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

You may 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 acquire 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 permit 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 use. While a provisioning center can be a lucrative endeavor, there are a few things you to know before you move forward.

Can You Transport Marijuana In A Personal Car?

Presently, under Michigan law, the general guideline is that possession and transport of marihuana in a vehicle is forbidden 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 must 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 may transport usable marihuana for as much as 5 patients (and themselves as well 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 center 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 transport of the marihuana will not happen on a public street, it can be moved as set forth by LARA, BMMR under the Administrative guidelines.

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 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 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 making use of 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 client who sets foot in a provisioning center has to have their card run through the Statewide Monitoring Database to guarantee that they have not already been provided their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center should 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 purchased by the patient at your provisioning center.

What License Do You Need?

You need a full license given by the state to operate as a Michigan provisioning center. If you are growing marijuana, you will also require to make certain that you apply for a Michigan commercial grow license application. You may wish to talk to an MMFLA lawyer, 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 substantial quantity of time and money, the profitability of these provisioning centers far exceeds the expense of getting one. If you can qualify for a license and get through the application process to obtain a provisioning center license, you need to do so before you begin running.

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 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 multiple provisioning center licenses so that you can run 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 want. 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 several State applications. If you desire to acquire 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 should submit separate applications for each license type, and should satisfy the minimum monetary 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 costs, which can be approximately $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can differ the charges depending upon which kind of license you apply for. Usually, however, 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 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 kind of license issued. In the meantime, nevertheless, 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 make sure 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 dramatically, and are tough to anticipate.

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

Should You Have A Attorney?

While not mandatory, you should definitely make sure that you are acquiring advice from an MMFLA lawyer before you think about opening a Michigan provisioning center. It  is very important that you get the very best possible legal suggestions and that you are following all the regulations and requirements. Only an attorney experienced in handling 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 provides support for your ability to presently comply and guarantee future compliance with the Administrative rules, your application is a lot more likely to be turned down or denied, and your dream of opening a provisioning center brought to an unceremonious ending.

Just How Much Will This Business Cost?

You can anticipate the total start-up expenses for this type of organisation 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 start business. You will need to potentially purchase 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 guarantee that your application is accurate and complete, and to guarantee that you are currently in compliance with all laws and guidelines, as well as making sure future compliance. This includes everything from licensing to a full 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 large, and continuing to grow.

Can You Go Mobile?

No, you can not run a mobile provisioning center as it is currently illegal to operate one in the state of Michigan. Nevertheless, this could change, and that's why it  is essential to speak with a medical marihuana attorney frequently, so that you are keeping up to date with changes to the law. Marijuana law is an evolving and changing field, and as a result, there might come a time where the MMFLA or the MMMA is amended to allow for 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 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 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 running with city approval prior to February 15, 2018 and you have actually already sent an application to the State seeking a license.

Soon a change in law will likely allow for recreational marijuana sales. If the ballot initiative passes, for the first two years after the State passes recreational cannabis facility policies and begins accepting licensing applications, only facilities licensed by the MMFLA to offer, 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 go into the recreational market, where others will not.

What Are The Requirements?

In order to request a provisioning center license, you need to make sure that you do not have a disqualifying criminal conviction, and that you meet the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will likewise need to get an properly zoned structure in a city or municipality that has "opted-in" to the MMFLA to permit such facilities to run within their boundaries. Whether your own it or lease it does not matter, however you must have the structure. After that, you will have to produce a business plan which contains all of the necessary 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 abide by the State's regulations now and in the future.

Conclusion

We hope this supplies you with some of the details you need prior to opening a Michigan provisioning center. Needless to say, the process is pricey, complicated and time consuming, however the benefit and ROI can be significant. 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 info, or want to come in and talk about making an application for a provisioning center license, we would love to have you come in for a consultation.

mra