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

You may 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, however only if you get 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 informally as a "dispensary." The current policies 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 organisation where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) can come to purchase medical marihuana for medical usage. While a provisioning center can be a profitable venture, there are a couple of things you to know before you move forward.

Can You Transport Cannabis In A Private Vehicle?

Currently, under Michigan law, the general rule is that possession and transport of marihuana in a car is forbidden 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 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 up to 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 center 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 take place on a public street, it can be moved as set forth by LARA, BMMR under the Administrative rules.

Just How Much Marijuana Can You Provide?

A licensed provisioning center under the MMFLA may not sell more than 2.5 ounces of marihuana daily to a registered qualifying patient. A provisioning center that is licensed may also 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 operate a provisioning center, you will need 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 allows the use of 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 sets foot in a provisioning center needs to have their card run through the Statewide Monitoring Database to ensure that they have not already been provided 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 supplied by the state to run as a Michigan provisioning center. If you are growing cannabis, you will also require to ensure that you obtain a Michigan commercial grow license application. You may wish to speak with an MMFLA legal representative, 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 start running your provisioning center without a State license being issued to you under the MMFLA. While the process of getting a license is intricate and needs a considerable quantity of time and money, the success of these provisioning centers far exceeds the expense of obtaining one. If you can get approved for a license and make it through the application procedure to get a provisioning center license, you ought to do so before you start 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 individual who wishes 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. Further, you can obtain numerous provisioning center licenses so that you can run numerous provisioning centers in different cities. The licenses do not connect to the person or the business that is applying, permitting you to utilize it anywhere you want. Rather, the licenses attach to the property you provide on your application for the business. For that reason, if you want to open several provisioning centers, you will have to send several 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 need to send different applications for each license type, and must satisfy the minimum financial and background requirements independently 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 charges, which can be approximately $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can differ the costs depending upon which kind of license you apply for. Normally, however, they charge the maximum enabled, which is $5,000.00 per license application. Further, after you receive a State license, there are regulatory assessments that must 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 stated that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, no matter the type of license issued. In the meantime, however, the assessments will remain as noted above. You will also find that there are other professional fees that you will have to pay in order to make sure that your application is complete, and that your business plan, with all of its necessary parts, is up to par with the State's application requests. Those expenses can differ drastically, and are hard to predict.

Needless to say, the application and licensing process is an costly endeavor, 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 considerable.

Should You Have A Legal representative?

While not mandatory, you should certainly make sure that you are acquiring recommendations from an MMFLA legal representative before you think about opening a Michigan provisioning center. It  is necessary that you get the best possible legal guidance 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 ensure 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 supplies support for your ability to currently comply and guarantee future compliance with the Administrative rules, your application is a lot more likely to be turned down or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

How Much Will This Business Cost?

You can anticipate the overall start-up fees for this type of service 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 begin 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 mandatory fees, expenses, and expert services that you need to get to guarantee 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 consists of everything from licensing to a full team of employees and much more. It's definitely not cheap, 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 currently unlawful to operate one in the state of Michigan. Nevertheless, this might change, and that's why it  is very important to speak with a medical marihuana lawyer frequently, so that you are keeping up to date with modifications to the law. Marijuana 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 function is to supply 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 products 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 getting 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 permit recreational cannabis sales. If the ballot initiative passes, for the first 2 years after the State passes recreational marijuana facility policies and begins accepting licensing applications, only centers licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be legally allowed to apply for recreational marihuana licenses for the same activity. Therefore, acquiring a provisioning center license under the MMFLA, gives you the opportunity to get in the recreational market, where others will not.

What Are The Requirements?

In order to look 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 properly zoned structure in a city or area that has "opted-in" to the MMFLA to allow such facilities to run within their borders. Whether your own it or lease it does not matter, but you must have the structure. After that, you will need to produce a business plan which contains all of the required elements 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 provides you with some of the details you need prior to opening a Michigan provisioning center. Needless to say, the process is pricey, intricate and time consuming, but the reward and ROI can be considerable. In reality, acquiring a competent MMFLA and MMMA lawyer, like Fowler & Williams, PLC, can help streamline and simplify the application procedure, and take most of the work off your plate.

If you want info, or want to come in and talk about requesting a provisioning center license, we would love to have you come in for a consultation.

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