medical marijuana municipal licensing process

MunicipalLicensingMedicalMarihuanaFacilities LicensingAct

June9th Detroit,MI

BY: CRAIG ARONOFF, ESQ.

ThreeNewMedicalMarijuanaLaws

1.MarijuanaTrackingActPublicAct282of2016/MCL§ 333.27901etseq.

2.AmendedMichiganMedicalMarihuanaAct(MMMA)InitiatedLaw1of2008/MCL§ 333.26421etseq.

3.MedicalMarijuanaFacilitiesLicensingAct(MMFLA)PublicAct281of2016/MCL§ 333.27101etseq.

EffectiveDates◦ ApprovedbyGovernoronSeptember21,2016,effectiveDecember20,2016◦ MedicalMarihuanaLicensingBoardappointedMay31,2017◦ LARAtoAcceptLicenseApplications onDecember15,2017

MarijuanaTrackingActPublic Act282of2016/MCL§ 333.27901 etseq.

CreatesaStatewideMonitoringSystemto:◦ TrackMarijuanaandMarijuanaProductinCommercialTrade

◦ MonitorCompliancewithLawsAuthorizingMMJCommercialTraffic

◦ IdentifyThreatstoHealthfromParticularBatchesofMMJ(Recall)

◦ RequireThoseinCommercialTradeofMMJtoSubmitCertainInformationforEntry

intotheSystem;

◦ ProvideRemediesforAnyViolation

MarijuanaTrackingActPublic Act282of2016/MCL§ 333.27901 etseq.

Purpose:• PreventFraud,AbuseandUnlawful/ProhibitedActivitiesAssociatedwithTradeofMMJ,and

• AdministerandEnforceMMFLAandMMMA.

MarijuanaTrackingActPublic Act282of2016/MCL§ 333.27901 etseq.

EstablishesaStatewideMonitoringSystemforthe“SeedtoSale”TrackingofMarijuana

StatewideTrackingSystem=Internet-Based,StatewideDatabasethatisAvailableona24-HourBasisto:• Licensees,• LawEnforcement,and• AuthorizedStateDepartmentsandAgencies.

MarijuanaTrackingActPublicAct282of2016/MCL§ 333.27901 etseq.

ForEVERY SaleorTransferofMMJ,theStateMonitoringSystemWillTrack:

Date,Time&Quantity

SystemWillVerify,inRealTime:• ValidityofPatientIDCards,• TransferLimits,and• TransfersAmongLicensees.

MarijuanaTrackingActPublic Act282of2016/MCL§ 333.27901 etseq.

ReceivesandIntegratesInformationofThird-PartyInventoryControlRequiredbytheMMFLA(continued):

ProvidetotheMMJLicensingDepartment:

1. TotalDailySales

2. TotalMMJPlantsinProduction

3. TotalMMJPlantsDestroyed

4. TotalInventoryAdjustments

AmendedMichiganMedicalMarihuanaAct(MMMA)InitiatedLaw1of2008/MCL§ 333.26421 etseq.

AddstotheDefinitionof“UsableMarijuana”tonowinclude“marijuanainfusedproduct.”• TopicalFormulation• Tincture• Beverage• EdibleSubstance

SimilarProductContainingUsableMarijuanaIntendedforHumanConsumptioninaMannerOtherThanSmokeInhalation

UnregulatedvsRegulated

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

CreatesFive(5)MMJLicensesinMichigan

1.Grower(500,1,000or1,500Plants)2.Processor(Extraction/Manufacturing)3.ProvisioningCenter(Dispensary)4.SecureTransportation(UniqueAmongMMJStates)5.SafetyComplianceFacility(Testing).

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

KeyProvisionsoftheMMFLA:•AuthorizesSalesofMMJAmongLicensees

•TransfersMadeSolelybyLicensedSecureTransporter

•EnterAllTransactions&InventoryIntoStatewideMonitoring System

•LimitsonCommonOwnership(TransportationandTesting)

•EmployeeQualifications– BackgroundCheck:ControlledSubstanceFelonywithinPast10Years(RulesMayRequireEmployeeLicense)

•LiabilityInsurance:$100,000•QualificationsforOwnership:

o CriminalHistory(Felonies/Misdemeanors)o TruePartyofInterest

- Direct/IndirectOwnership- Spouse

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MedicalMarijuanaLicensingBoard• 5membersappointedbytheGovernor• Nomorethan3canbemembersofthesamepoliticalparty• BoardappointedMay31,2017• Termof4years

Board’sDuties:Thelicensing,regulatingandenforcingaregulatorysystemestablishedforthegrowth,processing,testingandtransportationofmedicalmarijuanaundertheMMFLA.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

AdministrativeRulesandRegulations– LicensingDepartment&Board• Standardsforfacilitiesandequipment,includingtestingstandards;• Operatingregulationsforeachlicense(health,safety,securityofproduct&facility)• MinimumqualificationandrestrictionsforpersonsinvolvedintheoperationofMMJfacilities;• Standardsforthecultivation,manufacturing,securetransportation,storageandsaleofMMJ;• Packagingandlabelingstandards;• Marketingandadvertisingrestrictions;• THCstandardsforinfusedproducts;• Wastemanagement,qualitycontrol,andchainofcustodystandards;and• TheadministrationofthestatewidetrackingofallMMJtransfers.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

The Medical Marijuana Licensing Board has no authority toestablish any limit on the number or type of licenses thatmay be granted.

ThisAuthorityisReservedforMunicipalities.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MunicipalitiesHaveanIntegral RoleinImplementingtheMMFLA

Under the Medical Marihuana Facilities Licenses Act (MMFLA) NOmarijuana facility will be licensed by the State of Michigan unlessand until the “municipality has adopted an ordinance thatauthorized that type of facility.” Section 205(1).

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MunicipalitiesCanAdoptOrdinanceAllowing:• Some• All• NoneoftheMMJFacilitiesPermittedbytheMMFLA.

NoOrdinance=NoMMJBusinessesWillbeLicensed

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

Ordinance+Zoning

LicenseApplicantsMustBeLocatedinMunicipalityAuthorizingUse+

LicenseApplicantsPropertyMustbeProperlyZoned

Grower:Industrial/Agricultural/UnzonedOtherLicensees:ZoningNotSpecified.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MMJLicenseApplicantsMustNotifyMunicipalities

Applicants for a license to operate a MMJ facility pursuant to theMMFLA must, within 10 days of submitting an application to the State,notify the local municipality of such application by registeredmail.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

StateWillNotifyMunicipalitiesSection205(1)oftheMMFLAprovidesthatwhentheStatereceivesanyapplicationforthelicensureofaMMJfacilityitrequeststhefollowingfromthelocalmunicipality:

Copyofthelocalordinancethatauthorizesthemarijuanafacility;

Copyofanyzoningregulationsapplicabletotheproposedmarijuanafacility;and

AdescriptionofanyviolationoftheauthorizingorzoningordinancebytheApplicant.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

ForthcomingAdministrativeRulesNotExpectedtoProvideGuidancetoMunicipalitiesastotheContentorNatureofAuthorizingand/orZoningOrdinances.

RulesWillNotProhibitLocalGovernmentsfromEstablishingTheirOwnLicensingRequirements.ManyCitiesHaveTheirOwnMMJDepartmentstoRegulateLocalLicenses:• Colorado:Denver,Boulder,Aurora,ColoradoSprings,Pueblo

OtherStatesWhereMMJLegal:Illinois,Oregon,California,Arizona,Washington,Alaska,Nevada,Hawaii

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MMFLAAuthorizes&CapsAnnualLicensingFee

“Amunicipalordinancemayestablishanannual,nonrefundablefeeofnotmorethan$5,000onalicenseetohelpdefrayadministrativeandenforcementcostsassociatedwiththeoperationofamarijuanafacilityinthemunicipality.”Section205(3).ForEachLicense.ShouldnotincludeSitePlanReviews&OtherBuilding&Zoningfees

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

City/Municipality25%

County30%

State30%

Sheriff'sOffice5%

Michigan StatePolice5%

PoliceTraining5%

TAXBREAKDOWN

City/Municipality

County

State

Sheriff'sOffice

MichiganStatePolice

PoliceTraining

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

MedicalMarijuanaExciseTaxFund

Fundedby3%taxongrossretailsales:•30%toCountiesinWhichMMJFacilitiesLocated(Proportion)•25%toMunicipalitiesinWhichFacilitiesLocated(Proportion)•5%toCountiesExclusivelyforCountySheriffs(Proportion)•Remainder:30%toState;5%toMICommissiononLawEnforcement;5%StatePolice.

MedicalMarijuanaFacilities LicensingAct(MMFLA)Public Act281of2016/MCL§ 333.27101 etseq.

JobCreationJobCreation

FTE’sAvg.WageperHour

CultivationClassA

500-plants

CultivationClassB

1,000-plants

CultivationClassC

1,500-plants

ProcessingLab

TestingLabSecure

Transporter(Distributor)

ProvisioningCenter(Retail)

Executives $60.00+ 1.0 1.0 2.0 1.0 1.0 1.0 1.0

Management $35.00 2.0 3.0 4.0 2.0 2.0 3.0 2.0

AdministrativeSupport

$20.00 2.0 3.0 4.0 2.0 2.0 4.0 2.0

LineWorkers $15.00 10.0 20.0 30.0 8.0 4.0 6.0 10.0

Maintenance $15.00 1.0 2.0 2.0 1.0 1.0 1.0 1.0

Security $17.00 2.0 2.0 3.0 1.0 1.0 4.0 2.0

TotalFTE’s 17.0 31.0 45.0 15.0 11.0 19.0 18.0

Avg.EstimatedWages

$732,160 $1,225,120 $1,811,680 $669,760 $544,960 $869,440 $767,520

Source:Strata BusinessServices

Thankyou!

CraigA.Aronoff,Esq.craig@cannabislegalgroup.com

BartonMorrisbarton@cannabislegalgroup.com

(248)541-2600 cannabislegalgroup.com