Business owners hoping to enter into Michigan’s medical cannabis industry will likely need a large amount of start-up capital in order to become licensed.
During the Bureau of Medical Marihuana Regulation’s meeting on Oct. 17, 2017, Andrew Brisbo, director of the Medical Marihuana Licensing Board, announced that the Department of Licensing and Regulatory Affairs had made an initial recommendation that potential medical cannabis applicants be required to have the following amounts in start-up capital, as reported by Michigan Live:
Secure Transporters – $200,000
Testing facility – $200,000
Processor – $300,000
Dispensary – $300,000
Class A Grower – $150,000
Class B Grower – $300,000
Class C Grower – $500,000
This would be in addition to other costs that medical cannabis applicants would have bear, such as a state regulatory assessment fee that could run anywhere between $10,000 and $57,000. Applicants would also be required to prove that they are capable of acquiring an insurance policy that provides at least $100,000 in coverage.
Opponents of the proposal say that the steep start-up capital requirements would disproportionately disadvantage minorities and small-business owners, also pointing out that pharmacies do not have the same asset requirements.
Mindful of these criticisms, Brisbo stressed that the department’s proposal was based off of similar requirements in states like Arizona and that the department would be willing to negotiate the requirements.
“We looked at other state requirements and known costs of acquiring a license,” Brisbo said, as quoted by Detroit Free Press. “We looked at the data we had and put it out there as a starting point for discussion. We want to have input and understand the concerns of interested parties and the board’s perspective on things before a final decision is made.”
The board is expected to take up the issue when it meets in November.