Can the Department clarify the intent of Rule 24(2)(c)?
Rule 24(2)(c) of the Emergency Administrative Rules filed on December 4, 2017 pertains to operation at a same location commonly referred to as co-location. For background purposes, pursuant to section 205 of the MMFLA a municipality has the authority to adopt an ordinance to limit the type or number of marihuana facilities within their boundaries. For clarification purposes, the intent behind Rule 24(2)(c) is that the applicant cannot circumvent the municipal ordinance or zoning regulation, which may limit the type or number of marihuana facilities under section 205 of the act, simply by operating at a same location.
Komorn Law has represented numerous clients through the legal chaos of starting up a business in the Michigan Medical Marihuana Industry.
(1) An applicant shall disclose the sources and total amount of capitalization to operate and maintain a proposed marihuana facility.
(2) The total amounts of capitalization based on the type of marihuana facility specified in the application for a state operating license are as follows:
(a) Grower: Class A – $150,000.00.
(b) Grower: Class B – $300,000.00.
(c) Grower: Class C – $500,000.00.
(d) Processor: $300,000.00.
(e) Provisioning Center: $300,000.00.
(f) Secure Transporter: $200,000.00.
(g) Safety Compliance Facility: $200,000.00.
(3) An applicant shall provide proof to the department of the capitalization amounts in subrule (2) of this rule from sources as follows:
(a) Not less than 25% is in liquid assets to cover the initial expenses of operating and maintaining the proposed marihuana facility as specified in the application. For purposes of this subdivision liquid assets include assets easily convertible to cash, including, but not limited to, cash, CDs, 401(k), stocks and bonds, and marihuana inventory that meet the all the following conditions:
(i) The marihuana inventory is possessed by an applicant who is a registered qualifying patient or registered primary caregiver or by an applicant who applies for a state operating license and possesses marihuana inventory in compliance with the Michigan medical marihuana act.
(ii) No more than 15 ounces of usable marihuana or 72 marihuana plants may be utilized as marihuana inventory in this subdivision or utilized towards the capitalization requirement under this subrule.
(b) Proof of the remaining capitalization to cover the initial expenses of operating and maintaining the proposed marihuana facility may include but is not limited to additional liquid assets as described in subdivision (a) of this subrule or equity in real property, supplies, equipment, fixtures or any other nonliquid asset.
(4) The applicant shall provide proof that there is no lien or encumbrance on the asset provided as a source of capitalization.
(5) The capitalization amounts and sources must be validated by CPA-attested financial statements. The applicant shall disclose any of the capitalization sources that are foreign and a foreign CPA or its equivalent shall attest to the validation and a domestic CPA shall attest that foreign validation.
Komorn Law has represented numerous clients through the legal chaos of starting up a business in the Michigan Medical Marihuana Industry.
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
You must meet the requirements in the statutory definition of “caregiver” in MCL 333.26423(h). The Michigan Medical Marihuana Act (MMMA) can be found on our website at www.michigan.gov/mmp.
A patient must submit one of the following to designate you as their caregiver:
A complete Application Packet (if the patient is within 60 days of his or her registry card expiring OR the person is not a current patient with an active registry card)
A complete Add or Change Caregiver Form (if the patient already has an active registry card)
Your $25 processing fee must be submitted with the patient’s Application Packet or Add or Change Caregiver Form (the patient must also submit a $10 fee – total fee is $35).
Your valid state-issued driver license or personal identification card must be submitted with the patient’s Application Packet or Add or Change Caregiver Form.
Note: We will not accept an expired driver license or personal identification card.
Being a Caregiver
The Michigan Medical Marihuana Act (MMMA) allows registered caregivers to grow Marijuana for up to 5 patients.
The Michigan Medical Marihuana Act (MMMA) permits for 12 plants per patient, or 72 plants total, if the caregiver is also a patient.
The MMMA also limits caregivers to possessing only 2.5 ounces per patient
This amount can be surpassed from harvesting just one plant thus creating an excess amount.
Courts have also ruled that caregiver-to-caregiver transactions are not authorized by the MMMA, yet every single dispensary in Michigan is currently utilizing caregiver-to-caregiver transactions to provide patients with medicine.
Given the chaotic enforcement of the MMMA by state and local law enforcement and the endless conflicting laws, rules and court decisions it makes it virtually impossible for caregivers to operate in complete compliance with the law without taking a financial loss.
With the implementation of the MMFLA, the ever evolving laws and the legalization initiative, some politicians have talked about eliminating all or portions of the MMMA.
Caregivers therefore need to think about their position within the Michigan Marijuana industry.
Komorn Law has represented numerous clients through the legal chaos of starting up a business in the Michigan Medical Marihuana Industry.
Operation at a same location (commonly referred to as co-location) is allowed for grower, processor, and provisioning center licenses when specific requirements are meant:
The operation at a same location shall not be in violation of any municipal ordinances or zoning regulations.
The municipality shall not limit the type or number of marihuana facilities under section 205 of the act or prohibit the operation at the same location by local ordinance or zoning regulations.
For clarification purposes, the intent is that the applicant cannot circumvent the municipal ordinance or zoning regulation, which may limit the type or number of marihuana facilities under section 205 of the act, simply by operating at a same location.
Each license has distinct and identifiable areas with designated structures that are contiguous and specific to the state operating license.
Have separate entrances and exits, inventory, record keeping, and point of sale operations, if applicable.
Operation of a state operating license at the same location that includes a licensed provisioning center shall have the entrance and exit to the licensed provisioning center and entire inventory physically separated from any of the other licensed marihuana facility or facilities so that persons can clearly identify the retail entrance and exit.
Any other requirements outlined in the emergency administrative rules or MMFLA.
