Thinking about starting a Medical Marihuana Grow so that you can provide cannabis to the medical marihuana market? Are you a Medical Marihuana Act licensed caregiver who wants to take your product commercial on a larger scale? Thanks to the Medical Marihuana Facilities Licensing Act, now you can do so legally, so long as you can successfully obtain a license from the State to do so. This could be a fantastic opportunity with many new owners seeing tremendous levels of profit and success in the market. However, if you make this decision, you do need to make sure that you get a Michigan commercial grow license. Failing to do so will result in your venture being, most likely, illegal and lead to court action that will cripple your business before it begins.

Unfortunately, the Michigan commercial grow license application is a long, complex and expensive process. Ask a medical marijuana attorney, and they will tell you that you need to make sure that you are prepared. Let’s look at the steps you will have to take, the team you need to build and the position that you might find yourself in.

Who Can Apply?

The first question to ask yourself is whether or not you are eligible to apply for a Medical Marihuana Facilities license. The good news is that anyone, an individual or a full business can apply for a license. Applications began in 2017, and there is currently no deadline to complete the required forms. Of course, there are certain people, who, because they cannot meet the minimum financial requirements, or because they have a disqualifying criminal conviction in their background, are precluded from applying. However, assuming you don’t have a disqualifying criminal conviction, and you, or your group of investors, meet the minimum financial requirements, there are two main steps to the MMFLA licensing application process. The first step will be completed whether you have a final location for your building or not. However, if you have already chosen a location before submitting your State application, something that we highly recommend, you can complete both steps at the same time.

Pre-Qualification

Pre-qualification is the first step, and it begins with an extensive background check. There are two sections – 401 and 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 disclose 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 one of the reasons why it is worth consulting with an MMMA lawyer as it can be quite tricky to get all the details correct. The State will want to do a deep dive into the backgrounds of not only all of the “interested parties,” or members/owners of your marijuana business, but the State will also look into the backgrounds 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 deny the entire application. In other words, if there is one bad apple in the bunch, the State throws out the entire application. Therefore, it is important to know about the backgrounds of the persons you have in your investment group, prior to applying for your Medical Marihuana Facilities License. There are a lot of things that an experienced attorney can do to help you prepare for your application, and to ensure that any potential issues with your application are known, disclosed or prepared for before the application is submitted. However, this isn’t the only reason why a lawyer will often be an essential and necessary hire.

Consider The Cost

Before your information can be reviewed by an analyst from the Bureau of Licensing and Regulatory Affairs (LARA), Bureau of Medical Marihuana Regulation (BMMR), you need to pay a $6000 fee for your application. BMMR will refuse to move forward with your application until this has been paid in full. As well as being expensive, this fee is non-refundable so you want to make sure that there are no issues with your application that could lead to it being rejected. An MMFLA lawyer can ensure that this is the case and help you navigate any tricky issues. Further, before you can obtain State approval for operation, you will also have to get a municipal or city approval. Each city or township will also require you to complete an application and you will have to pay an application fee there as well. The application cost can range depending on what the city wants to charge, however, they cannot charge more than $5,000.00. Most cities and townships are charging the maximum amount. In total, the application fees alone are likely to be in excess of $10,000.00. That doesn’t include the costs of ancillary services, such as accountants, architects, marketers and other services necessary for your application to be complete.

Once you have gathered and paid the application fees, all applicants and supplemental applicants will have their fingerprints taken. You might think that if you already have had your fingerprints taken by local law enforcement this step can be skipped. However, BMMR will not accept fingerprints unless they are requested and collected by them through the licensing process. You will have to go to an approved location where your fingerprints can be collected electronically and submitted for review by the State.

Facility License

This is the second step and remember, if you have already chosen a location to grow marijuana, you can complete this step with the first. You must be prepared to meet all the MMFLA rules. During this step, you will need to have a business plan. However, that plan must include certain things. You must have all of the parts required by the State: facility plan, security plan, marketing plan, staffing plan, technology plan, waste disposal plan (if applicable), and 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 must be located in a city or township that permits MMFLA businesses to operate. The MMFLA has strict rules for individuals and businesses planning to grow in a municipality. If you want to grow in a municipality, it must 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 who have opted in to MMFLA), and it must have passed a regulatory ordinance that sets for the rules and guidelines for those facilities to operate within the city or township. The full guidelines can be found in 205, but if you do have any questions you need to contact your municipal authority. Or, alternatively, get your lawyer to do this for you. As the application progresses, BMMR will contact applicants, providing information on any other requirements, including a pre-licensure inspection of your location or facility.

Approved

Finally, you may gain approval for your license. After you are notified 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 every year, so it is impossible to predict exactly what it will be. However, beginning in 2019, regardless of which license you obtain, expect the assessment to be imposed and for that assessment to be substantial.

Conclusion

We hope this helps you decide whether you are ready to apply for a Michigan commercial grow license. Remember, with a lawyer by your side, this process can be far easier, and you will gain expert advice on how to proceed correctly to ensure that your application is accepted. Even after you obtain approval, legal advice is recommended to guarantee you stay on top of changes to the law and regulations, and so that you can remain in compliance and keep your business open.

Here at Fowler & Williams, PLC, we specialize in helping clients obtain MMFLA licenses and ensuring continuing compliance.
Should you decide to retain counsel to help you on your licensing journey, give us a call.

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