Cannabis compliance problems are the ultimate damper on any business operating in this sector. While countless Americans have been supporting the industry by purchasing cannabis products as they struggle with the pandemic, building and maintaining a cannabis business is challenging.
Even as the industry continues growing beyond what any would’ve thought, maintaining cannabis compliance is still tricky. With unstable and unstandardized cannabis regulations throughout the U.S., it’s safe to say that navigating these restrictions and avoiding costly infractions (or worse) has ganjapreneurs uneasy.
Each state offers its own set of guidelines, demands, and procedures for participating in the marijuana industry. Neighboring states can have entirely different regulations, and some municipalities will vary in their compliance demands.
Let’s cover some of the most common cannabis compliance problems you might encounter while operating a cannabis endeavor. Feel free to use these ‘green nuggets’ of information to enhance your business’s ability to adhere to regulatory requirements.
Looking to mitigate your risk and avoid costly infractions? Contact us today to learn more about what we’re doing to help our clients maintain compliance.
Common Cannabis Compliance Issues to Consider
While maintaining compliance might seem like a lot of work for little to no ROI, this couldn’t be further from the truth. Dodging violations is crucial to remain in business, and once an operation is found violating, the consequences are extreme.
But what happens when a cannabis business isn’t compliant?
Compliance consequences tend to range from huge finds to business license forfeiture. In some cases, business operators can temporarily lose their business.
For instance, according to Marijuana Business Daily, MedMen lost its Virginia medical cannabis dispensary license. Virginia regulators voted to take away the company’s medical marijuana dispensary license because it violated the state’s conditions. These demands were supposed to be met for the operation to get its license and start MMJ sales.
MedMen’s story in Virginia is a worst-case scenario. But the truth of the matter is that without taking caution and remaining compliant, this is a possibility.
Regulatory compliance in the cannabis sector isn’t optional; it’s essential. Whether you’re into cultivation, manufacturing, distribution, or retail, every business in the seed-to-sale supply chain has to adhere to local, state, and federal cannabis compliance demands.
Maintaining Cannabis Compliance
Maintaining cannabis compliance takes time and effort. Between maintaining adherence to regulatory demands, training staff, and preventing non-compliance violations, there’s a lot involved in ensuring your company remains compliant.
Marijuana compliance is a burden. But it’s crucial to protect your investment. For smaller cannabis businesses that find themselves operating on thin margins, maintaining compliance is vital for survival. Unlike large-scale companies, these smaller operations aren’t as established, which means an infraction can be the business’s death sentence.
Cannabis Regulation Complexities
Cannabis regulation complexities are demanding. Without expert assistance, the burden to know about regulations and requirements is placed on the business operator. And since requirements are subject to quick alterations under state and local legislatures, staying up to date on this information is quite time-intensive.
Maintaining cannabis compliance is even more challenging for those growing their business with the idea to scale. For those looking to expand their operations into other jurisdictions, understanding the differences between each region is crucial.
Implementing compliance initiatives and handling all of the other day-to-day operations involves learning tax regulations, occupational safety, medical privacy requirements, food safety, and other aspects of the industry as they relate to your endeavor. And the pandemic hasn’t made this any more straightforward.
Here are some of the most common cannabis regulation complaints:
1. Too many regulations for cannabis
Cannabis compliance in the U.S. isn’t simple, nor is it straightforward. Regulatory frameworks at all levels involve standards, licensing systems, and laws that impact your business as per where and how it operates. Federal cannabis compliance also has some special considerations, including legislation from the Health Insurance Portability and Accountability Act (HIPAA), the Occupational Safety and Health Administration (OSHA), and the Federal Communications Commission (FCC).
2. Complicated regulations
Cannabis compliance and regulations at all levels have multiple layers. These can be complicated, confusing, and ever-changing, all of which can make compliance feel overwhelming. Cannabis business operators are expected to know and adhere to many regulations, rules, and laws while operating in this sector, ultimately contributing to the complexity of working in this sector.
3. Too much time without a return on the investment
As business owners, we invest our time with the expectation of an ROI. But the time-consuming nature of compliance with little value besides maintaining company licensure makes it difficult for business owners to want to invest the time on compliance. This is especially problematic for small operations that don’t have the time and capital to invest. Simply put, the time these businesses spend on compliance takes away some time that could be spent on things contributing to their bottom line.
4. Unstable reporting tools
While reporting tools for the cannabis sector are available, most of them are unstable state-mandated reporting tools. This is why we recommend combining using a Point of Sale system with a CRM system to communicate with the POS, as well as spreadsheets to maintain books and facilitate record reviews.
With COVID-19, regulations have become even more unstable. State and municipal governments are reacting to the pandemic with inconsistency that only adds to the confusion. But it’s possible to ease the burden of compliance with preparation.
Easing Compliance Issues by Preparing
Compliance is crucial for all cannabis endeavors looking to scale their operations. As more states continue to legalize, we can expect these changes to persuade federal cannabis compliance-related change. But still, it’s essential to abide by regulatory compliance demands at all levels.
Even though the industry lacks an easy way to handle compliance and regulation, it’s possible to minimize the chance for error and reduce your operation’s risk.
Learning about why the laws and regulations control the industry will give you a firm understanding of what you’re legally allowed to do. While the regulations change frequently, it’s empowering to remain current on all legislation.
Prepare for cannabis compliance by:
Staying updated on industry trends
Reading regulatory blogs and newsletters
Participating in training and webinars
Monitoring relevant agency websites
Bringing in a cannabis CPA to mitigate compliance risk
Meticulous record-keeping will ensure your marijuana business is organized. But this also saves you and your company time, money, and effort in case the time comes when regulators want to check your compliance. This is why investing in secure and efficient record storage systems and documentation is such a crucial aspect of operating a cannabis business.
The cannabis sector is still being monitored closely. With this in mind, now is the time to dedicate the time, effort, and energy to achieving and maintaining compliance standards.
Looking for help monitoring your cannabis operation’s compliance? Our fully-integrated financial partner model is the solution that scales. Contact us today for expert assistance.
Some of the most common questions we receive about getting a Michigan growers license are:
How do I become a Class A grower in Michigan?
How much is a Class A growers license in Michigan?
Can a caregiver sell to a dispensary in Michigan?
Whether you didn’t get a Michigan commercial grow license in 2020 or just recently decided the time is right, here’s some insight into some of the most common questions cultivators are asking.
Interested in getting a commercial growers license in Michigan? Contact us today to learn more about how we can help.
How do I become a Class A Grower in Michigan?
Initial licensing fees to become a Class A Grower in Michigan
Ultimately, this depends on your municipality. Your municipality will need to “opt-in,” which involves writing an ordinance that permits cannabis growing within the municipal borders. There may be a municipality fee involved, but you’ll need to contact your city council to determine whether they have local municipality fees.
Once you do this, you’ll need to pay the State a non-refundable application fee of $6,000. This covers a state investigative service to perform background checks to ensure you and your business partners qualify to receive a Class A grower’s license in Michigan.
Capitalization requirements to become a Class A Grower in Michigan
For anyone applying for a Class A grower license in Michigan, demonstrating you have the capital to start and run the operation is crucial. As you’re applying for your Class A Grower License in Michigan, remember that you’ll need at least $150,000 in business capital to qualify. This can include a minimum of 25 percent in liquid assets that can easily be converted into stocks, bonds, cash, or CDs.
How much is a Class A Growers License in Michigan?
Cannabis growers licenses in Michigan start at $4,000 for a Class A Growers License. However, if you decide on another option, you could have to pay up to $40,000. These licenses must be renewed annually for a similar fee.
On the other hand, Class B Growers and Microbusinesses must pay $8,000 for their licenses. If you’re planning to do retail, secure transportation, or operate a Safety Compliance Facility, you can expect to pay $25,000. For Class C Growers, Excess Growers, and Processors in Michigan, you’ll have to pay $40,000 for your license.
The MRA is allowed to increase these license costs by up to 10 percent annually. The renewal fees are contingent on the initial license fee and the license holders’ relative success in comparison to other license holders of the same type. Some licenses cost just $1,000 with the option to renew for $1,000 regardless of other license holders’ success.
The annual renewal fees for cannabis business licenses in Michigan with an initial fee of $8,000 can increase or decrease by $2,000. This depends on if the license holder is in the top or bottom third of the type of license they hold. The bottom third pays $6,000 renewal fees, the middle pays $8,000, and the top pays $10,000.
For those holding a Class A Growers License in Michigan, there’s a similar method for renewal fees. The initial fee of $4,000 increases or decreases by $1,000 for renewal fees. But for $25,000 licenses, you can expect an increase or decrease by $5,000. $40,000 licenses are adjusted by $10,000 in the same manner.
What kind of Michigan growers license will I need?
The MRTMA offers 11 different kinds of marijuana establishment licenses; these include the following grow licenses:
Class A Growers – Growers holding a Class A Growers license in Michigan are allowed to grow up to 100 cannabis plants. They also don’t have to be licensed under the MMFLA. However, these growers cannot stack licenses. License stacking means the entity holds more than one license of that type.
Class B Growers – Cultivators holding a Class B Growers license in the Great Lake State are allowed to grow up to 500 cannabis plants. These growers are also not allowed to stack licenses and need licensing under the MMFLA.
Class C Growers – For Class C Growers license holders, a grow operation of up to 2,000 cannabis plants is permitted. However, these growers are allowed to stack up to 5 Class C licenses. At this point, they need licensing under the MMFLA.
Excess Growers – For Excess cannabis growers, a grow containing up to 2,000 cannabis plants for every MMFLA Class C Grower License help is allowed. But they must have 5 MRTMA Class C Grower Licenses and a minimum of 2 MMFLA Class C Grower Licenses.
Can a caregiver sell to a dispensary in Michigan?
Ganjapreneur reported that Michigan is phasing out caregivers’ access to cannabis licensees. On September 30, 2019, medical cannabis caregivers in Michigan are no longer able to transfer or sell products to licensed cannabis growers and processors. This is a rule established by the MRA.
In the past, caregivers were able to transfer cannabis products to some licensed operators. This was to keep product available to medical cannabis patients as the state shifted towards recreational sales. According to the MRA, the under-supply of medical cannabis is no longer an issue since nearly 200 cultivation licenses and more than 25 processing licenses have been issued.
Michigan Growers License Assistance from Northstar
Interested in obtaining a growers license in Michigan? Contact us today for expert assistance from legally starting your grow to maintaining your cash flow – and everything in between!
You’re curious about how to open a cannabis dispensary in New Jersey. As with any business-minded person, you’ve seen the successful cannabis entrepreneurs in other states, and now that the New Jersey adult-use cannabis market is legal, you’re wondering if you can achieve similar profits.
Opening a cannabis business in New Jersey is an exciting experience. However, it will take some careful planning to ensure success. After New Jersey voted and passed a constitutional amendment legalizing recreational cannabis on November 3rd, 2020, it’s safe to say we can expect big things to come to the Garden State.
This vote was surprisingly supportive of legalization because:
Most New Jersey residents support legalization. A recent survey revealed a whopping 61 percent of New Jersians favor legalization.
New Jersey’s dwindling tax revenue and increase in costs during the COVID-19 pandemic has the state looking for other sources of revenue. As the pandemic continues, it will become more challenging, and the state will have to find a way to replace some primary tax revenue sources.
Governor Phil Murphy is pro-legalization. His support has not gone unnoticed, especially following his statement that legalizing is “smart” and a “no-brainer.”
Most people support criminal justice reform. With this in mind, the state is being pressured to legalize because imprisoning people over cannabis is irresponsible.
Governor Phil Murphy signed the Jake Honig Compassionate Use Medical Cannabis Act into existence in July 2019. Through this bill, he hoped to make cannabis medical treatment more affordable and accessible. The main highlights include:
Letting physician’s assistants and advanced practicing nurses prescribe medical marijuana to patients
Permitting treatment for patients for up to a year
New Jersey Dispensaries have also seen some positive legislative changes from this act, including:
Cannabis Regulatory Commission (CRC) – The CRC has been established as the regulatory commission in the New Jersey Department of Treasury. This organization is now responsible for the medical marijuana program in New Jersey.
Price Lists – These require dispensaries to provide a price list of all medical marijuana products offered listed on their website. They must stick to these pricing lists and are only allowed to change their pricing once per month.
Home Delivery – New Jersey Dispensaries now have a set of regulations to permit deliveries to patients.
How to Open a Cannabis Dispensary in New Jersey: The Potential
Many entrepreneurs want to learn how to open a cannabis dispensary in New Jersey because of the opportunity at hand. MJ Biz Daily reported that it believes New Jersey’s recreational market is an untapped industry that’s bound to be worth between $1.2 and $1.5 billion by 2023. Thus, New Jersey’s cannabis sector could be one of the most significant markets in the US within a few short years.
The Garden State has 9 million residents, and it attracts millions of visitors annually. Let’s not forget about the higher income leading to more disposable income. With this information, there’s no doubt that opening a cannabis dispensary in New Jersey will be one of the most lucrative ventures in the state.
New Jersey also aims to increase its tax revenue substantially with its adult-use market. The state will likely bring in around $300 million in tax revenue annually. But this could be a low-ball statistic. This dwarfs Colorado’s cannabis tax revenue by more than twice as much.
Local Cannabis Restrictions & Laws for New Jersey Cannabis Dispensaries
Even though New Jersey has already voted to legalize adult-use marijuana, some local municipalities have banned or restricted these operations. The municipalities anticipated legalization, knowing that they did not want to allow it within their borders.
While you might wonder how to open a cannabis dispensary in New Jersey, you may also be curious about the medical marijuana dispensaries already operating. Since passing the 2010 Compassionate Use Medical Marijuana Act, medical cannabis has been offered to treat patients with cancer, MS, glaucoma, seizure disorder, HIV/AIDS, severe muscle spasm, Lou Gehrig’s disease, inflammatory bowel disease, Crohn’s, and other terminal illnesses. Eventually, PTSD, Tourette’s, autism-related anxiety, Alzheimer’s-related anxiety, chronic pain, and migraines became part of this list.
The program expanded rather fast, with over 95,000 medical marijuana patients in New Jersey. While the state stopped accepting license applications for medical marijuana dispensaries in New Jersey on August 27, 2019, the state’s attention is now focused on full legalization.
Even with this being the case, there’s still some information covering the requirements to start a medicinal marijuana business in New Jersey.
NJ medical cannabis licenses have already been given to Alternative Treatment Centers (ATC). These businesses do the following:
And/or dispense medical marijuana and paraphernalia to patients holding MMJ cards in New Jersey
How to Get an ATC License in NJ
Applicants for ATC licenses must make two payments with their application. The first is a $2,000 payment; the second is an $18,000 payment. However, the $18,000 payment is refundable if the license is denied.
How to Open a Recreational Dispensary in New Jersey
Now that New Jersey voted with overwhelming support for recreational marijuana legalization in November, we’re still waiting for more insight. This is what we know at this point:
The Requirements to Get a Cannabis Business License in New Jersey
Governor Phil Murphy put the Cannabis Regulatory Commission in place to oversee New Jersey’s cannabis marketplace. This was announced on November 6th, 2020, and Dianna Houenou will serve as chair while Jeff Brown serves as Executive Director. Krista Nash will serve as a commission member for the CRC, as well.
Once New Jersey legalized adult-use cannabis, the state created Bill S21. This bill was meant for the vote on November 21, 2020. However, the vote was delayed. And once the bill was debated for some time, the state legislature and later Governor Murphy approved some bills to regulate cannabis sales for anyone over 21 years of age.
Looking at how the current bills are being debated, we know a few things about the requirements to get a cannabis business license in New Jersey.
For recreational license requirements in New Jersey, the current bill says this will likely become the method:
“Each license application shall be scored and reviewed based upon a point scale with the commission determining the number of points, the point categories, and the system of point distribution by regulation. The commission shall assign points and rank [all] applicants [, from the most to the least points,] according to the point system.”
This point system approach is similar to what we’ve observed happening in other legalized states. The applications are graded using a point system that takes several characteristics into account, including the applicant and his or her team’s expertise, experience, and credentials spanning an assortment of topics.
These are some of the topics you could be graded on:
Environmental impact plan
Safety and security procedures
Procedures reporting adverse events
Emergency management plan
Sanitation practices plan
Proof of financial competence to carry out plans
Besides your direct cannabis expertise, you’ll need to be competent on a wide assortment of topics. The reason? Firm understandings of these topics can assist in running successful cannabis operations in New Jersey, and knowledge gaps can be detrimental to long-term success.
As We have the answers to some of the most common New Jersey cannabis business questions, including:
What are the requirements to open a dispensary in New Jersey?
How much will it cost to open a dispensary in New Jersey?
When will new cannabis license applications be available in New Jersey?
Where can I open a cannabis dispensary in New Jersey?
What are the tax implications for opening and operating a cannabis dispensary in New Jersey?
How do I open a medical marijuana dispensary in New Jersey?
We’re expecting New Jersey to have an incredible year as recreational cannabis legalization gains traction, and we’re excited to support new and established canna-companies!
If you’re considering operating a cannabis dispensary in New Jersey, contact us for CPA expertise to ensure you’re compliant and successful in your endeavor.
Cannabis laws and penalties in Michigan are quite different from federal law. As with most states, marijuana regulations in Michigan even differ from the states surrounding it.
With this in mind, our Michigan cannabis CPAs discuss the legality of cannabis in Michigan to shed some light on this budding industry.
Interested in forming a cannabis business in Michigan? Contact us today to learn more about how we can help.
Marijuana Legality in Michigan
While currently a Schedule I controlled substance under federal law, things are changing in many states. This, of course, includes marijuana legality in Michigan.
The Schedule I classification defines drugs as “with no currently accepted medical use and a high potential for abuse.” With this being the case, penalties for possessing or operating a business related to these substances – including cannabis up until recently – carry some rather harsh penalties.
Even though the federal-level regulations still restrict cannabis consumption and sales, each state has the opportunity to vote on state laws regarding the industry. This includes state laws for the use, possession, and sale of marijuana, even as it remains prohibited at the federal level.
As of late 2018, Michigan legalized recreational marijuana. Since then, the state has crafted its own set of state laws to regulate the consumption, possession, and sale of it.
Michigan Cannabis Law: Consuming Cannabis
Michigan allows adults over the age of 21 to use cannabis legally. With this being the case, Michigan is the first Midwestern state to welcome the adult-use industry.
However, recreational cannabis consumption in Michigan cannot happen everywhere.
According to Michigan law, anyone using cannabis in Michigan has to do it in private. This usually means most cannabis consumption is happening at consumers’ residences. Cannabis use in Michigan is not allowed in public places like parks or on the street.
With this in mind, cannabis possession in Michigan is an entirely different subject.
Marijuana possession in Michigan is not illegal. However, specific amounts are carryable depending on where you are. For instance, if a consumer is at home, they can possess up to 10 ounces of marijuana. But it’s illegal to carry beyond 2.5 ounces of cannabis out in public.
Furthermore, it’s crucial to keep in mind that some places in Michigan fall under federal jurisdiction rather than the state’s laws. For example, airports are still viewed as federal property.
With this being the case, federal law prohibits the possession or use of cannabis in an airport, or on any other federal property, for that matter. This means no carrying or smoking in prisons or government buildings.
Michiganians also cannot carry or consume cannabis in any areas frequented by children. This means no marijuana at or near schools or school buses.
Michigan Cannabis Law: Selling or Distributing Cannabis
Adults in Michigan can transfer up to 2.5 ounces of marijuana to another adult as a gift. However, the transfer cannot be promoted to the public.
Besides gifting cannabis, the Regulation and Taxation of Marijuana Act was approved by voters. Thus, the Great Lake State became the 10th state to legalize adult-use cannabis.
Since then, the Michigan Regulatory Agency, or MRA, has been tasked with overseeing cannabis business licensing. The first announcement claimed that the first 24 months would allow applications from currently licensed medical marijuana operators. However, from March 2021, Michigan plans to begin accepting recreational cannabis licensing applications from entrepreneurs looking to dive into Michigan’s recreational cannabis sector.
Cannabis Cultivation in Michigan
Michiganians looking to cultivate cannabis commercially must have a Michigan commercial marijuana growing license. This is the permit that lets people sell marijuana seeds or plants through a secure transporter. Furthermore, those who hold a Michigan commercial cannabis growing license can sell cannabis to provisioning centers or processors.
To be eligible for a Michigan cultivation license, some considerations must be met. For example, you cannot have a safety compliance facility or a secure transporter. This means that you cannot have these kinds of Michigan cultivation licenses if you have a grower’s license.
If you have a Michigan grower license, you’ll also need an active employee who has at least two years of experience working as a registered primary caregiver. As a licensee, you cannot be registered as a primary caregiver.
Michigan Grow License Types
Michigan has two types of commercial grow licenses. Each type has three classes, and the classification depends on how many cannabis plants you’re planning to cultivate.
Medical grower classes: A (500 plants), B (1,000 plants), and C (1,500 plants)
Recreational grower classes: A (100 plants), B (500 plants, and C (2,000 plants)
Through Michigan’s adult-use program, microbusiness licenses are available. Businesses possessing equivalent licenses with shared ownership are permitted to operate at the same location – without separation – only if the operation does not violate local ordinances, limits, or regulations. The program does not require separate entrances, exits, operations, or point of sale areas.
Michigan Commercial Grow License Cost
Setting up a commercial cannabis grow operation in Michigan means paying the application fee and regulatory assessment. However, under the Medical Marijuana Facilities Licensing Act (MMFLA), you might have to pay some additional state-level costs. Applicants might have to pay a fee to their municipality, which could cost up to $5,000.
The state license application fee is nonrefundable and offsets the cost for the Michigan State Police (MSP), LARA, and/or contract costs of investigative services used to conduct background checks on applicants. This non-refundable application fee is $6,000.
You’ll also need an annual regulatory assessment by the state. This must happen before being issued a license and can vary depending on how many licenses the state anticipates it will give. This regulatory assessment doesn’t apply to safety compliance facilities, though.
For a Grower A license, you should expect to pay $10,000. Grower B and Grower C licenses range from $10,000 to $66,000, depending on how many licenses are subject to assessment.
Michigan Cannabis Law Assistance
Interested in becoming part of this budding industry? Contact us today for expert assistance forming and establishing your Michigan cannabis endeavor.
Cannabis business licensing in New Jersey is one of the fastest-growing topics in the state. With the recent vote legalizing recreational cannabis in the Garden State, it’s safe to say ganjapreneurs are well on their way towards fulfilling their New Jersey cannabusiness dreams.
But what about the licensing? Do you need an NJ cultivation license to grow flower? And what license will you need to open recreational dispensaries in New Jersey?
We’ll answer these questions and more in this article. But let’s first discuss the history of legalization in New Jersey and the current legislation in place.
Interested in obtaining your NJ cultivation license? Contact us today for assistance.
New Jersey Cannabis Legalization: The History
Governor Jon Corzine signed the Compassionate Use Medical Marijuana Act, S. 119 into law on January 18, 2010. This was his last day in office – some might even say this was a goodbye gift.
Through the Compassionate Use Medical Marijuana Act, qualified patients were granted access to medical cannabis through six Alternative Treatment Centers (ATC). These are non-profits that hold legal cannabis licenses from the state to produce and sell medical marijuana.
However, the program’s enrollment wasn’t nearly as high as one might expect; between resistance from former Governor Chris Christie, high prices, and regulatory limitations, the program didn’t sufficiently meet the demand for an accessible way to obtain medical marijuana in New Jersey.
Then, in 2016 and 2017, the law changed to include post-traumatic stress disorder and chronic pain. As a result, 24 new medical marijuana ATC licenses were put on hold because of a lawsuit.
By December 15, 2019, adult-use legalization was put on the voters’ 2020 ballot after the state legislature passed a cannabis referendum bill. The vote amended the state constitution, thereby legalizing the cultivation, processing, and retail sale of cannabis for adults over 21 years of age. This constitutional amendment took effect on January 1, 2021.
Looking at the New Jersey Cannabis Market’s Metrics
So many people are looking into the cannabis business licensing New Jersey process, and it’s not hard to imagine why. There’s a lot of potential for the cannabis sector in this state.
New Jersey is ripe for the cannabis sector’s expansion. With an impressive population of 8.9 million and 6 licensed cannabis businesses in place, we can expect growth. At this point, the Garden State has 6 companies that are allowed to have up to 3 dispensaries operating. The state has 12 licensed dispensaries. However, only nine are currently open.
The state has around 95,000 medical marijuana patients. These products’ taxes are currently at 4% of sales until June 30, 2021, 2% from July 1, 2021 to June 20, 2022, and will drop to 0% after July 1, 2022. What’s unique about New Jersey’s adult-use cannabis market is that, so far, the state hasn’t implemented an excise tax on marijuana. Thus, regular sales tax will apply, and the local governments could demand a tax of up to 2% on retail sales.
Cannabis Business Licensing in New Jersey
At this point, cannabis Grower, Wholesaler, Distributor, Processor, Retailer, and Delivery licenses have not been made available. The state is waiting until it adopts a set of rules to govern these cannabis licensing.
For the first 18 months, the state’s restrictions against vertical integration will be established to prevent premature monopolies from developing. Thus, cannabis businesses will not obtain licenses for growing and distributing.
For the first two years of legal cannabis sales in New Jersey, the marijuana grower licenses available will be capped at 37 licenses. This limit will not apply to micro-licenses (businesses with ten or fewer team members).
At this point, the state has 12 licensed Alternative Treatment Centers (ATCs). These are all vertically-integrated non-profit medical license holders. Currently, 9 of these ATCs are in operation. The state will offer adult-use licenses to these organizations first.
A legal case is still holding up the 2019 medical licensing round. There’s a chance that these licenses will be given prior to the state adopting its final rules. If this happens, these license holders will also be given initial access to the adult-use licenses.
New Jersey is also incorporating a social equity program as part of the bill. The state will have an office within the CRC to ensure social equity. Many of these licenses will be granted to women, disabled veterans, minorities, and lower-income applicants. Once the legislation passes, the newly-formed Cannabis Regulatory Commission (CRC) has 180 days to implement its regulatory rules.
How to Start a Cannabis Business in New Jersey: Step-by-Step
You’ll need to do several things before you apply for cannabis business licensing in New Jersey. While not all are essential, they’ll make the entire process easier.
First, you’ll look over S. 21. This is the foundation of the state’s adult-use program. So, if you’re planning to participate in this program, it’s essential to understand it.
Wait for the draft rules from the CRC. Once these rules are released, we’ll have a better idea regarding what we’ll have to do to remain compliant.
Look for cannabis real estate in New Jersey. High-traffic areas that are currently zoned for medical cannabis may allow adult-use cannabis operations to operate within these borders, as well.
Work on preliminary plans comparable to medical cannabis license applications. Minimally speaking, you’ll want to have the following for your New Jersey cannabis license application, depending on which apply to your situation:
Environmental impact plan
Background of principals, board members, & owners
Quality control & quality assurance plan
Community engagement plan
Labor compliance plan
Workforce and job-creation plan
Minority-owned, veteran-owned, or women-owned business certification
Considering Cannabis Business Licensing in New Jersey?
Interested in getting a cannabis business license in New Jersey? Contact us today for expert financial assistance.
Wondering how to start a legal cannabis business in Michigan? You’ve come to the right place.
The Great Lake State officially legalized marijuana, and as more progress is made, entering the Michigan cannabis industry is becoming an option for many. This is one of the fastest-growing sectors in the state, so it makes sense that you want to get in on it now.
Before you begin, it’s vital to learn about the laws governing legal cannabis businesses in Michigan. At this point, we must follow three marijuana laws; the Michigan Medical Marihuana Act, or “MMMA,” the Medical Marihuana Facilities Licensing Act, or MMFLA, and the Michigan Regulation and Taxation of Marijuana Act, or “MRTMA.”
Marijuana Business Laws in Michigan
Michigan Medical Marihuana Act
The MMMA is the cannabis legislation in Michigan that permits medical marijuana use in the state. This document outlines the protections offered to medical marijuana users, as well as provides a system of registry identification cards for qualifying patients and primary caregivers.
Furthermore, this legislation allows “caregivers” to grow up to 12 plants for each registered MMJ patient. The maximum number of plants these “caregivers” can grow is 72. However, the only people allowed to purchase this marijuana are the caregiver’s registered patients.
Medical Marihuana Facilities Licensing Act
Through the MMFLA, medical marijuana businesses can become licensed. This legislation lets dispensaries sell cannabis products to registered patients. In some cases, the dispensaries can even sell to out-of-state patients.
Michigan Regulation and Taxation of Marijuana Act
The MRTMA is the adult-use cannabis licensing law. This legislation lets licensed recreational marijuana businesses operate in the state. Now that the MRTMA is in place, recreational marijuana businesses in Michigan can sell these products to anyone 21 years and older.
Interested in starting a cannabis business in Michigan? Contact us today to learn more about how we can help.
How to Start a Cannabis Business in Michigan: Step-by-Step In-Depth
Knowing how to start a marijuana company in Michigan means understanding what it takes to make it happen. Here are the steps to take and things to consider as you set out on your endeavor:
Step 1: Finding a Niche
Before establishing a cannabis business in Michigan, you’ll need to decide what you’ll do in the sector. Would you like to begin cultivating cannabis in Michigan? Or perhaps you have some other existing business or skill you’d like to pivot to support cannabusinesses. The industry opportunities include – but aren’t limited to – branding and licensing, ancillary companies, and plant-touching.
Branding & Licensing
Now that cannabis companies can operate in Michigan, you’re allowed to sell your own branded marijuana flower and infused products. If you’ve ever been to a Michigan dispensary, many of the brands you’ll observe aren’t licensed cannabis companies. Instead, these businesses have licensing/white labeling agreements with a Michigan licensed cannabis processor to manufacture these products. The majority of these brands are offering products produced by one of several cannabis processing facilities in Michigan.
This translates to the ability to start a cannabis brand without paying the costly start-up fees of getting a Michigan cannabis license under the MMFLA or MRTMA. So, suppose you’re looking to launch a brand selling flower, edibles, cartridges, or another infused product. If that’s the case, you’ll need some start-up capital, a clear business plan or pitch deck, and a legal professional who has experience negotiating cannabis licensing and white label deals.
The first businesses that come to mind when wondering how to start a cannabis business in Michigan’ are usually “plant-touching” businesses. However, some of the most profitable opportunities are in the ancillary business sector.
You might have an existing skill, business, or service that you could pivot to serve the cannabis industry. Perhaps you’re a digital marketer, real estate broker, general contractor, insurance agent, or excel in another career that could help cannabis business operators.
Regardless of whether you have a directly translatable professional skill, there are other opportunities to become involved in the cannabis ancillary services or products market. With so many ways to participate in the Michigan marijuana industry, you’ll need to choose a route to take.
For example, software developers can develop apps to serve the industry. Or manufacturers can pivot towards creating smoking accessories. As with the licensing and branding idea, you won’t have to pay licensing fees or spend time getting a cannabis license.
Plant-Touching Cannabis Businesses in Michigan
Starting a plant-touching marijuana business in Michigan involves establishing a business that actually handles the plant itself. These types of companies cultivate, dispense, process, test, and transport plant matter. Cannabis lounges and cannabis events also are included in this category because Michigan demands these businesses get an MRTMA license to operate.
Even though plant-touching cannabis businesses in the Great Lakes State are costly to start and involve an extensive and time-consuming licensing process, these can be quite profitable. If you’re considering starting a plant-touching marijuana business in Michigan, feel free to contact us for assistance at any time.
Step 2: Creating a Marijuana Business Plan, Including a Budget & Pro Forma
A solid cannabis business plan goes a long way. This should include a start-up budget and pro forma numbers. While you might self-fund your business to bypass investors or financing, a marijuana business plan will give you the framework for your business model and facilitate growth.
The Michigan cannabis industry can be cruel to business owners who don’t appropriately budget their operations. Cannabis endeavors, especially cultivation facilities, almost always go over budget. With this in mind, we suggest adding at least a 15% contingency to your budget to account for potential cost overruns.
Keep in mind; your business likely will not be profitable from the state. Most of the time, you’ll need to establish and grow your customer base. Or, if you’re a cultivator, you might need time to grow your first crop and perfect your cultivation system. Financially speaking, you’ll need to plan for the operating capital your business needs to reach profitability.
Step 3: Structuring Your Michigan Cannabis Business & Building Your Team
Once you’ve chosen your niche and created a business plan, you’ll want to form a Michigan cannabis company and build out your team. Selecting your business structure can involve forming LLCs and corporations. But choosing the right team will include finding people who bring value.
Minimally speaking, you’ll need a cannabis CPA and a cannabis business attorney. This can involve setting up several consultations with professionals specializing in cannabis to find the right fit.
As you’re choosing a cannabis business attorney, look for someone who has experience in cannabis and business law. While cannabis attorneys with criminal law backgrounds
After hiring someone for either position, you might also be able to utilize their network to find other team members. For instance, at Northstar, we’ve culminated a network of cannabis professionals to support businesses across all niches. This, of course, includes cannabis attorneys.
Professionals with expertise in cannabis will ensure your business’s structuring is right from the beginning, protecting it long-term from the industry’s most common woes. It might be worth bringing in additional partners, cannabis business consultants, and employees to complement your skills in some instances.
For example, if you’re working on a Michigan cultivation facility, you might need to find a master grower. On the other hand, if you’re in cannabis safety testing, you might need someone who has experience running a lab.
As you’re structuring your cannabis business, you’ll need to draft an operating agreement or set up your company’s bylaws. This is where you’ll determine how your business runs. Consider the following:
Will you need investors?
Who is responsible for what in the company?
How will decisions be made?
What tax status will work best for your cannabis business?
Your answers here should guide your company structuring, as well as how you’ll manage the business and which tax selections you’ll make. This step is essential as improper cannabis company structuring can cause issues, profit losses, and litigation in the future.
If you’re not operating a plant-touching company, you won’t need to think about the next few steps. Feel free to skip ahead to Step 7 as the next steps solely apply to plant-touching cannabis businesses in Michigan. But, if you’re a plant-touching company, you’ll have to use the following steps to get the right licensing with the Michigan Marijuana Regulatory Agency (MRA).
Step 4: Qualifying for a State Cannabis License in Michigan
While some states like Florida and Illinois limit the number of state cannabis licenses issued, Michigan doesn’t. If you can pass the state’s background check and get a municipally licensed property, you can obtain an MRTMA or MMFLA cannabis license.
The qualifications for owning a Michigan cannabis business are becoming more lenient. Financial statements, three years of taxes, and real estate deeds are no longer required. We’re also seeing less focus on criminal issues.
Now the MRA focuses primarily on business litigation, regulatory history, bankruptcy, and taxes. This means if you’ve been paying your taxes, don’t have outstanding tax liens or deficiencies, haven’t had problems with other governmental licenses, and haven’t been involved in unethical business practices, you should be able to acquire a cannabis business license in Michigan.
Step 5: Identifying and Municipally Licensing Your Cannabis Real Estate in Michigan
After starting your prequalification process, it’s time to begin searching for cannabis real estate in Michigan. As a plant-touching operation, you’ll need a cannabis facility under the MMFLA and MRTMA. This is also up to each individual municipality as to whether you can set up a shop in the area. Since most Michigan municipalities aren’t allowing licensed cannabis companies to operate, it can be challenging to find the right location.
Regardless of such, many Michigan municipalities allow legal cannabis business operations. These include Detroit, Lansing, Grand Rapids, Warren, Pontiac, Traverse City, Flint, and others.
If you’re looking to obtain a municipally licensed cannabis property, you have several options to consider. Will you buy the property or lease it? If you decide to buy, will you do so on a land contract? This is also known as “terms.” Land contracts are standard throughout the cannabis industry because the lack of banking and lending services for cannabis businesses makes it appealing.
In some cases, you might be able to find a property with a municipal cannabis license or existing cannabis business. There’s also the option to get your own license, of course. But if you find a property that already has a license attached, you can expect to pay a premium for it. If that’s not in your budget, the best option could be to find a property in Michigan eligible for cannabis licensure.
If the property doesn’t come with a cannabis license, you can establish a purchase agreement or contingent lease to save the property as you work on getting your municipal license. Without this action, you might be forced to pay a premium for a property that won’t work for your operation.
Keep in mind; some municipalities cap how many licenses they allow for certain types of facilities. This being the case, there could be a limited application window to obtain one of these municipal licenses. Dispensary licenses, in particular, are usually capped. But some municipalities will limit the number of processors, growers, and other license types for the area, too. This is why it’s vital to check if the municipality is accepting applications for your license type before getting a property.
Step 6: Getting a State Facility License in Michigan
Since you have your prequalification and municipal license in order, it’s time to fully build out your facility and apply for a state operating license. The MRA recommends applying once you’re sixty days from completing your operation’s build-out before applying for Step 2 cannabis facility licensing.
To apply for your final state operating license in Michigan, you’ll need to have your complete plans and submit them to the MRA. This should include your plans for recordkeeping, security, advertising, staffing, and others.
Furthermore, you’ll have to submit to an MRA inspection, along with an inspection from the Bureau of Fire Services (BFS). After you’ve gotten approval for your Step 2 packet and you’ve passed your MRA and BFS inspections, you’ll need to pay the licensing assessment fee. This will vary by license type, but once you pay this fee, you’ll receive an MMFLA or MRTMA license from the MRA – and then, you’ll be ready to start operating.
Step 7: Operating a Cannabis Business & Staying Compliant in Michigan
You’re no longer wondering about the process to legally start up a cannabis business in Michigan – and you’re ready to operate! You have a business plan, and now it’s time to put that plan to use.
At this point, you have funding and a team ready to contribute to your success in the Michigan cannabis industry. But you’ll still have some cannabis compliance-related obstacles to overcome.
Need Financial Help Starting a Cannabis Business in Michigan?
At Northstar Financial, we’re experts in cannabis. Contact us today for expert financial services and guidance.