Top 5 Most Commonly Asked Cannabis Business Questions

The cannabis industry is constantly changing and varies vastly from state-to-state. Below are a few of the most frequently asked questions (FAQs) we receive weekly.

1. Who Has to Submit a Supplemental Individual Prequalification Application for Step 1 Approval?

Any owner with more than 10% interest in the company, employees with managerial control, and their spouses are required to submit the prequalification application and supporting materials. There is currently no exemption for spouses that do not wish to participate as an applicant.

Failure to provide supplemental individual prequalification applications for those that qualify as a supplemental applicant will result in a deficiency during the application review.

2. Do I Have to Have a Licensed Medical Facility to Obtain an Adult-Use License?

The Marijuana Regulation and Taxation Act (MRTMA) requires that those seeking a Provisioning Center, Processor, Class B Grow, or Class C Grow license must have a medical license for the same type of facility for the first 2 years of licensing. Class A Grow, Microbusinesses and Safety Compliance Facilities are not required to have medical licensure prior to obtaining an adult-use license.

3. What Can I Do If My Municipality Has Selected to Opt-Out of the MMFLA or MRTMA?

There are a few options which may result in a municipality’s opt-in status. One of which is municipal lobbying. Through these types of efforts, an individual or group would have to approach elected officials and attend local government meetings. Another way, which may be more effective, is through a ballot initiative.

Michigan’s election law breaks down the requirements for getting a proposed law on the ballot, but the process can also depend upon the type of municipality and any applicable local ordinances. Usually a certain number of signatures are required based on the percentage of qualified voters from the most recent election for governor.

4. How Much Can I Expect to Spend to Enter the Cannabis Industry?

This is generally the first question everyone has. Your investment will vary greatly based on the size of your business, design and sophistication of your business model. Prospective cannabis business operators should be prepared to allocate funds to:

• Acquire property,
• Buildout a facility,
• Purchase equipment,
• Professional fees,
• Application fees,
• Licensing fees,
• security,
• Wages,
• Insurance

Cultivators, processors, and safety compliance facilities can anticipate startup costs up to $1 million. However, a retail dispensary may look at figures varying between $200,000 and $600,000.

5. Will My Criminal History Prohibit Me from Taking Part in the Cannabis Industry?

If an individual has been convicted of or released from incarceration for a felony under Michigan law, any other state’s law, or federal law within the last 10 years, they are ineligible for facilities licensing as a supplemental individual application. Additionally, misdemeanors involving controlled substances, theft, dishonest or fraud within the last 5 years are also disqualifying.

If the applicant has been…

• indicted for,
• charged with,
• arrested for,
• convicted of,
• pled guilty or nolo contendere to,
• forfeited bail concerning
• or had expunged any relevant criminal offense under the laws of any jurisdiction, it will be taken into consideration during the licensing decision.

This does not include traffic violations.

Facilities are required to conduct pre-employment background checks on all prospective employees. If a prospective employee has a pending charge or conviction within the last 10 years for a controlled substance-related felony, they are prohibited from working at the facility unless written permission from the Marijuana Regulation Agency (MRA) is given.

Contact a Cannabis Attorney 

If you have any other marijuana related business questions or concerns, please contact our team of experienced cannabis attorneys by filling out this form or calling our office at (248) 541-2600.