With the recent passing of Proposal 1 on November 6, 2018, it’s no surprise that enterprising individuals are looking at how to open a dispensary in Michigan. The proposal has legalized the use of recreational marijuana, possession up to certain amounts, and has paved the way for legal recreational and medical dispensaries to open.
However, there is still a lot of confusion around the regulation of marijuana, both medically and recreationally, even though medical marijuana has been legal in the state since the passing of the Medical Marijuana Facilities Licensing Act in 2016. This is, in part, due to a regulatory process that has been ongoing throughout 2019. As such, marijuana businesses are set to start appearing on the streets in 2020, meaning that you may not be able to open a recreational store just yet, but there are steps to open a dispensary in Michigan
Know the License That You Need
There are four types of medical marijuana license types. Up to June 13, 2018, the state had processed 546 pre-qualifications and over 150 facility license applications. The licenses are as follows:
- Tiered structure of grower license
- Processor license
- Secure transporter license
- Provisioning center license
- Safety compliance facility license
If you are looking to open a dispensary, then you want to apply for a Provisioning Center license. This covers commercial entities that purchases marijuana from a grower or processer then sells, supplies, or provides marijuana to registered qualifying patients.
Finding the right location
You need a location for your business to be located in, of course. A range of cities, such as Detroit, Grand Rapids, Sterling Heights, and Livonia, could be the perfect place to open a dispensary in Michigan. However, it’s important to be aware of the news on which cities are accepting new dispensaries, and how many licenses they plan on awarding, before making your plans.
Make sure that when you find a location, you get consent from the city municipal administration and work with them to identify areas where the business can be set off. Some cities have requirements for facilities to be established in particular zoned areas that are 1000 feet apart from drug-free zones. Others may have requirements, such as ensuring it has adequate parking space.
If you are considering applying in a city that doesn’t have similar control enactments in place yet, it’s worth looking at the controls in place in other cities, and to choose a location that works to those standards. It’s also wise to consult with the municipals of the cities to see what control enactments are likely to be put in place.
Before you are granted an application, however, you have to be approved by the city council. Opening a provisining center in Michigan begins with the local officials, making it somewhat unlike the other states.
As part of this process, applicants must be able to demonstrate a working knowledge of the marijuana business, which may necessitate working with a consultant before applying for approval. You also have to provide the state with a thorough business plan and prove your financial ability to start and sustain the business for at least two years.
If you get approval, you are then ready to take the next steps to make a pre-approved application.
Acquiring a License
Each municipality approaches the prospect of a new dispensary differently. Picking the right jurisdiction is essential, as a result. This is because municipalities have the ability to opt-in or opt-out as to whether or not they accept new marijuana businesses, as well as how many licenses they are willing to allow and where they are allowed to operate.
Because this process is still ongoing as part of the regulatory preparation period in 2019, it’s important to follow the news for mentions of cities that are allowing new medical marijuana facilities and to be ready to capitalize on an opportunity when it makes itself known.
Furthermore, you must be able to provide plans for how you are going to track the product/inventory, what testing procedures you plan on implementing for all marijuana products, and how the products are going to be packaged. Familiarity with existing regulations and plans for compliance is essential.
About the Term “Dispensary”
Though we may colloquially refer to medical marijuana provision centers as dispensaries, it is, in fact, illegal to address your own facility as that. You cannot refer to the business as a dispensary, nor can you advertise it as a dispensary. You also cannot use the following language in branding or self-referential material:
- Doctor of Pharmacy
- Pharmacy intern
- Pharmacy technician
- Licensed pharmacy technician
- Certified pharmacy technician
As such, those opening a medical marijuana provision center (known as a dispensary unofficially) must be careful in the words and phrases they use to describe and market their business.
What Fees and Startup Costs to Expect
Part of gaining approval to apply for a license in the first place means demonstrating your ability to operate and maintain a medical marijuana provisioning center (or dispensary) financially. The startup costs listed as necessary for a provision center are $300,000. As such, having the right funding ready is essential.
Furthermore, there are also application fees to be considered. Though regulatory changes in time for 2020 might change these, the existing application costs include a $6,000 application fee and the costs of a regulatory assessment, which can cost between $10,000 and $57,000.
Open a Provisioning Center in Michigan With the Right Help
The process of finding a location, gaining approval, and ensuring the best possible application for opening a medical marijuana provisioning center, also known as a dispensary, can be a complex one. The state is accepting new applications across a range of municipalities, but the time frame for receiving approval is unclear.
As such, it’s best to allow for a year and to make sure that you’re seeking the assistance of those who know the industry and the area that you’re applying in. Teams like Fowler & Williams could offer the knowledge and assistance you need.