Preparation is Key

When I first read the final “as passed” version of then House Bill 4209, now the Medical Marihuana Facilities Licensing Act (MMFLA), and saw that applications would not be accepted until December 15, 2017, I was dismayed at the length of time hopeful licensees would have to wait. For many, this state-level regulatory fix is years overdue, and to wait another 15 months after passage seems unnecessarily long. So, what is the state doing with all of this time, and what is a hopeful cannabis business owner to do in the intervening months?

As for the state, there are some built-in deadlines that it must meet. The governor-appointed Marihuana Licensing Board will oversee licensing affairs. Although there is no specific time frame for the publishing of draft regulations or their adoption, it is presumed that the regulations will be out in final form well in advance of December so that applications can be created, produced and available to prospective licensees.

“For hopeful cannabis business license holders, expect to see state applications published shortly before the December 15 application date.”

Licensing And Regulatory Affairs (LARA) is the administrative body in which the Marihuana Licensing Board will be housed. LARA also contains the Medical Marihuana Program, the Corporations Division and the Liquor Control Commission. Therefore, while many of the substantive rules will be unique to the manufacturing and distribution of medical cannabis, the administration of the MMFLA will not be unfamiliar to the department, and this provides some hope for its smooth implementation.

For hopeful cannabis business license holders, expect to see state applications published shortly before the December 15 application date. In the meantime, potential applicants should, at a minimum be preparing business plans for their internal use, preparing operations plans for presentation to municipalities, gathering information that we know will be on the application because it is listed in the MMFLA, securing a legal interest in property in a municipality that has indicated it will participate in the program and shoring up all personal legal and financial matters such as outstanding liens, court orders and tax bills.

If applicable, hopefuls should also be negotiating and finalizing corporate documents and joint venture agreements. If that sounds like a long, expensive list, consider that it is unlikely that the first licensed facilities will begin generating any revenue until the summer of 2018.

The regulations will put meat on the skeletal framework created by the MMFLA like, among other things, setting day-to-day operations rules and quality control standards, minimum insurance requirements, employee qualifications, testing standards, application fees and violation fines, waste disposal requirements, patient purchasing limits and consumer marketing restrictions. They may also do things like set minimum square footage requirements and set dosage and portion sizes.

Getting in on the proverbial ground floor of the Michigan medical cannabis industry requires a hefty investment of time and requires staying educated and up-to-date. Budding cannabis business entrepreneurs should start by visiting michigan.gov/lara and click on the “Medical Marihuana Licensing” tab.