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Found 4 results

  1. When forming a corporate structure for any business a company is generally weighing two factors: 1) What are my tax liabilities? and 2) What are my civil liabilities? General practice in Michigan for most business owners is to set something up called an LLC (limited liability company). This business has the benefit of being both taxed friendly, as you are only taxed on an individual level, and not as a company, along with the benefit of providing a solid amount of liability protection from being held personally responsible if your company is being sued. This is generally results in a win-win situation for business owners, and as a result is the ideal set-up. However, there are certain disadvantages to this set-up, which make it particularly dangerous for those setting of a cannabis business. 280E to be exact... If anyone is unfamiliar with this law please feel free to review the last blog post. This heightened tax liability, that is confusing, constantly changing, and often overlooked so as to avoid massive taxation, has frequently led to audits where cannabis businesses are facing massive audits sometimes as much as hundreds of thousands of dollars. So in an L.L.C when your company is determined to owe the IRS $500,000 the IRS will first determine whether the business can cover the debt, but also the Internal Revenue Service will be able to go after the business owner personally for the remainder of the owed taxes. That includes anyone with any portion of ownership in the company. So not only does your company stand to be dealt a death blow by a sever tax audit, but your personal finances could ultimately become crushed. Now these tax liabilities are most frequently owed by the provisioning side of the licensing and not by the grower, but based on the tax court trending towards more and more taxation it is safe to say that no company is truly safe from the potential wrath of the IRS and therefore it highly recommended when setting up your corporation to avoid taking excessive risk and therefore to avoid setting up as an L.L.C. -Josh Colton
  2. Polls and surveys conducted across the USA all agree that about 50% of the entire US population has used or enjoys marijuana. With marijuana selling anywhere from $5-$30 per gram, its no wonder that legalizing marijuana brings jobs and tax dollars out of the black market and into the regulated market. The prohibition of alcohol gave us Al Capone and the American Mafia, the prohibition of marijuana and other drugs gave us El Chapo and the Mexican Cartels. https://www.forbes.com/sites/civicnation/2018/05/11/how-providence-promise-is-building-a-college-going-culture-the-follow-your-dreams-tour/#6275595149f3
  3. Some clarity provided on fee structure for the licensing process, but nothing finite as they have only provided a range of potential fees. September 12, 2017 - At a meeting of the Medical Marihuana Licensing Board later today, the Department of Licensing and Regulatory Affairs (LARA) will inform the board members regarding several oversight issues and the implementation of the regulatory framework for the new Medical Marihuana Facility Licensing Act (MMFLA). LARA, in consultation with the board, has sole authority to promulgate rules and emergency rules as necessary to implement, administer, and enforce the MMFLA. LARA will notify the board of its intent to submit emergency rules necessary for the initial implementation of the MMFLA. The emergency rules – expected to be submitted in November – will further establish regulatory policies, including the application and licensing process and the fee structure. LARA is currently working with the board to develop permanent rules. Existing Facilities LARA consulted with the Michigan Attorney General’s office regarding facilities and dispensaries currently in operation and determined that any regulatory action will require an administrative rule. The department’s intent for the emergency rules is to consider any operation of a facility – that would otherwise need to be licensed under the MMFLA – as a potential impediment to licensure if continued after December 15, 2017. LARA will begin accepting license applications for all facilities on that date. This applies to all facilities defined under MMFLA. This approach will allow existing operations to wind down while also giving adequate time for patients to establish connections to caregivers to help ensure continuity of access. Fee Structure MMFLA requires LARA, in consultation with the board, to set the application fee and the annual regulatory assessment for each license. LARA will notify the board of its intent to submit emergency rules related to the following fee structure: The Application Fee is non-refundable and offsets the cost for LARA, the Michigan State Police (MSP), and/or contract costs for investigative services in order to conduct the background investigation of those applying for licenses. The nonrefundable application fee – which must be submitted with the application – will likely be in the $4,000 to $8,000 range, depending on the number of applications received. The annual Regulatory Assessment offsets operational costs and other statutory mandates including LARA’s costs to implement the act. It also offsets the cost of medical-marihuana-related services provided to LARA by the Michigan Attorney General’s office, MSP, and the Dept. of Treasury. By statute, the assessment must also provide $500,000 annually to LARA for licensing substance abuse disorder programs in addition to five percent of other state departments’ costs to the Michigan Department of Health and Human Services for substance abuse-related expenses. LARA is currently determining the annual regulatory assessment for fiscal year 2018 for each of the five license categories authorized by MMFLA. Grower A licenses are capped, by statute, at $10,000. Grower B-C, Processor, Transporter, and Provisioning Center licenses will be dependent on the number of total licenses subject to assessment and could be as low as $10,000 or as high as $57,000. The regulatory assessment does not apply to safety compliance facilities.
  4. This really sets the stage for super grows... The State of Michigan’s Department of Licensing and Regulatory Affairs (LARA) released an advisory bulletin today to inform and advise prospective medical marihuana licensees regarding stacking of medical marihuana class C grower licenses. The bulletin is for advisory purposes only and is subject to change. It is the intent of the Bureau of Medical Marihuana Regulation to allow a potential licensee to apply for – and be granted – multiple (“stacked”) class C grow licenses in a single location. Each class C license authorizes the grower to grow up to 1,500 marihuana plants. Stacked licenses must be issued to the same applicant/licensee and each license will be subject to an additional application and regulatory assessment. While a stacked licensee will need to identify and track all information in the statewide monitoring system under the appropriate license, the licensee will not be required to operate each license in a separate, distinct working area. A licensee with stacked licenses must be in compliance with all applicable local ordinances and zoning regulations. This bulletin does not constitute legal advice and is subject to change. It is intended to be advisory only, in anticipation of the Department of Licensing and Regulatory Affairs’ promulgation of emergency rules consistent with statutory requirements. Potential licensees are encouraged to seek legal counsel to ensure their licensure applications and operations comply with the Medical Marihuana Facilities Licensing Act and associated administrative rules.
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