Cathleen Francois, Exec. Dir.
“The purpose of this bulletin is to advise the public and potential medical marihuana facility applicants of the Bureau of Medical Marihuana Regulation’s (BMMR) intended application process. This bulletin is only for advisory purposes and is subject to change.”
Thus reads the ‘The Medical Marihuana Facilities License Application Process’ Advisory Bulletin released on October 12, 2017 from the Michigan Licensing and Regulatory Affairs (LARA) office.
Those who are presently involved in the industry that Michigan is evolving are more than aware of the fluid space and shifting sands in which they are finding themselves. Since last months conference in Detroit, Director of LARA, Shelley Edgerton, ran down the facts and responsibilities of LARA and the newly appointed Medical Marihuana Licensing Board and Justin Dunaskiss of Dunaskiss Consulting and Development addressed the facts, efforts and support of the lobbying efforts of his company, several changes and structural processes have been put into place.
Flint native, Rick Thompson, Head of the Michigan Cannabis Business Development Group (www.micbd.com) is no stranger to the marijuana industry. He’s been following the health and business markets for nearly his entire career. This weekend, he once again hosted the states most informative conference event, this time at the Kettering Hotel in Ann Arbor.
At this months conference, State Representative Yousef Rabhi spoke of his bill HB 5014 and the support of safe access to the current dispensaries during the transition of full legalization of their products. He also speaks of the revenue that will be increased for the state and all citizens, as well as the inability of the current legal system to create a resolution to the racial and social issues that are incurred by the present laws.
Stressing the common sense approach of the states rule development, Dunaskiss notes that the 3 public acts have built a strong foundation, but reminds the attendees that any one future bill can change the industry. Public Acts 281, 282, and 283, passed September 21, 2016 were reviewed. Also clarified were the 5 Licenses agreed upon, and the stacking issue when it comes to the commercialization, with once again the understanding that even that can change. Vertical integration, classes, and co-location for licensing is available at this time. Distribution licensing is supported by the law enforcement and has been modeled after the pharmaceutical industry model. Common sense law has created the idea of transport being watched every 2 weeks within once facility by the distributor to assure accuracy of transporting the product from one place in the facility to the next. Testing industry must have only that one license; at this time, you may not hold this license within a seed to sale facility.
Other reminders were that the local municipality is completely allowed to determine whether, where, and what type of licensing and businesses will be allowed. As of today, only a dozen municipalities have opted in, hundreds are in the process of negotiating the idea, but hundreds are waiting to see what happens within the state rules.
Clear delineations are being structured, financial credibility, (true interest clause), stringent background checks; the state will be looking at who has what percentage of the company itself.
His final recommendations; be professionally prepared, keep updated, find the things that will keep you abreast and supported. Even your marketing plan can be turned upside down by one decision.
Edgertonl is consistently candid on all of the information she provides. Her vision of how the applications will be reviewed is consistent with her common sense. She states that currently the Emergency Rules for the industry is approximately 30 pages and continues to be created.
She explains that creating an industry of this potential magnitude and diversity is complex. People need to understand the levels of needs within the businesses. Insurances, facility requirements, are necessary. OSHA and MOISHA rules will apply. Third party background checks for employees will be part of a company’s businesses paperwork. Edgerton, states that she is expecting great things from the people within the industry and the state itself. They have been putting out the resources and information as soon as it is developed.
Lately it has been the application process that has been addressed.
The process will be electronic and some applications may take more time than others.
Asking for your CPA or attorney’s aid may be beneficial before you before you apply.
Some rules from the department may seem strict, but the two step application process allows for pre qualification. Some municipalities are limiting their licenses. This pre-qualification period allows potential businesses the ability to shop around their real estate.
Background checks will be going through the FBI and all with felony charges will be denied.
Added legal knowledge and training is important, and LARA is answering with optioned information and classes to be streamed trainings as well as local seminars. These will give advanced information to anyone interested, but, she warns that everyone make sure to pay attention to the website, as nearly daily changes could be made that will affect the whole of the industry. For example, the Treasury just put out a bulletin on the excise and 6% sales tax, with a 3% excess tax will be on all retail products.
The applications for work groups were based on the method used in Colorado and the first round for the 5 groups created 700 applicants. The work groups will be going on for quite some time and the average number for the groups were 10-15 members. Another round will likely be in the beginning of 2018. The next application window has not yet been determined. She appreciates the scientific information that comes in from these representatives and believes this is a true support for patients.
Attorney, Paula Givens, of the Michigan Marijuana Law Experts proved her commitment and expertise with several statements and suggestions, but also warned that what the state decides upon will likely be largely developed on the rules of states with existing, working platforms.
Her takeaway on what should you be doing now to apply?; Find your location and then get on your municipality to assure you have an ordinance.
IRS section says 280E: Any plant touching business affects the corporate structures of your business.
Givens explains that the business taxes must be worked out with a learned and skilled accountant, for instance, Jordan Cornelious CPA, whose business is in Colorado. She highly suggests to read the MMFLA, including the definitions, and particularly sections 4 & 5 on commercial, industrial, and agricultural rules before creating any business model.
She states that other important research is within the Oregon Liquor Control Commission website that shows all of the probable requirements. No one creates a entirely new wheel, so about 85% of all of the standards are the same state-to-state, expecting that the security, inventory, waste, plans can be different but with the same general requirements.
At this point in time, all Certified labs must have a PhD.
Givens also mentions waste-water and how it seems to now be ignored by the standards.
Also remember that consumables, “edibles” demand professional kitchens, and food safety consultants are needed for food; this is food. Colorado and Oregon even have different permits for their ‘food handlers’.
Other suggestions: Create a corporation instead of an LLC when it comes to any plant touching company.
Have the facility in a different business and lease the property to your grow/plant company.
Craig Aaronoff, Attorney from the Cannabis Legal Group in Oakland County, explains that the
Caregiver role might change; people like Seniors may not be able to get to their Provisioning Centers. This may change the roll of other responsible parties and transportation licensing.
He reminds us that with over 1700 Municipalities in Michigan, all must choose to opt in, and that
the township next door may actually be the one in charge of the property businesses may be looking at, and gave examples of how one municipality may rule over another.
Aaronoff’s suggestion – Find your real estate and then educate yourself on the governing municipality; Trustees in villages, townships have Trustees and board members, city’s could have Commissioners and Mayors. Each will have a different way of making pertinent decisions.
This allows the investor to start putting their packages together. Build your plans and teams now so that you are prepared for your business when the times comes. Study the MMFLA to make sure you know the law and structure your business accordingly. He invites people to stay connected to the list of areas involved with the industry with a link to their often-updated municipal listing: www.CannabisLegalgroup.com/municipalities
For more information about the Michigan Cannabis Business Development Group, visit
http://micbd.com or email rick Thompson at 4mrick@gmail.com