Capitalization

[shishka]

So the state has some lofty capitalization requirements for licenses. Thank god they will at least let you count marijuana inventory as proof of capital.

 

[mibrains]

LARA Releases Advisory Bulletin Regarding Licensee Capitalization Requirements

Media Contact: LARA Communications 517-373-9280
Emal: mediainfo@michigan.gov

November 8, 2017 – The Dept. of Licensing and Regulatory Affairs (LARA) released an advisory bulletin today to inform and advise potential licensees of the Bureau of Medical Marihuana Regulation’s (BMMR) intention regarding licensee capitalization requirements. The bulletin is for advisory purposes only and is subject to change.

As permitted by the Michigan Medical Marihuana Facilities Licensing Act, the Medical Marihuana Licensing Board – when determining whether to grant an applicant a license – may consider the sources, and total amount, of the applicant’s capitalization to operate and maintain the proposed marihuana facility.

“By allowing current medical marihuana inventory and start-up equipment – as well as 401k accounts, CDs, and other common investments – to count towards a potential licensee’s capitalization requirements, we have taken the necessary steps to ensure that businesses of all sizes will be represented in Michigan’s burgeoning medical marihuana industry,” said BMMR Director Andrew Brisbo. “Capitalization standards are an important part of the regulatory structure that will help ensure both business stability and safe, reliable access to medical marihuana for patients. These requirements were developed after researching other Michigan industries and best practices from states with medical marihuana regulation.”

BMMR has determined that at least 25% of an applicant’s capitalization sources must be in liquid assets. Liquid assets are easily convertible to cash and may include:

• Cash, including checking or savings accounts
• Marihuana and marihuana-infused product inventory (in compliance with the Michigan Medical Marihuana Act, 2008 IL 1 or administrative rules)
• Certificates of deposit, 401k accounts, stocks, and bonds

The remaining capitalization may be evidenced in either additional liquid assets or in non-liquid assets. Evidence must be provided that shows there is no lien or encumbrance on the asset provided as a source of capitalization. Examples of non-liquid assets include but are not limited to:

• Equity in real property
• Supplies, equipment and fixtures

In order to be granted a proposed medical marihuana facility license, applicants will be required to demonstrate capitalization amounts as follows:

• Grower: Class A – $150,000
• Grower: Class B – $300,000
• Grower: Class C – $500,000
• Processor – $300,000
• Provisioning Center – $300,000
• Secure Transporter – $200,000
• Safety Compliance Facility – $200,000

An applicant for a medical marihuana facility license may be an individual, a corporation, an LLC, a partnership, a limited partnership, an LLP, an LLLP, a trust, or other legal entity. Additionally, the capitalization amounts and sources must be validated by CPA-attested financial statements.

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.

 

[Restorium2]

No problem. The cops have always said my cannabis has a million dollar street value. 

Seriously, the few people I know who are involved, nobody wonders if they are millionaires. 

10 hours ago, shishka said:

So the state has some lofty capitalization requirements for licenses. Thank god they will at least let you count marijuana inventory as proof of capital.

 

 

[bobandtorey]

• Marihuana and marihuana-infused product inventory (in compliance with the Michigan Medical Marihuana Act, 2008 IL 1 or administrative rules) ?

And now someone can have as much as they need as long as its for sale ?

[Restorium2]

24 minutes ago, bobandtorey said:

• Marihuana and marihuana-infused product inventory (in compliance with the Michigan Medical Marihuana Act, 2008 IL 1 or administrative rules) ?

And now someone can have as much as they need as long as its for sale ?

That would be a maximum of about 15 ounces if you follow MMM Act of 2008.

If you are a dispensary then you didn't have any rules and never were in compliance with the MMM Act. 

How does someone square this circle like that? It defies logic. 

The most a 'legal persona' could declare would be less that $10,000 so why even bring it up? hmmm

If I was a 'playa' I would be wondering if all of this is a way to incriminate oneself. Not in a small way like with the Act. In a huge way that has no legal defense and no 'get outa jail free card'. 

[t-pain]

RSO would be extract + alcohol, technically an infused product

mmma says 35 (edit: oops 36) ounces = 1 oz usable. thats 90 ounces (2551 grams) of rso you can have. at $100/gram of rso

thats 2551.46 * 100 = $255,146

 

and thats per patient. so 2.5 ounces of usable = 90 ounces of liquid rso x 5 patients (+1 yourself) = 6 x $255,146 = $1,530,876

if my math is correct.

[t-pain]

you guys dont even have to be a dispensary to have that much RSO.

havent you been stockpiling your RSO just for this occasion?? some of you are so angry at the regulations and rich people that you cant even do simple math ? if you cant multiply 6 numbers you should not be in business.

i thought they were going to ban patients/caregivers from holding licenses? maybe that was an earlier draft ?

[bobandtorey]

58 minutes ago, t-pain said:

you guys dont even have to be a dispensary to have that much RSO.

havent you been stockpiling your RSO just for this occasion?? some of you are so angry at the regulations and rich people that you cant even do simple math ? if you cant multiply 6 numbers you should not be in business.

i thought they were going to ban patients/caregivers from holding licenses? maybe that was an earlier draft ?

Not to worry it ant over yet Dec 15 is a long way away Imho

[Restorium2]

2 hours ago, t-pain said:

you guys dont even have to be a dispensary to have that much RSO.

havent you been stockpiling your RSO just for this occasion?? some of you are so angry at the regulations and rich people that you cant even do simple math ? if you cant multiply 6 numbers you should not be in business.

i thought they were going to ban patients/caregivers from holding licenses? maybe that was an earlier draft ?

What I wrote was that a real caregiver  wouldn't have $10,000 worth of legal inventory to declare.

Don't misconstrue the sense of right and wrong, put to words, for anger. 

Where in the heck do you find the nerve to charge $100 a gram? 

A gallon of oil at $5 a gram is only $17,920. A GALLON. 

 

Edited November 10, 2017 by Restorium2

[Restorium2]

What is wrong here is they hound caregivers to follow the rules. They go through their trash at the curb to get a warrant. They catch them over by ounces and send them to court. Yet dispensaries are openly selling more every day than any prosecuted caregiver has on hand legally for their patients.

There's a serious double standard here. It stinks.

They should remove the restrictions on caregivers because they have followed the rules for nearly ten years now while the dispensaries thumbed their noses at the rules daily. 

 

 

Edited November 10, 2017 by Restorium2

[t-pain]

erm, what price do you sell/buy rso for , resto ?

i pulled the $100/gram rso off the net, and from my experience buying 4 gelcaps for $50 once. maybe the prices have dropped since then.

still at $50 / gram thats $750k so still plenty enough to buy a license with.

[Restorium2]

14 hours ago, t-pain said:

erm, what price do you sell/buy rso for , resto ?

i pulled the $100/gram rso off the net, and from my experience buying 4 gelcaps for $50 once. maybe the prices have dropped since then.

still at $50 / gram thats $750k so still plenty enough to buy a license with.

Mostly give it away to patients. Sometimes it's about $20 for a 3-4 gram syringe. Which would make a LOT of gel caps. 

You don't 'buy a license' with what you would declare as inventory capitol. It would just make you eligible to then pay a lot of cash for your license. 

 

 

[semicaregiver]

Has anyone considered that you may be looking at the pronouncement from BMMR all wrong?   From what I have read  in other forums and list serves, the reason for considering mj inventory as capital is the fact that lots of people are coming from out of state (what a surprise).   Existing dispensary and grow ops in Colorado can now use the value of their "legal" inventory to demonstrate that they have the financial resources to operate in Michigan.   The inventory is just an asset much the way someone might show stock holdings as a liquid asset.   The end result is BMMR is making an effort to encourage operations from out of state to come into Michigan.    

[Restorium2]

23 minutes ago, semicaregiver said:

Has anyone considered that you may be looking at the pronouncement from BMMR all wrong?   From what I have read  in other forums and list serves, the reason for considering mj inventory as capital is the fact that lots of people are coming from out of state (what a surprise).   Existing dispensary and grow ops in Colorado can now use the value of their "legal" inventory to demonstrate that they have the financial resources to operate in Michigan.   The inventory is just an asset much the way someone might show stock holdings as a liquid asset.   The end result is BMMR is making an effort to encourage operations from out of state to come into Michigan.    

Makes sense. 

 

On ‎11‎/‎8‎/‎2017 at 8:55 PM, shishka said:

So the state has some lofty capitalization requirements for licenses. Thank god they will at least let you count marijuana inventory as proof of capital.

 

Better tread lightly with that unless your stash is not in Michigan. 

[bax]

11 hours ago, semicaregiver said:

 The end result is BMMR is making an effort to encourage operations from out of state to come into Michigan.

no, the BMMR memo specifies in accordance with the MMMA.

being "in accordance with the MMMA" means being a resident of michigan in order to be a patient or caregiver. it means being a caregiver who has marijuana specifically for his registered and connected michigan patients.

out of state dispensaries have nothing to do with the MMMA.

do you agree?

 

Edited November 12, 2017 by bax

[Restorium2]

12 hours ago, bax said:

no, the BMMR memo specifies in accordance with the MMMA.

being "in accordance with the MMMA" means being a resident of michigan in order to be a patient or caregiver. it means being a caregiver who has marijuana specifically for his registered and connected michigan patients.

out of state dispensaries have nothing to do with the MMMA.

do you agree?

 

I know what it means when it applies to me, a caregiver. But who knows WHAT it means when applied to a Michigan dispensary. Did they ever have a limit? They just barged in and made their own rules. Caregivers are in a class of their own and we need a class action to right this wrong. We are rightly owed the difference between the STRICT rules we have had to follow and what the dispensaries have enjoyed. 

This is where the hypocrisy is showing. It just doesn't balance out. The scales of justice are not balancing, literally. 

[Restorium2]

To right this wrong; any caregiver who has registered with the State of Michigan should have a moratorium on any limits at all. We have proven ourselves deserving by following the rules, in the face of rules being broken all around us. 

[semicaregiver]

19 hours ago, bax said:

no, the BMMR memo specifies in accordance with the MMMA.

being "in accordance with the MMMA" means being a resident of michigan in order to be a patient or caregiver. it means being a caregiver who has marijuana specifically for his registered and connected michigan patients.

out of state dispensaries have nothing to do with the MMMA.

do you agree?

 

True as stated   "...out of state dispensaries have nothing to do with the MMMA".

However, you do not need to be a MMMA registered patient or caregiver to own a dispensary.   Nor does your business/company need to be a Michigan based company.

[Green Leaf Medical]

I am wondering where tpain acquired his RSO formula? Where he implies that 36 ounces of RSO is considered 1 ounce of useable cannabis? Exactly where in the mma did this info come from?? When you say liquid RSO it sounds to me like tincture because our RSO sure isn’t liquid?

Edited November 15, 2017 by Green Leaf Medical

[t-pain]

1 hour ago, Green Leaf Medical said:

I am wondering where tpain acquired his RSO formula? Where he implies that 36 ounces of RSO is considered 1 ounce of useable cannabis? Exactly where in the mma did this info come from?? When you say liquid RSO it sounds to me like tincture because our RSO sure isn’t liquid?

last year the legislature amended the MMMA, adding equivalents to our weight limits. it was House Bill 4210.

please read the MMMA law carefully and stay within your limits.

http://legislature.mi.gov/doc.aspx?mcl-333-26424

 

Quote

(1) For each qualifying patient to whom he or she is connected through the department's registration process, a combined total of 2.5 ounces of usable marihuana and usable marihuana equivalents.

...

(c) For purposes of determining usable marihuana equivalency, the following shall be considered equivalent to 1 ounce of usable marihuana:

(1) 16 ounces of marihuana-infused product if in a solid form.

(2) 7 grams of marihuana-infused product if in a gaseous form.

(3) 36 fluid ounces of marihuana-infused product if in a liquid form.

 

about the rso being a liquid or a solid, please explain how you make RSO. and if you leave a little bit of alcohol in it, does it stay more liquid? if so, do that, in order to keep it a liquid.

 

no one has tested these limits yet in court. none of liquid solid or gaseous is defined anywhere. police cant weigh things or count either. be sure to print out the law in case you need to point at it. before anyone asks "gaseous" does not exist so far. the legislature got "gaseous" from a washington state bill. which they removed gaseous after learning gaseous wasnt a thing.

of course our wise michigan legislators have no clue.

[Green Leaf Medical]

We use 99% isopropyl and is evaporated off very slowly over about a weeks time. The consistency of our RSO is thicker than toothpaste and requires being warmed up in another container of hot water for a while before being able to load syringes. I could use everclear alcohol to leave it in a liquid state instead. But at what density point would it be considered RSO then and not a tincture? That is the question I have.....

[mishigami bear]

Where do you get 99% isopropyl alcohol? I only see 91% at the drugstore.

[blackhorse]

Grow stores have the 99% alcohol.

 

[Restorium2]

16 hours ago, Green Leaf Medical said:

We use 99% isopropyl and is evaporated off very slowly over about a weeks time. The consistency of our RSO is thicker than toothpaste and requires being warmed up in another container of hot water for a while before being able to load syringes. I could use everclear alcohol to leave it in a liquid state instead. But at what density point would it be considered RSO then and not a tincture? That is the question I have.....

The difference between a solid and a liquid is if it flows at room temperature.

FYI; If you winterize cannabis oil it takes out the wax and fats so it will have a tendency to stay liquid at room temperature. 

[bax]

right, if it holds its shape at room temp , like a brownie, its a solid.
if it turns into a puddle , its a liquid.
dont even get me started on plasma.