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

You might be thinking about 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 get municipal approval and a State issued operations license. "Provisioning Center" is the legally permissible term under Michigan's Bureau of Licensing and Regulatory Affairs, Bureau of Medical Marihuana Regulation, for what was formerly referred to colloquially as a "dispensary." The current guidelines 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 generally a business 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 successful 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 forbidden by law, and subjects you to criminal charges. Only registered qualifying patients and registered caregivers under the MMMA may 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 passenger compartment. You may likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for up to 5 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 (attached to or on the same property) and transport of the marihuana will not happen on a public street, it can be moved as stated by LARA, BMMR under the Administrative guidelines.

Just How Much Cannabis Can You Supply?

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 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 permits making use of twenty-four (24) software programs that are METRC compliant. Every client 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 sets foot in a provisioning center needs to have their card run through the Statewide Monitoring Database to ensure that they have not already been given their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center must 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 need to make sure that you apply for a Michigan commercial grow license application. You may wish to speak 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 begin running your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is intricate and requires a significant amount of time and money, the profitability 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 get 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 qualify for more than one license. This is useful for any business or individual who wants to establish a provisioning center and a grow or processor at the very same time. According to the law, there is absolutely nothing stopping you from doing this. Further, you can get several provisioning center licenses so that you can run numerous 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 want. Rather, the licenses connect to the property you list on your application for the business. Therefore, if you wish to open numerous provisioning centers, you will need to send several State applications. If you desire to acquire 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 need to send separate applications for each license type, and need to meet the minimum monetary and background requirements independently 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 costs, which can be up to $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can differ the fees depending on which type of license you apply for. Normally, nevertheless, they charge the maximum enabled, which is $5,000.00 per license application. Even more, 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 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 said 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 remain as noted above. You will also find that there are other professional fees that you will have 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 considerably, and are difficult 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 roi could be significant.

Should You Have A Lawyer?

While not mandatory, you should definitely ensure that you are getting recommendations from an MMFLA lawyer before you consider opening a Michigan provisioning center. It's important that you get the best possible legal guidance 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 guarantee that you have all the tools and guidance that you need to give your application the very best opportunity at success. Failure to ensure that your application is complete, and that it supplies support for your ability to currently comply and ensure future compliance with the Administrative rules, your application is far more likely to be rejected or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

How Much Will This Business Cost?

You can anticipate the total start-up fees for this type of service 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 be sufficient, 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 total, and to guarantee that you are currently in compliance with all laws and guidelines, along with ensuring future compliance. This consists of everything from licensing to a full team of employees and much more. It's certainly not inexpensive, and you need to be prepared for a heavy 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 presently illegal to operate one in the state of Michigan. However, this might change, which's why it  is necessary 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 result, there may come a time where the MMFLA or the MMMA is amended to allow for 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 sell 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 proper labeling and tracking. You may not sell these items prior to your obtaining a license, unless you were running with city approval prior to February 15, 2018 and you have already sent an application to the State looking for a license.

Soon a modification in law will likely permit recreational cannabis sales. If the ballot initiative passes, for the first 2 years after the State passes recreational marijuana facility guidelines and begins accepting licensing applications, only centers licensed by the MMFLA to offer, grow, process, transport or test medical marihuana will be legally permitted to look for recreational marihuana licenses for the same activity. Therefore, obtaining a provisioning center license under the MMFLA, gives you the chance to get in the recreational market, where others will not.

What Are The Requirements?

In order to make an application for a provisioning center license, you need to guarantee 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 town that has "opted-in" to the MMFLA to allow such centers to operate within their limits. 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 which contains all of the required aspects 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 offers you with some of the details you need before opening a Michigan provisioning center. Needless to say, the process is pricey, intricate and time consuming, however the reward and ROI can be considerable. In reality, getting a skilled 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 discuss getting a provisioning center license, we would like to have you come in for a consultation.

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