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

You might be thinking about opening 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, however 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 previously referred to colloquially as a “dispensary.” The current regulations no longer allow 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 generally a company where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) may come to purchase medical marihuana for medical use. While a provisioning center can be a rewarding endeavor, there are a couple of things you to understand before you move forward.

Can You Transport Marijuana In A Private Vehicle?

Presently, under Michigan law, the basic guideline is that possession and transport of marihuana in a vehicle is prohibited by law, and subjects you to criminal penalties. 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. 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 individuals in the passenger compartment. You may likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers may transport usable marihuana for up to five patients (and themselves too if the caregiver is also a qualifying patient) or up to 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 facility that is brought by a MMFLA State Licensed Secured Transporter, or, if they have a grow or processing center co-located ( connected to or on the same property) and transportation of the marihuana will not happen on a public street, it can be moved as stated by LARA, BMMR under the Administrative guidelines.

How Much Marijuana Can You Offer?

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 also 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 uses a software program called METRC. The State permits using twenty-four (24) software programs that are METRC compliant. Every customer who goes into a provisioning center, you will need to use a point of sale system that has software that is compliant. Every consumer who goes into a provisioning center must have their card run through the Statewide Monitoring Database to make sure that they have not already been provided their maximum daily quantity of 2.5 ounces from another licensed provisioning center. A provisioning center needs to also 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 run as a Michigan provisioning center. If you are growing cannabis, you will likewise require to make certain that you obtain a Michigan commercial grow license application. You might wish to speak to an MMFLA lawyer, such as Fowler & Williams, PLC, about this to make sure that you are fully licensed, or you will be shut down. Most importantly, DO NOT begin operating your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is complicated and needs a considerable quantity of time and money, the profitability of these provisioning centers far surpasses the expense of obtaining one. If you can qualify for a license and make it through the application process to get a provisioning center license, you must do so before you begin operating.

Can You Get More Than One License?

Yes, you can apply and get approved for more than one license. This is useful for any business or person who wishes to set up a provisioning center and a grow or processor at the same time. According to the law, there is absolutely nothing stopping you from doing this. Even more, you can acquire numerous provisioning center licenses so that you can operate several provisioning centers in different cities. The licenses do not attach to the person or the business that is applying, allowing you to utilize it anywhere you desire. Rather, the licenses attach to the property you provide on your application for the business. Therefore, if you wish to open numerous provisioning centers, you will have to submit numerous State applications. If you desire 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, however you must submit different applications for each license type, and must satisfy the minimum monetary and background requirements individually 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 fees, which can be approximately $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can differ the fees depending on which type of license you apply for. Normally, however, they charge the maximum enabled, which is $5,000.00 per license application. Even more, after you get a State license, there are regulatory assessments that will need to be paid every year, both after issuance and each year after when the license is renewed.

In 2018, the assessments differ.

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 said that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the type of license provided. In the meantime, however, the assessments will remain as noted above. You will likewise find that there are other professional fees that you will need to pay in order to make sure 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 expenses can vary considerably, and are hard to predict.

Needless to say, the application and licensing process is an pricey undertaking, however 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 Legal representative?

While not required, you should definitely make certain that you are obtaining recommendations from an MMFLA legal representative before you think about opening a Michigan provisioning center. It  is essential 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 guarantee that you have all the tools and guidance that you need to give your application the best chance at success. Failure to make sure that your application is complete, and that it offers support for your capability to presently comply and ensure future compliance with the Administrative rules, your application is far more likely to be turned down or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

Just How Much Will This Business Cost?

You can expect the total start-up fees for this kind of organisation to be anywhere 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 the 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 mandatory fees, costs, and professional services that you need to obtain to make sure that your application is accurate and total, and to guarantee that you are presently in compliance with all laws and guidelines, as well as ensuring future compliance. This includes everything from licensing to a full group of staff members and much more. It’s definitely not inexpensive, and you need to be prepared for a heavy financial investment. Nevertheless, as noted above, the market is large, and continuing to grow.

Can You Go Mobile?

No, you can not run a mobile provisioning center as it is presently unlawful to run one in the state of Michigan. Nevertheless, this could change, and that’s why it  is necessary to speak to a medical marihuana attorney regularly, so that you are keeping up to date with modifications to the law. Marijuana law is an evolving and changing 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 Lawfully Able To Do?

As a provisioning center, your sole purpose is to provide safe medical marihuana to registered qualifying patients. You may 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 appropriate labeling and tracking. You may not offer these items prior to your acquiring a license, unless you were operating with city approval prior to February 15, 2018 and you have already sent an application to the State looking for a license.

Soon a change in law will likely allow for recreational marijuana sales. If the ballot initiative passes, for the first 2 years after the State passes recreational cannabis facility guidelines and begins accepting licensing applications, only centers licensed by the MMFLA to offer, grow, process, transport or test medical marihuana will be legally permitted to apply for recreational marihuana licenses for the same activity. Thus, obtaining a provisioning center license under the MMFLA, offers you the chance to get in the recreational market, where others will not.

What Are The Requirements?

In order to get a provisioning center license, you need to ensure that you do not have a disqualifying criminal conviction, and that you fulfill the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will likewise need to get an appropriately zoned building in a city or town that has “opted-in” to the MMFLA to permit such facilities to run within their boundaries. Whether your own it or rent it does not matter, however you need to have the structure. After that, you will have to produce a business plan which 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 abide by the State’s policies now and in the future.

Conclusion

We hope this supplies you with some of the information you need prior to opening a Michigan provisioning center. Needless to say, the procedure is pricey, intricate and time consuming, however the benefit and ROI can be considerable. In reality, acquiring a skilled MMFLA and MMMA lawyer, 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 info, or want to come in and discuss applying for a provisioning center license, we would love to have you come in for a consultation.

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