RIGHT AROUND THE CORNER

The new medical cannabis facilities and tracking acts, and the act amending the Michigan Medical Marihuana Act, take effect December 20, 2016.

Caregivers will be able to continue to grow for up to five other patients, and provide the medicine to only those patients. However, those currently serving as caregivers will have to give up their caregiver cards when they become and owner or employee of a licensed medical cannabis facility; a grower, processor, secure transporter, safety compliance facility or provisioning center. All of these facilities will be required to participate in seamless seed-to-sale tracking intended to reduce the amount of commerce outside the system. It remains to be seen whether that will be effective, given the costs of licensing, compliance and transportation.

People seeking to be licensed entrepreneurs in this emerging commercial market should begin communicating now with city, township and village councils, boards and commissions. Those are the public bodies which have the power to enact ordinances allowing licensing of these facilities. There are well over a thousand townships, plus hundreds of cities and villages in Michigan. Many people seem to be focused on obtaining provisioning center licenses in the more populated areas. Those opportunities will be lucrative, although requiring good customer service, including hospitable staff and dependable hours of operation, in addition to quality products.

“People seeking to be licensed entrepreneurs in this emerging commercial market should begin communicating now with city, township and village councils, boards and commissions.”

Numbers and locations of provisioning centers may be one of the more controversial and difficult subjects for municipal boards to tackle. Those stores likely will be the most noticeable in a community, considering any signage, advertising and traffic. Those factors will certainly be less intensive at the growing, processing, testing and transport and storage locations.

Growing needs to come first, anyway. Without product there will be no processing or retail. Accordingly, it would be prudent for municipalities (and especially rural townships near good transportation arteries) to begin drafting ordinances allowing class A, B and C cultivation licenses. State law provides that those licenses may only be issued for operations in agricultural or industrial areas. Michigan has a lot of agricultural land. If there are sufficient utilities nearby (electric power and water), there may be opportunity for a business to thrive.

Many people expect that some and perhaps many communities will opt out of allowing any licenses. And there is nothing which they would need do to accomplish that. No license will be issued without the municipality passing a licensing ordinance. The license application will not be available until December 15, 2017, with the first licenses to be issued sometime in the first half of 2018. In the meantime, now is the time for people to find talk with their local elected officials to prod them to take advantage of this development opportunity. There will be a three percent tax imposed at the retail level, and the local community hosting the facility will share in 25 percent of the revenue from that tax. The more facilities a community hosts, the greater the share of the tax revenue. That is something which may get notice from those officials. Make sure they hear about that.

The State Bar of Michigan Marijuana Law Section is drafting proposed model ordinances to assist municipalities in working through the licensing process. It will be interesting to see how this develops.

Meanwhile, the “who’s who” expected that Lansing would soon pass a dispensary ordinance again have to cool their heels. Once the new legislation was signed, the city returned to the drawing board to modify their latest draft to comply with the changes in the new laws. It likely will be mid-December before a new draft is completed, and then another public hearing will be held, no sooner than January 2017.