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 get 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 previously referred to colloquially as a "dispensary." The existing regulations 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 organisation 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 successful venture, there are a couple of things you to know before you move forward.

Can You Transport Marijuana In A Private Vehicle?

Currently, under Michigan law, the general rule is that possession and transport of marihuana in a car is prohibited by law, and subjects you to criminal charges. 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. 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 persons in the traveler compartment. You might also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers may carry usable marihuana for as much as five 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 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 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 Offer?

A licensed provisioning center under the MMFLA may not offer more than 2.5 ounces of marihuana each day to a registered qualifying patient. A provisioning center that is licensed may also 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 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 consumer who goes into a provisioning center, you will need to utilize a point of sale system that has software that is compliant. Every customer who sets foot in a provisioning center must have their card run through the Statewide Monitoring Database to make sure that they have not already been provided their maximum daily quantity 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 run as a Michigan provisioning center. If you are growing marijuana, you will likewise require to make certain that you apply for a Michigan commercial grow license application. You might want to talk 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 start running your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is complicated and needs a considerable amount of time and money, the profitability of these provisioning centers far surpasses the expense of acquiring one. If you can get approved for a license and make it through the application procedure to get a provisioning center license, you need to do so before you start operating.

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 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. Even more, you can acquire multiple provisioning center licenses so that you can run multiple provisioning centers in various cities. The licenses do not attach to the individual or the business that is using, permitting you to utilize it anywhere you desire. Rather, the licenses attach to the property you list on your application for the business. Therefore, if you want to open numerous provisioning centers, you will need to submit multiple State applications. If you prefer to get different kinds of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one center, however you should send separate applications for each license type, and need to meet the minimum financial and background requirements individually 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 different fees, and they can differ the charges depending upon which kind of license you apply for. Typically, nevertheless, they charge the maximum enabled, which is $5,000.00 per license application. Further, after you get a State license, there are regulatory assessments that will need 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 actually said that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the kind of license provided. For now, however, the assessments will remain as noted above. You will also discover that there are other professional fees that you will need to pay in order to ensure 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 hard to anticipate.

Needless to say, the application and licensing process 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 Lawyer?

While not mandatory, you should certainly make sure that you are acquiring advice from an MMFLA legal representative before you think about opening a Michigan provisioning center. It  is necessary that you get the very best possible legal recommendations 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 very best opportunity at success. Failure to make sure that your application is complete, and that it supplies support for your ability to presently comply and guarantee future compliance with the Administrative rules, your application is far more likely to be rejected 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 fees for this kind of service to be anywhere in 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 suffice, realistically, to begin the 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 professional 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 policies, as well as making sure future compliance. This includes everything from licensing to a full team of workers 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 currently illegal to run one in the state of Michigan. However, this might change, which's why it  is essential to speak to a medical marihuana lawyer regularly, so that you are keeping up to date with modifications to the law. Marijuana law is an evolving and altering field, and as a outcome, there may come a time where the MMFLA or the MMMA is amended to permit a mobile provisioning center.

What Are You Lawfully Able To Do?

As a provisioning center, your sole function is to offer safe medical marihuana to registered qualifying patients. You might only sell 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 submitted 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 2 years after the State passes recreational marijuana facility policies and starts accepting licensing applications, only centers licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be lawfully permitted to look for recreational marihuana licenses for the same activity. Thus, acquiring a provisioning center license under the MMFLA, gives you the chance to go into 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 meet the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will likewise have 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 rent it does not matter, but you must have the building. After that, you will need to produce a business plan that 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 adhere to the State's regulations now and in the future.

Conclusion

We hope this supplies you with some of the information you need before opening a Michigan provisioning center. Needless to say, the procedure is costly, complicated and time consuming, but the reward and ROI can be considerable. In reality, obtaining 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 information, or wish to come in and talk about applying for a provisioning center license, we would like to have you come in for a consultation.

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