Forewarned is Forearmed: Part I

What Michigan’s Marijuana Licensing Board (If Created) Might Require From an Applicant

 

Preamonitus, praemunitus

Part I

By Robert A. Hendricks 

What’s Happening Now:

The Michigan Legislature is considering a number of marijuana legalization issues that were not addressed by the Michigan Medical Marihuana Act (“MMMA”). On October 7, the House of Representatives overwhelmingly passed the Medical Marihuana Facilities Licensing Act (“Licensing Act”) and two related bills and moved that legislation to the Senate Judiciary Committee.

Whether the Senate will pass these bills and send them to the Governor is an open question. If the Senate does act, will it leave the bills as written by the House, or substantially amend them? What will the Governor do? These and other questions continue to swirl around the marijuana legalization saga here in Michigan. What seems clear, however, is that broader legalization of marijuana in Michigan’s future is more likely than not.

What you do now, will affect you in the future.

Some Michigan citizens are watching and waiting for the right time to enter this new market. Many others are already involved in this industry, either as card-carrying Primary Caregivers under the MMMA, or as black- or grey-market entrepreneurs hoping that the new permissive attitude about marijuana will provide them enough cover to avoid arrest or jail. If the Licensing Act or something like it becomes the law in Michigan, these persons will require a license to legally engage in certain marijuana-related activity. Their eligibility to obtain such a license may depend on actions or decisions they make now. For these budding entrepreneurs, forewarned is forearmed.

While it is impossible to know what parts of the Licensing Act may be modified if or when this bill becomes law, it’s a safe guess that if this bill becomes law much of the licensing criteria will survive. People who may want a license to participate in the new market are well advised to understand what the criteria are so they can control their present activities to not jeopardize future eligibility.

So, What are the Criteria?

The Licensing Act would establish five types of medical marijuana licenses: grower, processor, transporter, safety facility, and retail provisioning center. The bill defines the criteria the Medical Marihuana Licensing Board would apply to applicants for marijuana licenses. Any person who desires to legally engage in any of the activities defined by these categories must be licensed.

The precise requirements for issuance of one or more licenses under the Licensing Act are contained in numerous carefully worded provisions. If and when this bill becomes law, those words will control who gets a license. As currently written and passed by the House, applicants for medical marijuana related licenses will be required to submit an application form which will contain information on the applicant’s identity, as well as the identity of various persons associated with the applicant. “Applicant” is broadly defined to include officers, directors, and managerial employees, as well as holders of more than 1% ownership stakes in the applicant.

The Licensing Act requires disclosure of marijuana related activities by an applicant. The application will require disclosure of business connections of the applicant to other marijuana growing, processing, testing, transporting or sale activities (both inside and outside Michigan), as well as such connections by the applicant’s spouse or family members. Licensees in some categories will not be allowed to own more than a 10% interest in certain other licensed marijuana businesses.

In Part II of this article, we will elaborate on the kinds of information the licensing board will look at to determine whether it will issue a license at all. Be sure to follow up those questions, because forewarned is forearmed.