Michigan Cannabis Accounting Services
At CJBS, we are Cannabis CPAs Who Care.
CJBS intricately understands the tax and accounting challenges of state-legal medical and adult-use cannabis businesses–and we are here to serve as your partner in navigating those challenges. The cannabis industry is unique, as is your business. That’s why the CJBS Cannabis Team is focused on tailoring solutions to meet your company’s needs.
Whether you operate as a new or established cannabis cultivator, processor, and/or retail dispensary, our experts are here to help you grow and scale your business in today’s ever-competitive environment.
Cannabis in Michigan
Michigan was the first state in the Midwest to legalize both medical and adult-use cannabis in 2018. Michigan also allows for home growing of cannabis (up to 12 plants).
In 2022 alone, Michigan generated $2.3B in cannabis sales, and is now the nation’s second largest cannabis market.
Cannabis Taxes in Michigan
- Cannabis in Michigan is subject to state sales tax. The state of Michigan once allowed for caregivers to grow cannabis, who sold directly to medical patients; however, this program was phased out in 2020. Currently, licensing is unlimited in Michigan; however, due to current supply and demand, a cultivation (grower) licensing moratorium is being weighed.
- Consumers who purchase adult-use cannabis from Michigan retailers and microbusinesses must pay a 10% excise tax, in addition to the state’s standard 6% sales tax, as the exemption for food or food ingredients or for drugs legally dispensed by prescription does not apply.
- Medical cannabis users in Michigan are required to pay a 6% sales tax on every purchase, as cannabis and cannabis-derived products for medical patients are not eligible for the exemptions for drugs for human use legally dispensed pursuant to a prescription or for food or food ingredients. However, patients do not have to pay an excise tax on medical cannabis.
Seeking For Financial Solutions? We Can Help.
If you’re thinking, “Cannabis taxes get complicated and add up quickly,” you’re not alone. That’s where we come in.
The CJBS team has deep experience in medical and adult-use cannabis tax laws and accounting in the Detroit, Lansing, Southwest Michigan area and throughout the rest of the state. Working hand-in-hand with our cannabis clients, we provide a full suite of services—including compliance expertise, tax-saving solutions, and business strategies—to help you plan for long-term success.
Cannabis in Michigan FAQs
When do I need to hire a cannabis accountant in Michigan?
In the cannabis industry, it is always better to be proactive, rather than reactive. To help prevent your business from costly fees or even greater penalties, you should hire an accountant as soon as you submit your application for licensure.
Are there any financial requirements in the adult-use Michigan license application?
- In Michigan, growers of cannabis are subject to a $3,000 application fee, as well as tiered licensing fees. ($4,000 for Grower Class A; $8,000 for Grower Class B; and $12,000 for Grower Class C).
- Processors are subject to a $3,000 application fee and a $24,000 licensing fee.
- Dispensaries are subject to a $3,000 application fee, and a $15,000 licensing fee.
- Secure transporters are subject to a $3,000 application fee, and a $15,000 licensing fee.
- Secure compliance facilities are subject to a $3,000 licensing fee, and a $15,000 licensing fee.
- Visit the Cannabis Regulatory Agency website to view other business application and licensing fees.
What types of tax deductions can cannabis businesses take?
Cannabis businesses are very limited on the types of deductions they can take beyond cost of goods sold (COGS) because of IRS Tax Code Section 280E. In some instances, businesses will be able to take additional deductions, such as the research and development (R&D) tax credit, for example. Nuances like these illustrate why it is important to work with an accountant that is up to date on cannabis tax laws.
Our Core Values Guide Everything We Do
Our three core values — Trust, Collaboration, and Creativity — guide everything we do at CJBS, from our innovative client work to our interactions with each other. Our team has diverse personal backgrounds and specialties, but we share a common culture rooted in these values.
Trust
Trust is essential to all our work, but the stakes can be especially high for cannabis businesses, which face a higher risk of bankruptcy and IRS audits.
Collaboration
Close collaboration with our clients, matched with consistent and proactive communication, ensures that we’re always providing you with the insights, tools, and tactics for your cannabis tax and accounting needs.
Creativity
Creativity allows us to solve our cannabis clients’ unique challenges, such as having few traditional banking options and no bankruptcy protection.
Integrity
Our firm is guided by our employees’ integrity. In a burgeoning industry like cannabis, it is more important than ever to hold ourselves to high ethical standards, and follow through on what we say we’re going to do.
Transparency
We operate with transparency by communicating to our cannabis clients with unwavering candor, honesty, and respect.
Your Cannabis Accounting Expert
Matt Bergman, CPA and CJBS senior partner, has been with the firm since 1997 and has specialized in cannabis accounting and tax services since 2015, when an existing client won a license under the Illinois medical cannabis pilot program. Matt worked hand in hand with them to help grow and scale their business, safely and efficiently. That business grew rapidly and was soon acquired by one of the country’s largest MSOs (multistate operators), and they remain a CJBS client to this day. Matt works with clients from small startups to the country’s biggest MSOs. After growing up in Deerfield, IL and Boston, MA, Matt lives in Wilmette, IL with his wife, two children, and three dogs.
Ryan Guedel, CPA and CJBS partner, has been with the firm for 10+ years, and currently works with clients in cannabis, real estate, manufacturing, construction, and distribution. Ryan coordinates due diligence engagements, carries out audits and reviews, and works on business development and taxation for the firm. A devoted professional, Ryan gives his all with each and every client interaction. His personal motto is “hard work and more hard work.” Ryan currently resides in Wheeling, Ill., with his wife Julie, son Cole Jameson, and rescue dog Pinky. He likes the area for its proximity to the CJBS offices. His hobbies include cheering on the NY Yankees, mixed martial arts, and motorsports.
News & Updates
Stay current on the latest Cannabis industry developments and find out what it means for you and your business.
