Pertinent Preparation

Jars of cannabis at a provisioning center.

[dropcap class=”kp-dropcap”]O[/dropcap]n Oct. 3, Michigan’s Marijuana Regulatory Agency (MRA) issued a copy of the application forms and instruction booklet for Adult-Use Establishment Licensing to the public. The application booklet is 106 pages long and goes into detail about the application requirements. In addition to the familiar cultivation, processing, retail, testing and transport licenses, there are additional licenses which are be available. In order to apply for an adult-use facility license, the person or entity first needs to hold a Medical Marihuana Facilities Licensing Act license, with a few exceptions. The exceptions are:

1.) 100-Plant Grow License (to wholesale product to licensed processors or retailers) – An entity is allowed to hold five of these licenses, but not at the same location.
2.) 150-Plant Micro Business License (where the entity grows, can process, and sells the product at the same location). The microbusinesses also will be able to sell at temporary events (see below). This requires compliance with all the requirements applicable to growing, processing and retail licenses. – An entity is allowed to hold only one of these licenses, and may not hold any other license, except for Temporary Events.
3.) Event Organizer – Allows the organizer to host temporary events up to seven days long where sale and/or consumption is allowed (a Temporary Event License is required also).
4.) Temporary Event License – Requires a diagram of the physical layout of the event, a security plan, responsible operations plan, product and waste management plan, marketing plan, list of participating cannabis vendors and employees and insurance. Event applications must be filed at least 90 days before the event. Any product must be moved by secure transporter if the quantity transported at one time exceeds 15 ounces. Such an event may only be held at a venue expressly approved by a municipality for the purpose of holding a temporary event.
5.) Designated Consumption Establishment License – Also requires a responsible operations plan, which shall include a detailed explanation of how employees will monitor and prevent over-intoxication, underage access, illegal sale or distribution and any other criminal activity on the premises. In addition, an applicant is required to attest that the applicant has entered into a labor peace agreement and provide a copy. None of the other licenses require a labor peace agreement, and there is no rule on point, but the forms require it.

All of the licenses (except for Temporary Events) require prequalification approval from the MRA. The Event Organizer License requires prequalification. That process currently takes several months on average, and so persons considering applying are urged to begin the application process as soon as possible (applications began to be accepted on Nov. 1).

Requirements for any cannabis establishment include a copy of the deed or lease to the property, a diagram of the establishment with floor plan, construction details, structure and building type, zoning, security and any occupancy restrictions and plans regarding technology, marketing, inventory and recordkeeping, staffing plan, certificate of use, occupancy and
proof of insurance or bond.

While the requirements for prequalification for medical and recreational licenses are similar, there are no capitalization requirements for the recreational licenses, and those require only one year of tax returns to be submitted, where the prequalification process for medical cannabis facilities licenses require three years of tax returns.

Existing medical cannabis facilities will likely have a quick and smooth transition to be allowed to sell to the adult-use market, and we can expect that licensed medical Provisioning Centers will be able to transition to licensed Adult-Use Retail Stores before the end of the year.

The only license that can be obtained without a location is the Event Organizer License, but any licensed event will need to be approved for a specific date and location. The municipality where the event is to be held must review and approve of the event. Some municipalities already have ordinances that allow various types of temporary events, which could include cannabis events. Other municipalities will need to pass an ordinance to approve such events in order for them to be licensed.

All of the forms and the application booklet are available on the MRA website, including inspection guides for each type of license.