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 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 formerly 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 usage. While a provisioning center can be a profitable endeavor, there are a few things you to understand before you move forward.

Can You Transport Cannabis In A Private Vehicle?

Currently, under Michigan law, the basic rule is that possession and transport of marihuana in a automobile is prohibited by law, and subjects you to criminal charges. Only registered qualifying patients and registered caregivers under the MMMA can 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 persons in the passenger compartment. You may 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 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 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.

How Much Cannabis Can You Offer?

A licensed provisioning center under the MMFLA may not offer more than 2.5 ounces of marihuana per day to a registered qualifying patient. A provisioning center that is licensed may likewise 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 utilizes a software program called METRC. The State allows making use of twenty-four (24) software programs that are METRC compliant. Every customer who goes into a provisioning center, you will have to use a point of sale system that has software that is compliant. Every customer who goes into a provisioning center has to have their card run through the Statewide Monitoring Database to make sure 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 bought 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 marijuana, you will also need to ensure that you apply for a Michigan commercial grow license application. You might want to speak with an MMFLA lawyer, such as Fowler & Williams, PLC, about this to ensure that you are fully licensed, or you will be shut down. Most importantly, DO NOT begin operating your provisioning center without a State license being issued to you under the MMFLA. While the process of acquiring a license is intricate and needs a significant amount of time and money, the profitability of these provisioning centers far outweighs the expense of acquiring one. If you can qualify for a license and get through the application procedure to obtain a provisioning center license, you need to do so before you begin 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 person who wants to establish a provisioning center and a grow or processor at the very same time. According to the law, there is nothing stopping you from doing this. Even more, you can obtain several provisioning center licenses so that you can operate several provisioning centers in various cities. The licenses do not attach to the individual or the business that is using, permitting you to utilize it anywhere you want. Rather, the licenses attach to the property you provide on your application for the business. Therefore, if you wish to open several provisioning centers, you will have to send several State applications. If you want 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, however you need to send different applications for each license type, and need to fulfill 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 approximately $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can vary the costs depending upon which type of license you apply for. Usually, nevertheless, they charge the maximum enabled, which is $5,000.00 per license application. Further, after you get a State license, there are regulatory assessments that have to be paid annually, 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 stated that starting in 2019 there will be a standardized regulatory assessment that will apply to all license holders, despite the type of license issued. For now, nevertheless, the assessments will remain as noted above. You will also discover that there are other professional charges that you will need to pay in order to guarantee that your application is complete, and that your business plan, with all of its required parts, is up to par with the State's application requests. Those costs can differ drastically, and are hard to predict.

Needless to say, the application and licensing procedure is an pricey 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 mandatory, you should certainly make certain that you are obtaining advice from an MMFLA attorney before you think about 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 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 very best chance 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 declined or denied, 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 costs for this kind 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 business. You will need to potentially buy 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, expenses, and professional services that you need to obtain to make sure that your application is precise and complete, and to make sure that you are currently in compliance with all laws and guidelines, in addition to guaranteeing future compliance. This includes everything from licensing to a full group of workers and much more. It's definitely 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 unlawful to run one in the state of Michigan. Nevertheless, this could change, and that's why it's important to talk to a medical marihuana lawyer frequently, 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 enable a mobile provisioning center.

What Are You Legally Able To Do?

As a provisioning center, your sole purpose is to supply safe medical marihuana to registered qualifying patients. You might 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 correct labeling and tracking. You may not offer these items prior to your getting a license, unless you were operating with city approval prior to February 15, 2018 and you have already submitted an application to the State seeking a license.

Soon a modification 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 regulations and begins accepting licensing applications, only centers licensed by the MMFLA to sell, grow, process, transport or test medical marihuana will be lawfully permitted to make an application for recreational marihuana licenses for the same activity. Therefore, obtaining 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 look 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 allow such centers to operate within their boundaries. Whether your own it or rent it does not matter, but you must have the building. After that, you will have to produce a business plan which 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 guidelines now and in the future.

Conclusion

We hope this provides you with some of the information you need prior to opening a Michigan provisioning center. Needless to say, the process is costly, intricate and time consuming, but the reward and ROI can be considerable. In reality, acquiring a competent MMFLA and MMMA lawyer, 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 applying for a provisioning center license, we would love to have you come in for a consultation.

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