March 1, 2021, is the new target date for individuals and businesses throughout Michigan, the United States, and the world who want to participate in Michigan’s cannabis industry, as the Michigan Marijuana Agency (MRA) has relaxed its licensing rules and getting into Michigan’s cannabis industry just got easier.
The agency has removed the restriction that only medical marijuana licensed entities may obtain the lucrative adult-use/recreational marijuana licenses in Michigan.
The Marijuana Regulatory Agency announced last week that it was exercising its right under MRTMA to reduce the restriction from the 2 year lock-out period which was to expire November 1, 2021 to March 1st. That’s the date MRA will begin accepting applications for adult use/recreational marijuana licensing.
What does that mean for people in the process of obtaining a medical marijuana license?
It means you immediately reevaluate your business plan. Obviously, it’s contingent on whether or not the municipality in which you planned your operation allows adult-use licensed businesses. We are finding that more and more municipalities have gone directly to that status so there may be opportunities for those of you who are not in adult-use licensed municipalities to relocate your operations. In addition, you should be lobbying your local government to add adult use so that the municipality and you can remain competitive.
What about those of you who are thinking of getting into the Michigan adult-use marketplace? Jump in now! Do not wait! If the available properties have not already been taken, they will be shortly. Prices of useable properties are escalating in light of this new development. Can you afford to wait another year or two in hopes property prices come down as more municipalities come online?
Buying a property today and getting it online by March 1st may be difficult. It may cost you more for the contractor and equipment than you otherwise planned but you should be able to make that back quickly. Get ahead of your competitors! Our clients tell us that they could easily have an adult-use retail enterprise up and ready for inspection by March 1st, and that’s starting from scratch today. We are finding that the municipalities are helpful. They are interested in seeing these operations develop for new businesses in their areas.
Inquiries from Western states about opportunities in Michigan are increasing exponentially as well. Existing operators from Colorado, California, Oregon, etc. no longer need to wait until the end of next year to get into our recreational marketplace. If you think you want part of this new business, get in now while you can.
PS: Annual Financial Statements
October 31, 2020 is the deadline for filing with the agency your annual financial statement (AFS). This filing has to include the attestation from the municipality certifying your delivery to it of the AFS.
For those of you who are busy working on the reporting, good for you. As I previously reported, the timeframe to complete the report could be 3-8 weeks per CPAs with whom we’re working. The cost to prepare it is expensive. Anyone who received an initial license through September 2019 has the October 31, 2020 deadline. There are a couple of exceptions as to timeframes but you best know what those are. Then anyone licensed October – December 2019 has a report due January 31st, 2021.
If you are a licensed entity and do not know what the AFS is, you best get ahold of your CPAs immediately. We believe that licensed entities which have not submitted the reports by the deadline will receive on November 1st notices of intent to suspend, or maybe outright suspensions of operations. That’s not pretty. The state has not yet stated what it will do for enforcement against licensed entities that have not timely submitted the report but be prepared for the worst. Let’s hope you have all been working on this and will have them ready to submit in a timely fashion.
If you need help with any of these issues please give us a call or send an email.