October 31, 2018 Deadline for Caregivers and The Changing Marihuana Dynamic in Michigan

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never come up in any discussion. However, in talking with our marijuana clients, a number of them are inquiring about the viability of the Caregiver model, especially as it was pushed for years. What many in the sector have described as the "Caregiver Model" is going the way of the Do-Do bird on October 31, 2018. Halloween this year will be the extinction event for the caregiver model as numerous have actually recognized it for several years here in Michigan. While Caregivers will continue to have the ability to grow and offer to their registered patients, and for themselves, if they are likewise registered qualifying patients, the "gray market" where they were marketing their excess, and making a fairly good revenue, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver might grow up to seventy-two (72) marihuana plants, if they had 5 registered qualifying patients (the most you were enabled) and they were a registered patient too. Sometimes, several caregivers would gather at one area and grow their plants together, separated by paint lines on the flooring, or in more sophisticated situations, with each having a secured locked space within the larger enclosed, secured center. Several Caregivers could produce far more usable marihuana than their patients can make use of. Those caregivers would certainly after that sell their excess to dispensaries, many of which were running with municipal approval across the State. This "gray" marketplace caused considerable earnings for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were mosting likely to be eliminated by 2021. Many Caregivers and sector insiders really felt that indicated the "Caregiver Model" might continue to create those same earnings for another two or 2 and a half years. The State, however, had other plans.

The State's Response

The State of Michigan, however, had other plans for the upstart marijuana market. First, the Bureau of Licensing and Regulatory Affairs has taken a very scrutinizing strategy to licensing applications where any one of the candidates were Caregivers. Most of those applications have actually been rejected over the past several months since the Board has located that there were failings to disclose by much of these caregivers concerning how much cash they made, just how they made it, and for failing to proclaim that earnings on a State or Federal Tax Return. Nonetheless, in a September 2018 publishing, LARA and the BMMR published that all centers that are running with municipal approval, but which have actually not gotten a State License, need to stop purchasing unlabeled and unauthorized medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any marihuana bought after the October 31, 2018 date by those centers have to be appropriately classified and coded as required by the regulations, and must originate from an appropriately State Licensed grower or processor. The caregivers may still grow, but they will have no methods whereby to market their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Repercussions

Some may argue that there are still licensed or unlicensed facilities that are going to continue purchasing from caregivers, regardless of the State mandate. To make sure, there might be some that take that danger.

Nonetheless, the State has demonstrated a commitment to enforcement and inspection. If the State were to identify that a candidate or a licensed center was still taking caretaker overages and offering them, the State would likely act. If a candidate were to be caught engaging in this model, they would likely be refuted asap by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move forward with sanctions against that center's license, including a suspension or cancellation of the license. Provided how much those licenses are worth, and the price of obtaining any one of the allowed center licensing types, most owners will certainly be extremely reluctant to take chances with the possible loss of their license, or understanding that their license will not be restored.

If you are a caregiver and don't know what to do come October 31, 2018, are a person considering applying for a MMFLA license, or are an applicant that needs representation or has questions about how these modifications will certainly impact you, give us a call. We have the experience and understanding in the marijuana and marihuana law fields to aid address your questions and offer you the assistance you need.

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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 present 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 business 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 use. While a provisioning center can be a lucrative venture, 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 general guideline 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 can transport marihuana in a automobile. Even then, they must do so in strict compliance with the MMMA. Cannabis may only transported 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 likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for as much as five patients (and themselves also 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 facility that is brought by a MMFLA State Licensed Secured Transporter, or, if they have a grow or processing center co-located ( connected to or on the same property) and transportation of the marihuana will not occur on a public road, it can be moved as set forth by lara, BMMR under the Administrative guidelines.

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 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 run a provisioning center, you will have 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 client who enters a provisioning center, you will have to use a point of sale system that has software that is compliant. Every consumer who sets foot in a provisioning center must have their card run through the Statewide Monitoring Database to make sure that they have not already been supplied 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 supplied by the state to operate as a Michigan provisioning center. If you are growing cannabis, you will likewise require to make certain that you obtain a Michigan commercial grow license application. You may want to talk to an MMFLA attorney, such as Fowler & Williams, PLC, about this to guarantee that you are fully licensed, or you will be shut down. Most importantly, DO NOT begin running 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 outweighs the expense of getting one. If you can get approved for a license and get through the application process to obtain a provisioning center license, you should 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 absolutely 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 attach to the person or the business that is applying, enabling you to use it anywhere you desire. Rather, the licenses attach to the property you provide on your application for the business. Therefore, if you want to open multiple provisioning centers, you will have to send several State applications. If you want to acquire various types of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one facility, however you need to submit different applications for each license type, and must satisfy the minimum financial and background requirements independently 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 costs, which can be as much as $5,000.00 per application. Each municipality is different, and they can charge various fees, and they can differ the charges depending upon which kind of license you apply for. Usually, nevertheless, they charge the maximum allowed, which is $5,000.00 per license application. Even more, after you get a State license, there are regulatory assessments that will need 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 said that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, no matter the type of license provided. In the meantime, however, the assessments will remain as noted above. You will also find 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 needed parts, is up to par with the State's application requests. Those expenses can vary considerably, and are tough to predict.

Needless to say, the application and licensing process is an expensive venture, 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 could be considerable.

Should You Have A Legal representative?

While not required, you should certainly make certain that you are acquiring guidance from an MMFLA attorney before you think about opening a Michigan provisioning center. It's important that you get the best possible legal recommendations 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 guarantee that you have all the tools and guidance that you need to give your application the very best opportunity at success. Failure to make sure that your application is complete, and that it provides support for your ability to presently comply and guarantee future compliance with the Administrative rules, your application is a lot more likely to be rejected 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 company 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 be sufficient, realistically, to start 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 mandatory fees, expenses, and expert services that you need to get to guarantee that your application is accurate and total, and to guarantee that you are currently in compliance with all laws and regulations, along with making sure future compliance. This includes everything from licensing to a complete group of workers and much more. It's definitely not cheap, and you need to be prepared for a heavy investment. Nevertheless, as noted above, the market is big, 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, which's why it  is essential to speak with a medical marihuana attorney routinely, so that you are keeping up to date with modifications 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 allow for 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 items have actually been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not offer these products prior to your obtaining a license, unless you were running with city approval prior to February 15, 2018 and you have already sent an application to the State looking for a license.

Soon a modification in law will likely enable recreational marijuana sales. If the ballot initiative passes, for the first 2 years after the State passes recreational marijuana facility regulations 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 look for recreational marihuana licenses for the same activity. Hence, obtaining a provisioning center license under the MMFLA, provides you the opportunity to get in 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 satisfy the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will also need to get an appropriately zoned structure in a city or municipality that has "opted-in" to the MMFLA to permit such facilities to run within their borders. Whether your own it or lease it does not matter, however you must have the structure. After that, you will need 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 abide by the State's guidelines now and in the future.

Conclusion

We hope this offers you with some of the info you need before opening a Michigan provisioning center. Needless to say, the process is costly, complex and time consuming, but the benefit and ROI can be substantial. In reality, acquiring a proficient MMFLA and MMMA attorney, like Fowler & Williams, PLC, can help streamline and simplify the application procedure, and take most of the work off your plate.

If you want details, or wish to come in and speak about requesting a provisioning center license, we would love to have you come in for a consultation.

Am I Ready To Apply for a Medical Marihuana Facilities Grow License?

Thinking about starting a Medical Marihuana Grow so that you can provide marijuana to the medical marihuana market? Are you a Medical Marihuana Act licensed caregiver who wishes to take your product commercial on a larger scale? Thanks to the Medical Marihuana Facilities Licensing Act, now you can do so lawfully, so long as you can successfully get a license from the State to do so. This could be a superb possibility with numerous new owners seeing remarkable degrees of profit as well as success in the market. Nevertheless, if you make this choice, you do need to ensure that you get a Michigan commercial grow license. Failing to do so will certainly cause your endeavor being, most likely, unlawful and lead to court action that will cripple your service before it starts.

Regrettably, the Michigan commercial grow license application is a long, complex and also pricey process. Ask a medical marijuana attorney, and also they will tell you that you need to ensure that you are prepared. Let's take a look at the actions you will have to take, the team you need to build and the position that you might find yourself in.

Who Can Apply?

The very first concern to ask yourself is whether or not you are eligible to apply for a Medical Marihuana Facilities license. The bright side is that anybody, an individual or a full business can apply for a license. Applications started in 2017, as well as there is presently no target date to finish the necessary forms. Of course, there are certain people, that, since they can not fulfill the minimum economic demands, or because they have a disqualifying criminal conviction in their background, are precluded from applying. Nonetheless, assuming you do not have a disqualifying criminal conviction, and you, or your team of capitalists, meet the minimum financial demands, there are two major actions to the MMFLA licensing application process. The very first step will be completed whether you have a final location for your structure or not. Nevertheless, if you have already chosen an area prior to submitting your State application, something that we extremely advise, you can complete both steps at the same time.

Pre-Qualification

Pre-qualification is the initial step, and it begins with an extensive background check. There are 2 sections-- 401 as well as 404 of the Medical Marihuana Facilities Licensing Act (M.C.L. 333.27401 et seq.) to refer to when determining who you need to legally divulge and whether they have a relevant business interest in your operation. This includes individuals such as the spouse of the individual and all corporate officers. This is among the reasons it is worth consulting with an MMMA lawyer as it can be quite complicated to get all the information correct. The State will certainly want to do a deep dive into the backgrounds of not only all of the "interested parties," or members/owners of your cannabis organisation, but the State will certainly also explore the histories of all of those person's spouses as well. Should anyone have a disqualifying criminal conviction in their past, or not be of "good moral character," the State can reject the whole application. In other words, if there is one bad apple in the bunch, the State throws away the entire application. For that reason, it is necessary to find out about the backgrounds of the persons you have in your investment group, before applying for your Medical Marihuana Facilities License. There are a lot of things that a knowledgeable attorney can do to help you plan for your application, and to make certain that any type of possible issues with your application are understood, revealed or planned for before the application is submitted. Nonetheless, this isn't the only reason that an attorney will typically be a crucial and needed hire.

Think about The Price

Before your information can be evaluated by an analyst from the Bureau of Licensing and Regulatory Affairs (LARA), Bureau of Medical Marihuana Regulation (BMMR), you need to pay a $6000 charge for your application. BMMR will certainly decline to move forward with your application until this has been paid completely. Along with being pricey, this fee is non-refundable so you want to ensure that there are no issues with your application that can result in it being turned down. An MMFLA lawyer can make sure that this is the case and also help you navigate any challenging problems. Additionally, before you can acquire State authorization for operation, you will also have to obtain a municipal or city approval. Each city or township will certainly also require you to complete an application and you will certainly need to pay an application fee there as well. The application cost can range depending on what the city wishes to charge, nevertheless, they can not charge more than $5,000.00. Most cities as well as townships are charging the maximum amount. In total, the application costs alone are most likely to be in excess of $10,000.00. That doesn't include the costs of ancillary services, such as accountants, engineers, marketing professionals and various other services needed for your application to be full.

When you have collected and also paid the application fees, all applicants and supplemental candidates will have their fingerprints taken. You might assume that if you currently have actually had your fingerprints taken by local police this step can be missed. However, BMMR will decline finger prints unless they are asked for and also collected by them via the licensing process. You will certainly have to go to an accepted location where your fingerprints can be collected electronically and also submitted for evaluation by the State.

Facility License

This is the second step and remember, if you have already selected a location to grow marijuana, you can finish this step with the first. You have to be prepared to fulfill all the MMFLA rules. During this step, you will certainly need to have a business plan. Nonetheless, that plan should include specific things. You must have every one of the parts required by the State: facility plan, security plan, marketing plan, staffing plan, technology plan, waste disposal plan (if applicable), as well as a record keeping plan. There are specific minimum requirements set forth in the Administrative Rules that regulate MMFLA facilities, with which you must show your business is in compliance.

Your facility has to be located in a city or township that permits MMFLA services to operate. The MMFLA has strict regulations for individuals and organisations preparing to grow in a municipality. If you wish to grow in a district, it should have an ordinance that authorizes marihuana facility operations. Colloquially, the municipality must have "opted-in" to the Medical Marihuana Facilities Licensing Act (list of Michigan municipalities that have actually opted in to MMFLA), and also it must have passed a regulatory ordinance that sets for the rules and also guidelines for those facilities to run within the city or township. The complete standards can be found in 205, yet if you do have any inquiries you need to call your municipal authority. Or, additionally, get your lawyer to do this for you. As the application progresses, BMMR will contact candidates, offering information on any various other requirements, consisting of a pre-licensure inspection of your location or facility.

Authorized

Ultimately, you might gain approval for your license. After you are informed of this, you will need to pay for a regulatory assessment. Presently, the regulatory assessments for 2018 are as follows:

Safety Compliance Facility and Secured Transporters-- $0.00.

Class A Grow License-- $10,000.

Class B Grow License-- $48,000.00.

Class C Grow License-- $48,000.00.

Processor and Provisioning Center-- $48,000.00.

Likely, the State will establish an across the board equivalent regulatory assessment for all licenses in 2019. Regulatory assessments are subject to change each year, so it is impossible to anticipate precisely what it will be. Nevertheless, beginning in 2019, no matter which license you acquire, anticipate the assessment to be imposed and for that assessment to be substantial.

Verdict.

We hope this helps you choose whether you are ready to apply for a Michigan commercial grow license. Bear in mind, with a legal representative on your side, this process can be far easier, and also you will certainly get experienced suggestions on how to proceed properly to make certain that your application is approved. Even after you obtain authorization, legal guidance is suggested to ensure you stay on top of changes to the legislation and policies, and so that you can continue to be in compliance and also keep your service open.

Here at Fowler & Williams, PLC, we focus on aiding clients acquire MMFLA licenses as well as guaranteeing continuing compliance.

Should you choose to retain counsel to assist you on your licensing journey, give us a call.