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

You might be thinking about 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 acquire 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 colloquially as a "dispensary." The present policies no longer allow 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.) can come to purchase medical marihuana for medical usage. While a provisioning center can be a profitable endeavor, there are a few things you to know before you move forward.

Can You Transport Cannabis In A Personal Automobile?

Presently, under Michigan law, the basic rule is that possession and transport of marihuana in a car is forbidden by law, and subjects you to criminal penalties. Only registered qualifying patients and registered caregivers under the MMMA may transport marihuana in a automobile. 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 individuals in the guest compartment. You might likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can transport usable marihuana for up to 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, however, 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 ( connected to or on the same property) and transport of the marihuana will not take place on a public street, it can be moved as set forth by LARA, BMMR under the Administrative guidelines.

Just How Much Cannabis 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 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 enters a provisioning center, you will have to use a point of sale system that has software that is compliant. Every customer who sets foot in a provisioning center has to have their card run through the Statewide Monitoring Database to make sure that they have not already been given 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 purchased 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 likewise need to make sure that you apply for a Michigan commercial grow license application. You may wish to talk to an MMFLA attorney, 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 getting a license is complex and needs a significant amount of time and money, the success of these provisioning centers far outweighs the cost of obtaining one. If you can qualify for a license and make it through the application process to obtain a provisioning center license, you should do so before you begin 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 person who wants 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. Further, you can obtain numerous provisioning center licenses so that you can run several provisioning centers in different 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. For that reason, if you want to open multiple provisioning centers, you will have to send multiple State applications. If you prefer to obtain 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 should send different applications for each license type, and need to meet the minimum monetary 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 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 differ the fees depending on which type of license you apply for. Typically, nevertheless, they charge the maximum enabled, which is $5,000.00 per license application. Further, after you receive 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 actually stated that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the type of license provided. For now, nevertheless, the assessments will stay as noted above. You will likewise discover that there are other professional fees that you will need to pay in order to make sure 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 costs can vary significantly, and are tough to anticipate.

Needless to say, the application and licensing procedure is an costly endeavor, 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 could be considerable.

Should You Have A Legal representative?

While not required, you should definitely make certain that you are getting guidance from an MMFLA attorney before you consider opening a Michigan provisioning center. It  is essential that you get the very best possible legal recommendations 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 very best possibility at success. Failure to ensure that your application is complete, and that it offers support for your ability to currently comply and make sure future compliance with the Administrative rules, your application is far more likely to be declined 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 kind of organisation to be anywhere in 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 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, costs, and professional services that you need to obtain to make sure that your application is accurate and complete, and to guarantee that you are currently in compliance with all laws and guidelines, as well as guaranteeing future compliance. This includes everything from licensing to a complete team of workers and much more. It's certainly not cheap, and you need to be prepared for a heavy 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 operate one in the state of Michigan. However, this could change, which's why it  is necessary to speak with a medical marihuana attorney routinely, so that you are keeping up to date with modifications to the law. Cannabis law is an evolving and altering 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 Legally Able To Do?

As a provisioning center, your sole purpose is to offer safe medical marihuana to registered qualifying patients. You may only offer marihuana or marihuana infused items 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 offer these products 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 permit 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 sell, grow, process, transport or test medical marihuana will be legally allowed to request recreational marihuana licenses for the same activity. Therefore, acquiring a provisioning center license under the MMFLA, provides 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 guarantee 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 also have to get an appropriately zoned building in a city or township that has "opted-in" to the MMFLA to allow such facilities to operate within their borders. Whether your own it or lease it does not matter, but you need to have the structure. After that, you will have to produce a business plan that contains all of the necessary 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 comply with the State's guidelines now and in the future.

Conclusion

We hope this offers you with some of the details you need before opening a Michigan provisioning center. Needless to say, the procedure is costly, complicated and time consuming, however the benefit and ROI can be substantial. In reality, getting a proficient 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 information, or wish to come in and discuss looking for a provisioning center license, we would like to have you come in for a consultation.

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