The marijuana law business in the State of Michigan just got a lot more interesting!
The passage of Proposition 18-1 adds a third layer to the regulatory scheme and the planning for present and future participants.
Not only that, but the business opportunities in the recreational market have just tripled or sextupled from the medical market depending on whose estimates you believe.
Here are some thoughts for our friends based on recent Michigan marijuana law meetings and questions and observations with and from clients:
According to the Bureau of Medical Marijuana Licensing, a licensee which seeks an additional license under MMFLA will not need to submit updated information (“unless required”) with that new license application. They figure that if you’re approved by the Board for licensure, you’re good until renewal time. They will require updated financials and possibly background checks at renewal. Final procedures are not yet in place. Thus, if you currently have a license and want to add more, it will be a lot quicker and easier to get those processed now. Plus, you move up on the list of review.
We’ve been talking with tax professionals and they are indicating that:
- They believe the IRS will audit essentially every business in the marijuana industry and the individual returns for all individuals and entities which are part of the licensed marijuana business.
- The IRS is also undertaking a program to audit Form 8300 compliance. If you are not aware of what Form 8300 is, you better contact your CPA/tax advisor immediately and learn. There are large penalties for failure to comply.
- You need to open and read your mail from the Internal Revenue Service/US Department of Treasury. Don’t wait. There might be an audit notice in it and you need to address it immediately with knowledgeable tax professionals.
- We’ve all heard the requirement to report on the Form 8300 if you receive $10,000.00 or more in cash. It’s not the only reporting requirement. There’s a portion of the law which references “series of cash transactions.” Landlords need to be aware of this since a year-long lease of $1,000.00 or more per month paid in cash is a “series of cash transactions.” Lenders are subject to the same reporting requirement when there are a “series of cash transactions.” Failure to report is a huge financial penalty and could subject you to criminal penalties.
It looks like the City of Grand Rapids is back in play for marijuana, both medical and adult-use.
- Recently the Planning and City Commissions held meetings at which they reviewed the current status of the existing medical marijuana opt-in ordinance and evaluated some tweaks to it. Currently, it appears that the moratorium will be repealed and there will be a revised application process. One likely requirement for growers, processors, and provisioning centers is that an applicant for a city operating permit must be pre-qualified with State approval. No such requirement for labs and transporters; just prove application for pre-qualification was filed with Bureau of Marijuana Regulation.
- Some other changes they are looking at a deal with developing definitions for fields, churches,” and schools for purposes of distance separations. Furthermore, there’s work on the creation of a system through the City Commission whereby it may grant a waiver when the “sensitive use” is within 1,000 feet of the proposed licensed location. No decisions yet, but you need to plan now so you’re ready to move forward quickly and efficiently when the amended ordinance is enacted. Don’t wait if you want to be one of the first.
- On November 13, 2018, at the Grand Rapids City Commission Meeting, the Marijuana Industry Voluntary Equitable Development Agreement (MIVEDA) was amended. The stated purpose is “to incentivize wealth creation within the Grand Rapids community” by placing an emphasis “on local ownership and hiring, encouraging micro local business enterprises (MLBE) participation where possible and prioritizing applications that do not require a separation distance waiver.” This agreement is a voluntary one between the City and the applicant whereby the applicant commits to certain requirements for its business operation. It’s voluntary. However, the more commitments and agreements you are willing to make with the City, the more points you are awarded. The point system will be utilized by the City to rank applications and prioritize submissions to the Planning Commission for a Special Land Use process. Right now the City estimates that the first Special Land Use request will go before the Planning Commission in May.
If you need assistance with state or local applications, planning, or strategizing your business planor need to know something about marijuana law in Michigan, Cannalex Law is here to help.