Answers
Answers to the questions that decide a cannabis or CRE deal
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What is this library?
C3 CRE publishes direct answers to the questions operators, investors and owners ask before a cannabis or commercial real estate decision. Each page leads with a 40-to-60-word answer, then the statute, the mechanics and the exceptions, with every figure sourced and dated.
14 questions
Michigan licensing & zoning
Opt-in/opt-out posture, buffer measurement, license types and CRA process — the regulatory questions that decide whether a parcel is a site.
How much does it cost to open a dispensary in Michigan?
Budget $250,000–$750,000 or more all-in for a Michigan dispensary: a $15,000 adult-use retailer license fee, $50,000–$300,000 for build-out depending on building condition and finish level, plus real estate acquisition or lease deposits, security systems, insurance, seed-to-sale software and roughly six months of working capital before revenue stabilizes.
UpdatedHow much is a cannabis license in Michigan?
Fees range from $1,000 to $24,000 depending on license type. A Class A grower is $1,200, a Class B grower $6,000, a Class C grower or processor $24,000, an adult-use retailer $15,000, a microbusiness $8,300, and a Class A microbusiness $18,600, per the CRA fee schedule.
UpdatedWhich Michigan cities allow marijuana dispensaries?
There is no single statewide list — adult-use retail is allowed by default everywhere a municipality has not opted out, while medical retail requires an affirmative opt-in ordinance. Detroit, Ann Arbor, Ypsilanti, Warren, Lansing, Grand Rapids and dozens of others have opted in; confirm the current ordinance before assuming any city qualifies.
UpdatedWhat is a green zone and how do I find one in Michigan?
A green zone is the informal term for the zoning district and overlay area where a municipality's cannabis ordinance actually permits an establishment once opt-in status, buffer distances and any density cap are satisfied. Find one by reading the local ordinance's permitted-district map, not by assuming any storefront address qualifies.
UpdatedWhat is the difference between opting in and opting out in Michigan?
Under medical law (MMFLA), a municipality must affirmatively opt in by ordinance before any medical facility can operate — silence means prohibition. Under adult-use law (MRTMA), establishments are permitted by default unless the municipality passes a prohibition ordinance and opts out — silence means permission, subject to zoning and the state buffer rule.
UpdatedHow far does a dispensary have to be from a school in Michigan?
Adult-use dispensaries must sit at least 1,000 feet from a pre-existing public or private school, unless the municipality adopts an ordinance reducing that distance — many do, down to as little as 500 feet. Medical facilities carry no state-level distance mandate; any separation requirement there comes entirely from local zoning.
UpdatedHow is the 1,000-foot school buffer measured in Michigan?
Property line to property line. The CRA measures from the establishment's parcel boundary to the school's parcel boundary, not from door to door or building to building. That parcel-line rule can disqualify a building whose entrance sits well outside 1,000 feet if the underlying lot lines run closer than the storefront suggests.
UpdatedWhat is the difference between a provisioning center and a retailer in Michigan?
A provisioning center is a medical dispensary licensed under MMFLA; a retailer is an adult-use dispensary licensed under MRTMA. Many storefronts hold both licenses and serve both customer types from one counter, but each license has its own application, fee and municipal opt-in requirement, and a building can be zoned for one without the other.
UpdatedWhat are Michigan's cannabis license types and plant limits?
Michigan issues eleven adult-use license types: Class A/B/C and Excess Growers (100 to 2,000+ plants), Processor, Retailer, Microbusiness, Class A Microbusiness, Secure Transporter, Safety Compliance Facility, and Designated Consumption Establishment. Fees range from $1,000 to $24,000, and each type carries a distinct real estate profile from small flex space to heavy-power industrial.
UpdatedCan I run a grow, processor and retailer in the same building in Michigan?
Yes. Under MRTMA, a municipality may not prohibit growers, processors and retailers from operating together in a single facility. That statutory protection is the basis for vertically-integrated single-building deals, and it materially changes which buildings are worth pursuing versus a strategy built around three separate leased locations.
UpdatedHow long does it take to get a cannabis license in Michigan?
Plan for four to nine months from a complete application to an active license, driven mostly by how quickly the municipality issues a Certificate of Occupancy and how fast the CRA's 14–21 day local-notification window and pre-licensure inspection can be scheduled — not by CRA processing speed alone.
UpdatedCan a Michigan cannabis license be transferred with the property?
A cannabis license itself is not real property and does not automatically convey with a deed, but the CRA does approve ownership transfers and change-of-location requests, which is why most cannabis real estate deals are structured as combined license-plus-property sales with the transfer approval sequenced ahead of or alongside closing.
UpdatedWhat is a Class A Microbusiness in Michigan?
A Class A Microbusiness is a Michigan license letting a single vertically-integrated building grow, process and retail cannabis under one roof, with a 300-plant limit and an $18,600 fee — double the plant limit and roughly double the fee of the standard $8,300 Microbusiness license's 150-plant limit.
UpdatedDo I need a certificate of occupancy before applying to the CRA?
Yes. The municipality must issue a Certificate of Occupancy before the CRA will conduct its pre-licensure inspection. The CRA also notifies the local government of a pending application and allows 14 to 21 days for the municipality to report noncompliance, so the municipal permitting sequence gates the state's final step.
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10 questions
Facilities & real estate
Power, HVAC, hazardous classification, build-out cost and deal structure for cannabis cultivation, processing and retail buildings.
How much power does a cannabis grow facility need?
Plan for 20–40+ watts per square foot of canopy for lighting alone — a 20,000 SF Class C indoor grow typically needs 800A to 1200A of three-phase service once HVAC and dehumidification are added. Lighting technology and canopy density drive the range. Build a bottom-up load schedule from nameplate ratings; never size off a listing sheet.
UpdatedWhat ceiling height do I need for an indoor cannabis grow?
Plan on 14–18 feet of clear height minimum for single-tier canopy once ducting, dehumidifiers, lighting and canopy depth are stacked, and 24 feet or more if the design uses multi-tier or vertical racking. Clear height under the lowest obstruction — not eave height on a listing sheet — is the number that matters.
UpdatedWhat is C1D1 and do I need it for extraction?
C1D1 (Class I, Division 1) is a hazardous-location electrical classification required where flammable solvent vapors are present continuously during normal operation, such as open-loop hydrocarbon extraction. It requires classification-rated ventilation, gas detection and an emergency power-off system, and is a code condition, not a room label — retrofitting it into an unsuited building is expensive.
UpdatedWhat should I look for in a cannabis warehouse?
Verify electrical service and utility upgrade capacity, clear height and roof loading against the mechanical design, water and drainage infrastructure, hazardous classification feasibility if extraction is planned, and zoning: permitted versus conditional use, buffer measurement method, and remaining license capacity in that district before treating any warehouse as a viable site.
UpdatedHow much does a dispensary build-out cost?
A retail-ready shell with adequate electrical and restrooms typically builds out for $50,000–$150,000. A full renovation of a non-retail building — adding security vestibules, a vault, camera systems and code-compliant restrooms — commonly runs $200,000–$400,000 or more, depending on the municipality's specific security and signage ordinance requirements.
UpdatedShould I buy or lease my cannabis property?
Buy if the license and the real estate are meant to move together long-term and capital is available; lease if capital is scarcer, the license transfer market is uncertain, or the operator wants exit flexibility. Leasing also depends on finding a landlord willing to accept a cannabis tenant, which remains a limited pool.
UpdatedWhat is a cannabis sale-leaseback and why do operators do them?
A sale-leaseback lets a cannabis operator sell owned real estate to an investor and immediately lease it back, converting illiquid equity into cash for expansion, debt paydown or working capital while keeping full operational control of the building as a long-term tenant rather than an owner.
UpdatedWhy do cannabis properties trade at higher cap rates?
Cannabis properties price at wider cap rates than comparable conventional buildings because the buyer pool is smaller, conventional bank financing is largely unavailable, and the asset's value is partly contingent on a license that can be revoked, non-renewed or non-transferable, all of which investors price as additional risk premium.
UpdatedWill a bank finance a cannabis property?
Rarely, and only through a small number of state-chartered or cannabis-specific lenders. Because marijuana remains federally Schedule I, most FDIC-insured banks avoid lending against cannabis-licensed real estate entirely, leaving private cannabis lenders, seller financing and equity partners to fill the gap that conventional commercial mortgages would otherwise cover.
UpdatedWhat happens to a cannabis property if the tenant loses its license?
The lease typically becomes unenforceable at the licensed use, rent usually stops, and the landlord must either find a new licensed tenant, convert the building to conventional industrial or retail use, or pursue the defaulting tenant's assets — often through receivership, as with TerrAscend Corp.'s May 2026 Michigan receivership across 20 dispensaries.
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8 questions
Market & distress
Pricing, saturation, taxation and receivership — what the CRA and Treasury data say about where the Michigan market stands now.
Is the Michigan cannabis market oversaturated?
By the license count, yes in aggregate: active licenses fell to 2,171 at year-end 2025, a net decline of 85 and the first annual drop since 2019, while average adult-use flower price sits at $58.18/oz as of June 2026. Consolidation, not expansion, is now driving Michigan cannabis real estate transaction volume.
UpdatedWhat is the average price of cannabis in Michigan right now?
$58.18 per ounce for average adult-use flower, as reported by the Michigan CRA as of June 2026. That figure is down sharply from triple-digit per-ounce pricing three years earlier, reflecting sustained oversupply relative to demand as license counts grew faster than retail sales through most of that period.
UpdatedHow does Michigan's 24% wholesale tax affect operators?
The 24% wholesale tax, effective 1 January 2026, stacks on top of the existing 10% adult-use excise tax and 6% sales tax, compressing margins for growers and processors and projecting roughly $420.7 million annually for roads and infrastructure. It faces an active legal challenge from the Michigan Cannabis Industry Association.
UpdatedHow many dispensaries are there in Michigan?
838 active adult-use retailers statewide, per the Michigan CRA as of 31 July 2026, down from 848 in 2024. The same snapshot counts 935 active growers and 270 active processors, and total active licenses across all types stood at 2,171 at year-end 2025 — a net decline of 85 from the prior year.
UpdatedWhy are Michigan cannabis businesses closing?
Compressed retail and wholesale pricing — average flower at $58.18/oz, down from triple-digit prices — combined with the new 24% wholesale tax effective January 2026 have squeezed margins hard enough that active licenses fell by a net 85 in 2025, the first annual decline since 2019, concentrated among thinly capitalized operators.
UpdatedHow do I buy a distressed dispensary in Michigan?
Source through receivership proceedings, broker networks tracking defaults, and direct outreach to operators showing distress signals — then verify license status with the CRA before committing capital, since a distressed property's value depends entirely on whether its license survives receivership or transfer, unlike a conventional distressed asset.
UpdatedHow much marijuana tax revenue does my city get?
In FY2025, Michigan Treasury distributed $54,017.10 per adult-use retailer/microbusiness license — $93,773,685.60 total across 868 licenses in 238 municipalities. A city's total equals that per-license figure multiplied by its license count: Detroit received $3,295,043.10 across 61 licenses; smaller municipalities with a handful of licenses receive proportionally less.
UpdatedDoes Schedule III rescheduling change cannabis real estate?
Partially. In April 2026 the Acting Attorney General issued a final order moving FDA-approved marijuana products and state-licensed medical marijuana to Schedule III, easing Section 280E's tax burden for medical operators and improving after-tax margins. Adult-use remains Schedule I, banking access is unchanged, and municipal zoning authority is entirely unaffected.
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Definitions
Every term used here is defined
Lease structures, investment metrics, entitlement mechanics and Michigan cannabis licence classes — about forty terms, cross-linked from every answer and guide on the site.
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