MMFLA: Marijuana Facilities Licensing - Marijuana Licensing Lawyer

The Michigan Medical Marijuana Facilities Licensing Act (MMFLA)

October 2017 UPDATE:


There has been almost daily news and updates on the MMFLA in recent days. LARA has been issuing Advisory Bulletins almost once week, attempting to provide some guidance to the many individuals and entities that seek to apply for licenses on December 15, 2017. We anticipate that things will continue to heat up as we get closer to the December 15, 2017 date when the state will begin to accept medical marijuana license applications for the five classes of licenses. You can also access all of the MMFLA LARA Advisory Bulletins here: LARA MMFLA Advisory Bulletins.

Worthy of note, LARA has said that it will NOT limit the number of medical marijuana licenses granted. What this means, is that anyone who applies and meets all of the licensing criteria will be issued a license. This is a bold departure from most medical marihuana states who severely limit the number of growers, processors, and dispensaries.

The state of Michigan will begin accepting applications for the following licenses on December 15, 2017.
  • Marijuana growers licenses, Class A, B, and C
  • Secure Transporters
  • Marijuana Processors
  • Laboratory Testing Facilities (called "Safety Compliance Centers")
  • Dispensaries (called "Provisioning Centers").
Information is coming fast and furious and will continue to do so. We will try to keep this page up to date. Below is a listing and summary of the LARA Advisory Bulletins accessible here: LARA MMFLA Advisory Bulletins.

LARA ADVISORY BULLETINS.

Advisory Bulletin of September 12, 2017.

This first Advisory Bulletin addressed the issue of existing marihuana dispensaries and how their continued operation would impact their applications. Also discussed was the non-refundable license Application Fee, which LARA estimates to be about $4,000 - $8,000 per year, and the Annual Regulatory Assessment fee. By law, LARA must be self-funded and must also allocate funds to substance abuse disorder programs. The amount of the Annual Regulatory Fee will depend on the number of licenses that are received. Marihuana grower Class A licenses are capped at $10,000 by the law. The other licenses will be assessed an amount of $10,000 - $57,000 per year.

Advisory Bulletin of September 21, 2017

LARA will allow medical marihuana facilities to co-locate at a single location. This was one of the big questions many potential applicants kept asking. A grower, processor, and dispensary will be able to locate at the same physical location under state law. Each license must have separate working area, separate entrance and exits, separate point of sale operations, and separate record keeping. Of course, the local municipality or city that has authorized medical marihuana facilities must not have passed an ordinance that would prohibit such co-location of licenses. Secure transporters and lab testing licensees will never be able to co-locate with each other or any of the other licenses but must remain completely separate.

Advisory Bulletin of September 28, 2017

Another question answered. LARA will allow licensees to apply for and be granted multiple or "stacked" Class C (1500 plant) grow licenses in a single location. The marijuana plants will not have to be separate from each other, but the licensee will have to pay for each license and regulatory assessment separately, and maintain all information in the state monitoring system. This will allow for large scale grow operations that could have thousands of marijuana plants housed under one roof.

Advisory Bulletin of October 5, 2017

Harvested marijuana will have to be tested before it can be transported to a processing facility or dispensary. In addition, finished marijuana and marijuana-infused products that are processed or manufactured at licensed processing facility will have to be tested a second time before the finished marijuana or marijuana products can be transported and sold at a dispensary. All testing results will be entered into the state monitoring system.

Advisory Bulletin of October 9, 2017

LARA will be providing educational training seminars around the state to explain the application process for the five types of licenses. In addition, the statewide tracking and monitoring system company will be present at the seminars and explain how marihuana businesses are to effectuate the seed-to-sale tracking system. The seminars will be held on November 8, 9, 13, 14, and 15. The November 9 and 15 seminars will be live streamed on the state website from 9:00 a.m. - 12:00 at this website: www.michigan.gov/medicalmarihuana.

Advisory Bulletin of October 12, 2017

LARA will utilize a two-step application process (NOTE: LARA has not provided applications for any of the five medical marijuana licenses yet). LARA will accept "Pre-Qualification" applications and "License Applications." The two-step process will allow potential applicants to complete the initial background investigation while they are locating a physical place for their medical marijuana facility to be located. The first step is essentially a background check of an applicant and their affiliates' criminal history, financial history, regulation and taxation history, and business litigation history. The applicant and affiliates will be fingerprinted as a part of this process. Once the applicant and affiliates pass this initial hurdle, then they would be pre-qualified for a license. They would file the second part of the application process once they locate a physical location. Those fortunate applicants who already have a physical location AND local municipal authorization for their location will go directly to the full license application. This two step process is a good idea, as most of Michigan's cities and municipalities have not passed enabling ordinances yet. This means that there are a lot of potential applicants who wish to apply - but do not have a physical location. It is a classic Catch-22, the cities and local municipalities want to wait to opt-in until LARA issues its rules so that they will not have to rewrite their ordinances. However, the cities failure to enact legislation means they have in effect "opted out" of the MMFLA entirely, which leaves potential applicants unable to apply. Under this two-step process, applicants will be able to "pre-qualify" to be a licensee, and then they can complete the full application once their city or municipality passes enabling laws.

Introduction to the MMFLA.

Eight long years after Michigan voters overwhelmingly passed the Michigan Medical Marihuana Act in November 2008, the Michigan legislature passed three separate marijuana bills that will drastically impact and change the way that medical marijuana is grown and sold in Michigan. The new legislation also amended the MMMA to expressly allow for the manufacture, possession, and use of marijuana infused products (known as marijuana edibles or medibles).

The new state laws create a comprehensive state licensing system intended to control the growing, processing, transporting, testing, and sale of medical marijuana throughout the state. Marijuana that is grown and sold through state-licensed dispensaries will be carefully controlled and monitored - similar to the way the state controls the manufacture, distribution, and sale of alcohol. This page will try to summarize some of the key changes and explain how they will affect you.

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Rumors and Innuendos.

There have been many rumors and innuendos. Most are not true. There are many unknowns about the new medical marijuana legislative laws, in part because much of the fine print and details has yet to be written. The state has until December 15, 2017 to finalize the rules and regulations that will govern the new licenses, although we expect that there will be guidance long before then. Rest assured that we will be closely monitoring these new laws and the rules and regulations that will be promulgated in the near future and will be ready to provide you with accurate and timely advice.

What the New Marijuana Laws do not do.

The new laws do NOT decriminalize marijuana. The new laws do NOT create recreational marijuana. The new laws do NOT change the method of obtaining a patient or caregiver medical marijuana identification card. The new laws do NOT mandate seed-to-sale tracking for patients or their caregivers who cultivate marijuana under the protection of the MMMA. The new laws do NOT get rid of the Section 8 medical marijuana affirmative defense.

Personal growing of medical cannabis by medical patients or by their primary caregiver remains unchanged. Likewise, the 5 - 1 patient caregiver ratio and relationship under the Michigan Medical Marijuana Act (MMMA) remains unchanged.

Medical Marihuana Will be Available in State-Licensed Dispensaries.

Under the medical marijuana act, all 200,000(+) state-registered medical marijuana patients must either grow their own marijuana or obtain it from one of the 37,000 registered primary caregivers. While the voter-enacted Michigan Medical Marihuana Act authorized the medical use of marijuana throughout the state, it failed to create any sort of acquisition or distribution system. The state attorney general and appellate courts have repeatedly ruled that marijuana dispensaries are not authorized nor allowed by the Michigan Medical Marihuana Act, and neither are patient-to-patient or caregiver-to-caregiver transfers.

There are hundred of dispensaries and compassion clubs open throughout the state. They have been allowed to open and exist by local law enforcement and local prosecutors who decided to turn a blind eye. Some counties have numerous marijuana dispensaries while others, many in west Michigan, have been so-called "dry" counties. The dispensaries that opened for business in the "dry" counties were systematically raided and shuttered, with the owners charged with felony drug offenses. Patients in these dry counties who did not want to cultivate marijuana plants (or designate a primary caregiver to do it for them) often have had to drive long distances to obtain medical cannabis. This will soon change.

Marijuana Dispensaries Will be allowed.

House Bill 4209. The new law will expressly allow state-licensed dispensaries, called "provisioning centers" to operate under the oversight of the state, and the licensees will be immune from state marijuana criminal laws. The newly minted dispensaries will be required to obtain all of the marijuana and marijuana products that they sell from state-licensed growers and manufacturers. The marijuana growers will be tasked with supplying the dispensaries with quality marijuana. Marijuana-infused products (medibles) sold in the licensed dispensaries will be required to have been manufactured by state-licensed producers. All of the marijuana and marijuana-infused products will have to be transported by a state-licensed secure transporter. All of the marijuana and marijuana products will be required to have undergone testing at a state-licensed laboratory. Each step of the journey from seed to cultivation to sale will be tracked, inventoried, and verified by the new seed-to-sale statewide monitoring system.

Secure Transporters, Large Scale Grows, Testing Labs, and Processors.

It is important to note that House Bill 4209 did NOT amend the MMMA. Those that wish to continue their private grow operations will be allowed to do so. Instead, the new laws create a new marijuana licensing system that is will be vast and complex. The new law is titled: the "Medical Marihuana Facilities Licensing Act." Under this new licensing law, five new types of medical marijuana licenses will be created, together with a vast bureaucracy to oversee the new licenses and collect taxes. The licenses are:

  • growers: Class A (500 plants); Class B (1000 plants); and Class C (1500 plants)
  • processors (a/k/a makers of marijuana-infused products)
  • secure transporters
  • safety compliance facilities (a/k/a testing laboratories)
  • provisioning centers (dispensaries)

Local Control.

All five marijuana license categories will only be available to those persons whose local municipality or local government has an ordinance that allows for that type of license. What this means is, dispensaries, grow facilities, testing centers, transporters, and processors will not be allowed to exist within a municipality or city that does not have a law that allows for them to exist and function within the city limits. Thus, local units of government will be able to decide if they want to allow dispensaries, processing centers, testing facilities, transporters, and large grow facilities within their borders. According to news reports, some municipalities have already cast a "no" vote. That is their prerogative under the new law. Without local pre-approval, a prospective licensee is not eligible to apply to the state for any of the five licenses.

Financial Incentives and Taxes.

Every license category will have application fees at the local and state level. Local municipalities are allowed to charge up to five thousand dollars ($5000) per application. In addition to the application fees, a new marijuana tax of three percent (3%) will be imposed on the sales from the marijuana provisioning centers.

Local governments that pass laws allowing medical marijuana businesses will participate in the new tax revenue. The tax monies will be split between the state, the counties, and the local cities and townships that allow marijuana facilities to be located in them. Those cities or villages that decide to be "dry" will not receive any of the new tax money.

Licenses to be Divided up.

Michigan House Bill 4209 requires that ownership of the new marijuana licenses be separated. Those who hold a dispensary license will not be allowed to own or hold an ownership interest in a testing facility or a secure transporter. Those that hold a secure transporter license or testing facility license cannot own or hold any ownership interest in any of the other four licenses.

Seed to Sale Tracking System.

House Bill 4827 creates a seed-to-sale tracking system that is designed to oversee the five new state-issued marijuana licenses. Note that HB 4827 did NOT amend the Michigan Medical Marijuana Act. Instead, this new law creates a computer network system that will be charged with tracking and verifying the source, inventory, and location of ALL medical marijuana plants, marijuana, medical marijuana infused products, and medical marijuana sales. Marijuana will be tracked from its inception as a seed or a clone, through harvest, to the secure transporters, to the licensed marijuana-infused product manufacturers, to the testing laboratory, then back to the secure transporters to the marijuana furnishing centers and ultimately to the consumers. This new tracking system will be active 24/7.

Dispensaries will be required to verify the status of every patient or primary caregiver's identification card prior to a sale. Those with expired MMMA cards or those who have never applied for a card will Not be allowed to make purchases from the new state-licensed medical marijuana dispensaries. The new system will track each marijuana sale, and record the date, time, place, quantity, price and identity of the grower, transporter, tester, producer, seller and purchaser. The system will not allow a patient or caregiver to purchase more than the 2.5 ounces allowed by the MMMA at a time. Thus, a patient who purchases their quota from dispensary 'A' will not be allowed to go down the street and purchase an additional 2.5 ounces from dispensary 'B'. All information is required to be held confidential, and is supposed to be accessible only to the state, state licensees, and law enforcement personnel, and only to the extent these entities are authorized to access the information.

Patients and Caregivers Will Still be Allowed to Grow Marijuana.

Those who wish to continue to grow their own marijuana under the Michigan Medical Marijuana Act will be allowed to do so. In short, the new laws do not disrupt the current patient-caregiver relationship. Neither medical marijuana patients nor their caregivers are required to participate in the seed-to-sale tracking system. The only time a patient (or their caregiver) will interact with the new system is if they decide to purchase marijuana from one of the state licensed medical marijuana provisioning centers. Before they will be allowed to make a purchase, the marijuana dispensary will be required to electronically verify that the patient's (or caregiver's) card is valid. And of course, any purchases made will be recorded in the state's medical marijuana database.

When Can I Apply for One of the New Marijuana Licenses?

House Bill's 4209 and 4827 were signed by the governor on September 21, 2016, and were effective December 20, 2016. However, the state will not begin accepting applications for any of the five new license categories for an additional 360 days after the initial ninety days. The earliest date the state will begin accepting applications is Friday, December 15, 2017.

Marijuana Medibles.

House Bill 4210 was the only medical marijuana bill from 2016 that amended the Michigan Medical Marijuana Act. HB 4210 modified MMMA Sections' 3, 4, 6, and 7. The major change is that the definition of "usable marijuana" now includes THC-infused products such as marijuana brownies, tinctures, lotions, marijuana oils, Simpson's Oil, waxes, and other types of non-smokable marijuana used for medical consumption. These products had been barred from Section 4 immunity by a 2013 Michigan Court of Appeals decision (People v Carruthers).

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