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

You might be considering 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 allowable 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 existing regulations no longer allow such companies to be referred to legally as "dispensaries" and the State requires that they be referred to as marihuana provisioning centers. A provisioning center is generally a business 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 use. While a provisioning center can be a rewarding venture, there are a couple of things you to know before you move forward.

Can You Transport Marijuana In A Private Vehicle?

Presently, under Michigan law, the general guideline is that possession and transport of marihuana in a automobile is restricted by law, and subjects you to criminal charges. Only registered qualifying patients and registered caregivers under the MMMA may transport marihuana in a automobile. Even then, they have to do so in strict compliance with the MMMA. Cannabis may only carried in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or individuals in the passenger compartment. You might also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can transport usable marihuana for as much as 5 patients (and themselves also 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, however, provisioning centers that are licensed by the State and their local municipality, must only accept marihuana into their facility 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 occur on a public road, it can be moved as set forth by LARA, BMMR under the Administrative rules.

How Much Cannabis Can You Provide?

A licensed provisioning center under the MMFLA may not offer more than 2.5 ounces of marihuana per day to a registered qualifying patient. A provisioning center that is licensed may also sell to a registered primary caregiver, however 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 use 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 allows using twenty-four (24) software programs that are METRC compliant. Every customer who goes into a provisioning center, you will have to utilize a point of sale system that has software that is compliant. Every consumer who sets foot in a provisioning center has to have their card run through the Statewide Monitoring Database to ensure that they have not already been supplied their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center needs to 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 bought by the patient at your provisioning center.

What License Do You Need?

You need a full license given by the state to run as a Michigan provisioning center. If you are growing marijuana, you will also require to make sure that you obtain a Michigan commercial grow license application. You may want to speak with an MMFLA attorney, such as Fowler & Williams, PLC, about this to ensure that you are fully licensed, or you will be closed down. Most importantly, DO NOT begin running your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is complicated and requires a significant amount of time and money, the success of these provisioning centers far outweighs the cost of acquiring one. If you can qualify for a license and make it through the application procedure to obtain a provisioning center license, you should do so before you start operating.

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 very same time. According to the law, there is absolutely nothing stopping you from doing this. Even more, you can acquire several provisioning center licenses so that you can operate numerous provisioning centers in various cities. The licenses do not connect to the individual or the business that is using, allowing you to use it anywhere you desire. Rather, the licenses attach to the property you list on your application for the business. Therefore, if you want to open several provisioning centers, you will have to send multiple State applications. If you prefer to acquire different kinds of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one center, but you must submit separate applications for each license type, and should meet the minimum monetary and background requirements independently for each license type.

Just 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 charges, which can be as much as $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can differ the costs depending upon which type of license you apply for. Generally, nevertheless, they charge the maximum allowed, which is $5,000.00 per license application. Further, after you receive a State license, there are regulatory assessments that must 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 actually stated that starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, regardless of the type of license issued. For now, however, the assessments will stay as noted above. You will also find that there are other professional charges that you will need to pay in order to ensure that your application is complete, and that your business plan, with all of its essential parts, is up to par with the State's application requests. Those expenses can differ drastically, and are hard to anticipate.

Needless to say, the application and licensing process is an costly endeavor, 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 roi could be significant.

Should You Have A Lawyer?

While not required, you should certainly make sure that you are getting suggestions from an MMFLA attorney before you think about opening a Michigan provisioning center. It  is necessary that you get the very best possible legal suggestions and that you are following all the regulations and requirements. Only an attorney experienced in dealing with cases under the MMMA and licensing work under the MMFLA, like Fowler & Williams, PLC, can guarantee 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 provides support for your capability to presently comply and guarantee future compliance with the Administrative rules, your application is a lot more likely to be rejected or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

Just How Much Will This Business Cost?

You can anticipate the overall start-up expenses for this kind of service to be anywhere between 400 and 500K, at a minimum. While the State needs a minimum capitalization requirement of $300,000.00 (one quarter of which must be liquid funds), that will not suffice, realistically, to start business. You will need to potentially acquire 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 complete, and to guarantee that you are currently in compliance with all laws and policies, along with making sure future compliance. This consists of everything from licensing to a full team of employees and much more. It's certainly not inexpensive, and you need to be prepared for a heavy investment. However, as noted above, the marketplace 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. However, this could change, which's why it  is very important to speak to a medical marihuana lawyer regularly, so that you are keeping up to date with modifications to the law. Cannabis law is an evolving and changing field, and as a result, there may come a time where the MMFLA or the MMMA is amended to permit a mobile provisioning center.

What Are You Legally Able To Do?

As a provisioning center, your sole purpose 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 been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not offer these items prior to your obtaining 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 looking for a license.

Soon a change in law will likely enable recreational cannabis sales. If the ballot initiative passes, for the first two years after the State passes recreational cannabis facility regulations and starts accepting licensing applications, only facilities licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be lawfully allowed to request recreational marihuana licenses for the same activity. Thus, obtaining a provisioning center license under the MMFLA, offers you the opportunity to go into the recreational market, where others will not.

What Are The Requirements?

In order to obtain a provisioning center license, you need to ensure 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 likewise have to acquire an properly zoned building in a city or municipality that has "opted-in" to the MMFLA to allow such centers to run within their limits. Whether your own it or lease it does not matter, however you need to have the structure. After that, you will have to produce a business plan that contains all of the necessary components 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 adhere to the State's guidelines now and in the future.

Conclusion

We hope this offers you with some of the details you need before opening a Michigan provisioning center. Needless to say, the process is pricey, complex and time consuming, however the benefit and ROI can be considerable. In reality, acquiring 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 want to come in and speak about getting a provisioning center license, we would love 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

Cannabis and extinct birds would seemingly never turn up in any discussion. Nonetheless, in talking to our cannabis clients, many of them are asking about the feasibility of the Caregiver model, especially as it was promoted many years. What many in the market 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 lots of have actually known it for several years here in Michigan. While Caregivers will certainly continue to have the ability to grow and offer to their registered patients, and for themselves, if they are likewise registered qualifying patients, the "gray market" where they were offering their overages, and making a fairly good profit, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver could grow up to seventy-two (72) marihuana plants, if they had 5 registered qualifying patients (the most you were enabled) and they were a registered patient too. In some cases, several caregivers would gather at one place and grow their plants with each other, separated by paint lines on the floor, or in more advanced circumstances, with each having a protected locked space within the bigger confined, locked facility. Several Caregivers can produce far more useful marihuana than their patients can utilize. Those caregivers would certainly then sell their overages to dispensaries, many of which were operating with municipal approval across the State. This "grey" market resulted in significant revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were going to be eliminated by 2021. Numerous Caregivers and market insiders really felt that suggested the "Caregiver Model" might remain to generate those exact same profits for another 2 or two and a half years. The State, nonetheless, had other plans.

The State's Response

The State of Michigan, nevertheless, had other plans for the upstart marijuana market. First, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing strategy to licensing applications where any of the candidates were Caregivers. A number of those applications have actually been rejected over the past several months due to the fact that the Board has discovered that there were failures to disclose by many of these caregivers pertaining to just how much cash they made, how they made it, and for failure to declare that revenue on a State or Federal Tax Return. Nevertheless, in a September 2018 publishing, LARA and the BMMR posted that all facilities that are operating with municipal approval, but which have actually not gotten 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 type of marihuana purchased after the October 31, 2018 date by those centers must be correctly labeled and coded as required by the policies, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, but they will certainly have no methods through which to sell their product lawfully to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some might suggest that there are still licensed or unlicensed facilities that are mosting likely to continue purchasing from caregivers, in spite of the State mandate. To make sure, there may be some that take that risk.

Nonetheless, the State has actually demonstrated a dedication to enforcement and examination. If the State were to establish that a candidate or a licensed center was still taking caretaker excess and offering them, the State would likely take action. If an applicant were to be caught engaging in this model, they would likely be refuted 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 facility's license, including a suspension or abrogation of the license. Provided how much those licenses are worth, and the price of acquiring any one of the permitted center licensing types, many owners will certainly be extremely resistant to take chances with the possible loss of their license, or expertise that their license will certainly not be renewed.

If you are a caregiver and do not understand what to do come October 31, 2018, are an individual considering applying for a mmfla license, or are a candidate who requires representation or has questions regarding how these adjustments will certainly affect you, give us a call. We have the experience and expertise in the cannabis and marihuana law areas to aid answer your concerns and give you the assistance you require.