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

You may be thinking of 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 acquire 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 present 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 essentially a business where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) may come to acquire medical marihuana for medical use. While a provisioning center can be a successful venture, there are a few things you to understand before you move forward.

Can You Transport Marijuana In A Private Automobile?

Currently, under Michigan law, the basic rule is that possession and transport of marihuana in a automobile is prohibited 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 must do so in strict compliance with the MMMA. Cannabis may only transported in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or persons in the traveler compartment. You may also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can transport usable marihuana for as much as five patients (and themselves too 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 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 happen on a public road, it can be moved as set forth 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 per day to a registered qualifying patient. A provisioning center that is licensed may likewise offer 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 need 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 the use of twenty-four (24) software programs that are METRC compliant. Every customer who goes into a provisioning center, you will have to use a point of sale system that has software that is compliant. Every consumer who goes into a provisioning center needs to have their card run through the Statewide Monitoring Database to make sure that they have not already been given 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 purchased 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 also require to ensure that you apply for a Michigan commercial grow license application. You might want to speak with 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 running your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is complex and needs a significant quantity of time and money, the profitability of these provisioning centers far exceeds the cost of acquiring one. If you can get approved for a license and make it through the application process to obtain a provisioning center license, you should do so before you begin running.

Can You Get More Than One License?

Yes, you can apply and receive more than one license. This is useful for any business or person who wishes to establish a provisioning center and a grow or processor at the exact same time. According to the law, there is nothing stopping you from doing this. Even more, you can get multiple provisioning center licenses so that you can operate numerous provisioning centers in various cities. The licenses do not attach to the person or the business that is using, permitting you to use it anywhere you want. Rather, the licenses attach to the property you provide on your application for the business. For that reason, if you wish to open multiple provisioning centers, you will have to submit several State applications. If you prefer to obtain 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 need to submit different applications for each license type, and should satisfy the minimum monetary 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 fees, which can be approximately $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can vary the fees depending on which kind 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 will need to be paid every year, 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 beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the type of license provided. For now, however, the assessments will stay as noted above. You will also find that there are other professional costs 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 costs can vary considerably, and are hard to anticipate.

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 might be substantial.

Should You Have A Legal representative?

While not mandatory, you should certainly ensure that you are getting guidance from an MMFLA lawyer before you consider opening a Michigan provisioning center. It  is essential 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 make sure that you have all the tools and guidance that you need to give your application the best chance at success. Failure to ensure that your application is complete, and that it offers support for your capability to currently comply and guarantee 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 expenses for this type of company 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 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 obligatory fees, costs, and professional services that you need to acquire to ensure that your application is accurate and complete, and to ensure that you are presently in compliance with all laws and guidelines, as well as making sure future compliance. This includes everything from licensing to a complete group of employees and much more. It’s definitely not inexpensive, and you need to be prepared for a heavy financial investment. Nevertheless, 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 unlawful to run one in the state of Michigan. Nevertheless, this might change, and that’s why it’s important to talk to a medical marihuana attorney routinely, so that you are keeping up to date with changes to the law. Cannabis law is an evolving and altering 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 offer marihuana or marihuana infused items that were grown by a MMFLA licensed grower or processed by a MMFLA licensed processor and the products have been tested by a MMFLA licensed safety compliance facility with correct 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 already sent an application to the State looking for a license.

Soon a modification in law will likely enable recreational marijuana sales. If the ballot initiative passes, for the first 2 years after the State passes recreational cannabis facility policies 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 get recreational marihuana licenses for the same activity. Hence, getting a provisioning center license under the MMFLA, offers you the opportunity to get in the recreational market, where others will not.

What Are The Requirements?

In order to make an application for 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 need to obtain an appropriately zoned structure in a city or municipality that has “opted-in” to the MMFLA to allow such centers to run within their borders. Whether your own it or rent it does not matter, but you must have the building. 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 policies now and in the future.

Conclusion

We hope this provides you with some of the details you need prior to opening a Michigan provisioning center. Needless to say, the process is expensive, complex and time consuming, but the benefit and ROI can be substantial. In reality, acquiring a competent MMFLA and MMMA attorney, 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 details, or wish to come in and speak about obtaining a provisioning center license, we would enjoy to have you come in for a consultation.

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