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

You may 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, however only if you obtain 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 informally as a “dispensary.” The existing guidelines no longer permit 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 basically a organisation where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) may come to acquire medical marihuana for medical use. While a provisioning center can be a successful endeavor, there are a couple of things you to know before you move forward.

Can You Transport Cannabis In A Personal Automobile?

Currently, under Michigan law, the basic guideline is that possession and transport of marihuana in a car is restricted by law, and subjects you to criminal charges. 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 transferred 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 may also 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 as well 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, however, 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 transport of the marihuana will not take place on a public street, it can be moved as stated by LARA, BMMR under the Administrative rules.

Just How Much Marijuana Can You Offer?

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 also sell to a registered primary caregiver, but 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 use a point of sale system that has software that is complaint with the Statewide Monitoring Database, which uses 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 have to use a point of sale system that has software that is compliant. Every client who goes into a provisioning center has to have their card run through the Statewide Monitoring Database to guarantee that they have not already been supplied their maximum daily quantity 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 bought by the patient at your provisioning center.

What License Do You Need?

You need a full license given by the state to operate as a Michigan provisioning center. If you are growing marijuana, you will also need to make sure that you get a Michigan commercial grow license application. You might wish to speak to an MMFLA legal representative, 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 running your provisioning center without a State license being issued to you under the MMFLA. While the process of getting a license is intricate and needs a considerable quantity of time and money, the profitability of these provisioning centers far exceeds the expense of obtaining one. If you can qualify for a license and get through the application procedure to get a provisioning center license, you ought to do so before you begin running.

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 nothing stopping you from doing this. Even more, you can get numerous provisioning center licenses so that you can run multiple provisioning centers in various cities. The licenses do not connect 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 list on your application for the business. For that reason, if you want to open several provisioning centers, you will need to submit several State applications. If you want 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 center, however you need to send different applications for each license type, and should satisfy 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 as much as $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can differ the fees depending on which kind of license you apply for. Usually, 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 have 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 said that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the kind of license issued. In the meantime, however, 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 make sure that your application is complete, and that your business plan, with all of its essential parts, is up to par with the State’s application requests. Those expenses can vary drastically, and are difficult to predict.

Needless to say, the application and licensing procedure is an pricey endeavor, 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 considerable.

Should You Have A Legal representative?

While not required, you should certainly ensure that you are getting recommendations from an MMFLA lawyer before you think about 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 lawyer experienced in handling cases under the MMMA and licensing work under the MMFLA, like Fowler & Williams, PLC, can ensure that you have all the tools and guidance that you need to give your application the best opportunity at success. Failure to make certain 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 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 overall start-up fees for this type of service to be anywhere in 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 start the business. You will need to potentially purchase 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 guarantee that your application is accurate and total, and to make sure that you are currently in compliance with all laws and policies, along with guaranteeing 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 financial investment. Nevertheless, 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. However, this could change, and that’s why it  is necessary to speak with a medical marihuana attorney regularly, so that you are keeping up to date with modifications 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 enable a mobile provisioning center.

What Are You Legally Able To Do?

As a provisioning center, your sole function is to supply 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 been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not sell these products prior to your obtaining a license, unless you were operating with city approval prior to February 15, 2018 and you have actually already sent an application to the State looking for a license.

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

What Are The Requirements?

In order to get 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 obtain an appropriately 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 lease it does not matter, however you must have the structure. After that, you will have to produce a business plan that contains all of the necessary 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 policies now and in the future.

Conclusion

We hope this supplies you with some of the information you need before opening a Michigan provisioning center. Needless to say, the process is expensive, intricate and time consuming, however the benefit and ROI can be considerable. In reality, obtaining a competent 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 wish to come in and talk about making an application for a provisioning center license, we would love to have you come in for a consultation.

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