Commercial Cannabis Craft Act Press Release

Eric Foster
Mar 12 · 5 min read
Growing the Commercial Marijuana Industry

Contact Information:

Eric Foster

Banks & Company

248–996–5553

Eric@bankscompany.us

Matt Hoffman

Michigan Economic Stimulus Fund

616–240–6072

Mr.hoffman@handgrownworkforce.com

Cimone Casson

Minorities for Medical Marijuana

312–933–5167

Ccasson12@gmail.com

Commercial Cannabis Craft Act: A simple solution to fix

licensing access and other complex Medical Marijuana issues

{Southfield, Michigan March 8, 2019} As with any industry its infancy, there can be major challenges as regulations evolve and the business matures. Right now in Michigan, we face many challenges in the Medical Marijuana Licensing process and now the integration of the voter approved Recreational Marijuana initiative. For example;

Production is not meeting demand

Medical Marijuana production is currently unable to meet patient demand. Existing Caregivers are face significant financial & structural barriers that prevent them from transitioning into the legal world of marijuana, decreasing chances for Michigan residents to become licensed operators.

There’s potential for Illegal marijuana to get into the market

The potential leakage of excess Medical Marijuana product into the illegal market through the Caregiver system; if Caregivers are able to operate after both legal Commercial Regulated Marijuana systems are functional.

Loss of tax revenue

As of today, roughly seventy temporary Rule 19 Operators are in the application process, but they are in constant limbo with short-term emergency extensions. These extensions expire 3/31/19, interrupting state income tax and sales tax revenue from these operators. The 3% excise tax on Commercial Provisioning Center sales expired on 3/6/19, taking revenue from local communities and counties that allow provisioning centers.

Adult use purchase vs. usage

The current transactional purchase of adult use Marijuana is not legal until Commercial recreational retailers are licensed, which encourages illegal “gifting” of marijuana. Establishments are popping up and communities are running to prohibit Medical Marijuana and Recreational Marijuana due to uncertainty in the application of the new Adult Use regulations

How can we fix these issues?

The Michigan Economic Stimulus Fund, Minorities for Medical Marijuana, Lake Newaygo County NAACP have joined with Banks & Company, Canna Capital & Our Canna to create a Commercial Marijuana reform plan to address these issues through legislative amendments to the MMFLA, MRTMA and MMA Public Acts

Introducing the Micro Manufacturer Licensure

Create a legal, cost effective pathway for existing caregivers to transition into the Commercial Medical Marijuana licensed market. This new Commercial Medical/Recreational reform would create “Micro Manufacturer” Licensees under the Medical Marijuana Facilities Licensing Act (MMFLA), with a transition year license for Caregivers, to build their business to apply for permanent license after 1 year.

Allow Adult Use Sales through Provisioning Center and ban “gifting establishment”

  • Allowing legally eligible adults to purchase up to 1 ounce of Marijuana from Licensed and Rule 19 Provisioning Centers per month until the establishment of Commercial Recreational facilities
  • Making the practice of “gifting” through commercial auspices, clubs or establishments illegal

Amend Public Act 281 to codify the Rule 19 temporary operators through December 31, 2019

Codifying these operator-applicants into the MMFLA law while they continue through LARA approval process and making them operate in a compliant format as the licensees will cure the issues with both access to and provision of tested and compliant Medical Marijuana.

Retain the 3% excise tax, accelerate the start of the 10% excise tax and levy a new 1% excise tax on Micro Manufacturer sales

  • Preserves the 3% Excise Tax revenue from Provisioning Center sales of Medical Marijuana for State, Local, County and County Sheriff’s units, retaining a minimum of $37 million in tax revenue
  • Adult Use sales at Medical Marijuana Provisioning Centers could generate up to an extra $131.4 million in tax revenue due to the 10% excise tax levied on Adult Use Recreational sales
  • Levy a 1% Excise Sales tax for Micro Manufacturer sales and distribute these new tax revenues with 40% to the host municipality of the Micro Manu., 30% to the host County and 30% to the State for local and county road repairs grants, mental health services or public health services

What are the benefits?

This new Micro Manufacturing classification creates an orderly transition for the commercial cannabis industry. It manages cost and quality control issues severely hampering the current licensed supply chain. Caregivers could legally transition into taxed small businesses, creating a new state and local revenue stream, as well as thousands of new Michigan based small businesses. This would also reduce illegal activity within the industry.

This measure also addresses a deficit in the availability and affordability of fully compliant Medical Marijuana by allowing Micro Manufacturers (former Caregivers) to legally sell to Growers, Processors and Provisioning Centers.

Adult use sales transaction can be conducted in the open and legally through the Provisioning Centers, increasing overall revenue flowing into the industry and resulting tax revenue to help schools, municipalities and counties

Potential positive economic impact of $1 billion or more

This reform measure could drive $50- $300 million in new tax revenue, with a net economic impact between $470 million and $2.7 billion.

Legislative Action

The coalition partners have meet with multiple Republican and Democratic legislators, Education trade associations, County and Local Municipal stakeholders and has secured a primary bill sponsor and 3 co-sponsors. The bills are being developed and will be introduced in the House of Representatives within the next few weeks.

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Check the links for more information on the partner organizations

Michigan Economic Stimulus Fund

www.economicstimulus.org
www.minorities4medicalmarijuana.org

Banks & Company

www.bankscompany.us

Lake Newaygo Branch of the NAACP

CannasCapital

www.cannascapital.com

CimoneCasson

www.ccimonecasson.com