate cannabis at home, with allowances similar to adult-use but with additional protections.
Hemp and hemp-derived CBD products are legal in Michigan if they contain no more than 0.3% THC. Intoxicating hemp-derived cannabinoids such as delta-8 THC are regulated as cannabis products under Michigan law, requiring licensed production and sales through the regulated system. All cannabis and hemp products must comply with testing, labeling, and packaging requirements set by the CRA.
For cannabis operators, Michigan is one of the country’s most competitive cannabis markets, with both large-scale multi-state operators and small independent businesses. Banks and financial service providers require complete compliance documentation, including license verification, tax IDs, ownership records, operating agreements, and financial statements. Given the high volume of transactions, operators must implement secure cash management practices—armored transport, reconciled deposits, AML/BSA monitoring, and audit-ready accounting. Cannabis excise tax (10% on adult-use sales) and state sales tax compliance are critical to maintaining stable banking relationships.
The Michigan Cannabis Regulatory Agency oversees both adult-use and medical cannabis. For official licensing resources, compliance requirements, and program updates, visit: https://www.michigan.gov/cra/cannabis
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