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Even the Best Laid Plans.....

What is Stopping You from Becoming a Cannabis Entrepreneur?   In Michigan, it Could be Bureaucracy and Red Tape.

Michigan has historically had an entrepreneurial spirit from the well known Henry Ford and the Van Andel and De Vos’, to those that we sometimes forget as having ties to Michigan such as Berry Gordy with Motown Records, Dan Gilbert with Quicken Loans, Eric Ryan co-founder of Method, John Varvatos from John Varvatos House of Fashion and Roger Penske with Penske Automotive Group.  There are too many more to mention, but this shows the wide range of talent and the enormous entrepreneurial spirit that has been fostered in Michigan.

If you’ve got the entrepreneurial itch to start something of your own, cities such as Grand Rapids and Detroit have resources available for startups. For example, in 2015 the Small Business Development Center (SBDC) helped open 347 new businesses, creating 3,984 jobs. Thirty-five of those businesses were in West Michigan. And, here’s a fun fact - Grand Rapids was listed third in the in terms of economic growth in the US in  2015, and in 2017 was listed as # 5 of the Top 15 Cities to  Start a Business by CNBC.

Another reason why small business thrives in Michigan is the people.  If we are strong enough to tough out the Michigan winters we can handle anything!  But, in addition to that, we are kind and generous to one another and their endeavors. Anthony Montalbano along with Brian Ritter started AMBR in Detroit in 2102. "The level of generosity in the people here is amazing," Montalbano said. "It kind of stems from the fact that everyone wants to succeed, and people understand that to succeed, they have to help not just themselves but each other.  "And that culture is amazing."

Does this inspire you to start your own business, or have you already been bitten by the entrepreneur bug?  If you know that owning your own business instead of working for someone else is your passion, but you're not sure what type of business to start, Michigan is in a great place right now to start a business centered around marijuana.  We already allow marijuana use for certain medical conditions, so there are opportunities for growing, distributing, packaging, delivery, and many more areas. Legalization is going to be on the ballot in November which could open up even more opportunities.

In Michigan, anyone who believes they can satisfy the requirements for a facility license may apply for one.  The state began accepting licenses December 15, 2017, and is using a two-step process for licensing. The first process is a prequalification and the second is a license qualification.

Prequalification includes a full background check of everyone with a direct and indirect ownership interest.  Before the Bureau of Medical Marihuana Regulation (BMMR) begins to look at your information - which involves a 21-page minimum application - they must receive a $6000 application fee.  

Step 2 is the Licensing Qualification requires information regarding the physical location of the business. If approved in Step 2, you will need to provide a regulatory assessment.  A Grower A license up to 500 plants is capped at $10,000.  The assessment for Grower B-C (1,000 - 1,500 plants), Processor, Transporter and Provisioning Center licensing depends on the total number of licenses subject to assessment and could be between $10,000 and $57,000.

Now that you have the capital you need, all of your paperwork done, a location within a municipality that is compliant with Section 205 requirements, you will find out if you are approved by the BBMR.  The board is going to be looking at your criminal past, your financial history, your commercial license or certification history, delinquency in any taxes, your business plan, past litigation involving business practices, and proof of financial responsibility.  Additionally, the board may look into your integrity, moral character and reputation, and the outside control, either directly or indirectly over the applicant. This is the part that worries me a bit as these are subjective and can be difficult for even a 5 person board that may have to overcome some personal biases.  There may be standards, however, your standards, the board’s standards, and mine may be a world apart.  

There is a 17 member advisory panel that is to be set up to help the board make decisions.  Members include representatives from the police, sheriff, physicians, counties, and townships.  Noticeably absent from this panel are the representatives of registered medical marihuana patients or medical marihuana primary caregivers.

One of the jobs of the licensing board is to grant or deny licenses within a reasonable time.  Remember, the process began in December 2017, and as of June, not a single license has been granted.  The application is long, and the process time consuming, however, what is the threshold for not making decisions in a timely manner?

This information is by no means meant to discourage anyone from trying to become a cannapreneur.  Conversely, we are working to make the dream possible for everyone. We work to ensure that everyone has access to this entrepreneurial opportunity and that an industry is created that is representative of all of us who dreams of being a cannabis entrepreneur.

Connie Maxim-Sparrow