Adult Use Marijuana Sales Begin in Michigan

Cannabis is legal in Michigan and up and running with retail dispensaries as of December 1, 2019

The recreational market began legally in Ann Arbor, Michigan on December 1, 2019. As of right now, this is the only city with any licensed recreational stores in the state.

At 10:00am, licensees were able to transfer product from medical inventory to recreational inventory for sale. The transferable product must be within a licensee’s inventory for a minimum of 30 days and may not exceed 50% of total product type available. The thinking is that this will help move product that medicinal patients have elected not to purchase, and the amount limitation will preserve product for medicinal patients over recreational consumers (1). This consideration is important, but foresight was definitely lacking within the licensing process. Especially since industry members have been expressing concerns over product shortages for months (2).

 

Marijuana regulatory agencies (nationwide) have failed to tap experts’ knowledge and assistance when formulating guidelines or planning processes. Anyone with a basic knowledge of economics could explain that product is required to supply demand. Within Michigan’s licensing process, they failed to license growers prior to retailers. It takes roughly four months for marijuana to be ready from seed to sale. Licensees were processed and approved on a first-come first-served basis for all types (2).

 

Any burgeoning industry will experience growing pains as they initiate implementation, but the recreational market in Michigan is not expected to be functioning at full capacity for at least another calendar year. This shortage of product in Michigan has driven the price of marijuana to roughly $4,000 per pound, four times the price as Colorado (2).

 

This is an historic occasion for the normalization and legalization of marijuana. Michigan is the first in the Midwest to legalize marijuana for recreational use, and will be a litmus test for neighboring states such as Illinois, Ohio, Indiana, Iowa and others as to how they frame their regulations in the future.

For retail dispensaries and cannabis facilities seeking security planning or architectural plans and programming, please visit Total Harvest Coverage

(1) Adult-Use Marijuana Transfer Window Opens Sunday in Michigan https://www.michigan.gov/lara/0,4601,7-154-89334_79571_79784-513379–,00.html
(2) Beggin, Riley. “Why easy access to recreational marijuana is taking so long in Michigan.” Bridge Magazine. November 25, 2019. https://www.bridgemi.com/michigan-government/why-easy-access-recreational-marijuana-taking-so-long-michigan

Maneuvering Marijuana in Michigan: Secure Transporters

Secure transporters move marijuana product and cash obtained from medical cannabis and/or recreational marijuana transactions across the state for a fee.  Think about it as a business owner: you are operating a new business, and your product was very recently illegal. The black market will continue to operate for some time until the State of Michigan has a system in place to protect these assets. As such, there is a mandated 3rd party transport law for all medical cannabis and recreational marijuana moving from Growers, Processors, Licensed Micro business, storage and retail dispensaries.

“In Colorado, which legalized recreational use in 2014, the illegal black market is now a larger problem than before legalization…” Walsh, Dustin. (4/8/2019) Legal pot vs. black market a balance. Crain’s Detroit Business, Vol. 35 Issue 14, p1-1, 1p.  

Bearing this in mind, the conveyance of product from grower to seller must be protected. 

The state of Michigan will begin accepting applications for select secure transport licenses beginning December 6, 2019. If an individual or entity is thinking of applying for any licensure, it would be in his/her best interest to start assembling documents now. To be eligible as a secure transporter, the license applicant will need to meet several qualifications taken from: Mich. Comp. Laws Serv. SS 333.27505 (LexisNexis 2018) and Mich. Comp. Laws Serv. SS 27959 (LexisNexis 2018):

  • No ownership/interest in another marijuana business
  • May not be a registered patient or caregiver of medicinal marijuana
  • Resident of Michigan
  • May not hold title to marijuana 

 

 

 

Growers, Processor and Provisioning Centers and Secure Transportation of Marijuana and Cannabis The role of secure transporter within the Michigan Medical cannabis and recreational marijuana chain is integral. A grower may not move their product legally (to other growers and/or dispensaries) without using the services of a secure transporter. MCL 333.27503 (4) (LexisNexis, Lexis Advance through Public Act 47 from the 2019 Legislative Session): 

 

 

Secure Transporter Requirements: 

  • Drivers must have chauffeur’s license issued by Michigan
  • Employees handling marijuana or cash from transactions may not have a felony conviction within the past five years, been released from incarceration in the past five years, or a hold a  misdemeanor conviction involving substance abuse in the past five years. 
  • Each transporting vehicle must be operated by a minimum 2-person crew. The vehicle is never to be left unattended while marijuana product is in custody.
  • Route plans and manifests must be kept within the vehicle, and available to present to law enforcement at all times. This data must also be logged into the statewide monitoring system. 
  • Marijuana must be contained within sealed containers, and not accessible while the vehicle is in motion. 
  • A vehicle operating as a secure transporter may not display any visual markings or indicate in any way that it is transporting marijuana. 

    Implementing Total Harvest Coverage to maintain compliance with state laws and regulatory requirements is key to the best security planning and protocols that deter diversion and theft.

In Michigan, security requirements vary by municipality and County.  It is imperative one checks the local code for a potential business to correctly implement the adequate standard. It is of the utmost importance that businesses/operators are complying with regulations as these establishments are available for inspection at any time.

Learn more about Marihuana facility design standards, security compliance and planning

DEA Rules, security requirements and regulations per the Code of Federal Regulations 21CFR1301.72 https://www.klsecurity.com/products/medical-marijuana-dea-storage.html

For the latest updates, the Michigan Marijuana Regulatory Agency (MRA) is in the process of implementing the security and regulatory framework for the entire state, Michigan County and Townships. Information has been gathered from sources deemed reliable but not guaranteed and is subject to change without notice.

All license information and security measures taken directly from legislation: Michigan Regulation and Taxation of Marihuana Act. “REGULATION AND TAXATION OF MARIHUANA ACT”. , 2017 Bill Text MI S.B. 1243 SEC. 501

 

LINKS TO FORMS & LEGISLATION:

MICHIGAN MARIJUANA REGULATORY AGENCY

https://www.michigan.gov/lara/0,4601,7-154-89334_79571_90056—,00.html

MICHIGAN REGULATION AND TAXATION OF MARIHUANA ACT

https://www.legislature.mi.gov/(S(wwmtk0j1m4jeg10at2zbsucs))/mileg.aspx?page=getObject&objectName=mcl-Initiated-Law-1-of-2018

 

Secure your Stash: Licensing and Security in Michigan’s Medical Cannabis & Recreational Marijuana Market

Due to the legalization of marijuana on a medical and recreational level, Michigan is ripe with financial opportunities. There are many different levels of operation an entrepreneur may engage. To cultivate, sell, or transfer marijuana to establishments, one would need a Michigan Grower’s license. There are three classes of license for growers: Class A – 500 marijuana plants; Class B – 1,000 plants; Class C – 1,500 plants. Remember, cannabis still may be subject to DEA Rules, security requirements and regulations per the Code of Federal Regulations 21CFR1301.72

THC360’s approach to integrated security plans, compliance with state laws and maximize business revenues is part of the leading cannabis companies success and growth plans. As a premier partner of Total Harvest Coverage, we believe in designing best in class plans for your cannabis facility or transportation fleet.

Within the pot hierarchy, there is a step directly below growers: microbusiness. Michigan Microbusiness license holders may cultivate up to 150 marijuana plants, process/package marijuana, and may sell/transfer to those 21 & over but cannot sell to other marijuana businesses. (Think: start up with little capital.)

Next in the cannabis chain, we will find the processor and the retailer. These are separate licenses and have different limitations/functions. The processor may purchase marijuana from a grower, extract resin, or create a marijuana infused product for sale (edibles, etc.), and/or transfer said product to another processor or provisioning center. The retailer may acquire marijuana from establishments and sell to other establishments or individuals.

The chart below demonstrates which cannabis license holder can engage with another:

The state of Michigan will begin accepting applications for select licenses beginning December 6, 2019. If an individual is thinking of applying for any licensure, it would be in his/her best interest to start assembling documents now. The forms and applications are not yet available, but It’s safe to assume the document checklist will resemble those for medicinal facilities. The MMFL prequalification requires over 40 documents alone.  This information can be found on the state of Michigan’s website: https://www.michigan.gov/lara/0,4601,7-154-89334_79571_87302—,00.html

In Michigan, security requirements vary by municipality.  It is imperative one checks the local code for a potential business to correctly implement the adequate standard. It is of the utmost importance that recreational businesses/operators are complying with regulations as these establishments are available for inspection at any time. Performing a realistic evaluation of the expected size of business (as well as future growth) should be done at the introductory phase. For example: a microbusiness may suffice with several small TL-15 Rated safes bolted to the floor or a dispensary may require a modular vault and vault door to house the quantity of inventory.

In summation, asset protection should always be at the forefront of a business owner’s mind. Replacing valuable product or having to cease business to meet government regulations is costly, inconvenient, and stressful.  The cannabis and marijuana industry is sure to be highly competitive and a highly sought-after revenue stream. KL Security has experienced consultants ready to help, and offers security solutions for dispensaries, growers and retails that meet compliance for security.

KL Security is able to help at all levels of the supply chain:

Full line of cash management safes for retail point of sale

Cannabis Inventory Management

Growers, Greenhouses, or Cultivations Farms and Land

  • Safe and Vault Systems
Modular Vaults systems that meet DEA 21CFR1301.72 for Dispensaries are designed for DEA Approved Storage at Growers, Retail and Cultivation Farms

For the latest updates, the Michigan Marijuana Regulatory Agency (MRA) is in the process of implementing the security and regulatory framework for the entire state, Michigan County and Townships. Information has been gathered from sources deemed reliable but not guaranteed and is subject to change without notice.

All license information and security measures taken directly from legislation: Michigan Regulation and Taxation of Marihuana Act. “REGULATION AND TAXATION OF MARIHUANA ACT”. , 2017 Bill Text MI S.B. 1243 SEC. 501

 

LINKS TO FORMS & LEGISLATION:

MICHIGAN MARIJUANA REGULATORY AGENCY

https://www.michigan.gov/lara/0,4601,7-154-89334_79571_90056—,00.html

MICHIGAN REGULATION AND TAXATION OF MARIHUANA ACT

https://www.legislature.mi.gov/(S(wwmtk0j1m4jeg10at2zbsucs))/mileg.aspx?page=getObject&objectName=mcl-Initiated-Law-1-of-2018