October 23, 2017 no comments

Michigan Medical Marijuana Licensing Update

In 2008, 63% of voters approved a medical marijuana measure that legalized marijuana in Michigan. Michigan’s original law established requlations for patients and caregivers but did not establish regulations for the businesses that made medical marijuana available to them. Earlier this year, and in an effort to fill in the gaps in the initial law, lawmakers in Michigan passed three bills that will reform the state’s medical marijuana program and provide for the licensing and regulation of medical marijuana businesses.

On December 15, the state will begin offering applications for five licenses: growers, processors, testers, transporters and dispensaries. The Michigan Medical Marijuana Licensing Board is expected to begin awarding licenses beginning in the first quarter of 2018. The state is expected to adopt temporary regulations prior to December 15 in order to begin processing the new applications.

Under the new statutory scheme local municipalities will be allowed to opt in and adopt a local ordinance or opt out and determine not to allow medical marijuana to be grown or sold in their municipality. Aside from receipt of local approval and applicant will need to engage in a two step process for approval.

The first is a pre-qualification application, that will allow the state to do a background check on the individual and business, that will include among other items submittal of state-approved identification and percentage of interest for all other persons or businesses with an interest in the license; documentation on type of business organization, financial information, regulatory compliances, criminal history check with fingerprinting, litigation history and tax history company business registration documents including operating agreement or by-laws, prior or existing regulatory licenses, income information bankruptcy history, and tax compliance certificates.

The documentation that must be included in the second step of the process pertains to the actual license and includes the type of license, proof of the municipal approval and copy of its medical marijuana ordinance; plans for technology, staffing, inventory, security and record keeping plans; the medical marijuana facility’s floor plans and layout; and proof of insurance, bond or securities for the actual facility. Recommended capitalization requirements range from $150,000 for a dispensary to $500,000 for a medical marijuana grow operation for up to 1,500 plants which means you will need to demonstrate up front the necessary financial backing to obtain licensure which may have the effect of excluding smaller players from the marketplace. The Michigan state licensing Board is expected to begin issuing licenses after the first quarter of 2018.

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