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Marijuana Laws and Development

Since the passing of the Michigan Regulation and Taxation of Marihuana Act (“MRTMA”), the business of growing, manufacturing, and selling cannabis has entered a stage of rapid grow in the State of Michigan. Although Michigan was home to a burgeoning and robust marijuana industry after the passage of the Michigan Medical Marijuana Act (“MMMA”), the MRTMA’s passage was the starting gun for what is predicted to be a billion dollar industry by 2021.

The legalization of a previously illegal commodity set the stage for the emergence of novel economic dynamic. The product itself is well known, and the illicit marijuana market was thriving despite a legal prohibition. In essence, the MRTMA unleashes modern commerce into an existing marketplace, but a marketplace devoid of established (lawful) participants on the supply side. As recreational production and sales licenses are issued, the market will shift from virtually no public competition to a crowded field. Under these circumstances, the speed with which producers and sellers able to begin operations will mean the difference between wild success and tremendous failure.

The MRTMA, and the MMMA before it, created a legal framework for the production, manufacture, testing, transportation, and sale of cannabis and cannabis related products. Within that framework, the Michigan Department of Licensing and Regulatory Affairs (“LARA”) was empowered to enact regulations designed to effectuate the basic plan set forth by the legislature. The regulatory process has been fraught with uncertainty, however, making skilled representation imperative to successfully navigating the murky waters.

Entering into the cannabis industry requires specialized legal skill, not only to obtain licensure, but also to ensure compliance with local zoning ordinances. The MRTMA gives each municipality the option to either elect to "opt in" and allow licensees in their jurisdiction or to "opt out" of the industry entirely. Even with the proper license, a new entrant must make sure the municipality has decided to opt in, and that any proposed location for the operation comply with local zoning ordinances regarding the placement of cannabis licensees.

Other traditional legal matters which concern any commercial business must also be addressed by entrants into the marijuana industry. Business entities must be lawfully formed under state law. Capital must be raised in accordance with existing laws regarding investment and the issuance of securities. The acquisition of real property for the operation presents the same potential pitfalls as any commercial property purchase. Industry participants are employers such as any other company, so compliance with employment and labor laws must be ensured. In sum, the traditional transactional needs of any business must also be addressed by entrants into the cannabis industry.

Whether you are a sophisticated business enterprise entering the cannabis industry because of its potential for rapid growth, or a boutique firm looking to turn a passion into a career, the experienced attorneys at Neumann Law Group are prepared to meet your legal needs. Contact us for a free consultation.

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