Buying or selling a cannabis business in Michigan

Legal status and regulator

Michigan allows medical and adult-use marijuana. The Cannabis Regulatory Agency (CRA), inside the Department of Licensing and Regulatory Affairs, licenses both programmes. Adult-use is now almost the whole market: in August 2026 adult-use sales were $258.8 million against about $296,000 for medical facilities.

Licence types and counts

The state does not cap any licence type. On 31 August 2026 the CRA reported 2,155 active adult-use licences:

Licence	Active, 31 Aug 2026
Retailer	845
Class C grower	803
Processor	268
Class B grower	69
Excess grower	61
Secure transporter	22
Safety compliance facility (lab)	19
Class A grower	10
Microbusiness and Class A microbusiness	16
Designated consumption establishment	6

The total is shrinking. Michigan ended 2025 with 2,171 active licences, 85 fewer than a year earlier, the first year-over-year fall since adult-use sales began. For how this shapes pricing, see limited-license vs open-market states.

How does a sale work in Michigan?

A Michigan licence is a revocable privilege and not a property right, and the CRA states that a licence is non-transferable from one entity to another. There are two lawful routes, both run through the agency’s amendment process:

1. Equity purchase. The buyer acquires the membership interests or shares of the licensed entity and files an ownership change amendment. The licence stays where it is; the owners change.
2. Asset purchase. The buyer’s own entity purchases the business assets and files an asset purchase amendment so it can operate the location. The CRA sets out how to document this on its purchase agreement page.

In both cases the incoming owners must hold CRA prequalification, which is the background and financial review of each applicant. Sign first, file, and close on approval. The mechanics of that gap are covered in regulatory-approval contingencies and the choice of route in asset sale vs membership-interest sale. When inventory must move to a new licence, the CRA authorises a Metrc re-licensure after the new licence is active. Michigan’s track-and-trace system is Metrc.

Residency, ownership limits, and social equity

Michigan has no per-owner cap on the number of licences, which is why single operators hold dozens of stores. Practitioner sources report no residency requirement for adult-use owners. The state’s social equity programme works through fee reductions, not a separate licence class, so there is no state-level equity transfer lock of the kind found in New York or Illinois. Local equity rules are another matter: see Detroit.

Local control decides scarcity

Under MCL 333.27956 a municipality may prohibit adult-use establishments, limit their number, require a municipal licence, and charge an annual fee of up to $5,000. Municipalities cannot levy their own cannabis excise tax. They share state revenue instead: for fiscal year 2025, 313 local governments and tribes received $54,017.10 for each licensed retailer and microbusiness within their borders.

The practical result is that the municipal permit, not the state licence, carries the scarcity value. Whether that permit can pass to a buyer, and on what terms, is set by local ordinance. City detail: Detroit, Ann Arbor, and Grand Rapids. The general diligence list is on local control and municipal approvals.

Taxes and 280E

Since 1 January 2026 adult-use marijuana carries a 24% wholesale excise on top of the 10% retail excise and 6% sales tax. The wholesale tax falls on the grower or processor making the first sale. On income tax, Treasury’s Revenue Administrative Bulletin 2020-17 describes a state deduction for adult-use licensees of expenses that federal 280E disallows; see state 280E decoupling. Federal 280E still applies to adult-use income.

Market conditions in 2026

Michigan is the clearest oversupply case in the country. Adult-use sales were about $3.18 billion in 2025, down about 3% from $3.28 billion in 2024, measured as the change in the CRA’s cumulative sales-to-date figures in its December reports, even though retailers sold about 260,000 more pounds. Average adult-use flower was $60.33 an ounce in August 2026, against a 2020 annual average of about $419. January 2026, the first month of the wholesale tax, produced the lowest monthly sales in three years. Cumulative sales since launch passed $17 billion in August 2026.

What this means for sellers

Price expectations from 2021 do not apply. A buyer will pay for demonstrated store-level cash flow, a protected municipal permit, a favourable lease or owned building, and clean Metrc and tax records. Growers should present cost per pound and post-tax results for 2026. Owners under pressure should read selling in an oversupplied market before choosing between a sale and a wind-down, because Michigan courts regularly appoint receivers and a receiver’s buyer still needs CRA approval.

What this means for buyers

You can apply for a state licence yourself, so never pay for the state licence alone. Pay for a location you could not otherwise get and for earnings you can verify against Metrc. Confirm in writing how the municipality treats a change of owner, check wholesale tax filings since January 2026, and expect distressed inventory of grows and processors at asset value.

Is a broker licence needed in Michigan?

Michigan’s real estate broker definition in MCL 339.2501 includes negotiating the sale of a business, business opportunity, or goodwill for a fee. Trade sources report the point has been contested, so confirm the current position; see business broker licensing by state. This page is general education, not legal or tax advice. To talk through a Michigan sale or acquisition, book a confidential intro call.