Michigan Criminal Defense Law Blog

You will need a minimum of $150,000.00 and as much as $500,000.00 of both liquid and non-liquid assets combined.  Many observers believe that these numbers are way too low, and this is because after obtaining a license, the licensee must then run a successful business.  As a licensee, this means that in addition to obtaining a license, you subsequently will have all the associated business costs, such as rent, insurance and labor, not to mention security, legal and accounting costs, just to name a few.

Also, if you are hiring one or more professionals to assist you preparing for and/or applying for your commercial medical marijuana license, these fees would also need to be added to LARA’s projected capital requirements.

The $150,000 – $500,000 number is based on a recent LARA advisory bulletin.  When the bulletin was first released there was an open question as to whether these assets had to be liquid, or if investments, including retirement accounts, would count toward this assessment?  A subsequent clarification from LARA indicated that:

A New Jersey Appeals Court has issued an opinion wherein they indicate that the New Jersey Division of Consumer Affairs (Division) has the authority to reclassify marijuana, and thereby remove it from Schedule I. According to the Drug Enforcement Agency’s website, “drugs, substances, and certain chemicals used to make drugs are classified into five (5) distinct categories or schedules depending upon the drug’s acceptable medical use and the drug’s abuse or dependency potential.”  The rate of abuse of a drug is one of the most important factors.  Those drugs having a high potential for abuse combined with a significant potential to create psychological and/or physical dependence, are classified as “schedule I” drugs.  Another important determinative factor is that such drugs have no “no currently accepted medical use.”

In New Jersey, a prisoner convicted of a drug crime involving marijuana filed a petition asking the Division to change the categorization of marijuana from schedule I to schedule IV.  These drugs have a low potential for abuse and low risk of dependence. Commonly known schedule IV drugs include Xanax, Valium, and Ambien.  In his brief, the prisoner argued that because the Legislature determined that marijuana had “a beneficial use . . . in treating or alleviating the pain or other symptoms associated with certain debilitating medical conditions” when it passed the New Jersey Compassionate Use Medical Marijuana Act (CUMMA), N.J.S.A. 24:6I-1 to -16, in 2010, marijuana no longer satisfied one of the requirements for inclusion in Schedule I, that the substance “has no accepted medical use in treatment,” N.J.S.A. 24:21-5(a).

The Director denied the petition indicating that marijuana has been listed as a Schedule I substance since the passing of the federal Controlled Substances Act (CSA) in 1970[i]. He also indicated that he disagreed with the prisoner’s position that the CUMMA demonstrated a legislative intention “to treat marijuana similar to or consistent with substances listed in Schedules II-V.”

In a surprise move, Michigan’s Bureau of Medical Marihuana Regulation (BMMR) reversed its prior decision and had now declared in a press release that they will allow currently existing marijuana dispensaries to continue operating provided they have local approval.  Furthermore, that such operations will not impact the applicant’s eligibility for licensure.

Prior to the 2016 amendments to Michigan’s Medical Marijuana Act, the only way for a card holding medical marijuana patient to obtain marijuana was to either grow it him or herself or to purchase it from a “caregiver.” The trouble was, there were no rules surrounding the lawful sale and purchase of medical marijuana, and therefore, it was not, strictly speaking, against the law to open a dispensary. This legal gray area caused many problems; problems that the 2016 amendments sought to correct and clarify.

Previously, the BMMR had indicated that currently, existing dispensaries should shut down by not later than September 15, 2017, and that such dispensaries may have trouble getting licenses.  This has now changed according to the press release.

Recently, several House Bills have been passed in order to regulate medical marijuana in the state of Michigan. However, these bills are not absolute. Instead, they are subject to change as the state determines more effective ways to govern medical marijuana businesses and seeks to fill gaps that the original bills left out.

On October 19th, 2017, a bill (House Bill Number 5144) was proposed to provide such amendments. The new bill amends 2016 PA 281, also known as the Medical Marihuana Facilities Licensing Act. What follows is a review of the major changes implemented along with House Bill No. 5144.

The Medical Marihuana Facilities Licensing Act licenses and regulates those involved in the commercial aspects of a medical marijuana business in Michigan. It also outlines the duties of local and state government officials when regulating such marijuana-related businesses. In addition, the act establishes the medical marijuana licensing board and the advisory panel. It provides guidelines for interacting with the statewide monitoring system when it comes to marijuana transactions, outlines penalties, taxes, and other fees related to having a medical marijuana business, and establishes that those with such a business are protected from prosecution.

Soon, Michigan entrepreneurs will have the opportunity to apply for one of five commercial medical marijuana licenses.  This how-to book covers all the bases and will help those interested in applying get a jump-start on the competition.

Written by some of Michigan’s top legal and financial experts, this 230-page book includes essential information and advice about successfully running a medical marijuana business that that includes;

1. Easy to understand summaries of the three Michigan Medical Marijuana Acts.
2. Detailed descriptions of the five-available commercial medical marijuana licenses.
3. Detailed instructions for applying for the license(s) of your choice.
4. Instructions for creating a successful business plan, a necessary step in the application process.
5. Information for identifying and protecting your business’ intellectual property.
6. Advice on safeguarding your business and your employees.
7.  Information on financing and insuring your medical marijuana business,
8. Accounting information that will assist you in ensuring proper accounting, record keeping, and tax compliance.

Author’s include:

Michigan will let large marijuana growers apply for and obtain multiple licenses in a single location. Michigan’s Department of Licensing and Regulatory Affairs recently published an advisory bulletin that will allow a licensee to apply for multiple, or stacked, class C grow licenses. Each class C license allows a grower to cultivate up to 1,500 marijuana plants in one location.

One person or business can apply for an unlimited number of Class C licenses, which allows mega-marijuana growers to compete in Michigan’s marketplace. The Department of Licensing and Regulatory Affairs explained that offering stacking of the licenses will allow medical marijuana growers to operate more efficiently, which helps consumers.

Critics opine that the large growers will squeeze the smaller operators out of Michigan’s lucrative medical marijuana industry. Michigan’s medical marijuana business is expected to generate over $700 million and $20 million yearly in tax revenues.