2018-03-18 / Insight

The basics

Question: What are the capitalization requirements for starting a medical marijuana business? Answer: Applicants are required to demonstrate capitalization amounts to operate and maintain the proposed marihuana facility as follows:

• Grower: Class A — $150,000

• Grower: Class B — $300,000

• Grower: Class C — $500,000

• Processor: $300,000

• Provisioning Center: $300,000

• Secure Transporter: $200,000

• Safety Compliance Facility: $200,000

The capitalization sources can be demonstrated as follows:

• At least 25 percent in liquid assets. Liquid assets include assets easily convertible to cash. Examples of liquid assets may include, cash, marihuana inventory (in compliance with the administrative rules), CD’s, 401(k), stocks, and bonds.

• Remaining capitalization may be evidenced in either additional liquid assets or non-liquid forms, for example equity in real property, supplies, equipment, and fixtures.

• Evidence must be provided proving that there is no lien or encumbrance on the asset provided as a source of capitalization.

Additionally, the capitalization amounts and sources must be validated by CPA at tested financial statements Q:

What are some reasons a person might not be able to obtain a license for a medical marijuana business?

• The applicant is ineligible if he or she has knowingly submitted an application for a license under this act that contains false information.

• The applicant is ineligible if he or she fails to demonstrate the ability to maintain adequate premises liability and casualty insurance for its proposed marihuana facility (an insurance policy that covers at a minimum of $100,000).

• The applicant cannot hold an elective office of a governmental unit of this state, another state, or the federal government; is a member of or employed by a regulatory body of a governmental unit in this state, another state, or the federal government; or is employed by a governmental unit of this state. This subdivision does not apply to an elected officer of or employee of a federally recognized Indian tribe or to an elected precinct delegate.

• The applicant, if an individual, is ineligible if he or she has been a resident of this state for less than a continuous 2-year period immediately preceding the date of filing the application. (This requirement does not apply after June 30.)

• The applicant is ineligible if he or she has been convicted of or released from incarceration for a felony under the laws of this state, any other state, or the U.S. (federal law) within the past 10 years or has been convicted of a controlled substance-related felony within the past 10 years.

• The applicant is ineligible if he or she has been convicted of a misdemeanor involving a controlled substance, theft, dishonesty, or fraud in any state within the past 5 years.

• The applicant is ineligible if he or she has been found responsible for violating a local ordinance in any state involving a controlled substance, dishonesty, theft, or fraud that substantially corresponds to a misdemeanor in that state within the past 5 years. Q:

Does a municipality have any involvement with a license? Answer: Yes, a municipality (city, township or village) has the following involvement:

• Must pass an ordinance which authorizes the type of facility you wish to open;

• May limit the number of each type of facility within the municipality’s boundaries;

• Any other ordinances relating to marihuana facilities;

• May adopt zoning regulations relating to facilities within its jurisdiction;

• The municipality must receive notice from you that you have applied for any one of the five licenses;

• May establish an annual fee to be paid by you; the fee can be as much as $5,000;

• Must approve your request to have your license transferred, sold or purchased. Q:

Will provisioning centers be held accountable for educating patients who buy from their store? Answer: The Michigan

Dept. of Licensing and

Regulatory Affairs, through the Michigan

Medical Facilities

Licensing Act (MMFLA) and emergency administrative rules, does not impose any requirements related to patient education.

Local ordinances may require a provisioning center to provide patient education.

Q: Can someone hold a CPL license and a medical marijuana facility license? Answer: There are no restrictions in the

MMFLA that prevent a CPL holder from obtaining a medical marihuana facility license.

Q: Can a medical marijuana transporter deliver product anywhere in the state or just within the city where it has its license? Answer: A secure transporter may travel through any municipality to transport marijuana based product.

Q: What are qualifying conditions for medical marijuana cards in Michigan?

Answer: According to NORML.org, the following:

• Alzheimer’s disease

• Amyotrophic Lateral Sclerosis

• Cachexia or wasting syndrome

• Cancer

• Chronic pain

• Crohn’s disease

• Glaucoma


• Hepatitis C

• Nail patella

• Nausea

• Post-traumatic stress disorder (PTSD)

• Seizures

• Severe and persistent muscle spasms

Q: How can I find a medical marijuana dispensary?

Answer: The website weedmaps.com features a map of local dispensaries based on your location. (It also includes locations where a medical marijuana prescription might be obtained.)

Q: What do medical marijuana dispensaries look like?

Answer: Forget Rastafarian flags or Bob Marley shrines. Reports from places where facilities are already operating around the country indicate that most dispensaries feature contemporary designs — similar in size and look of a nice coffee shop. Glass display cases typically allow customers to view various marijuana strains available for sale. Other products, such as edibles, also are likely to be on display.

Q: Are there different kinds of medical marijuana? Answer: Yes. Be sure to talk to those who work in dispensaries for the most accurate information. Generally, however, there are two basic types of cannabis: sativa (a more upbeat, cerebral sensation) and indica, which is used more as a pain killer, or for those seeking a sedative effect. There are also hybrids that combine different types of sativa and indica for those seeking different types of treatment.

(Sources: Michigan Dept. of Licensing and Regulatory Affairs; CheatSheet. com; LifeHacker.com; Weedmaps.com; norml. org/legal/item/michigan medical-marijuana

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