In Michigan, a city, township, or village opts out of cannabis businesses by passing a local ordinance that prohibits or limits marijuana establishments within its borders. Without such an ordinance, the community is open by default: the Michigan Regulation and Taxation of Marihuana Act, approved by voters in 2018, presumes every municipality allows licensed adult-use cannabis operations unless local officials formally say otherwise.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act A council that never takes up the question has effectively voted yes by silence.
This flips the medical marijuana framework. Under the Medical Marihuana Facilities Licensing Act, a municipality must adopt an ordinance affirmatively authorizing medical facilities before any license issues there.2Michigan Cannabis Regulatory Agency. Municipal Guide Adult-use flipped the presumption. The burden now falls on communities that want to keep commercial cannabis out.
Passing the Opt-Out Ordinance
The mechanics are ordinary. A governing body adopts the ordinance through its standard legislative process, which requires a majority vote of the elected members, plus whatever public notice and hearing requirements apply to any local ordinance. Once the ordinance takes effect, the Cannabis Regulatory Agency will not issue licenses in that community.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act
The choice does not have to be all or nothing. The MRTMA lets local governments limit the number of establishments or permit only certain business types while excluding others.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act A township might allow retailers but ban large grow operations, or cap total retail licenses at two or three. That selective approach lets a community capture some tax revenue and local fees while keeping the industry’s footprint small.
Communities that do allow businesses can charge an annual local fee of up to $5,000 per establishment to cover application processing, administration, and enforcement.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act That cap is set by state law and cannot be exceeded regardless of what the community actually spends.
Which License Types a Municipality Can Restrict
The opt-out authority covers every category of marijuana establishment defined under the MRTMA. A local ordinance can prohibit or limit any of the following:
- Retailers, meaning stores that sell cannabis products directly to consumers
- Processors that manufacture edibles, concentrates, and other finished products
- Growers at every tier, from Class A (up to 100 plants) through Class C (up to 2,000 plants) and excess grower licenses
- Secure transporters, which are licensed carriers that move cannabis between facilities
- Safety compliance facilities, meaning testing labs that analyze products for potency and contaminants
- Microbusinesses, which cultivate, process, and sell under a single license
- Any other license type created by the Cannabis Regulatory Agency, including designated consumption establishments and event organizers
A community concerned about street-level retail might ban dispensaries but allow a testing lab or a transporter to operate quietly in an industrial park. The statute does not force one answer for the whole industry.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act
Zoning Instead of a Ban
Some municipalities neither ban outright nor welcome business freely. They use zoning to control where cannabis operations can locate. State rules require a minimum buffer of 1,000 feet from schools, and local governments can layer additional setbacks from churches, parks, daycare centers, and residential areas.
This tool has a limit. If the buffer distances are drawn so aggressively that no parcel in the municipality can lawfully host a cannabis business, the zoning regime functions as a de facto prohibition. Zoning is supposed to regulate placement, not serve as a backdoor ban that avoids the accountability of a formal opt-out vote. A municipality relying on zoning should confirm that at least some commercially zoned parcels survive the buffer overlay.
Zoning also gives communities lasting control after licensing. A local government can confine cannabis operations to specific commercial or industrial districts, set parking and security-lighting requirements, and limit operating hours. These tools work independently of the opt-out choice and can shape the local footprint even where the industry is broadly welcome.
What Residents Can Still Do in an Opted-Out Community
An opt-out ordinance stops commercial licensing. It does not touch what adults do in their own homes. Residents 21 and older can possess up to 2.5 ounces of cannabis, and they can store additional amounts at home as long as the excess is kept in a locked container.3Michigan Legislature. Michigan Compiled Laws – Section 333.27954 Local ordinances cannot override these personal rights.
Transportation is likewise protected. A municipality cannot block cannabis from moving through its borders or prevent deliveries from licensed retailers in neighboring communities.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act A resident in a dry town can order from a dispensary one county over, and the delivery driver has every right to complete the trip. Local authority reaches the physical presence of businesses, not the movement of legal products or the choices residents make behind their own front door.
Personal use has its own boundaries. Public consumption is not protected, and property owners, including landlords, can prohibit smoking on their premises. A lease can ban smoking cannabis, but it cannot prohibit a tenant from possessing it or consuming it another way, such as through edibles.3Michigan Legislature. Michigan Compiled Laws – Section 333.27954 On-site consumption at a designated consumption establishment requires an affirmative local decision to allow that license type.
The Revenue a Municipality Gives Up
Opting out has a price tag that local officials sometimes underestimate. Michigan distributes adult-use cannabis tax revenue to the municipalities and counties where licensed retailers and microbusinesses operate. For fiscal year 2025, each eligible municipality received $54,017.10 per licensed retail store or microbusiness within its borders.4Michigan Department of Licensing and Regulatory Affairs. Press Release: Nearly $94 Million in Adult-Use Marijuana Payments for Fiscal Year 2025 A community that could have hosted five retail locations left roughly $270,000 on the table in a single year.
The full distribution:
- 15% to municipalities where licensed retailers or microbusinesses are located
- 15% to counties where those businesses are located
- 35% to the School Aid Fund for K-12 education
- 35% to the Michigan Transportation Fund for roads and bridges
School and road funding flows regardless of local choices, but the municipal and county shares go only to jurisdictions that actually host licensed businesses.4Michigan Department of Licensing and Regulatory Affairs. Press Release: Nearly $94 Million in Adult-Use Marijuana Payments for Fiscal Year 2025 Starting in 2026, Michigan transitioned from the original 10% retail excise tax to a 24% wholesale tax on adult-use cannabis.5Michigan Department of Treasury. Wholesale Marijuana Tax How the restructuring will affect per-store distributions in future years is not yet settled. The core point is unchanged: opting out means opting out of the money.
On top of tax revenue, municipalities that allow businesses collect the annual local fee of up to $5,000 per establishment.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act For smaller communities with modest commercial activity, those fees plus tax payments can add up to a noticeable share of the local budget.
Reversing an Opt-Out by Petition
A governing body can repeal its own opt-out ordinance through the same legislative process it used to adopt it. When a council will not act, the MRTMA gives residents a direct route to the ballot.
Voters can circulate a petition to either allow or prohibit cannabis establishments, regardless of what the local government has decided. The petition needs signatures from at least 5% of the votes cast for governor in that municipality at the last gubernatorial election.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act In a community where 5,000 people voted for governor, that means 250 valid signatures.
Once the local clerk verifies the signatures, the proposal goes on the ballot at the next regular election. The petition is subject to Michigan’s election law, including filing deadlines that give clerks time for administrative processing.1Michigan Legislature. Michigan Regulation and Taxation of Marihuana Act A majority vote changes the ordinance to match. The mechanism works both directions: residents of an opted-out town can vote to open it, and residents of an open town can vote to close it.