Recreational Cannabis Licenses

So, the voters have spoken and now recreational marihuana possession and use are going to be legal in Michigan (they’re not quite yet, as detailed in our blog Proposal One Passed! What’s Next? What’s Legal?). Keep in mind, the passage of Proposal One does not change the fact that cannabis is still consider a schedule one drug, and it is illegal to possess or use marihuana for any reason under Federal Law, and doing so could lead to Federal charges. While that is unlikely to happen, it is still a possibility, and everyone should be aware of it all the same. Starting December 6, 2018 (though it might be a few days sooner depending on when the vote is officially certified by the State), individuals twenty-one (21) and older can possess and use cannabis, as long as you stay within the requirements of the new statute. However, the real question for many business owners and investors has become, how do I get a commercial license in Michigan’s recreational cannabis industry? Much of that answer is still murky, but there are ways to ensure preparedness when entering the marketplace.

What We Know

Proposal One has set out some basic requirements for obtaining licensing. First, the State has one-year from the date the vote is certified to promulgate administrative rules and regulations, along with an application for commercial recreational cannabis licenses. For at least two years after the application and rules are published, the State will only consider applications from people or business entities that have obtained a commercial license in the medical marihuana industry under the Medical Marihuana Facilities Licensing Act (MMFLA). There
will be six (6) license types under Proposal One’s scheme: growers, processors, retail stores, safety compliance facilities, secured transporters and a new marihuana microbusiness. There will be three classes of recreational marihuana grow licenses, permitting growers a certain number of plants depending on class type. Proposal One will also allow for stacking similar license types, as well as certain different license types together at one location, as is permitted under the MMFLA. The new license type, the marihuana microbusiness, will allow for owners to obtain one license for a marihuana microbusiness (though that may change after three years). The microbusiness license will allow for the growing of up to one-hundred (100) plants, a small processing facility, and a retail store at the same location. However, under the language of Proposal One, the store will not be able to bring in marihuana to process or sell from other retailers, growers or processors, and will not be able to sell its products any where else. We also know that, in reality, it will be at least a year before the State begins issuing any licenses.

 

What’s Still Up in the Air?

The critical questions that remain unanswered involve the regulatory structure the State will ultimately put into place regarding commercial recreational licenses, and which municipalities are going to opt- in with regard to allowing these facilities within their boundaries. There is a lot of speculation about the recreational application process and recreational cannabis administrative regulations, and the likelihood that they will be similar to what is currently in place for commercial medical marihuana licenses. The State has not officially stated a position or given any information about what they intend to do in this regard. While it is a solid bet that the rules the State has established for medical marihuana facilities licensing will be influential on the final regulations regarding recreational commercial licensing, the better bet is that there will be additional regulations and requirements that are not found in the present medical licensing structure that will be added to the recreational licensing structure.

Further complicating things is that, as with the MMFLA, cities, townships and villages will need to individually opt- in to Proposal One’s scheme and affirmatively accept that they want recreational cannabis businesses within their municipal boundaries. Each of the opted-in municipalities will then have to create ordinances to determine zoning, locations and number of these facilities that they are willing to permit. While many cities that have opted-in to the MMFLA likely will also opt-in to Proposal One and recreational marihuana facilities, not all of them will. As a result, planning in this regard is also important. Knowing which municipalities opted-in on their own vote, and which ones were opted-in by voter initiative. Until cities, towns and villages start taking affirmative action to opt-in or out, which is likely to begin prior to the issuance of State publication of the application and regulations, where these facilities will be permitted to locate will be up in the air.

 

What Can I Do Now to Help My Chances

Most importantly, start working on your plan now. Even if you do not have a medical marihuana facilities license yet, there is time to get one, even before the State starts accepting applications for recreational licenses. Partnering with us, or even another experienced firm, gives you the best chance, because we can sit down with you, explain the legal roadmap you will have to navigate, and explain best
practices and procedures to use to put you in the best position to obtain both a medical marihuana and a recreational marihuana facilities license. The process will not be simple. Planning now and getting everything prepared, and adapting as the rules change and municipalities decide whether to opt-in or opt-out, will give you the best chance for a license. Many of the businesses that have not received licenses in the medical marihuana industry have failed because of poor planning and failures to properly disclose either financial background problems or criminal history problems. Good planning, in advance, can avoid those pitfalls and ensure that your license is
reviewed quickly and without the problems that we have seen in applications submitted by other offices on behalf of clients.

The best thing you can do, is schedule a consultation and discuss how you can put your plan together. There is a definite path, with strict boundaries, that leads to getting a license in Michigan. An experienced partner, like us, can help you navigate those requirements, and present you in the best light possible when it comes to consideration of your application. We can also help prepare you in advance for implementation of recreational licensing, and can help start preparing you now, for what will be coming down the road.

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