Just last week the State of Michigan released the final set of rules for licensure of a Cannabis Business. Here are the Updates…..
Application Procedure Requirements
Basically, you can submit a partial application and it will have a pending status until completed. Part one of the application is the Prequalification. Once you pass Prequal, you have a year to complete the lull application and all requirements or you do not pass go and will not collect $100 (cannopoly). In other words, you go straight to the back of the line.
Application Financial and Criminal Background Requirements
The first part of the application is a financial and criminal background check. In a nutshell (help, I’m stuck in a nutshell), you have to disclose all your financial and criminal background history. For the financial side, bank records, tax records, etc.. For the criminal side a full criminal background check with fingerprints, passport photo’s, etc.
You also have to disclose all the owners of the company and corporate docs for registering and partnership agreements for governing your cannabis business, a CPA Attestation showing you have money in the bizzank (bank). Oh yeah, and any other licenses you have. La La La.
Application Completion Requirements
Ok, so your completed application must have a facility description, name, address, and location, number of employee’s, projected financials, a business plan, operations plan, City approval, a copy of the city ordinance, and any other requested docs when they do the application review.
This is where it gets complicated. I would highly recommend hiring, what is, in my opinion, one of the best cannabis consulting agencies in the U.S.. They are called New Leaf Cannabis Consulting. Their website is www.newleafcannabisconsulting.com. Go visit them now, today.
I know them personally (wink, wink).
Application Fee’s and Assessments
The breakdown goes like this….$6000 for app review, even if you are applying for all three licenses (grow, process, dispense). It’s non-refundable. When you are granted your license, you have to pay an annual State assessment fee, which will fluctuate slightly from year to year.
· Grower Class A (500 Plants)-$150,000
· Grower Class B (1000 Plants)-$150,000
· Grower Class C-$500,000
· Provisioning Center-$300,000
· Testing Lab-$200,000
25% of that needs to be straight cash on the barrelhead, or stocks quickly converted. The other 75% can be inventory if you own a store, or the combined home equity of all your partners and yourself.
You must agree to a full inspection of everything, whenever they want, basically. Nuff said.
Proof of Funding and Insurance
You must have $100,000 of liability insurance.
You have to have a CPA attestation saying you have capitalization requirements.
Denial of Licensure
If you get denied, you can appeal it.
Renewal of Licensure
You have 60 days past due to renew yearly. If you don’t, your license gets yanked.
Notification/ Reporting/ Compliance
The State will require you to submit notifications of hiring, firing, sales, any criminal issues, security surveillance tapes, etc. Get ready for big brother.
Notification of Criminal Activity
Obviously you should contact the police and LARA if there has been a robbery or other criminal activity. If you don’t, and they find out, you could lose your license to operate.
Inspections and Investigations
There will be semi-regular inspections and/or investigations, if needed. You have to submit to inspections and investigations to police, government, and fire whenever they request it.
Sanctions and Fines
There will indeed by sanctions and fines levied upon your company if you are found to be in non-compliance with regulations at any point. If you receive either and disagree with this, you have 21 days to request a hearing about it. Civil Fines can be from %5000 up to $10,000.
Once you have received a Class C 1500 Plant License, you can apply for additional ones. Each application for an additional stacked license is another $6000 non-refundable review fee.
Changes to License
You have to inform the State and Lara if there are any changes to board members, locatiob, or anything specifically having to do with the license and operations.
Operation at Same Location
To sum it up, a licensee who has any combination of licenses may operate at the same location. A stacked license is considered 1 facility.
Chemicals and hazardous materials must be kept in a secured and surveilled separate room, as do any cannabis flower or products, at any stage. Dried and drying cannabis flower needs to be in a secured, and surveilled limited access vault.
Cannabis Facility Requirements
The building must meet security requirements (see below). A cannabis grow facility can be outdoors as a greenhouse or outdoor crop, but you have to erect blocking fences so no one can see your crops. The fences also need security…locked entry, surveillance and whatnot. Drying, trimming, curing, and packaging all need to occur inside, though.
A secure transporter shall have to get an additional license for any additional locations besides the primary one. A secure transporter can travel through any municipality. Money and cannabis need to be kept separate, as well as product or money from another cannabis business. Also, they must have a route plan and manifest. There’s actually a lot more, but I’ll save that for another article.
Provisioning centeres need to have a separate room for Point of Sale. In other words, a sales floor (duh). If a customer is under 18, they have to be accompanied by an adult or legal guardian. And lastly, all transactions need to be entered in the statewide monitoring system METRC.
Building and Fire Safety
Building inspector and Fire Safety Inspector need to issue you permits. Certificate of occupancy Is also required, as is a state of the art fire suppression system, and planned exits. Exhaust ventilation systems that are up to code also must be in place.
Security and Video Surveillance
This is a pretty important one. Required alarm monitoring, limited recorded access, surveillance throughout the interior and exterior. Backup monitoring recording. The State will absolutely require this at the pre-licensure inspection (you didn’t think you were just going to get a license without being fully setup and ready to go, did you? That is not how regulatory agency’s work, unfortunately).
There is much more. The new Michigan Finalized Licensing Regulations include requirements on Waste Management, Testing/Testing Samples, Testing Labs, Cannabis Infused Products, Sale and Transfer, Tracking Identification, Plant Tracking Requirements, Dispensary Sale and Transfer, Dispensary Daily Purchasing Limits, Marketing/Advertising, Employee’s, Home Delivery, Hearings and License Review Process, and Prohibitions that are absolute no no’s that, if you break, you will be fined, or lose your license.
As with anything, the devil’s in the details. I hope this article was Informative and helps to guide you on your path to becoming a cannabis entrepreneur.
New Leaf Cannabis Consulting is a Full Service Cannabis Business Licensing, Management, and Funding Consultancy Agency. Our Clients Are Cannabis Business Entreprenuer’s. We provide them with Business Plans, Financials, Licensing Submission, Operations Manuals, Blueprint Assistance and Management, Branding and Packaging Design and Much More in Order to Get Through State Licensure.