How to Get Started in Michigan's Budding Business
Attorneys share their advice for breaking into the state’s growing cannabis industryBy Taylor Kuether | Last updated on May 19, 2022
Now that Michigan is the first Midwestern state to pass recreational marijuana legislation, it’s quickly become a hub for cannabis-related business ventures.
If you’re thinking of getting into greenery yourself, Michigan attorneys have some advice. For starters: Be flexible, as cannabis laws are continuously evolving.
“Two years in the cannabis industry is like 10 years anywhere else because things change so much,” says Barton Morris, principal attorney and founder of the Cannabis Legal Group in Royal Oak.
“It’s necessary to [seek an attorney] that can understand those changes and really even forecast them with an understanding of other things that are going on in more mature markets,” Morris says. And not just any attorney.
“[This industry] requires lawyers that have some understanding and background in practicing transactional litigation with respect to real estate issues, land use issues, municipal issues. Then you have to tie that in with the federal illegality of cannabis, the medical marijuana laws that we have, and all of these different, really rapidly evolving set of laws,” Morris says. “You apply that to traditional business services and then you have this niche cannabis law practice.”
Don’t think you have to go it alone. Benjamin Sobczak, an attorney specializing in commercial litigation and cannabis law at Dickinson Wright in Troy, notes that the market is currently condensing at a rapid pace—meaning buddying-up could be the right move for those with expertise in some areas but not others.
“Right now, there are a lot of people buying, selling or trading assets,” he says. “If you think about this like a board game, people threw all the pieces on the table and everyone grabbed for them. Now people are realizing what they have and what they still need, and are looking for others who can help them meet those needs and develop a more well-rounded brand or company.”
Assets, licenses, locations, names—all of it is on the table to buy, sell, combine, or gather, continues Sobczak. Specifically in Michigan, smaller marijuana businesses and startups are starting to be purchased by bigger business owners and groups.
In such a unique landscape, agility is paramount for cannabis entrepreneurs. “You’re building a business from scratch,” he says. “All of it is subject to and influenced by this ever-shifting landscape of regulations, not to mention it’s still federally illegal.”
Patience is proving to be a virtue. “Everything is going to take longer than you think it should; everything is going to cost more than you think it might; everything is way more complicated than you anticipated it being,” says Sobczak.
Just how much does it cost for entrepreneurs to break into the cannabis business? It differs from one sector of the industry to the next, Morris says. Delivery, for example, requires a smaller amount of capital to get started, whereas the cost of launching a grower facility is enormous—think millions of dollars just for equipment. Anticipate spending several hundred thousand dollars all the way up to several million, says Morris.
He also implores those interested in this growing field to stay sharp. “Pay utmost attention to regulatory compliance,” he says. “Very few industries are regulated as stringently. Those that don’t take it seriously will find themselves removed from the industry.”
Finally, know that you’re not too late. Morris notes that Michigan hasn’t even begun licensing for recreational marijuana businesses—it only just began licensing for the medical marijuana program.
“Out of the 1,700 municipalities that we have, probably only 100 or so have actually opted in to allow [medical marijuana] facilities within their cities,” he says. “All of the 10 largest cities in the state of Michigan have opted in, but there are 1,600 more that are still contemplating it.
“The biggest question I get is ‘Is it too late to get into the market?’” Morris says. “And the answer is absolutely not; we are just beginning.”
For more information on this area of law, see our overview of cannabis law or reach out to a law firm with experience in the marijuana industry.
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