Michigan is emerging as a national hub for drone technology and Advanced Air Mobility (AAM). Varnum’s mobility team helps clients navigate complex, legal, regulatory, and operational challenges in this fast-growing industry.
The Michigan Advanced Air Mobility Initiative
The AAM Activation Fund, a collaborative effort between the Michigan Department of Transportation (MDOT), the Michigan Aeronautics Commission (MAC), the Office of Future Mobility and Electrification (OFME), and the Michigan Economic Development Corporation (MEDC), launched in July 2024 with over $6 million in funding. A second round of funding followed in July 2025, in conjunction with Executive Directive 2025-4, which formally established the Michigan Advanced Air Mobility Initiative.
Funding from this round has supported projects by CVS Health, Traverse City Connect, Jack Demmer Automotive Group, and the University of Michigan. These projects focus on:
- Integrating drones into health and automotive operations
- Developing a Detroit-Ann Arbor mobility corridor for innovation, testing, and deployment
MDOT is also collaborating with the Federal Aviation Administration (FAA) and the Canada-U.S. Transportation Border Working Group to establish an international corridor connecting ports of entry between Michigan and Canada.
Why Companies Are Choosing Michigan for Drone Innovation
Recently, Birdstop, a drone manufacturing company, relocated from California to Detroit. The company cited Michigan’s legislative and regulatory environment, combined with its auto manufacturing heritage, as a key factor. Birdstop plans to leverage Michigan’s existing supply chain and talent pool to increase the share of drones manufactured in the U.S.
Michigan offers:
- Extensive manufacturing capacity
- The eighth-largest skilled trades workforce in the U.S.
- Expertise in motors, batteries, carbon fiber, and sensors
- A rich history of mobility and automotive leadership
The University of Michigan’s M-air initiative is advancing drone research through a Beyond Visual Line of Sight unmanned aircraft systems (UAS) corridor linking the university to the Advanced Aerial Innovation Region at Michigan Central. Features include:
- Open-source digital twin, live air traffic integration
- Data engines for monitoring and executing multiple UAS and urban air mobility use cases
- Public-private collaboration through Mcity, the University of Michigan’s autonomous and connected vehicle test facility, expanded to aerial mobility
Through programs such as the Perot Jain Tech Lab Air & Space initiative, M-air has already supported 25 students working with six startup companies, developing the next generation of AAM talent.
Michigan as a Defense Drone Hub
The National All-Domain Warfighting Center (NADWC) was recently designated a National Range for Deep Uncrewed Aerial Systems Training by the U.S. Department of Defense. This positions Michigan as a national leader in advanced UAS and counter-UAS innovation. Annual exercises like Northern Strike already test counter-drone systems, creating opportunities for early-stage companies to scale with defense contracts.
Current Drone Legislation in Michigan
In December 2025, the Michigan House of Representatives introduced multiple drone-related bills, now referred to the Committee on Transportation and Infrastructure. Key proposals include:
- HB 5327 – Amends the Unmanned Aircraft Systems Act of 2016 to include a “nuisance” provision with a high standard of “knowingly and intentionally,” likely limiting practical impact.
- Five other associated bills in the House of Representatives (HB 5328, HB 5329, HB 5330, HB 5331, and HB 5332) focus on drone use by public entities, including state agencies, municipalities, universities, and commissions. Key concerns addressed:
- Data Privacy
- Cybersecurity Vulnerabilities
- National Security
- Accountability and Transparency
How Varnum Supports Michigan Drone Projects
Varnum’s Mobility Practice Team assists drone companies and investors across the entire project lifecycle: from concept and testing to development and ongoing compliance. Services include:
- Navigating FAA regulations and emerging aviation laws
- Establishing data privacy and cybersecurity frameworks
- Risk mitigation and liability structuring
- Guidance on corporate transactions, mergers, and joint ventures
- Practical advice for both established companies and startups
Michigan’s drone market is expanding rapidly. Companies with strategic legal guidance are better positioned to manage regulatory risk and grow efficiently. Contact Varnum’s Mobility Practice Team for guidance on drone projects in Michigan.
