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[Music] everyone and welcome to cannabis is live it is June 14th we are the cannabis legal group coming at you week after week with the most up-to-date news both in the state and federally my name is Nicholas Galindez and this is jennifer domain today we're going to kind of talk to you about one big subject that being the medical marijuana facilities licensing act recent changes to the application form and disclosures we're also going to give a little bit of updates about the medical marijuana act as far as just numbers about total patients in the area as well as some adult use updates which are you know that program is going to be rolling out very shortly throughout the summer into the fall and the end of the year but first before we do that as always the cannabis news with Jennifer domain for this week's news we actually had a number of very exciting developments happen across the nation the first one I think is the United States Postal Service has provided a policy update stating that is now legal to mail hemp derived products including CBD through the United States Postal Service in fact the policy update further stated that not only is it legal to do this as long as the mailer complies with all federal and state regulations and laws regarding health but also retains records for to show that that hemp product is legal and in compliance with local and federal laws so this is actually rather surprising because most people were expecting that for the United States Postal Service to be a federal agency and allow for hemp and hemp dr CBD to be mailed you may have to sign a certification form or some sort of statement indicating what you're mailing and to assert that you are in fact in compliance by the postal service is not requiring any of that and only requires you to retain records so this is a very liberal and progressive step for the United States Postal Service we commend them for this approach and we'll look forward to seeing additional policy updates in regards to this in the future next up we have updates from nevada where governor steve sis lac signed a bill number 533 into law which basically created a cannabis compliance board this is unique because as you may recall michigan recently removed our board so now in nevada is instituting a board to govern all of their cannabis facilities furthermore this same bill prohibits local governments from issuing social consumption licenses for up to two years so that effectively leaves the entire state of Nevada including Las Vegas without having any social consumption license opportunities until 2021 this looks like it is a direct response to the Las Vegas City Council that voted in May to allow for social consumption business licenses and land use regulations to be creative so it looks like the state of Nevada is now in its creating a position for themselves where they are in direct contravention to what the City Council for Las Vegas has said and I has made more of a definitive statement in that regard and finally we want to talk to you about how marijuana is becoming so mainstream that it is actually surpassing McDonald's and Starbucks in several municipalities and I think we have a graphic to show you so as you can see here there's a graphic that was created by marijuana business daily and it shows the number of marijuana retail stories compared to Starbucks and McDonald's per 100,000 residents by city and so Nick I just want to talk to about this briefly because it looks like especially with Portland and Denver you can see that the marijuana stores are so densely populated there that it's way above Starbucks and I feel like I see Starbucks on every street corner yeah and I mean I think this is especially interesting just given the fact that you know you have a lot of these green zones where it's a pretty much a green oasis of different cannabis businesses I mean just for purposes of this conversation gonna go ahead and make an assumption that you know a lot of these are Center centralized in a lot of bigger cities of kind of to make that comparison right now there's a lot of them allowed in Detroit a lot of them that are going to be centralized in Flint Bay City and I think the influx in the big first wave of businesses entering there it kind of makes it very interesting especially when you do kind of compare it to the numbers of coffee stores and fast-food joints I think you could there could be a lot to be said about the trend of kind of moving away from fast food into more healthy eating as well but I think this kind of creates a big issue though you know I think the more the merrier to a certain extent I certainly think we're all pulling for a lot of more municipalities to come on board it's the right decision to allow them but I think it also creates some issues with operators and having to compete with so many businesses I would agree with that what I'm seeing from these charts here is a very real congregation of like businesses and then once you have a market that is so saturated then you're going to be undercutting each other trying to drive the prices lower you're going to reduce your overall profitability and you're not going to have as much overall success if in earrings such an oversaturated market and that's what I think especially Portland and Denver are coming close to where it looks like Portland is several times higher than Starbucks and that is significant so I mean if you look at that graphic again you can see how closely the the numbers fall for Anchorage Alaska but when you look at Denver and Portland again marijuana isn't allowed throughout that entire state it's going to be centralized in certain cities in certain sections of those cities so now you have dry zones where patients everywhere what might not be able to have access and the more rural areas or areas of the city where they might not have public transportation but you also have on a flipside an issue for the business owners now where they are forced to go find real estate and conduct business in an oversaturated market I think it's a little you know the businesses or the municipalities that allow these businesses there want them to succeed it's in their best interests a lot of them are thoroughly vetting these candidates but if the system that they've set up makes it so that you know if I'm having to lower my prices because Jennifer has a store next door and she's getting more customers and has a lot more marketing capabilities so on and so forth I shut down immediately and then another person comes in my place and then there's six different stores next door and on the next Main Street you're pretty much setting up these businesses to fail so I think that there needs to be a good balance between planning just because you're allowing it doesn't mean you should allow it on every single storefront it also doesn't mean you should just allow one so I think that you know a good mix meeting in the middle somewhere there kind of makes the most sense from both a city and an a business operational standpoint so obviously a lot of these markets are going to cater to different residents that you know Portland might have different needs and those residents might be going to these different cities for different different store fronts for different reasons and maybe the market does need 20 different storefronts per 100 K what I think just generally especially as it starts up in Michigan if the numbers are like this I definitely think there might be a lot of turnaround as far as operators go and you know we definitely don't want to have that happen given how much these licenses cost compared to you know potentially you know getting a Starbucks or McDonald's up and running and keeping it running right absolutely so it will certainly be interesting to see how the local economies adjust having possibly oversaturated markets and seeing how the economy will equalize over time and reach an equilibrium but that's it for today's news and as always we'll be coming at you next week with the next week's news all right sorry about that guys a little bit of a technical difficulty there we want to just kind of dive right in and talk to you about the marijuana regulatory agency and how they held their first public hearing this past week this is the first public hearing we've had since the licensing board was eliminated and the marijuana regulatory agency was established so the purpose of this public hearing was to provide updates on the agency and discuss upcoming changes that we can expect to see from Lara they did report increased numbers in application processing and decisions issued compared to the medical marijuana licensing boards so they did show statistics to show that the new agency is moving at a faster rate of speed compared to the prior board in regards to numbers the Michigan Medical Marijuana Act that's the patient and caregiver model they did state that the new total amount for the patient numbers is 287 thousand and ninety four patients in the state of Michigan we have one of the largest patient bases in four states in the country and this number just keeps growing I am expecting honestly to see this number start to dwindle over time because eventually people are probably going to stop getting their marijuana card and just purchase on the adult use platform but I could be wrong what do you think so I think you know if you have a qualifying condition and doctors willing to certify I think there's certain advantages to to maintaining your patient status one of those being lesser taxes so they're going to tax your medicine less than they would dully use recreational product the other distinction I think that still needs to be kind of fleshed out is driving while we don't advocate driving on cannabis at all there is the difference between an adult over 21 cannot drive you know while impaired there's a certain you know there right now until there's a nanogram limit potentially for adult use there's still kind of a you know more protections for patients and so I don't think that they'll be dwindling yet especially because there haven't been that many municipalities that have opted in for adult use so I think that even though stores will start opening a lot of the product will be coming from patients from those medical facilities I will probably agree with that as well I then the MRA decided to go into adult use and talk a little bit about what we can expect for emergency rules and the administrative rules surrounding the new adult use cannabis platform so emergency rules which are the initial guidelines we're going to be getting to see the overall structure of the adult use landscape these have been much anticipated and we haven't gotten a draft yet but we are expecting them to be published later this month these rules are going to establish additional license types and requirements and basically provide an outline for what it will take to file an application what they will be looking for in a licensee and any sort of restrictions or Consequences for failure to follow those rules so we're definitely looking forward to seeing what those rules will have and then once the rules are issued then we'll be looking forward to reviewing the paper applications the paper applications will be structured in very similar format to what we see in the medical marijuana application so that means we're going to have a pre-qualification step one section where it's a background check review and we're going to be looking at the backgrounds of all of the business owners and the applicant entity the step two is the facility application so a very similar structure to what the Medical Marijuana application structure is but the unique requirements may vary and so we'll definitely be keeping you posted on those once we have seeing the emergency rules as well as a paper application the state also indicated they are expecting to start accepting applications in the fall of this year just very exciting they're moving much faster than I think either of us had anticipated and so the law requires that they make a decision within 90 days of submitting a complete application this is much faster than what we've seen for the medical marijuana side so this is by statute they have to give a decision within 90 days which is nice but again we have to get through a two-step process here and so it's going to be a very fast turnaround keep in mind that for most of the license types offered you're only going to have MMF la licensees so medical marijuana facility licensees will be eligible to apply the state will be having a modified application process for this adult use application if you're an MMF le licensee I don't know what that process is going to look like yet again you'll have to wait for the emergency roles that we'll be sure to report on that so I have two things to kind of comment on before we do a little brief update on the last part of the hearing and really dig into the application changes one is that I think the MRA has been practicing more recently than previously and a lot of this the changes we're going to talk about in the future are intended to I think you know meet that 90-day deadline for adult use it used to be based on the monthly meetings that we had from the licensing board that it would take a long time just to process everything and what we've seen as times gone by learning curve the bmm our BMR and now the EMA has been doing a stellar job of kind of you know really getting at what is needed to be looked at initially and really kind of digging deeper if needed and what we can report is that we you know from start to finish we did see one of our clients get fully you know step one approval within nine exactly ninety days actually so it can be done it does mean a complete application so if you don't either work on the front end and you submit half of an application there's going to be more than 90 days before you get decision but it's good to see them being efficient and streamlining the process including these application changes the second thing was meet applying back what I just said about patients and adults it used to be that patients and it still is that they cannot drive while impaired for adults before the adult use law there was a zero-tolerance policy for having any of it in your system so I take back what I said a little bit ago about you know whether or not people are going to be really wishing that patient cards I think that still is true the answer is still that I think there will still be a good growing patient population at least for now just due to the lower prices and the more availability of medical storefronts so those are my two cents just to kind of close off one of the more smaller topics that we had the MRI did go over a little bit more about the administrative rules so what they're gonna do as Jennifer mentioned is release the emergency rules for adult use later this month and then shortly afterward they're gonna start working on refining both the MMF la and adult use rules by kind of creating what they call topic based rule sets and so the one example that I think really worked when the MRA gave an example was you know for lab practices and standards instead of having one set for medical one set for adult use they're kind of going to fold those both into one which they called lab practices and standards so instead of having to refer to two separate documents that my or you know more or less say the same thing they're gonna kind of you know make it efficient again and look in one place if you're a testing lab or look in another place if you're a a marijuana establishments slash provisioning center selling to the public so I think that's gonna help along the line and kind of flesh out more rules based on the license type versus the two different laws I completely agree with that I think that especially if the state is considering having co-located facilities with holding both a medical and an adult use license the facilities are going to have a hard enough time keeping their point-of-sale systems straight and making sure that they're in compliance it's going to make things much easier for them just to look at one topically related rule set rather than having to look at individual rules under different different laws and making sur
that they're in compliance with each checkbox on both of the laws so to have a topically based rule set I think makes the most sense at this point in time and will certainly make the transition into have a bolt of medical and an adult use market much smoother so that brings us to our main topic for today I know it's been kind of a you know back and forth conversation addressing a lot of topics but kind of the meat potatoes of this whole MRA meeting was about the rule changes I've been begging for these to happen since January when the rules are when the law changed because there were certain things that just kind of didn't make sense you had an instruction booklet that was outdated you had forms that only fit two different situations even though there's a significant different number of situations that can be presented to the agency so the more things are fleshed out and specific to those different types of scenarios I think it's again more efficient and really streamlined streamlines the process so I think the one takeaway from the application changes is you know these were made to better fit the changes in the law that happened back in January 2019 it better fits with what the law actually requires the agency to check for from each applicant each company and it also just streamlines the entire application process reduces at least initially a lot of the clutter that was being sent to the agency initially and so I think just kind of you know we're trending in a positive note ever I think since the MRT MA has kind of been passed prop 1 passed and a lot of things have been kind of falling into place since then just says with every new industry a lot of things are taking time and so the more we're patient the more we also help one another out in this process I think it's all for the better so Jennifer do you want to kind of go through at least you know some of the changes we can go back and forth in so I think one of the biggest changes that we're seeing and this was done really without much fanfare but earlier this week the Department released a whole set of new MMF alais application forms so when you would go on to the MRA website suddenly there is new application forms and they really hadn't explained them yet but that's the purpose of the public hearing was to give a little bit more guidance so now on just the differences between the two under the old application you had basically three types you had an entity pre-qualification application you had a supplemental application for the owners or if you had a holding company or anything like that and you also had a facility license application which kind of talked more about your business practices the new application there's now substantially more application forms for you to pick from so you could have an entity application so if I wanted to have Nick and I created a business and we created NJ LLC to be the provisioning center applicant then we could use that application if I just wanted to run my own provisioning center then I could use a sole proprietor pre-qualification application and I wouldn't even need to really get a entity we still have a supplemental application but they've been broken up now into two separate formats so we've got the Supplemental application for individuals and a supplemental application for entities so those holding companies now they have a separate application that they have to fill out and then we also have the facility license application so there's a lot more documents to this new structure but it actually makes things easier I think what do you think Nick yeah because I think before with you know step one you had two different types it was either your company or you're an individual applying for a license and then if you were a company or an individual that had a membership interest in a company you would use that other form now it kind of you know it makes it a little bit more practical there are two main applications one if your company what if you're an individual applying and then if it's a company you either and you're an owner of that company as a company gets a little convoluted but you file a supplemental application so there's a lot of new acronyms a EPA SP PA s EPA s IPA and Fla but really it's a you know making more of those scenarios actually fit as to what the MRA has been seen along with that they kind of changed the fillable forms around a little bit they plot the new pretty MRA logo on top just to make sure it was up-to-date but it really does make a big difference I think as far as the information and how its received by the people that are filling out the application as well as after it's by the actual people who are reviewing it so I think you know baby steps with this but it's definitely going to help out in the long run other than the forms being changed though to make it fit different scenarios in a better way there were also some big news about what exactly actually has to be gathered and looked at from the agency and I think that makes a big difference absolutely the biggest thing that I am seeing here is a reduction in the amount of information that you have to provide lara so as you may recall you had to provide 36 months of bank statements four years three years of bank statements and that's a problem I think sorry I'll get excited about this right so some banks don't carry that information electronically for more than a year some people just aren't expected to or don't keep track of all of this stuff and save it and so it creates a problem when especially when you have tens or hundreds of bank accounts getting three years of them is significant compared to getting one year and I think that what the agency determined is that you know let's get a year let's get this in front of us at first and we'll start looking at it if one or more of these accounts raises any red flags we might ask a question or two about it or we might you know and they have the ability to go back another year or for that full three years to allow them to do that but I think what they decided and this is my opinion was just that they were getting so much paperwork from so many months and a lot of the times it didn't end up mattering or makes sense for them to ask for that much stuff upfront and so I think it's still within their purview to go and get all of that information but they're not requiring it at the outset I would agree with that so from three years to a year that's a substantial reduction and the amount of documentation you have to compile in order to hit submit to your application which certainly speeds up the processing time and hopefully reduces the overall time needed by the analysts to review your bank statements so certainly a good thing there additionally for real property they indicated that if you are a supplemental applicant and you have real property before you had to provide every deed lease land contract all the documentation associated with your ownership in any real estate company or any real estate period sorry so your home any rental properties if your business has a property that you are on if your business's businesses business has one right it went basically infinite right there was nothing no stone left unturned based on how the disclosure was kind of written and and what we had seen the agency kind of asked and now you know they weren't making a list and checking it and making sure every single one was submitted at that point but the way it was worded and the way the statutory requirements were were labeled gave them the power to do that in this case though they're taking a little bit more of a inclusive approach where they're saying only tell us about real property if it's being used for capitalization so you have those minimum amounts that you have to show the state in order to be able to operate maintain the business so only use it if it's being used as capital or you have to disclose it if it's the actual proposed facility location so I think what this changed from any and every deed lease land contract purchase agreement easement so on and so forth is that they're really narrowing it down to the financial part of it if you're actually sourcing money from a property or if you're actually going to use it for the proposed facility that's when you have to give us the proof of your deed or the lease and all of that stuff so I think they're similar to the three years versus one year bank statements they're saying you know they're really narrowing the scope to what matters for the purposes of them to actually prequalify you and pre-approval right and finally it's a smaller change but it's important one nonetheless tax returns you still have to provide three years of tax returns that part hasn't not changed that being said part of the disclosure stated that you had to list every tax jurisdiction where you lived you how to pay taxes in for the last seven years so people had to remember where did I live for the last seven years where did I pay taxes did I have to pay a city tax there did I have to pay you know you had your state tax you have the IRS of course so you have to list all of these out that can be a little bit time-consuming especially if you've moved around a lot or you had certain city taxes in certain locations etc now you they only require you just to show your last three years of taxes and they don't ask you about the last seven years of your taxing jurisdictions which certainly makes life a little bit easier especially for those people who have moved around a lot so certainly good changes all across the board the biggest takeaways I think would be that there are new application forms that are structured specifically for what type of entity or individual you are in applying for a license reduced amounts of financial accounts that are required reduced amount of real property interests that are required to be disclosed and a reduced amount of taxable jurisdictions that you have to disclose so all good things I think it's overall gonna speed up the process and I'm looking forward to seeing how they take the MMF Ola application and make some changes now to the new adult use application me too all right well I think that's it for today as always we'll be coming at you every week to tell you about the newest updates and the news from Michigan and across the country if you have any questions leave us a comment on Facebook or on YouTube and we'll catch you next week bye [Music]
