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, but only if you get 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 formerly referred to informally as a "dispensary." The current regulations no longer allow such companies 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 Private Car?

Presently, under Michigan law, the basic rule is that possession and transport of marihuana in a automobile is prohibited by law, and subjects you to criminal penalties. 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. Cannabis 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 guest compartment. You may likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for as much as five patients (and themselves as well 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 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 street, it can be moved as stated by LARA, BMMR under the Administrative rules.

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 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 have 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 customer who sets foot in a provisioning center, you will need to use a point of sale system that has software that is compliant. Every consumer who goes into a provisioning center needs to 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 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 supplied by the state to operate as a Michigan provisioning center. If you are growing marijuana, you will also need to make sure that you apply for a Michigan commercial grow license application. You may want to talk to an MMFLA lawyer, such as Fowler & Williams, PLC, about this to ensure that you are fully licensed, or you will be closed 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 obtaining a license is complex and needs a substantial amount of time and money, the profitability of these provisioning centers far exceeds the expense of getting one. If you can get approved for a license and make it through the application process to acquire a provisioning center license, you ought 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 person who wishes to set up a provisioning center and a grow or processor at the very same time. According to the law, there is nothing stopping you from doing this. Even more, you can get multiple provisioning center licenses so that you can run several provisioning centers in various cities. The licenses do not attach to the person or the business that is applying, permitting you to use it anywhere you desire. Rather, the licenses attach to the property you provide on your application for the business. Therefore, if you want to open multiple provisioning centers, you will need to submit numerous State applications. If you want to obtain different kinds of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one center, but you should send different applications for each license type, and need to meet 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 different fees, and they can vary the charges depending upon which type of license you apply for. Normally, however, they charge the maximum enabled, which is $5,000.00 per license application. Even more, after you get a State license, there are regulatory assessments that will need to be paid yearly, 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 stated that starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, regardless of the type of license provided. For now, nevertheless, the assessments will stay as noted above. You will likewise discover that there are other professional charges 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 expenses can vary considerably, and are tough to anticipate.

Needless to say, the application and licensing procedure is an pricey 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 roi might be significant.

Should You Have A Attorney?

While not required, you should definitely ensure that you are getting recommendations from an MMFLA lawyer before you consider opening a Michigan provisioning center. It  is very important 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 make sure that you have all the tools and guidance that you need to give your application the best possibility at success. Failure to ensure that your application is complete, and that it provides support for your capability 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 expect the overall start-up costs for this type 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 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 expert services that you need to obtain to make sure that your application is accurate and complete, and to make sure that you are currently in compliance with all laws and policies, along with making sure future compliance. This includes everything from licensing to a full team of workers and much more. It's definitely not cheap, and you need to be prepared for a heavy financial investment. However, 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 presently illegal to run one in the state of Michigan. Nevertheless, this could change, which's why it's important to talk to a medical marihuana lawyer routinely, so that you are keeping up to date with changes to the law. Cannabis 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 allow for a mobile provisioning center.

What Are You Lawfully Able To Do?

As a provisioning center, your sole function is to provide 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 been tested by a MMFLA licensed safety compliance facility with appropriate labeling and tracking. You may not sell these products prior to your acquiring a license, unless you were operating with city approval prior to February 15, 2018 and you have already submitted an application to the State looking for 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 marijuana facility policies and begins accepting licensing applications, only centers licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be legally permitted to get recreational marihuana licenses for the same activity. Therefore, obtaining a provisioning center license under the MMFLA, offers you the opportunity to go into the recreational market, where others will not.

What Are The Requirements?

In order to apply 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 need to get an properly zoned building in a city or municipality that has "opted-in" to the MMFLA to permit such centers to run within their borders. Whether your own it or lease it does not matter, however you need to have the structure. After that, you will have to produce a business plan which contains all of the required aspects 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 information 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 considerable. In reality, acquiring a qualified MMFLA and MMMA attorney, like Fowler & Williams, PLC, can help streamline and simplify the application procedure, and take most of the work off your plate.

If you want details, or wish to come in and speak about obtaining a provisioning center license, we would love to have you come in for a consultation.

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