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HB 5442

Marihuana: licenses; new licenses for certain types of marihuana establishments; prohibit the cannabis regulatory agency from issuing. Amends secs. 7, 8, 9 & 9a of 2018 IL 1 (MCL 333.27957 et seq.) & adds sec. 9b. TIE BAR WITH: HB 5444'25, HB 5443'25, HB 5441'25

2025-2026 Regular Session Introduced by Joey Andrews

Beginning Jan 1, 2026, new marijuana retailer licenses can’t be issued if they exceed a 1:5,000 resident ratio, with several license type exemptions and transfers allowed.

bill electronically reproduced 12/23/2025
#marihuana:licenses
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Bill Summary · HB 5442

Summary of Michigan HB 5442 (2025-2026): Marihuana Establishment Licenses; New Licenses Prohibited

Note: This summary reflects the text and provisions as presented. It may reference related bills (tie-bar):

  • HB 5444, HB 5443, HB 5441 (as noted in the enacting section)

1) Main purpose and intent

  • To modify the Michigan Regulation and Taxation of Marihuana Act (the Marihuana Act) by:
    • Amending sections governing the Cannabis Regulatory Agency (CRA) and licensure processes.
    • Adding a new section (9b) that imposes licensing and supply controls beginning January 1, 2026.
    • Setting limits on when new licenses for certain marihuana establishment types may be issued and when applications may be approved, effectively slowing or constraining growth of licenses in specific categories.
  • The bill requires concurrence with several companion bills to take effect (enacting section 1).

2) Key provisions and changes

a) Cannabis Regulatory Agency (CRA) duties and authority (Sec. 7)

  • The CRA remains responsible for implementing the act, including:
    • Promulgating rules necessary to implement, administer, and enforce the act.
    • Processing license applications, determining eligibility, and conducting background checks for ownership interests.
    • Ensuring compliance via inspections, investigations, and disciplinary actions (fines, suspensions, revocations).
    • Holding at least four public meetings annually.
    • Collecting license fees and fines; directing fees to the Marihuana Regulation Fund (license fees) and the General Fund (fines).
    • Providing annual reports to the Governor on licenses, demographics, enforcement actions, and CRA revenues/expenses.
    • Employing necessary staff.
  • CRA may contract with advisers/consultants and may enter agreements with Indian tribes on regulatory issues.

b) Rules framework (Sec. 8)

  • CRA must promulgate rules covering:
    • Licensure processes, renewals, suspensions, and revocations.
    • License fees sized to cover implementation and enforcement costs (tied to license size/volume).
    • Qualifications for licensure (related to operation of marihuana establishments), with a specific carve-out: a prior marihuana offense does not automatically disqualify an applicant unless it involved distribution to a minor.
    • Standards for safe cultivation, processing, distribution, health standards, and pesticide prohibitions for marihuana products.
    • Testing, packaging, labeling standards (including THC limits for certain products, sampling requirements, labeling information about product contents).
    • Packaging and labeling warnings, including a prominent warning about risks to fetuses and development when used by pregnant or breastfeeding women.
    • Security requirements (lighting, alarms, transport, etc.), without prohibiting outdoor/greenhouse cultivation.
    • Record-keeping and transfer monitoring systems.
    • Operation of marihuana secure transporters and advertising/display restrictions.
    • A plan to promote participation from communities disproportionately impacted by past prohibitions.
    • Penalties for non-compliance.
    • Informational pamphlets for retailers/microbusinesses (customer pamphlet on safety and poison control).
    • Procedures for appointing operators of establishments (per section 9a).
    • A cap on total THC content for certain products.
    • Additional licensing types or classes for varied activities (as described below in subsection (2)).
  • Rules may also:
    • Create new license types (e.g., limited cultivation, processing, transportation, delivery, storage, sale).
    • Regulate industrial hemp.
    • Allow the CRA to exclude certain tetrahydrocannabinol (THC) forms from the definition of THC after findings on abuse potential, etc.
    • Prohibit impracticable rules or certain restrictions (e.g., limiting the number of licenses, or requiring excessive customer data).

c) License applications and issuance (Sec. 9)

  • Applications for state licenses are submitted to the CRA and must include:
    • A copy to the municipality where the establishment will be located.
    • Determination of eligibility and compliance with the act.
    • Issuance of a state license or a rejection notice within 90 days.
  • State license types explicitly listed (Sec. 9(2)(a)-(h)):
    • Marihuana retailer
    • Marihuana safety compliance facility
    • Marihuana secure transporter
    • Marihuana processor
    • Marihuana microbusiness
    • Class A grower (up to 100 plants)
    • Class B grower (up to 500 plants)
    • Class C grower (up to 2,000 plants)
  • Licensure eligibility conditions (Sec. 9(3)):
    • Applicants must be in compliance, have submitted a proper application, and paid fees.
    • Municipal compliance with local ordinances.
    • Land-use constraints (no residential-only zoning; no proximity restrictions within 1,000 feet of a K-12 school unless the municipality relaxes the distance, etc.).
    • Ownership restrictions to avoid concentration of ownership across license types; limits on combinations (e.g., not holding interests in conflicting license types simultaneously) with exceptions via future CRA rules.
  • If a municipality caps licenses, the CRA must use a competitive process to select applicants best suited to operate in compliance with the act (Sec. 9(4)).
  • License terms:
    • Generally 1-year licenses, unless a longer term is issued.
    • Renewal upon complete renewal application and renewal fee from licensees in good standing.
  • Application window and phased licensure (Sec. 9(6)):
    • CRA must begin accepting applications within 12 months after the act’s effective date.
    • For 24 months after opening applications, certain license types are limited to Michigan residents or to licensees holding certain existing medical marihuana licenses, with some categories unrestricted (e.g., safety compliance facilities).
    • After the initial 24-month window, CRA may accept applications from any applicant if there is a demonstrated need to minimize the illegal market, meet demand, or improve rural access.

d) Ownership and management oversight (Sec. 9a)

  • CRA may approve operation of a marihuana establishment by:
    • Court-appointed personal representatives, guardians, conservators, receivers, or trustees for license holders.
  • Requires notice to the appointing court if a sanctioned operator receives a violation notice within two days.

e) 2026 licensing cap and related prohibitions (Sec. 9b)

  • Beginning January 1, 2026, the CRA shall not issue a marihuana retailer license if granting it would create more than a 1:5,000 resident ratio of retailers to residents in the municipality.
  • Exceptions:
    • Renewals of existing retailer licenses.
    • Transfers of a retailer license.
  • Beginning January 1, 2026, the CRA shall not approve or issue new state licenses (with several listed exceptions):
    • Licenses for Class A growers, retailers, or microbusinesses.
    • Licenses described in Sec. 8(2)(a) (e.g., retailer safety compliance etc.)
    • License renewals.
    • License transfers.
    • Applications submitted before the act’s effective date for prequalification.
  • The subsection allows continued issuance in other defined contexts, maintaining flexibility for certain license types and transfers.

3) Who or what would be affected

  • Prospective and current marihuana business owners:
    • Retailers, safety compliance facilities, secure transporters, processors, microbusinesses, and three classes of cultivators (A, B, C).
    • Applicants must meet local zoning, school proximity, and ownership restrictions.
    • Residents-only eligibility rules for some categories during the initial application window (first 24 months after opening).
  • Municipalities:
    • The act requires municipalities to participate in licensing decisions, enforce local ordinances, and may be involved in competitive selection if license caps exist.
  • The CRA and state police:
    • CRA authority to regulate, license, inspect, and discipline licensees; state police assistance in background checks.
  • Communities disproportionately impacted by past cannabis enforcement:
    • The rules require development of outreach and inclusive participation plans to diversify license ownership and participation.

4) Procedural and timeline aspects

  • Effective date contingent on concurrent bills (enacting section 1): HB 5442 activates only if SB/HB counterpart bills (HB 5441, HB 5443, HB 5444) are enacted into law.
  • Application window:
    • CRA must begin accepting applications within 12 months of enactment.
    • Initial 24 months restrict certain license types to specific applicant groups (Michigan residents or existing medical licensees).
  • 2026 licensing cap:
    • A phased constraint on new retailer licenses and broader state licenses (with broad exceptions for transfers, renewals, and preexisting applications).

5) Potential impacts and considerations

  • Slower expansion of certain license types (especially retailers) due to the 2026 cap and population-based limits.
  • Increased importance of local zoning and school-distance considerations for new applications.
  • Emphasis on equity and community impact through licensing policies and a community participation plan.
  • Added complexity for applicants due to ownership-structure restrictions and potential future rule changes by the CRA.
  • Tax and funding effects:
    • License fees collected would fund the CRA, while fines go to the general fund, affecting agency resources and enforcement priorities.

If you’d like, I can provide a side-by-side comparison with current law and highlight the specific sections most likely to change operational practices for licensees.

Compiled from official sources — confirm details with the bill’s official record.

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