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

You may be thinking about 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 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 guidelines 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 essentially 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 profitable venture, there are a couple of things you to understand before you move forward.

Can You Transport Cannabis In A Personal Vehicle?

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 charges. Only registered qualifying patients and registered caregivers under the MMMA may transport marihuana in a motor vehicle. Even then, they have to do so in strict compliance with the MMMA. Cannabis may only transferred 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 might likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can transport usable marihuana for as much as 5 patients (and themselves also 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 take place on a public street, it can be moved as set forth by LARA, BMMR under the Administrative rules.

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 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 making use of twenty-four (24) software programs that are METRC compliant. Every client who sets foot in a provisioning center, you will have to utilize a point of sale system that has software that is compliant. Every consumer who sets foot in 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 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 bought by the patient at your provisioning center.

What License Do You Need?

You need a full license provided by the state to operate as a Michigan provisioning center. If you are growing cannabis, you will also require to make certain that you get a Michigan commercial grow license application. You might want to speak to an MMFLA legal representative, such as Fowler & Williams, PLC, about this to guarantee 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 getting a license is complicated and requires a considerable quantity of time and money, the success of these provisioning centers far outweighs the cost of obtaining one. If you can get approved for a license and make it through the application procedure to obtain a provisioning center license, you ought to 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 same time. According to the law, there is nothing stopping you from doing this. Further, you can acquire multiple provisioning center licenses so that you can operate multiple 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 desire. Rather, the licenses connect to the property you provide on your application for the business. Therefore, if you want to open several provisioning centers, you will need to submit multiple State applications. If you desire to get different types of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one center, but you must submit different applications for each license type, and need to meet 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 as much as $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can vary the costs depending upon which type of license you apply for. Typically, nevertheless, they charge the maximum allowed, which is $5,000.00 per license application. Even more, after you get a State license, there are regulatory assessments that must be paid yearly, 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 said that starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, regardless of the kind of license provided. In the meantime, however, the assessments will stay as noted above. You will also find that there are other professional costs that you will have 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 expenses can vary drastically, and are hard to anticipate.

Needless to say, the application and licensing procedure is an expensive venture, 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 Attorney?

While not mandatory, you should certainly ensure that you are acquiring 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 suggestions 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 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 supplies support for your ability to currently comply and guarantee future compliance with the Administrative rules, your application is much more likely to be declined or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

Just How Much Will This Business Cost?

You can anticipate the overall start-up expenses for this kind of company 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 the 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, expenses, and professional services that you need to acquire to make sure that your application is precise and total, and to make sure that you are presently in compliance with all laws and policies, as well as making sure future compliance. This includes everything from licensing to a complete group of workers and much more. It's definitely not cheap, and you need to be prepared for a heavy investment. Nevertheless, as noted above, the marketplace is large, and continuing to grow.

Can You Go Mobile?

No, you can not run a mobile provisioning center as it is currently prohibited to run one in the state of Michigan. Nevertheless, this might change, and that's why it  is very important to talk to a medical marihuana lawyer routinely, so that you are keeping up to date with changes to the law. Marijuana law is an evolving and altering field, and as a outcome, there might 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 function is to supply safe medical marihuana to registered qualifying patients. You may only offer marihuana or marihuana infused products 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 correct labeling and tracking. You may not sell these items prior to your acquiring a license, unless you were running with city approval prior to February 15, 2018 and you have already submitted an application to the State seeking a license.

Soon a modification in law will likely allow for recreational marijuana sales. If the ballot initiative passes, for the first two years after the State passes recreational marijuana facility regulations and starts accepting licensing applications, only facilities 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. Hence, obtaining a provisioning center license under the MMFLA, offers you the chance to enter 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 satisfy 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 township that has "opted-in" to the MMFLA to allow such centers to run within their borders. Whether your own it or lease it does not matter, but you need to have the building. After that, you will have to produce a business plan that contains all of the required components from the state, consisting of 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 supplies you with some of the details you need prior to opening a Michigan provisioning center. Needless to say, the process is expensive, complicated and time consuming, but the benefit and ROI can be considerable. In reality, getting a competent MMFLA and MMMA attorney, 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 information, 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.