Supplemental Cannabis License Applicant: Is Being One Necessary?

Is being a supplemental cannabis license applicant in Michigan necessary to get into the state’s booming marijuana industry? This article covers the topic in detail.

Are you trying to get into Michigan’s cannabis industry? Do you need help navigating the complex space or corporate legal services? Request a consultation now.

Medical Marijuana

The supplemental individual pre-qualification application for a medical cannabis facility license consists of eight disclosures, including:

• One year of financial information,
• Three years of tax compliance,
• criminal history,
• Seven years of litigation history, and more.

Recreational Marijuana

The supplemental individual pre-qualification for an adult-use/recreational marijuana business has fewer requirements such as disclosure of 12 months of tax compliance, criminal history, five years of civil litigation history and so on.

However, those who wish to apply for an adult-use Class B or C Grower, Processor, Provisioning Center or Secure Transporter license must first hold a medical marijuana facilities license.

After your application disclosures and supporting materials are submitted, you’re then required to complete a fingerprint request.

This process is part of a much more comprehensive background check for a supplemental cannabis license applicant in Michigan.

If you’re not prepared to commit to the intense review of the step 1 pre-qualification application, there are other ways you may still be a part of the marijuana industry.

Money Lender

Each license type is required to demonstrate an amount of capital to verify the business is able to operate and maintain the proposed facility.

Capitalization requirements range from $150,000 – $500,000 per license depending upon license type, and must be at least 25 percent liquid assets.

If you wish to be involved in the industry as an investor, you could do so as a money lender.

As a money lender, you would be required to execute a lending agreement with the applicant entity to define the terms of your loan.

Additionally, you would have to disclosure your name, social security number, date of birth, address, contact information and the nature of any interest you may have in the proposed facility.

Proof of funds or evidence of the value must also be shown.

While this can be a successful investment, you’ll likely have little control, if any, in the proposed marijuana business.

Business Owner with Less than 10 Percent Interest 

If you own less than 10 percent of the applicant entity and do not have any managerial control, you’re not required to complete a supplemental individual application.

However, you will be identified on the entity’s pre-qualification application.

For such purposes, managerial control refers to the ability to create and enforce policy.

You’ll be required to provide your social security number, address, spouse’s name, and spouse’s social security number for the applicant entity pre-qualification application.

The Marijuana Regulatory Agency (MRA) will review the applicant entity’s structure and membership roles.

It’s extremely important to accurately disclose your title and responsibilities in the entity.

If it appears you may have managerial control, the MRA may have follow-up questions or request additional documentation.

Employee

If you wish to be an employee of a licensed marijuana facility and don’t hold more than 10 percent interest or have managerial control, you’re not considered a supplemental applicant.

Your employer is required to complete a background check confirming your criminal history.

To be an employee of a licensed marijuana facility, you may not have been charged with or convicted of a felony in the last 10 years.

Those with a felony in the last 10 years may still be considered for employment, but are subject to MRA approval.

Are you trying to get into Michigan’s cannabis industry? Do you need help navigating the complex space or corporate legal services? Request a consultation now.