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


Purpose:• PreventFraud,AbuseandUnlawful/ProhibitedActivitiesAssociatedwithTradeofMMJ,and

• AdministerandEnforceMMFLAandMMMA.


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.


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).


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


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

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


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


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

ThisAuthorityisReservedforMunicipalities.


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).


MunicipalitiesCanAdoptOrdinanceAllowing:• Some• All• NoneoftheMMJFacilitiesPermittedbytheMMFLA.

NoOrdinance=NoMMJBusinessesWillbeLicensed


Ordinance+Zoning

LicenseApplicantsMustBeLocatedinMunicipalityAuthorizingUse+

LicenseApplicantsPropertyMustbeProperlyZoned

Grower:Industrial/Agricultural/UnzonedOtherLicensees:ZoningNotSpecified.


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.


StateWillNotifyMunicipalitiesSection205(1)oftheMMFLAprovidesthatwhentheStatereceivesanyapplicationforthelicensureofaMMJfacilityitrequeststhefollowingfromthelocalmunicipality:

Copyofthelocalordinancethatauthorizesthemarijuanafacility;

Copyofanyzoningregulationsapplicabletotheproposedmarijuanafacility;and

AdescriptionofanyviolationoftheauthorizingorzoningordinancebytheApplicant.


ForthcomingAdministrativeRulesNotExpectedtoProvideGuidancetoMunicipalitiesastotheContentorNatureofAuthorizingand/orZoningOrdinances.

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

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


MMFLAAuthorizes&CapsAnnualLicensingFee

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


City/Municipality25%

County30%

State30%

Sheriff'sOffice5%

Michigan StatePolice5%

PoliceTraining5%

TAXBREAKDOWN

City/Municipality

County

State

Sheriff'sOffice

MichiganStatePolice

PoliceTraining


MedicalMarijuanaExciseTaxFund

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


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,[email protected]

[email protected]

(248)541-2600 cannabislegalgroup.com

Medical Marijuana Municipal Licensing Process

Law

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