10 Things You Need To Know Before Opening A Marihuana Provisioning Center

You may be thinking about starting a marihuana provisioning center in Michigan. Now, after the passage of the Medical Marihuana Facilities Licensing Act or the MMFLA (M.C.L. 333.27401 et seq.) that is possible, but only if you obtain municipal approval and a State issued operations license. "Provisioning Center" is the legally permissible term under Michigan's Bureau of Licensing and Regulatory Affairs, Bureau of Medical Marihuana Regulation, for what was formerly referred to colloquially as a "dispensary." The present policies no longer permit such businesses to be referred to legally as "dispensaries" and the State requires that they be referred to as marihuana provisioning centers. A provisioning center is basically a company where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) can come to acquire medical marihuana for medical usage. While a provisioning center can be a lucrative venture, there are a couple of things you to know before you move forward.

Can You Transport Marijuana In A Personal Car?

Presently, under Michigan law, the general rule is that possession and transport of marihuana in a vehicle is forbidden by law, and subjects you to criminal charges. Only registered qualifying patients and registered caregivers under the MMMA may transport marihuana in a motor vehicle. Even then, they must do so in strict compliance with the MMMA. Marijuana may only carried in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or persons in the passenger compartment. You may also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for as much as five patients (and themselves as well if the caregiver is also a qualifying patient) or as much as 12 plants per patient (again, including plants for the caregiver, if they are also a qualifying patient). Under the MMFLA, nevertheless, provisioning centers that are licensed by the State and their local municipality, must only accept marihuana into their center that is brought by a MMFLA State Licensed Secured Transporter, or, if they have a grow or processing center co-located (attached to or on the same property) and transportation of the marihuana will not take place on a public road, it can be moved as stated by LARA, BMMR under the Administrative guidelines.

Just How Much Cannabis Can You Supply?

A licensed provisioning center under the MMFLA may not offer more than 2.5 ounces of marihuana each day to a registered qualifying patient. A provisioning center that is licensed may likewise sell to a registered primary caregiver, but not more than 2.5 ounces per qualifying patient attached to the caregiver's license. If you are licensed by the State to run a provisioning center, you will have to utilize a point of sale system that has software that is complaint with the Statewide Monitoring Database, which utilizes a software program called METRC. The State permits making use of twenty-four (24) software programs that are METRC compliant. Every consumer who enters a provisioning center, you will have to utilize a point of sale system that has software that is compliant. Every consumer who enters a provisioning center must have their card run through the Statewide Monitoring Database to guarantee that they have not already been provided their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center should likewise update the qualifying patient's profile on the Statewide Monitoring Database after sale, so that the Database will show how much medical marihuana was acquired by the patient at your provisioning center.

What License Do You Need?

You need a full license supplied by the state to operate as a Michigan provisioning center. If you are growing marijuana, you will likewise need to make certain that you get a Michigan commercial grow license application. You may wish to talk to an MMFLA legal representative, such as Fowler & Williams, PLC, about this to ensure that you are fully licensed, or you will be shut down. Most importantly, DO NOT start operating your provisioning center without a State license being issued to you under the MMFLA. While the process of getting a license is complicated and needs a significant quantity of time and money, the profitability of these provisioning centers far outweighs the expense of obtaining one. If you can get approved for a license and get through the application process to get a provisioning center license, you must do so before you start running.

Can You Get More Than One License?

Yes, you can apply and qualify for more than one license. This is useful for any business or individual who wants to establish a provisioning center and a grow or processor at the exact same time. According to the law, there is absolutely nothing stopping you from doing this. Further, you can acquire several provisioning center licenses so that you can run numerous provisioning centers in different cities. The licenses do not connect to the individual or the business that is applying, permitting you to use it anywhere you want. Rather, the licenses attach to the property you list on your application for the business. Therefore, if you want to open numerous provisioning centers, you will have to submit numerous State applications. If you want to obtain various types of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one facility, but you must submit different applications for each license type, and must meet the minimum financial and background requirements separately for each license type.

How Much Will A License Cost?

The cost for the license application to the State is $6,000.00 per application, regardless of license type applied for, including for a provisioning center. There are also municipal application costs, which can be up to $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can vary the costs depending on which type of license you apply for. Generally, nevertheless, they charge the maximum enabled, which is $5,000.00 per license application. Even more, after you receive a State license, there are regulatory assessments that have to be paid annually, both after issuance and each year after when the license is renewed.

In 2018, the assessments vary.

Secured Transporters and Safety Compliance Facilities (testing labs) have no assessment ($ 0.00).

Class A Growers have a $10,000.00 regulatory assessment.

Class B and Class C Growers, Provisioning Centers and Processors have a $48,000.00 regulatory assessment.

The State has said that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, no matter the kind of license issued. For now, nevertheless, the assessments will remain as noted above. You will likewise discover that there are other professional fees that you will have to pay in order to ensure that your application is complete, and that your business plan, with all of its needed parts, is up to par with the State's application requests. Those costs can differ drastically, and are tough to anticipate.

Needless to say, the application and licensing procedure is an expensive undertaking, but in a market that is slated to do about $891,000,000.00 in annual sales this year, up from about $741,000,000.00 in 2017, the return on investment could be substantial.

Should You Have A Lawyer?

While not required, you should certainly make sure that you are getting guidance from an MMFLA lawyer before you consider opening a Michigan provisioning center. It  is very important that you get the best possible legal recommendations and that you are following all the regulations and requirements. Only an lawyer experienced in dealing with cases under the MMMA and licensing work under the MMFLA, like Fowler & Williams, PLC, can make sure that you have all the tools and guidance that you need to give your application the best possibility at success. Failure to make sure that your application is complete, and that it supplies support for your ability to presently comply and make sure future compliance with the Administrative rules, your application is a lot more likely to be rejected or denied, and your dream of opening a provisioning center brought to an unceremonious ending.

How Much Will This Business Cost?

You can anticipate the total start-up costs for this type of organisation to be anywhere in between 400 and 500K, at a minimum. While the State requires a minimum capitalization requirement of $300,000.00 (one quarter of which must be liquid funds), that will not be sufficient, realistically, to start business. You will need to potentially buy land or property in an opted-in municipality. (Here is an up to date list of Michigan Municipalities currently opted-in to MMFLA) There will be obligatory fees, costs, and expert services that you need to acquire to make sure that your application is accurate and total, and to make sure that you are currently in compliance with all laws and regulations, along with ensuring future compliance. This consists of everything from licensing to a full group of workers and much more. It's definitely not inexpensive, and you need to be prepared for a heavy investment. Nevertheless, as noted above, the market is big, and continuing to grow.

Can You Go Mobile?

No, you can not run a mobile provisioning center as it is presently prohibited to run one in the state of Michigan. Nevertheless, this could change, and that's why it  is necessary to speak with a medical marihuana lawyer regularly, so that you are keeping up to date with changes to the law. Cannabis law is an evolving and altering field, and as a outcome, there might come a time where the MMFLA or the MMMA is amended to allow for a mobile provisioning center.

What Are You Legally Able To Do?

As a provisioning center, your sole function is to offer safe medical marihuana to registered qualifying patients. You might only sell marihuana or marihuana infused items that were grown by a MMFLA licensed grower or processed by a MMFLA licensed processor and the items have actually been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not sell these products prior to your acquiring a license, unless you were running with city approval prior to February 15, 2018 and you have actually already submitted an application to the State seeking a license.

Soon a change in law will likely permit recreational cannabis sales. If the ballot initiative passes, for the first 2 years after the State passes recreational marijuana facility regulations and starts accepting licensing applications, only facilities licensed by the MMFLA to offer, grow, process, transport or test medical marihuana will be lawfully allowed to look for recreational marihuana licenses for the same activity. Therefore, getting a provisioning center license under the MMFLA, provides you the opportunity to get in the recreational market, where others will not.

What Are The Requirements?

In order to obtain a provisioning center license, you need to make sure that you do not have a disqualifying criminal conviction, and that you satisfy the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will also have to acquire an appropriately zoned structure in a city or township that has "opted-in" to the MMFLA to permit such facilities to operate within their boundaries. Whether your own it or rent it does not matter, however you must have the structure. After that, you will have to produce a business plan which contains all of the required aspects from the state, including a security plan, facility plan, marketing plan, staffing plan, technology plan, recordkeeping plan, waste disposal plan, and more, showing that you will comply with the State's policies now and in the future.

Conclusion

We hope this supplies you with some of the info you need before opening a Michigan provisioning center. Needless to say, the process is costly, complicated and time consuming, however the benefit and ROI can be significant. In reality, obtaining a skilled MMFLA and MMMA attorney, like Fowler & Williams, PLC, can help streamline and simplify the application process, and take the majority of the work off your plate.

If you want details, or wish to come in and speak about making an application for a provisioning center license, we would like to have you come in for a consultation.

October 31, 2018 Deadline for Caregivers and The Changing Marihuana Dynamic in Michigan

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never show up in any type of discussion. However, in consulting with our marijuana clients, a lot of them are inquiring about the stability of the Caregiver model, specifically as it was promoted years. What many in the sector have actually described as the "Caregiver Model" is going the way of the Do-Do bird on October 31, 2018. Halloween this year will be the extinction event for the caregiver model as many have actually recognized it for years here in Michigan. While Caregivers will continue to be able to grow and market to their registered patients, and for themselves, if they are additionally registered qualifying patients, the "gray market" where they were marketing their excess, and making a fairly good profit, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver can grow up to seventy-two (72) marihuana plants, if they had five registered qualifying patients (the most you were permitted) and they were a registered patient too. In some cases, multiple caregivers would collect at one place and grow their plants with each other, separated by paint lines on the floor, or in more sophisticated situations, with each having a protected locked area within the larger confined, locked facility. Many Caregivers can create much more functional marihuana than their patients can make use of. Those caregivers would certainly after that market their overages to dispensaries, many of which were operating with municipal approval throughout the State. This "grey" industry caused substantial earnings for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were going to be eliminated by 2021. Lots of Caregivers and market experts felt that indicated the "Caregiver Model" could continue to produce those very same profits for an additional 2 or two and a half years. The State, nevertheless, had other plans.

The State's Response

The State of Michigan, however, had other plans for the upstart cannabis industry. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing technique to licensing applications where any of the applicants were Caregivers. Many of those applications have actually been denied over the past several months due to the fact that the Board has located that there were failures to reveal by many of these caregivers concerning just how much cash they made, how they made it, and for failing to declare that income on a State or Federal Tax Return. Nevertheless, in a September 2018 posting, LARA and the BMMR published that all facilities that are running with municipal approval, but which have not received a State License, have to stop purchasing unlabeled and unauthorized medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any marihuana purchased after the October 31, 2018 date by those facilities need to be correctly classified and coded as required by the policies, and must come from an appropriately State Licensed grower or processor. The caregivers may still grow, but they will have no methods through which to market their product lawfully to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some may argue that there are still licensed or unlicensed centers that are mosting likely to proceed buying from caregivers, in spite of the State mandate. To make sure, there may be some that take that risk.

Nonetheless, the State has demonstrated a dedication to enforcement and inspection. If the State were to determine that an applicant or a licensed center was still taking caretaker overages and offering them, the State would likely do something about it. If an applicant were to be caught taking part in this model, they would likely be denied asap by the Board. If a licensed facility were to be caught breaking this mandate, the State would likely move on with sanctions against that center's license, consisting of a suspension or cancellation of the license. Provided just how much those licenses are worth, and the expense of getting any one of the permitted facility licensing types, many owners will be really reluctant to take chances with the possible loss of their license, or expertise that their license will not be restored.

If you are a caregiver and do not know what to do come October 31, 2018, are a person thinking of getting a MMFLA license, or are a candidate who requires representation or has questions regarding how these modifications will certainly impact you, give us a call. We have the experience and expertise in the marijuana and marihuana law areas to assist address your inquiries and provide you the advice you require.

Am I Ready To Apply for a Medical Marihuana Facilities Grow License?

Thinking of starting a Medical Marihuana Grow to make sure that you can offer marijuana to the medical marihuana market? Are you a Medical Marihuana Act licensed caregiver that wants to take your product commercial on a larger range? Thanks to the Medical Marihuana Facilities Licensing Act, currently you can do so legally, as long as you can successfully obtain a license from the State to do so. This can be a wonderful opportunity with several brand-new owners seeing significant levels of profit as well as success in the market. However, if you make this choice, you do need to ensure that you obtain a Michigan commercial grow license. Failing to do so will certainly cause your venture being, most likely, illegal and bring about court activity that will certainly paralyze your company before it starts.

Sadly, the Michigan commercial grow license application is a long, complicated and expensive process. Ask a medical marijuana lawyer, and also they will certainly tell you that you need to see to it that you are prepared. Let's look at the actions you will certainly have to take, the team you need to build as well as the position that you might find yourself in.

Who Can Apply?

The initial question to ask yourself is whether or not you are eligible to apply for a Medical Marihuana Facilities license. The bright side is that any person, an individual or a full company can apply for a license. Applications started in 2017, and there is currently no due date to finish the needed forms. Certainly, there are specific individuals, that, due to the fact that they can not fulfill the minimum monetary demands, or due to the fact that they have a disqualifying criminal conviction in their history, are averted from applying. Nevertheless, thinking you don't have a disqualifying criminal conviction, and you, or your group of financiers, fulfill the minimum financial needs, there are 2 major steps to the MMFLA licensing application process. The initial step will be completed whether you have a final location for your structure or not. However, if you have already picked a location before submitting your State application, something that we highly advise, you can finish both steps at the very same time.

Pre-Qualification

Pre-qualification is the initial step, and it begins with an extensive background check. There are 2 sections-- 401 and also 404 of the Medical Marihuana Facilities Licensing Act (M.C.L. 333.27401 et seq.) to refer to when determining who you need to legally disclose as well as whether they have a relevant business interest in your operation. This includes people such as the spouse of the individual as well as all corporate officers. This is among the reasons it is worth speaking with an MMMA attorney as it can be rather challenging to get all the information correct. The State will wish to do a deep dive into the backgrounds of not only all of the "interested parties," or members/owners of your marijuana business, but the State will also consider the backgrounds of every one of those person's spouses as well. Should anyone have a disqualifying criminal conviction in their past, or otherwise be of "good moral character," the State can deny the whole application. To put it simply, if there is one bad apple in the bunch, the State throws away the entire application. Consequently, it is essential to find out about the backgrounds of the persons you have in your investment group, before applying for your Medical Marihuana Facilities License. There are a great deal of things that a knowledgeable lawyer can do to help you prepare for your application, and also to ensure that any type of prospective problems with your application are recognized, disclosed or gotten ready for before the application is submitted. Nonetheless, this isn't the only reason why a lawyer will commonly be an essential and required hire.

Think about The Cost

Before your information can be examined by an analyst from the Bureau of Licensing and Regulatory Affairs (LARA), Bureau of Medical Marihuana Regulation (BMMR), you need to pay a $6000 fee for your application. BMMR will certainly reject to progress with your application until this has been paid completely. As well as being pricey, this fee is non-refundable so you want to make certain that there are no issues with your application that might bring about it being rejected. An MMFLA attorney can guarantee that this holds true as well as help you navigate any type of challenging concerns. Additionally, before you can obtain State authorization for operation, you will also have to get a municipal or city approval. Each city or township will certainly likewise need you to finish an application and also you will have to pay an application fee there too. The application expense can vary depending on what the city wishes to charge, however, they can not charge more than $5,000.00. A lot of cities as well as townships are charging the maximum amount. In total, the application fees alone are most likely to be in excess of $10,000.00. That does not consist of the costs of ancillary services, such as accounting professionals, engineers, marketers and also various other solutions needed for your application to be complete.

As soon as you have collected and also paid the application fees, all applicants and also supplemental applicants will certainly have their finger prints taken. You may assume that if you already have actually had your fingerprints taken by local law enforcement this step can be missed. Nonetheless, BMMR will certainly decline finger prints unless they are asked for and collected by them with the licensing procedure. You will have to go to an approved place where your finger prints can be collected electronically and sent for review by the State.

Facility License

This is the second step and bear in mind, if you have already picked a location to grow marijuana, you can complete this step with the first. You need to be prepared to meet all the MMFLA rules. During this step, you will certainly need to have a business plan. Nonetheless, that plan must include particular things. You must have all of the parts called for by the State: facility plan, security plan, marketing plan, staffing plan, technology plan, waste disposal plan (if applicable), as well as a record keeping plan. There are specific minimum requirements set forth in the Administrative Rules that regulate MMFLA facilities, with which you must show your business is in compliance.

Your facility needs to be located in a city or township that permits MMFLA companies to run. The MMFLA has strict policies for people as well as companies preparing to grow in a municipality. If you intend to grow in a community, it should have an ordinance that authorizes marihuana facility operations. Colloquially, the municipality should have "opted-in" to the Medical Marihuana Facilities Licensing Act (list of Michigan municipalities who have actually opted in to MMFLA), as well as it should have passed a regulatory ordinance that sets for the policies and standards for those facilities to run within the city or township. The full standards can be found in 205, yet if you do have any type of questions you need to contact your municipal authority. Or, alternatively, get your attorney to do this for you. As the application proceeds, BMMR will get in touch with applicants, providing information on any various other demands, including a pre-licensure inspection of your location or facility.

Approved

Finally, you might gain approval for your license. After you are informed of this, you will need to pay for a regulatory assessment. Currently, the regulatory assessments for 2018 are as follows:

Safety Compliance Facility and Secured Transporters-- $0.00.

Class A Grow License-- $10,000.

Class B Grow License-- $48,000.00.

Class C Grow License-- $48,000.00.

Processor and Provisioning Center-- $48,000.00.

Likely, the State will establish an across the board equivalent regulatory assessment for all licenses in 2019. Regulatory assessments are subject to change yearly, so it is impossible to predict exactly what it will be. Nonetheless, beginning in 2019, regardless of which license you get, anticipate the assessment to be imposed and also for that assessment to be substantial.

Final thought.

We hope this helps you determine whether you are ready to apply for a Michigan commercial grow license. Keep in mind, with a legal representative by your side, this process can be far easier, as well as you will certainly gain professional recommendations on exactly how to proceed correctly to make certain that your application is accepted. Even after you obtain approval, legal guidance is suggested to assure you stay on top of changes to the law and also regulations, and so that you can remain in compliance as well as keep your company open.

Here at Fowler & Williams, PLC, we specialize in assisting customers get MMFLA licenses and ensuring continuing compliance.

Should you decide to retain counsel to assist you on your licensing journey, give us a call.