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

You might 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 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 informally as a "dispensary." The present 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 generally 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 usage. While a provisioning center can be a rewarding venture, there are a couple of things you to know before you move forward.

Can You Transport Cannabis In A Private Vehicle?

Presently, under Michigan law, the general guideline is that possession and transport of marihuana in a automobile 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 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 five 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, 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 roadway, it can be moved as set forth by LARA, BMMR under the Administrative rules.

How Much Marijuana Can You Offer?

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 also sell to a registered primary caregiver, however 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 permits making use of twenty-four (24) software programs that are METRC compliant. Every consumer 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 goes into 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 quantity 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 bought by the patient at your provisioning center.

What License Do You Need?

You need a full license supplied by the state to operate as a Michigan provisioning center. If you are growing cannabis, you will likewise need to make certain that you get a Michigan commercial grow license application. You may wish to talk to 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 begin 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 substantial quantity of time and money, the success of these provisioning centers far exceeds the expense of acquiring one. If you can get approved for a license and make it through the application procedure to acquire a provisioning center license, you must 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 person who wants to establish a provisioning center and a grow or processor at the exact same time. According to the law, there is absolutely nothing stopping you from doing this. Further, you can get numerous provisioning center licenses so that you can operate several provisioning centers in different cities. The licenses do not connect to the person or the business that is using, allowing you to use it anywhere you desire. Rather, the licenses attach to the property you list on your application for the business. For that reason, if you want to open several provisioning centers, you will have to submit numerous State applications. If you prefer to acquire different types of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one center, however you must send separate applications for each license type, and should satisfy the minimum financial and background requirements individually for each license type.

Just 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 up to $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can differ the charges depending on which type of license you apply for. Usually, 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 have to 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, no matter the kind of license provided. In the meantime, nevertheless, 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 guarantee 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 significantly, and are hard 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 roi could be significant.

Should You Have A Lawyer?

While not required, you should definitely make certain 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 attorney experienced in managing cases under the MMMA and licensing work under the MMFLA, like Fowler & Williams, PLC, can guarantee that you have all the tools and guidance that you need to give your application the best opportunity at success. Failure to make certain that your application is complete, and that it supplies support for your capability to currently 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 expect the total start-up costs for this type of business 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 start 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, costs, and expert services that you need to acquire to make sure that your application is accurate and complete, and to make sure that you are presently in compliance with all laws and guidelines, 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 inexpensive, and you need to be prepared for a heavy financial investment. However, as noted above, the market 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's important to speak with a medical marihuana lawyer routinely, so that you are keeping up to date with modifications to the law. Marijuana law is an evolving and changing 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 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 products 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 correct 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 already sent an application to the State seeking a license.

Soon a change in law will likely permit recreational marijuana sales. If the ballot initiative passes, for the first two years after the State passes recreational cannabis facility regulations 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 obtain recreational marihuana licenses for the same activity. Thus, getting a provisioning center license under the MMFLA, provides you the chance to enter 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 fulfill the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will also have to acquire an properly zoned structure in a city or town that has "opted-in" to the MMFLA to allow such facilities to operate within their boundaries. 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 which 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 adhere to the State's regulations now and in the future.

Conclusion

We hope this offers you with some of the information you need before opening a Michigan provisioning center. Needless to say, the procedure is costly, intricate and time consuming, however the benefit and ROI can be significant. In reality, getting a proficient MMFLA and MMMA lawyer, like Fowler & Williams, PLC, can help streamline and simplify the application process, and take most of the work off your plate.

If you want details, or wish to come in and discuss making an application for a provisioning center license, we would like to have you come in for a consultation.