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, but only if you get 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 informally as a "dispensary." The existing policies 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 organisation where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) can come to acquire medical marihuana for medical usage. While a provisioning center can be a lucrative endeavor, there are a couple of things you to know before you move forward.

Can You Transport Marijuana In A Private Vehicle?

Currently, under Michigan law, the basic guideline is that possession and transport of marihuana in a car 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 automobile. 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 persons in the traveler compartment. You might also not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can transport usable marihuana for up to five 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 road, it can be moved as stated by LARA, BMMR under the Administrative guidelines.

Just How Much Cannabis Can You Provide?

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 offer 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 operate 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 the use of twenty-four (24) software programs that are METRC compliant. Every client who sets foot in a provisioning center, you will have to use a point of sale system that has software that is compliant. Every consumer 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 given their maximum daily allotment of 2.5 ounces from another licensed provisioning center. A provisioning center should 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 acquired 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 cannabis, you will likewise require to ensure that you apply for 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 begin operating your provisioning center without a State license being issued to you under the MMFLA. While the process of obtaining a license is complex and requires a significant quantity of time and money, the success of these provisioning centers far surpasses the expense of getting one. If you can get approved for a license and make it through the application process to get 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 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 exact same time. According to the law, there is nothing stopping you from doing this. Further, you can acquire numerous provisioning center licenses so that you can operate multiple provisioning centers in various cities. The licenses do not attach to the individual or the business that is using, enabling you to utilize it anywhere you want. Rather, the licenses connect to the property you list on your application for the business. For that reason, if you want to open multiple provisioning centers, you will need to submit multiple State applications. If you prefer 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 meet the minimum financial and background requirements individually 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 costs depending on which type of license you apply for. Generally, however, they charge the maximum allowed, which is $5,000.00 per license application. Further, 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 stated that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, no matter the kind of license provided. For now, nevertheless, the assessments will remain as noted above. You will also find that there are other professional costs 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 needed parts, is up to par with the State's application requests. Those costs can vary significantly, and are difficult to predict.

Needless to say, the application and licensing procedure is an costly 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 return on investment might be significant.

Should You Have A Attorney?

While not mandatory, you should definitely make certain that you are obtaining advice from an MMFLA legal representative before you consider opening a Michigan provisioning center. It  is very important that you get the very best possible legal advice 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 make sure 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 offers support for your ability to presently comply and guarantee future compliance with the Administrative rules, your application is much 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 expect the overall start-up expenses for this kind of company 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 start 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, expenses, and expert services that you need to acquire to ensure that your application is precise and total, and to guarantee that you are presently in compliance with all laws and policies, along with guaranteeing future compliance. This includes everything from licensing to a full group of workers and much more. It's definitely not cheap, and you need to be prepared for a heavy financial 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 currently prohibited to operate one in the state of Michigan. Nevertheless, this could change, and that's why it's important to speak to a medical marihuana lawyer frequently, so that you are keeping up to date with changes to the law. Marijuana law is an evolving and changing field, and as a result, there might 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 offer 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 items have been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not sell these items prior to your getting a license, unless you were running 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 change in law will likely permit recreational cannabis sales. If the ballot initiative passes, for the first 2 years after the State passes recreational cannabis facility guidelines and begins accepting licensing applications, only facilities licensed by the MMFLA to offer, grow, process, transport or test medical marihuana will be legally allowed to apply for recreational marihuana licenses for the same activity. Hence, acquiring a provisioning center license under the MMFLA, gives you the chance to go into the recreational market, where others will not.

What Are The Requirements?

In order to obtain 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 obtain an appropriately zoned building in a city or township that has "opted-in" to the MMFLA to permit such centers to operate within their borders. 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 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 info you need prior to 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, getting a qualified 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 discuss looking for a provisioning center license, we would love to have you come in for a consultation.