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, but only if you obtain municipal approval and a State issued operations license. "Provisioning Center" is the legally allowable 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 existing 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 business 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 use. 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 Personal Car?

Currently, under Michigan law, the basic rule is that possession and transport of marihuana in a car is prohibited by law, and subjects you to criminal penalties. 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. Marijuana may only transported 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 may carry usable marihuana for up to 5 patients (and themselves too 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, 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 (attached to or on the same property) and transportation of the marihuana will not occur on a public road, 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 each day to a registered qualifying patient. A provisioning center that is licensed may likewise offer 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 run a provisioning center, you will have 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 consumer who enters 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 must have their card run through the Statewide Monitoring Database to make sure 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 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 supplied by the state to operate as a Michigan provisioning center. If you are growing cannabis, you will likewise need to make sure that you apply for a Michigan commercial grow license application. You might want to speak with an MMFLA legal representative, such as Fowler & Williams, PLC, about this to ensure 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 complex and requires a significant quantity of time and money, the success of these provisioning centers far outweighs the cost of getting one. If you can get approved for a license and get through the application process to obtain a provisioning center license, you must do so before you start operating.

Can You Get More Than One License?

Yes, you can apply and qualify for more than one license. This is useful for any business or individual who wants to set up 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 several provisioning center licenses so that you can run numerous provisioning centers in different cities. The licenses do not attach to the individual or the business that is using, allowing 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 wish to open multiple provisioning centers, you will have to send several 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 facility, but you need to submit different applications for each license type, and should meet the minimum monetary 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 charges, 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 costs depending on which kind of license you apply for. Usually, however, 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 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 actually stated that starting 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 stay as noted above. You will also discover that there are other professional fees that you will need to pay in order to guarantee 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 costs can differ considerably, and are tough to predict.

Needless to say, the application and licensing procedure is an expensive undertaking, but 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 substantial.

Should You Have A Legal representative?

While not required, you should certainly make sure that you are acquiring recommendations from an MMFLA legal representative before you consider opening a Michigan provisioning center. It's important that you get the best possible legal recommendations 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 very best chance at success. Failure to ensure that your application is complete, and that it offers support for your capability to currently comply and make sure 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 expect the total start-up fees 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 suffice, realistically, to begin the business. You will need to potentially buy 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 obtain to make sure that your application is accurate and total, and to ensure that you are currently in compliance with all laws and regulations, as well as ensuring future compliance. This consists of everything from licensing to a complete group of workers and much more. It's certainly not cheap, and you need to be prepared for a heavy financial investment. However, 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 presently unlawful to run one in the state of Michigan. Nevertheless, this might change, which's why it's important to talk to a medical marihuana lawyer routinely, so that you are keeping up to date with modifications to the law. Cannabis 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 enable a mobile provisioning center.

What Are You Lawfully 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 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 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 change in law will likely allow for recreational marijuana 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 facilities licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be lawfully permitted to obtain recreational marihuana licenses for the same activity. Thus, acquiring a provisioning center license under the MMFLA, offers you the chance 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 acquire an properly zoned building in a city or municipality that has "opted-in" to the MMFLA to allow such facilities to operate within their limits. Whether your own it or lease it does not matter, however you must have the building. After that, you will need 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 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, but the reward and ROI can be substantial. In reality, obtaining a qualified MMFLA and MMMA attorney, 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 want to come in and discuss obtaining a provisioning center license, we would love to have you come in for a consultation.