If you’re an entrepreneur or investor looking to stake your claim in an emerging market, cannabis may be an attractive option. However, before you take the plunge, you should become acquainted with the state laws and regulations that make “cannabusinesses” possible in Michigan.
Whenever you start a new business, you need to find out what steps to take to establish the groundwork. In other words, you need to acquire the appropriate licenses, fill out the right paperwork, and make sure the legality of your business is firmly, properly established. However, doing this alone can be next to impossible. In order to ensure your business has everything it needs to survive and thrive, make sure you discuss your plans with our cannabis attorneys.
WHY CHOOSE GREWAL LAW?
When you work with our firm, you can rest easy knowing our team of cannabis lawyers has the experience necessary to help you. We are familiar with the local and state laws and we can work with you to ensure your business has its best chance.
PROPER LICENSING FOR CANNABIS BUSINESSES
Thanks to the enactment of the Medical Marihuana Facilities Licensing Act (MMFLA) and the Michigan Regulation and Taxation of Marihuana Act (MRTMA), Michigan has paved the way for entrepreneurs to pursue medical and recreational cannabis businesses. Due to the language of Michigan’s recreational cannabis law, those seeking to operate a recreational cannabis business will have to first obtain licensing on the medical side before they will be able to transition to a recreational business, with some minor exceptions.
If you are interested in obtaining a medical marijuana business license, make sure you know the specifics. Medical marijuana business licenses are broken down as follows:
Growers, based on plant count
- Class A – 500 plants
- Class B – 1,000 plants
- Class C – 1,500 plants
- Provisioning Centers, (also called dispensaries)
- Secured Transporters
- Safety Compliance Facilities
The MMFLA created a highly regulated supply chain for the commercial medical marijuana industry in Michigan. Each one of the five facilities, the grower, processor, dispensary, transporter, and the safety compliance facility, plays an essential role.
All cannabis plants and products are tracked and monitored through a statewide monitoring system to ensure patient safety and to prevent theft or diversion of product to the black market. As a result, the MMFLA has facilitated tremendous opportunities for entrepreneurs looking to start cannabis businesses.
STARTING A CANNABIS BUSINESS IN MICHIGAN
In order to obtain the correct licensing in accordance with the MMFLA, and to maintain a respected, lawful business, you need the help of an experienced cannabis lawyer. If you are ready to figure out the next step, our firm is here to provide the guidance and legal advisement you need.
CONSIDER THE EXPENSE
The licensing process can be expensive. The Michigan Department of Licensing and Regulatory Affairs (LARA) has established the Marijuana Regulatory Agency (MRA) to handle all matters related to commercial cannabis business licensing.
The MRA has established two different categories of fees at the state level for medical marijuana businesses:
- First, there is a $6,000 application fee for all applicants.
Second, there is an annual regulatory assessment fee.
These fees are currently set as follows:
- Growers: Class A - $10,000, Class B - $66,000, Class C - $66,000
- Processors - $66,000
- Provisioning Centers - $66,000
- Secured Transporters - $66,000
- Safety Compliance Facilities - $0
The MRA has also established capitalization requirements for all potential
applicants. According to the MRA, all applicants must submit CPA-attested
financial statements to meet the following capitalization requirements:
- Class A - $150,000 ($37,500 in liquid assets)
- Class B - $300,000 ($75,000 in liquid assets)
- Class C - $500,000 ($125,000 in liquid assets)
- Processors - $300,000 ($75,000 in liquid assets)
- Provisioning Centers - $300,000 ($75,000 in liquid assets)
- Secure Transporter - $200,000 ($50,000 in liquid assets)
- Safety Compliance Facility - $200,000 ($50,000 in liquid assets)
In addition to the requirements above, applicants will also have to pay a licensing fee to the local municipality where their business will be located. This fee cannot exceed $5,000 annually.
BE PREPARED FOR THE BACKGROUND CHECK
Each investor who owns at least 10% of the applying business will have to disclose a comprehensive set of documents as part of the background investigation. These documents typically span several hundred to several thousand pages, depending on the investor and their financial history.
These required documents include:
- Tax Returns
- Bank Statements
- Loan Statements
- Criminal Records
- Commercial Licensing Documents
THE APPLICATION PROCESS TAKES TIME
The application process can be quite intensive overall. In order to protect their interests and get through the process quickly, applicants will need a team of professionals on their side. When you work with a professional attorney and other cannabis legal experts, it can help ensure you meet the rigorous and stringent licensing standards established by the state and local government. Most applicants will require the services of an attorney, an architect, a CPA, a commercial real estate agent, and licensed contractors.
ADULT USE (RECREATIONAL) CANNABIS BUSINESSES
With Michigan voters’ enactment of the Michigan Regulation and Taxation of Marihuana Act (MRTMA) in November 2018, Michigan is poised to begin accepting applications for commercial businesses that seek to cultivate, manufacture, and sell cannabis for recreational use to those who are at least 21 years old.
Michigan’s Marijuana Regulatory Agency (MRA) will begin accepting applications for Adult Use Cannabis businesses on November 1, 2019. If you are interested in pursuing a license, contact our office for a free introductory consultation. Please keep in mind that with the exception of the Microbusiness and the 100 plant Grower license, Michigan law requires that the business first be licensed for medical marijuana before the business can transition to recreational sales.
Michigan will begin accepting applications for the following licenses beginning on November 1, 2019:
- Class A – 100 plants
- Class B – 500 plants
- Class C – 2,000 plants
- Secure Transporter
- Safety Compliance Facility
In addition, the MRA has authorized the following additional special license types:
- Designated Consumption Establishment
- Excess Marihuana Grower
- Marihuana Event Organizer
- Temporary Marihuana Event
If you’re interested in learning more about the application process for any of these licenses, contact the cannabis law attorneys at Grewal Law PLLC. The cannabis market presents a unique investment opportunity to be a part of a newly legalized industry with an already established customer base. Our cannabis law division is here to assist you with any questions that you may have to start your own cannabusiness.
READY TO GET STARTED? CALL US AT (888) 211-5798
Our cannabis law attorneys at Grewal Law PLLC have been assisting entrepreneurs pursue licensure across the state of Michigan for years. We have extensive experience working with hopeful businesses, and we have the legal knowledge necessary to protect your interests and investments.
If you are interested in pursuing a cannabis business, contact our cannabis law attorneys at Grewal Law PLLC today.