Getting Ready for Licensing!
Major buzz at Bloom City Club in Ann Arbor, host site for December’s, and every month’s, meeting of Women Grow-Southeast Michigan chapter. There is barely room to squeeze into a seat; and once you are sitting you know you will stay seated until the end so you don’t have to squeeze your way to the aisle.
The speaker is cannabis industry attorney Paula Givens, from the Cannabis Legal Group in Royal Oak. Paula came to the industry after a career prosecuting violations of federal labor law and now specializes in regulatory compliance. She helped to create applications for medical marijuana licensure in Illinois and New York, and recreational licensure in Oregon.
She is here to speak about changes that are coming to the cannabis world as a result of the legislature’s recently passed Medical Marijuana Facilities Licensing Act (MMFLA).
What’s New under MMFLA?
Licenses to Operate Facilities
“What’s new in the industry,” she begins, “is that real State of Michigan licenses to operate medical marijuana facilities are in the future.” In particular, MMFLA provides for five new medical marijuana licenses:
- Class A: 1 to 500 plants
- Class B: 500 to 1,000 plants
- Class C: 1,000 to 1,500 plants
- Processor (extraction/manufacturing)
- Provisioning Center (dispensary)
- Secure Transportation
- Safety Compliance Facility (independent testing laboratory).
“The MMFLA does not abolish Michigan’s current caregiver/patient system,” she says. “This new licensing systems presents to Michigan growers, however, a choice: continue with caregiving or become licensed by the State. Under the MMFLA, Michigan’s caregivers are not allowed to be both an owner of a license and a caregiver.”
Lawful Medical Marijuana Dispensaries
“What’s new,” she continues, “is that lawful medical marijuana dispensaries are around the corner for Michiganders!” Recalling the buzz-killing State of Michigan v. McQueen (2013). where Michigan’s Supreme Court considered marijuana dispensaries and found them to be not protected by the voter-approved Michigan Medical Marijuana Act (MMMA), she explains:
Presently, dispensaries operate at the intersection of a local ordinance that may or may not offer a local permit, and a lack of local enforcement. Remember, there is no defense under MMMA. As such, most dispensaries do not operate within the technical boundaries of protection offered by the MMMA.
Medical Marijuana Licensing Board
“What’s new,” she adds, “is a five-member Medical Marijuana Licensing Board within the Michigan Department of Licensing and Regulatory Affairs to implement and administer the MMFLA.” The five board members—maximum three from the same political party—will be appointed by the governor for four-year terms. Its role will be to license, regulate, and enforce the regulatory system that was established for the growth, processing, testing, and transportation of medical marijuana under the MMFLA.
While the board will have significant authority over the administration of the rules created to implement the MMFLA, the MMFLA specifically denies the board the authority to establish any limit on the number or type of licenses that may be granted. This authority, however, is left to municipalities, which may limit the number through zoning and buffers.
Finally, she adds, “What’s new is the tracking aspect of the MMFLA and a related new law, the Marijuana Track Act.”
The MMFLA requires an Internet, databased Statewide Monitoring System to track the movement of all marijuana on a 24-hour/365-day basis to ensure that only registered patients purchase medical marijuana and not in amounts in excess of limits established under the Michigan Medical Marijuana Act.
The Marijuana Tracking Act spells out the details of the tracking system.
Fees, Assessments, and Taxes
According to Paula, there will be fees, assessments, and taxes associated with obtaining and maintaining licenses under the MMFLA but specific amounts have not been determined:
- Application Fees (State): The board will be responsible for setting the amount but they haven’t yet. Givens’ Cannabis Legal Group predicts application fees to cost between $5,000 and $10,000, a range that she says “would be consistent with similar fees charged by Oregon’s Liquor Control Commission and the Colorado Marijuana Enforcement Division for marijuana licenses.”
- Application Fees (Local): The MMFLA allows municipalities to charge an annual fee of $5,000 that should not be confused with the state’s application fee. “Some experts are predicting that municipal application fees under the new laws will be capped at $5,000. This is not necessarily true, especially if municipalities advocate before the new agency adopts its administrative rules to convince the state that they too should be able to charge in excess of $5,000.”
- Regulatory Assessment (State): The assessment, to be established by the board, will be paid annually by licensees to cover administrative, legal, regulatory, and enforcement expenses. “It may, for a Class A Grower License, be $10,000.” Givens expects the regulatory assessment for processors and provisioning centers to be between $5,000 and $10,000–annually.
- Tax: The MMFLA creates a Medical Marijuana Excise Fund generated through a 3% tax on the gross retail receipts of all provisioning centers (dispensaries). “It will be dispersed, at the close of each fiscal year, to state, local, and municipal governments and subdivisions.”
Moving Forward to Get a License
Givens expects the draft rules for the new law to be ready by August or September 2017 and finalized in September or October, then probably implemented in stages by type of license, probably beginning with cultivators. She advises that it is not too soon to begin preparing to obtain a state medical marijuana license.
If you are hoping to get a license:
- “Find property in a friendly city: Check ordinances. What are the buffers: 500 feet? 1,000 feet?”
- “If you already own a building or land, call to get on the agenda to discuss the current ordinance or to discuss getting an ordinance if they don’t have one. Bring patients with you to the meeting. Bring a compliance lawyer to explain seed-to-sale tracking.”
- “The zoning is the thing. Agricultural and industrial are unzoned. Your best success will be in an industrial zone.”
Between now and implementation a lot can happen. As MiLegalize prepares for a new campaign to legalize marijuana, our best effort should be to ensure that signatures are collected to get it on the 2018 ballot. However, “It is not expected that the efforts of MiLegalize will have any impact on the first stages of implementing the MMFLA,” Givens says.
In the meantime, we prepare for life under the Medical Marijuana Facilities Licensing Act (MMFLA). “I hope members of industry get a seat at the table,” Givens says.