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October 2017

Michigan Medical Marijuana Bureau to Use Two-step Application Process to Move Things Along

FBM-1017-MJ-Application

Those seeking permits under Michigan’s Medical Marijuana Facilities Licensing Act (MMFLA) will be required to go through a two-step application process – pre-qualification and license qualification. The process, to be administered through the Michigan Bureau of Medical Marijuana Regulation (BMMR), will begin accepting applications on December 15, 2017. The good news here is for those applicants that have yet to find a municipality where they will operate, as the plan allows for them to submit application materials to the state for review, despite not having a designated location of operation.  

The BMMR’s representatives have repeatedly advised that they do not know how many applications to expect under the new MMFLA. The use of this two-step application process seems to indicate that the state expects to be inundated with applicants.  By having a pre-qualification system, the state can begin the process of evaluating each individual applicant regardless of whether they have found a location in which to operate, thereby moving the application process along. It should also be noted that passing the first application step will not result in the issuance of a license.

The first part of the application process will be Pre-Qualification. During Pre-Qualification, applicants will be fingerprinted and undergo a full background investigation of both themselves and their affiliates (if any). This background check will entail a review of the applicant’s criminal and financial history, history of compliance with regulation and taxation and their business litigation history. Early guidance indicates this will be a federal background check, not just state-level investigation.

But that’s not all.  Pre-qualification will also require the following information:

  • applicant’s name and the name of their business entity,
  • contact information,
  • the percentage interest all persons have in the business the applicant intends to operate,
  • documentation of the applicant’s business status,
  • significant information about the proposed business, including company bylaws, business registration documents, W2s and statements from relevant financial institutions, and
  • signed and notarized attestation statements consenting to the BMMR background investigation and affirming full disclosure of information.

Again, the focus of Pre-Qualification will clearly be on the individual(s) seeking the license(s), and their backgrounds.

The second step will be considered License Qualification. Applicants at this stage will have to identify the type of license they seek, as well as a copy of the authorizing ordinance from the municipality where the applicant will operate, with proof of municipality approval.  In addition, staffing, marketing, security and recordkeeping plans, depictions of floor plans, and proof of insurance will be required. The focus of the License Qualification will be on the operation of the business, whereas Pre-Qualification will be focused on the individual applicants.  The state also advised that for those applicants who have already secured a location for their business, they will have the option of submitting materials for both step one and step two at the same time.

Meanwhile, next month the state will host five events across the state to educate prospective applicants on the new application process. This will include a demonstration of the application process for each of the five license categories – grower, processor, secure transporter, provisioning center and safety compliance facility. Employees from the Bureau of Medical Marijuana Regulation will be on hand at the events, as well as representatives from Franwell, the company that will operate the seed-to-sale tracking system. Franwell will demonstrate how their system will work in practice to track every marijuana plant grown, transported, and sold under the facilities licensing act. These sessions are open to the public and will be held in Farmington Hills (Nov. 8), Traverse City (Nov.13), Saginaw (Nov. 9), Kalamazoo (Nov. 14), and East Lansing (Nov. 15).

Foley, Baron, Metzger & Juip’s Michigan Medical Marijuana Practice Group will continue to follow these and other developments with the Michigan Medical Marijuana Facilities Licensing Act as the state prepares to accept applications in December. Our firm offers comprehensive administrative licensing services, including guidance with applications and the defense of licenses before the state licensing board. We also advise clients regarding Michigan medical marijuana law and the applicable state regulations, as well as land use, environmental compliance, facilities siting and related issues. Contact Richard Baron or Dan Cortez for additional information at 734-742-1800.