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 acquire 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 colloquially as a "dispensary." The existing 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 use. While a provisioning center can be a profitable endeavor, there are a couple of things you to understand before you move forward.

Can You Transport Cannabis In A Private Vehicle?

Currently, under Michigan law, the general rule is that possession and transport of marihuana in a vehicle 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 motor vehicle. Even then, they must do so in strict compliance with the MMMA. Marijuana may only carried in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or individuals in the passenger compartment. You might also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for up to five 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 happen on a public roadway, it can be moved as stated by LARA, BMMR under the Administrative rules.

Just How Much Cannabis Can You Supply?

A licensed provisioning center under the MMFLA may not offer more than 2.5 ounces of marihuana each 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 run 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 allows making use of twenty-four (24) software programs that are METRC compliant. Every consumer who sets foot in a provisioning center, you will have to utilize a point of sale system that has software that is compliant. Every consumer who sets foot in a provisioning center needs to have their card run through the Statewide Monitoring Database to guarantee that they have not already been given their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center must 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 acquired by the patient at your provisioning center.

What License Do You Need?

You need a full license given by the state to run as a Michigan provisioning center. If you are growing cannabis, you will also need to make sure that you get a Michigan commercial grow license application. You may wish to talk to an mmfla lawyer, such as Fowler & Williams, PLC, about this to guarantee that you are fully licensed, or you will be closed down. Most importantly, DO NOT start operating your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is complex and needs a considerable quantity of time and money, the profitability of these provisioning centers far surpasses the expense of getting one. If you can qualify for a license and get through the application procedure to obtain a provisioning center license, you should do so before you start running.

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 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. Even more, you can acquire several provisioning center licenses so that you can operate multiple provisioning centers in different cities. The licenses do not attach to the person or the business that is using, enabling you to use it anywhere you desire. Rather, the licenses connect to the property you provide on your application for the business. Therefore, if you wish to open multiple provisioning centers, you will need to submit several State applications. If you desire to obtain various kinds of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one facility, however you should submit separate applications for each license type, and need to 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 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 costs depending upon 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 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 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 issued. For now, nevertheless, the assessments will remain as noted above. You will also discover that there are other professional fees that you will need to pay in order to ensure 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 differ considerably, and are tough to predict.

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 certainly ensure that you are getting guidance from an MMFLA legal representative before you consider opening a Michigan provisioning center. It  is necessary that you get the very best possible legal recommendations and that you are following all the regulations and requirements. Only an lawyer 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 very best possibility at success. Failure to ensure that your application is complete, and that it provides support for your ability to presently 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.

Just How Much Will This Business Cost?

You can expect the total start-up expenses for this type of company 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 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 obligatory fees, costs, and expert services that you need to acquire to ensure that your application is precise and total, and to ensure that you are currently in compliance with all laws and policies, in addition to ensuring future compliance. This consists of everything from licensing to a full team of staff members and much more. It's definitely not cheap, and you need to be prepared for a heavy 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 prohibited to operate one in the state of Michigan. Nevertheless, this might change, and that's why it  is essential to speak to a medical marihuana attorney frequently, so that you are keeping up to date with modifications to the law. Cannabis law is an evolving and changing field, and as a outcome, there might come a time where the MMFLA or the MMMA is amended to permit a mobile provisioning center.

What Are You Lawfully Able To Do?

As a provisioning center, your sole function is to offer safe medical marihuana to registered qualifying patients. You might only offer marihuana or marihuana infused items 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 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 offer, grow, process, transport or test medical marihuana will be lawfully permitted to make an application for recreational marihuana licenses for the same activity. Therefore, acquiring a provisioning center license under the MMFLA, gives you the opportunity to get in the recreational market, where others will not.

What Are The Requirements?

In order to apply for a provisioning center license, you need to make sure 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 permit such facilities to run within their borders. Whether your own it or rent it does not matter, but you must have the structure. After that, you will need to produce a business plan that contains all of the necessary components 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 provides you with some of the info you need prior to opening a Michigan provisioning center. Needless to say, the procedure is costly, complex and time consuming, but the reward and ROI can be considerable. In reality, acquiring a proficient 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 info, or wish to come in and discuss making an application for a provisioning center license, we would enjoy to have you come in for a consultation.