What are the capitalization requirements?
Applicants will be required to demonstrate capitalization amounts to operate and maintain the proposed marihuana facility as follows:
(a) Grower: Class A – $150,000
(b) Grower: Class B – $300,000
(c) Grower: Class C – $500,000
(d) Processor: $300,000 (e) Provisioning Center: $300,000
(f) Secure Transporter: $200,000
(g) Safety Compliance Facility: $200,000
The capitalization sources can be demonstrated as follows:
- At least 25% is in liquid assets. Liquid assets include assets easily convertible to cash. Examples of liquid assets may include, cash, marihuana inventory (in compliance with the administrative rules), CD’s, 401(k), stocks, and bonds.
- Remaining capitalization may be evidenced in either additional liquid assets or non-liquid forms, for example equity in real property, supplies, equipment, and fixtures.
- Evidence must be provided proving that there is no lien or encumbrance on the asset provided as a source of capitalization.
Additionally, the capitalization amounts and sources must be validated by CPA-attested financial statements
Refer to Emergency Administrative rule 11 for additional information on capitalization.
Komorn Law has represented numerous clients through the legal chaos of starting up a business in the Michigan Medical Marihuana Industry.
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