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, 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 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 essentially a organisation where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) can come to buy medical marihuana for medical use. While a provisioning center can be a lucrative endeavor, there are a couple of things you to understand before you move forward.

Can You Transport Marijuana In A Personal Car?

Currently, under Michigan law, the basic rule is that possession and transport of marihuana in a automobile 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 motor vehicle. Even then, they have to do so in strict compliance with the MMMA. Marijuana may only transferred in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or individuals in the traveler compartment. You may also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for as much as 5 patients (and themselves also 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 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 take place on a public road, it can be moved as set forth by LARA, BMMR under the Administrative rules.

How Much Marijuana Can You Offer?

A licensed provisioning center under the MMFLA may not offer 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 run 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 customer 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 ensure 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 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 provided by the state to run as a Michigan provisioning center. If you are growing cannabis, you will also need to ensure that you apply for a Michigan commercial grow license application. You may want to speak to an MMFLA attorney, such as Fowler & Williams, PLC, about this to ensure 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 intricate and requires a considerable amount of time and money, the success of these provisioning centers far surpasses the cost 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 begin running.

Can You Get More Than One License?

Yes, you can apply and receive 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 very same time. According to the law, there is absolutely nothing stopping you from doing this. Even more, you can get multiple 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 utilize it anywhere you desire. Rather, the licenses attach to the property you provide on your application for the business. For that reason, if you wish to open multiple provisioning centers, you will have to submit multiple State applications. If you desire to acquire 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 must submit separate applications for each license type, and need to meet the minimum monetary and background requirements separately 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 different fees, and they can differ the charges depending upon which type of license you apply for. Normally, however, they charge the maximum allowed, which is $5,000.00 per license application. Further, after you get a State license, there are regulatory assessments that will need to be paid every year, 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 starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, regardless of the type of license provided. In the meantime, nevertheless, the assessments will stay as noted above. You will also find that there are other professional costs 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 necessary parts, is up to par with the State's application requests. Those costs can differ dramatically, and are tough to predict.

Needless to say, the application and licensing process 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 considerable.

Should You Have A Lawyer?

While not required, you should certainly make sure that you are acquiring advice from an MMFLA lawyer before you consider opening a Michigan provisioning center. It  is essential that you get the best possible legal guidance and that you are following all the regulations and requirements. Only an lawyer experienced in dealing with 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 very best possibility at success. Failure to make certain that your application is complete, and that it supplies support for your capability to currently comply and guarantee 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 overall start-up costs for this type 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 suffice, realistically, to begin 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, costs, and expert services that you need to acquire to ensure that your application is precise and complete, and to ensure that you are presently in compliance with all laws and policies, in addition to ensuring future compliance. This includes everything from licensing to a full team of employees and much more. It's definitely not cheap, and you need to be prepared for a heavy 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 currently prohibited to run one in the state of Michigan. However, this might change, which's why it  is very important to speak to a medical marihuana lawyer regularly, so that you are keeping up to date with changes 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 permit a mobile provisioning center.

What Are You Legally Able To Do?

As a provisioning center, your sole purpose is to provide safe medical marihuana to registered qualifying patients. You might only sell marihuana or marihuana infused items 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 appropriate labeling and tracking. You may not sell these products prior to your getting a license, unless you were running with city approval prior to February 15, 2018 and you have already sent an application to the State seeking a license.

Soon a modification in law will likely permit recreational cannabis 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 centers licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be lawfully allowed to apply for recreational marihuana licenses for the same activity. Thus, obtaining a provisioning center license under the MMFLA, gives you the chance to enter 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 ensure 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 acquire an properly zoned structure in a city or town that has "opted-in" to the MMFLA to permit such facilities to run within their limits. Whether your own it or lease it does not matter, however you must have the building. After that, you will need to produce a business plan that contains all of the required 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 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 process is expensive, intricate and time consuming, however the benefit and ROI can be considerable. In reality, acquiring a skilled MMFLA and MMMA attorney, like Fowler & Williams, PLC, can help streamline and simplify the application process, and take the majority of the work off your plate.

If you want information, or want to come in and speak about applying for a provisioning center license, we would like to have you come in for a consultation.

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