More than half a year after Michigan voters approved a ballot measure to legalize recreational marijuana, the authorities have released emergency rules which will shape the recreational industry in the state. Here are some of key takeaways from those rules.
Local Authorities Have Until Nov. 1 to Opt Out of Hosting Cannabis Businesses
State authorities will start accepting recreational marijuana business license applications on Nov. 1 this year. Until that date, local authorities (townships and cities) can make up their minds whether they will or will not allow marijuana businesses to operate within their jurisdictions. Currently, 600 communities have opted out, but many of those were waiting to review the rules released by the state government before making a final decision on the matter.
Social Use is in the Offing
The state plans to issue special licenses to establishments that wish to have the social consumption of pot on their premises. However, those social consumption lounges will not be allowed to sell food or alcohol. If organizers of festivals and special events apply for a permit, marijuana consumption will also be allowed at such gatherings. Industry analysts wonder what industry players like Green Hygienics Holdings Inc. (OTCQB: GRYN) and Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) would make of this provision given the fact that marijuana lounges won’t be allowed to sell food or alcohol, but cannabis can be availed at festivals (where food and alcohol are also available).
Starting a Recreational Cannabis Business Will Be Easier Than Starting a Medical Cannabis Business
It will be easier for those interested in starting recreational pot business when compared to the requirements for starting a medical cannabis company. For example, those opening recreational cannabis businesses will not be required to prove that they have funds while those who start medical cannabis companies have to prove that they have between $200,000 and $500,000 in cash and assets before obtaining a license. It is also more affordable to get a license to grow recreational marijuana than get one for growing medical marijuana.
One Store Can Sell Both Medical and Recreational Marijuana
The emergency rules also have clauses allowing medical cannabis provisioning centers to sell recreational marijuana as well if the two types of products are stored or displayed in different sections of the store. The entrance and points-of-sale systems can be the same for both types of buyers.
Medical Cannabis Plants May Be Transferred to Recreational Marijuana Grow Facilities
In the beginning, plants originally cultivated for the medical marijuana market may be transferred to a facility cultivating weed for the recreational market. This provision has been created in order to minimize supply kinks as recreational marijuana sales are launched.
A Plan for Social Equity in the Industry is Being Drafted
The state authorities have also indicated they will release a social equity plan later this month (July) outlining how communities which were hit hard during the days of cannabis prohibition can be supported to benefit from the legal industry. This support could include license fee waivers.
On paper, these rules seem logical and practical enough, but the true test will come once their implementation begins later this year before recreational sales begin next year.
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