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

You might be thinking of 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, however only if you obtain municipal approval and a State issued operations license. "Provisioning Center" is the legally acceptable 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 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 business where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) may come to buy medical marihuana for medical usage. While a provisioning center can be a successful endeavor, there are a couple of things you to understand before you move forward.

Can You Transport Marijuana In A Personal Car?

Currently, under Michigan law, the basic rule is that possession and transport of marihuana in a vehicle is restricted by law, and subjects you to criminal penalties. Only registered qualifying patients and registered caregivers under the MMMA can 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 guest compartment. You may also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for up to 5 patients (and themselves also 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, 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 ( connected to or on the same property) and transport of the marihuana will not happen on a public street, it can be moved as stated by LARA, BMMR under the Administrative rules.

Just How Much Marijuana Can You Supply?

A licensed provisioning center under the MMFLA may not sell 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 operate 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 uses a software program called METRC. The State allows using twenty-four (24) software programs that are METRC compliant. Every consumer who goes into a provisioning center, you will have to utilize a point of sale system that has software that is compliant. Every client who enters a provisioning center must 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 purchased 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 need to make certain that you apply for a Michigan commercial grow license application. You might wish to speak 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 begin running your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is intricate and requires a significant amount of time and money, the success of these provisioning centers far surpasses the expense of getting one. If you can qualify for a license and get through the application procedure to obtain a provisioning center license, you need to do so before you begin 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 same time. According to the law, there is absolutely nothing stopping you from doing this. Even more, you can get multiple provisioning center licenses so that you can operate several provisioning centers in different cities. The licenses do not connect to the individual or the business that is using, enabling you to utilize it anywhere you want. Rather, the licenses connect to the property you provide on your application for the business. Therefore, if you want to open multiple provisioning centers, you will have to send numerous State applications. If you prefer to acquire different 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 should meet the minimum financial 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 fees, which can be up to $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can vary the costs depending upon which type of license you apply for. Usually, nevertheless, they charge the maximum allowed, which is $5,000.00 per license application. Further, after you get 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 stated that starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the type of license issued. In the meantime, nevertheless, the assessments will remain as noted above. You will also find that there are other professional costs that you will need to pay in order to guarantee 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 predict.

Needless to say, the application and licensing process is an expensive 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 might be significant.

Should You Have A Lawyer?

While not mandatory, you should certainly make certain that you are acquiring advice from an MMFLA legal representative before you think about opening a Michigan provisioning center. It  is very important that you get the 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 very best possibility at success. Failure to make sure that your application is complete, and that it provides support for your capability to currently comply and guarantee future compliance with the Administrative rules, your application is far more likely to be declined 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 expenses for this kind of business 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 be sufficient, realistically, to begin 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, expenses, and expert services that you need to acquire to make sure that your application is precise and total, and to guarantee that you are currently in compliance with all laws and regulations, as well as making sure future compliance. This includes everything from licensing to a complete team of employees and much more. It's certainly not cheap, and you need to be prepared for a heavy financial 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 unlawful to run one in the state of Michigan. Nevertheless, this might change, which's why it's important to speak with a medical marihuana attorney frequently, so that you are keeping up to date with changes 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 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 offer 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 sell these items prior to your obtaining a license, unless you were operating with city approval prior to February 15, 2018 and you have actually already sent an application to the State looking for a license.

Soon a modification in law will likely enable recreational cannabis sales. If the ballot initiative passes, for the first two years after the State passes recreational marijuana 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 allowed to make an application for recreational marihuana licenses for the same activity. Thus, getting a provisioning center license under the MMFLA, provides you the opportunity to enter 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 fulfill the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will likewise have to acquire an appropriately zoned structure in a city or town that has "opted-in" to the mmfla to permit such facilities to operate within their borders. Whether your own it or lease it does not matter, however you must have the building. After that, you will need to produce a business plan that contains all of the necessary 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 regulations now and in the future.

Conclusion

We hope this provides you with some of the information you need before opening a Michigan provisioning center. Needless to say, the process is expensive, complicated and time consuming, however the benefit and ROI can be substantial. In reality, acquiring a qualified MMFLA and MMMA lawyer, like Fowler & Williams, PLC, can help streamline and simplify the application procedure, and take the majority of the work off your plate.

If you want info, or want to come in and discuss making an application for a provisioning center license, we would enjoy to have you come in for a consultation.