August 26, 2019

Michigan Marijuana Regulatory Agency Releases Bulletin Outlining Tiered Structure Based on Market Share

Many types of licensed medical cannabis businesses in Michigan could see their “regulatory assessment fee” – essentially an annual license fee – reduced in the coming fiscal year. A bulletin distributed by the state Marijuana Regulatory Agency (MRA) announced that officials have set new regulatory assessment fees for Fiscal Year 2020. In Michigan, fiscal years run from October 1 through September 30 of the following year; FY 2020 therefore begins on October 1, 2019.

According to the bulletin, regulatory assessment fees will now be tiered, with smaller businesses paying less. Previously, for the current FY, regulatory assessment fees were largely uniform, with nearly all business types compelled to pay $66,000 in order to activate their state licenses. The only exceptions were Class A Growers, the smallest cultivation license type, which saw regulatory assessment fees of $10,000 for the current FY. Additionally, “safety compliance facilities,” or testing labs, did not have such fees levied on them.

For the upcoming fiscal year, the regulatory assessment fees (or lack thereof) of newly licensed Class A Growers and safety compliance facilities will remain unchanged. All other new licenses will see lower regulatory assessment fees, ranging from $30,000 to $56,000.

Additionally, the bulletin states, “A tiered structure has been created within each license type to further balance the costs between licensees based upon market share.” In the case of license renewals, “Each renewal license will pay the new regulatory assessment listed below based upon their market share during the previous fiscal year.” For growers, market share will be determined based on gross weight transferred, with businesses slotted into three tiers. Fees for “bottom tier” businesses are lower than those for “top tier” ones. The bulletin does not specify the bounds of the tiers for various license types.

Overall, most businesses will see lower regulatory assessment fees in the upcoming FY. The only exceptions are Class C Growers (the largest grower license type) and processors that are renewing their licenses and are in the top tier based on their market share. Both types of licensees will see regulatory assessment fees of $67,000 for FY 2020, an increase of $1,000 compared to the current FY’s fees.