Bankruptcy Options for Cannabis Companies

 

An increasing number of states are moving forward with legalizing cannabis in some fashion. In Michigan, and in many other states, it is legal for most adults over the age of 21 to partake in medical and recreational marijuana.

As such, an entire cannabis industry in Michigan has popped up over the last few years to meet the immense demand of consumers. The state has created an in-depth licensing system to ensure that all direct and ancillary businesses in the industry are up to the proper standards and operating legally.

While cannabis is a growing industry that has just begun to realize its full potential, not all cannabis-related businesses are going to be successful. Unfortunately, due to clashing laws, cannabis companies don’t enjoy the same federal protections as other industries in times of need.

One of the main areas where cannabis businesses don’t enjoy protections from the law are when they are struggling financially. Cannabis companies don’t enjoy the same bankruptcy protections as businesses in other industries.

So, what are the options for cannabis companies if they are facing financial hardship? We’ll detail those options — as well as how this could change in the future.

Why Cannabis Companies Can’t File for Bankruptcy

 

If cannabis companies are legally allowed to operate in Michigan and some other states, why are they not allowed to file for bankruptcy? The reason is quite simple, really: Marijuana is illegal in all forms at the federal level, and bankruptcy protection is provided by the federal government.

When a company files for bankruptcy, they will do so under the rules set forth by the United States Bankruptcy Code in a U.S. bankruptcy court. These protections are only provided to companies that are operating legally.

Since cannabis is illegal in all forms federally, any company in the cannabis industry is not afforded typical protections under U.S. Bankruptcy Code — since they are technically operating illegally according to federal law. This goes not just for companies directly in the industry, but could also apply to ancillary companies that provide some services to cannabis companies.

This doesn’t mean that these companies are going to be prosecuted by the federal government, and it is highly unlikely that the federal government is going to shut down a cannabis company’s operations as long as they are abiding by their state’s rules and aren’t doing any interstate commerce. But, it also means the federal government isn’t going to go out of its way to provide these companies with federal protections such as bankruptcy.

Bankruptcy Alternatives to Cannabis Companies

 

Typical business bankruptcy proceedings would include a reorganization or official action to sell off the company’s assets to meet the business’ debt obligations. This would be done under a direct order from the bankruptcy court, which would lead the process so there is no concern about which creditors are prioritized over others, and which assets must be sold.

Some businesses are even able to use bankruptcy protection to restructure their debt so that they can emerge from bankruptcy as a solvent company that can continue to operate.

Without this official and straightforward process available to them, though, cannabis companies must seek out alternatives if they are in a tough financial position.

There are two main options cannabis companies will have in these situations. 

ABC

The first option is called an ABC, or assignment for the benefit of creditors. This is available to cannabis companies in many instances, because ABC is a process that operates under state law. As such, each state will have its own rules and regulations for how this can be used.

The process is very similar to how Chapter 7 bankruptcy works. State law will dictate how the cannabis company’s assets will be liquidated. All of these assets will be assigned to a person known as an assignee. This person will then oversee the entire liquidation of all the assets as well as how the proceeds from this liquidation are distributed to the company’s various creditors. 

The positive to ABC is that it can actually be completed much quicker and for far less money than a typical bankruptcy proceeding.

Workout Agreement

If the ABC effort doesn’t work, or if there are hiccups in the process, then another option would be for the cannabis company to directly negotiate with their creditors. This is referred to as a “workout agreement,” since the two sides will “work out” the conditions or terms of settling the outstanding debt.

While some creditors may be willing to work with the cannabis company to work out repayment arrangements, others may not. One of the main reasons for this is that the cannabis company doesn’t have a lot of leverage in this case, since they can’t use the threat of bankruptcy.

That being said, a creditor may be willing to negotiate arrangements with a failing cannabis company because the alternative might be to file a civil suit. Those lawsuits can be time-consuming and expensive, and might not lead to much in the end.

Could Bankruptcy Law Change?

With more and more cannabis businesses popping up throughout the country, it’s possible that bankruptcy laws could ultimately change so that cannabis companies could receive some protection. 

In fact, a Michigan-based cannabis company tried to challenge its Chapter 7 bankruptcy filing, which was dismissed in part because federal law considered the business to be illegal.

The company appealed the decision to federal district court, but they were not successful in their arguments. In making its ruling in the case, the federal court said that bankruptcy isn’t available for any company that has assets “that are used for, or generated by, a business prohibited under the CSA [Controlled Substances Act].” 

Since marijuana is prohibited under the CSA, then, any business dealing in marijuana is ruled to be ineligible for bankruptcy protections.

There is a possibility that this could change in the future, though. Some members of Congress have considered proposing legislation that would at least decriminalize recreational marijuana, while others have suggested making recreational use legal — as many states have.

Until this happens, though, it’s very likely that cannabis companies that are in financial trouble will have to seek alternatives to bankruptcy.

 

Can You Smoke Weed in Public in Michigan?

 

Michigan is one of the states in America where it is legal to use marijuana both for medical and recreational purposes. It was actually the first state in the Midwest to legalize marijuana on a recreational basis back in 2018, which allowed adults who are over the age of 21 to use weed for non-medical purposes.

That being said, there are some limitations as to how much weed one can possess legally in the state, as well as limitations on where weed can be smoked. It’s very important that you follow these laws, as breaking them can get you into legal trouble even though Michigan legalized recreational marijuana usage.

Below are some more details about the restrictions surrounding marijuana usage in Michigan, and where you can and can’t smoke it in public.

Who Can Possess Marijuana in Michigan?

 

Michigan law restricts the purchase and possession of recreational marijuana to adults over the age of 21. There are some restrictions to this that bar certain individuals from purchasing, possessing or using marijuana.

As long as you meet the requirements, though, you will be allowed to possess weed in Michigan.

How Much Weed Can You Possess?

 

According to state laws, individuals are allowed to possess as much as 10 ounces of marijuana while they are at their home. This includes both inside their home as well as on the property surrounding it. 

If you are outside of your home, Michigan law states you can possess up to 2.5 ounces of weed. This allows you to travel with weed to another location in the state, or to purchase it from a dispensary and then bring it to your home, for example.

There are some places where it is completely illegal to possess any amount of weed. This includes on the property of any prison, jail or K-12 school.

Can You Grow Your Own Weed?

Yes. If you are at least 21 years of age, you’re allowed to cultivate as many as 12 cannabis plants at your home, assuming you meet all the requirements of doing so.

These plants must be grown only for personal use, and they can’t be placed anywhere that can be seen by the public. In other words, they shouldn’t be placed in a window or near a window where the plants could be viewed if blinds or curtains were drawn.

One important aspect of this is that the weed plants you grow have to be for your own use. You can’t produce or sell the cannabis products you make from your own weed plants, unless you have a special license to do so.

Only microbusinesses, retailers or provisioning centers with the proper licenses are allowed to sell weed products in Michigan.

What Can You Buy and Where Can You Buy It?

Along these lines, it’s important to understand where you can purchase marijuana legally in Michigan as well as what types of products you’re allowed to purchase. In Michigan, you can only purchase recreational marijuana at licensed provisioning centers and retail outlets also referred to as dispensaries.

You should easily be able to find a list of fully licensed and regulated dispensaries by searching online. 

In terms of what you can buy, you will have quite the choice of products at most dispensaries. This includes weed that you can smoke, as well as other infused products such as edibles that come in the form of chocolate, gummies, concentrates and mints.

There are also plenty of different vape products that you can purchase. While the state temporarily halted the sale of vape products containing marijuana back in 2019, that ban has been lifted.

At most of these dispensaries, you can also purchase a number of different accessories to enhance the consumption method while you’re using.

Just keep in mind that you are only allowed to legally possess 2.5 ounces of weed outside of your home. This includes when you are transporting any products you legally purchased from a dispensary to your home. So, you may want to limit your purchase to this amount just to be safe.

Can You Smoke Weed in Public in Michigan?

Just because recreational weed is legal in Michigan doesn’t mean that you can use it anywhere. In many regards, this is very similar to the consumption of alcohol. Most adults over the age of 21 can legally purchase alcohol in Michigan, but they can’t drink a beer anywhere they want in public. The same goes for marijuana whether medical or recreational

Michigan state law says that you’re allowed to use weed in your home. You can also use it in someone else’s home as long as the property owner, landlord or occupant gives you permission to do so. 

This means that if you are renting your home, your landlord does have the right to ban you from smoking marijuana in it, even if you are of legal age to do so. A landlord can’t, however, ban you from using weed in other forms, such as edibles or concentrates. A landlord can ban smoking in all forms even for tobacco, for instance, but can’t ban your use or non-smokable weed or alcohol. 

All outdoors consumption of marijuana, in any form, is illegal. While you likely won’t get in trouble for smoking weed in your own backyard, you certainly can get in trouble for doing so in a public place such as on the street or in a park, or even in your vehicle. 

The only exception to this law is if you are consuming weed at a location that has a social consumption license. These Designated Consumption Establishments allow people to use weed while they are on their premises, as a social activity.

 

What Happens if TSA Finds Cannabis in Checked Luggage?

     Marijuana is more socially acceptable throughout the country. Some states such as Michigan have even legalized the practice of growing, selling and using cannabis on a medical and/or recreational basis.

For those who are interested in partaking in marijuana in one way or another, this is really good news. At the same time, differing laws can create a lot of confusion, especially when someone is traveling across state lines.

One of the most common questions that’s asked in terms of traveling with cannabis is whether you are allowed to carry it in your checked luggage. Below, we’ll address what happens if TSA finds cannabis in your checked luggage.

Does TSA Check for Cannabis in Luggage?

According to the TSA, security officers won’t be actively searching for marijuana or any other illegal drugs. Instead, they are focused on finding anything in luggage that could be a threat to passengers and aviation as a whole.

It’s obviously possible, though, that TSA security officers may end up finding cannabis products in your checked luggage. So, what happens in this instance?

The TSA says that if security agents find cannabis during a security check, they are required to report it to local law enforcement officials — depending on what state the airport is located in.

If the airport is located in a state where marijuana is legal, for example, then the TSA security agent may just confiscate the cannabis in your luggage, unless you are trying to transport a very large amount of it.

On the other hand, if the airport is located in a state where marijuana is still completely illegal, then you will likely be turned over to law enforcement officers for a possible fine and/or other criminal action.

How Can TSA Officers Find Cannabis in Luggage?

A question you might have is how would a TSA security officer find cannabis in your luggage if they aren’t actively searching for it? There are a few ways that they might come across it, actually. Here are some of the main ways it could happen

Random Searches

TSA security officers will perform random searches of about 10% of all checked bags, by policy. When they do this, they will open a passenger’s luggage and conduct a physical inspection of the contents inside. If you are one of the unlucky ones to have your luggage randomly inspected, TSA officers will find your cannabis if you have any inside.

Airport Scanners

While cannabis does appear on airport scanners, it doesn’t appear as a clear picture of what it is. When luggage goes through an airport scanner, the contents inside either appear blue/black, green or orange.

Blue/black represents any hard plastic. Green represents any non-organic material. And orange represents organic material. 

Since cannabis is organic material, it will appear orange in an airport scanner. But, if TSA security officers aren’t specifically looking for cannabis, why would they open a person’s checked luggage if they see an orange item?

The answer is because explosivesbecause that explosives would also appear orange through an airport scanner, since they are composed partially of some organic materials. 

In other words, if a TSA security agent sees orange pop up in your luggage, they may be opening it to search for explosives, only to find that what’s inside is cannabis.

What About Medical Marijuana?

Another common question is whether it’s legal to carry cannabis in your checked luggage if you have a medical marijuana card. The answer, unfortunately, is that this is irrelevant from the TSA’s perspective.

The reason is because cannabis in all forms — whether for medical or recreational use — is still considered completely illegal. And since the TSA is a federal agency, it operates by federal law.

Therefore, showing your medical marijuana card to a TSA security agent who finds your medical marijuana won’t change what they do after they find cannabis in your checked luggage. They are still required by federal law to report you to local law enforcement officials.

As mentioned above, though, the one exception to this is if the airport is located in a state where medical marijuana is legal. If it is, then your cannabis may just be confiscated instead of being turned over to law enforcement.

What if I’m Traveling to and from States Where It’s Legal?

The same reasoning for medical marijuana applies in the case of flying from one state where cannabis is legal to another state where it’s also legal. Even if the two states have the exact same laws, flying with cannabis in your checked luggage is not legal from the TSA’s perspective — because all marijuana is considered illegal from a federal standpoint.

Are There Any Exceptions at All?

With all of the above in mind, it is important to note that you can fly with certain cannabis products in your checked luggage. What determines whether it’s legal or not is what the cannabis product is made of.

TSA states that some cannabis-infused products are completely legal to fly with. In order for the cannabis product to meet the legal criteria, according to the TSA, it must not contain more than 0.3% THC on a dry weight basis. Or, it must be approved for use by the FDA.

This means that some cannabis-infused products are completely legal to put in your checked luggage. Most of these products are Cannabidiol that are derived from hemp and not marijuana — though there are some from the latter source.

If you want to fly with this type of product, it is very important that you store the product in its original packaging, and that it clearly states the level of THC that it contains. These are similar instructions you would want to follow if you were flying with prescription medications — which should be kept in their original packaging that shows you are the one who they were prescribed to. 

You don’t want TSA security officers to have to make a determination as to whether your cannabis-infused product meets the criteria for exception. In almost every case, they will err on the side of caution and either confiscate your cannabis and/or turn you over to local law enforcement authorities.



TSA Guidelines for Cannabis 2022

Many states throughout the country have legalized cannabis in some form. Some states have legalized it only for approved medical use. Others have legalized it for adult recreational usage as well. Others have done neither, and still consider its usage to be illegal in all forms.

These different rules in regard to cannabis usage can make traveling across state lines quite complicated and confusing if you want to travel with cannabis on you.

If you plan to fly with cannabis, it’s important that you understand the rules laid out by the Transportation Security Administration. The TSA sets the rules for what is and what is not allowed on all planes in the United States, and these rules must be followed by everyone who wishes to fly — regardless of what state they are coming from or going to.

Below is a detailed look at TSA guidelines for cannabis in 2022.

The Challenge with Conflicting Laws

The biggest challenge in understanding the rules regarding cannabis when you’re traveling is that there are three different set of laws at play:

  • The laws of the state you’re flying from
  • The laws of the state you’re flying to
  • Federal laws

As mentioned before, different states have different rules for how they handle cannabis, in both medical and recreational form. What’s legal in one state may not be legal in another.

In Michigan, for example, both medical marijuana and adult recreational marijuana are legalis legal. By contrast, all forms of marijuana are illegal in Kansas. This means that if you are found to possess marijuana in Kansas, you could be held accountable to the state’s laws, even if you are a resident of Michigan and purchased it there legally.

In addition, marijuana is considered completely illegal from a federal standpoint. Federal law enforcement agencies are highly unlikely to intervene on individual state laws regarding marijuana, but they may when someone carries marijuana across state lines — in certain situations.

Can You Fly in the U.S. with Marijuana?

The quick answer to this question is a simple “no.” The more in-depth answer to this question is a more complicated “it depends.”

Let’s dive further into these two possible answers.

The Simple No

The simple “no” answer is because, as mentioned previously, marijuana in all forms is considered illegal by federal law. And since the TSA is a federal agency, federal law supersedes state law within an airport and on airplanes.

As such, the TSA does not officially allow marijuana to be taken into airports or on airplanes. If they find it, they will, in some cases, refer you to law enforcement agencies. Those agencies may or may not pursue official criminal charges, but you can bet that whatever marijuana you had with you will be confiscated. 

It Depends

The more complicated “it depends” answer is based around two factors. The first is the official policies of the TSA. As stated in their official guidelines regarding marijuana:

“TSA’s screening procedures are focused on security and are designed to detect potential threats to aviation and passengers. Accordingly, TSA security officers do not search for marijuana or other illegal drugs …”

If you combine that statement with the description above, it means that the TSA won’t specifically be searching to see if people are carrying marijuana with them into airports … but if they happen to find it during a security search, they may report it to law enforcement agencies.

The second factor is what the specific cannabis product in question is. While marijuana and some products that are infused with cannabis are considered illegal by federal law, there are some exceptions to that.

According to the TSA, “products that contain no more than 0.3 percent THC on a dry weight basis or that are approved by FDA” are allowed to be taken into airports and on airplanes. This provides some wiggle room for certain products to be taken past TSA legally.

What Products Fit into This Description?

While most medical marijuana — and certainly all recreational usage marijuana — wouldn’t fit into the TSA’s description of legal products, what would are most CBD products. 

CBD is mainly derived from either hemp or marijuana. Almost all that are derived from hemp contain less than 0.3% THC. Even some that are derived from marijuana contain less than that amount, making them legal by TSA’s standards.

This means that CBD products in any form — whether it be oil, edibles or other products — would be allowed to be taken into an airport and on a plane as long as it contained less than 0.3% THC. An important thing to keep in mind, though, is that the onus will be on you to prove that the product you are carrying with you meets that criteria.

As such, it’s always advisable to bring your CBD product in its original packaging. Make sure the packaging clearly states what it is and what the ingredients are — especially the percentage of THC that it contains, if any at all.

In essence, these are the same rules you would want to follow if you had prescription medication that you wanted to fly with. It should be kept in its original packaging that has the original prescription written on it.

This proves what the prescription is, the fact that it’s legal, and the fact that you are the one who’s legally allowed to possess it. If you dump your prescription medication into a plastic bag, for instance, you leave it up to a TSA agent to trust what you say about the medication.

The same goes for CBD products. You don’t want to leave it up to chance whether you’ll be allowed to carry your CBD products with you through an airport and onto a plane.

While having your products confiscated may not be that big of a deal, having to deal with the potential hassle of legal questions likely would be.



How to Get a Michigan Weed/Marijuana Dispensary License

Medical marijuana has been legal in the state of Michigan since back in 2008. Michigan completely changed the landscape for weed possession and consumption in 2018, though, when it became the 10th state in the U.S. to legalize it for recreational use.

Despite having 14 years of experience dealing with some form of legal marijuana, many of the rules and regulations regarding setting up weed dispensaries are still in the works. It’s an evolving process that is being completely managed by the state’s MRA, or Marijuana Regulatory Agency.

If you’re interested in obtaining a license to operate a weed dispensary in Michigan, read on below to find all important information for how you can do so.

What Do I Need to Start a Dispensary in Michigan?    

The first step in starting a dispensary in Michigan is getting prequalified. To do that, though, you have to decide what type of dispensary you want to open, since there are different laws and licenses that cover each type.

You can either open a provisioning center, which is a medical marijuana dispensary, or a recreational dispensary. Once you’ve made that decision, you can proceed with the prequalification process.

That process begins with an application submitted to the state’s Department of Licensing and Regulatory Affairs. The process includes LARA conducting background checks on not only the primary applicant but also all supplemental applicants. The prequalification process also comes with a fee of $6,000, which must be paid before the MRA will even begin its work. 

If the applicants have been approved through prequalification, they will be allowed to search for a facility for their dispensary. The applicants must fully secure the facility and have it ready for operation before they can proceed to the second step of the application, which is applying for a full license. 

At this point in the process, the MRA will conduct a full inspection of the facility, as well as look into information about the municipality, employees and financial statements. 

If the applicant passes these inspections and meets all the requirements under the state’s Regulation and Taxation of Marijuana Act, they will be approved for a license. They must then pay the initial application fee, which will vary depending on the type of license they applied for. After the fee is paid, they’ll receive the license and be given the ability to operate.

How Long Does It Take to Open a Dispensary in Michigan?

The application process itself is quite long. You should expect to spend around six months getting through the prequalification period. The more complicated that a business is — and the more partners it has — the longer it may take to vet all the owners, for instance.

After prequalification is approved, it could take more than a year before you can even apply for a final license. That’s because you’ll need to find an existing facility or a prospective facility and build it out according to specifications, obtain the required municipal permits and approvals, recruit and hire employees, and go through the inspection process before you even get your final license.

In all, it’s reasonable to expect the entire process to take 12 to 24 months from the time you start the prequalification process to the time you receive your final license to operate.

How Do You Get a Micro Grow License in Michigan?

Michigan provides the opportunity for businesses to apply for what’s called a microbusiness license. This allows a company or person to grow as much as 150 cannabis plants, process them into products such as edibles and concentrates, package those products and then sell them to legal adults 21 years of age or older.

This is an option for people or companies who are interested in the cultivation and processing of marijuana into usable products that can then be sold directly to consumers. It’s can be a rewarding business model, as it’s fully integrated from top-down. 

Michigan law states that those who have a microbusiness license aren’t allowed to transfer or sell their products to other establishments. In other words, these microbusinesses have to sell their products directly to buyers.

To obtain a micro grow license in Michigan, you have to go through a similar prequalification application, followed by a license application for your facility. The application fee is $6,000, while the initial license fee is $8,000, with an annual renewal fee ranging from $6,000 to $10,000 based on the company’s gross retail sales.

Federal Law Regarding Weed Dispensary Licenses

Federal law has long declared that the sale, distribution or use of marijuana is illegal. The Controlled Substances Act, or CSA, codifies all current federal laws regarding drugs, which marijuana is considered. 

Marijuana is listed as a Schedule I controlled substance, lumping it into the category of other drugs with a high potential for being abused, that lack medical value and that can’t be prescribed by a doctor safely. As such, anyone who is caught marketing, distributing or growing marijuana is considered to be in violation of federal law.

Obviously, this federal law conflicts with many state laws, including those in Michigan. Because of this, though, it’s unlikely that any federal law enforcement agency will enforce those federal laws as long as the people in question don’t operate outside of a state where they are legally licensed to operate, as we’ll see in the next section.  However, even if you are approved by the State, you can still be held criminally liable by the federal government if they wish to pursue you.

State Law Regarding Weed Dispensary Licenses

Michigan is one of the state’s whose laws are in direct contrast to federal law. In Michigan, both medical marijuana and recreational marijuana are legal for certain people over the age of 21. In addition, it’s legal for people to apply for an obtain licenses to grow, process and sell marijuana for both medical and recreational purposes.

One often overlooked aspect of the state-federal conflict in laws here is that Michigan’s laws apply in all cases — as long as the activities occur only within the state. Once a marijuana-related activity happens outside of Michigan, it gives reason to the federal government to investigate and prosecute you.threatens to violate federal law.

For instance, a licensed microbusiness is allowed to cultivate, process and sell their products all within the state of Michigan. It is not, however, allowed to take their products across state lines and sell it in Ohio. Even possessing marijuana while one is crossing outside of Michigan’s state lines could be considered a federal crime.

Municipal Law Regarding Weed Dispensary Licenses

Weed dispensaries in Michigan are not allowed to operate within areas that are zoned as exclusively residential. They also aren’t allowed to be located within 1,000 feet of a K-12 school.

State law also gives individual municipalities additional powers to further reduce that distance requirement or impose more location requirements based on what they wish. 

Municipalities are even allowed to completely ban weed dispensaries within their borders, which some municipalities in Michigan have already chosen to do.



Can anyone sell edibles in Michigan?

Michigan is one of the states in America where both medical marijuana and recreational marijuana use is legal. Thanks to a new law passed a few years ago, people who are over the age of 21 can legally purchase a small amount of marijuana for recreational usage.

CBD products are also legal and come with no restrictions on the amount one can possess as long as they are derived from hemp and contain less than 0.3% THC. CBD products that are above that limit or are derived from marijuana are still legal, but fall under Michigan’s recreational marijuana usage statutes.

It’s even legal for people to grow a certain amount of marijuana in their homes for personal usage. This doesn’t mean that anyone can just decide to sell either marijuana or CBD products without getting specific licenses from the state and city they intend to do business in.

Below is a full breakdown of the rules and regulations for selling edibles in Michigan. They are all covered by Rule 33 of the Marijuana Regulatory Agency.

What license do you need to sell edibles in Michigan?

There are a few options you can choose if you want to sell edibles in Michigan. To sell directly, you will need to obtain an MMFLA license — for the Medical Marihuana Facilities Licensing Act — and an MRTMA license — through the Michigan Regulation and Taxation of Marihuana Act.

These licenses will give you the ability to sell edibles in Michigan legally. However, you also have another choice. You could partner with a cannabis processor that is licensed in Michigan on a white label or licensing agreement. 

Under this arrangement, you hand the creation of the product off to the cannabis processor, while you handle the marketing and distribution under your own brand or label. This allows you to start your business without high start-up costs — and manufacturing expertise — that’s associated with cannabis processing.

How much is a dispensary license in Michigan?

There are a few steps, and a few fees, to getting a dispensary license in Michigan. First, you must pay a $6,000 fee to get pre-qualified for an application. This fee is non-refundable. 

If you’re approved to receive a license, you will be assessed an additional initial fee, based upon the type of license you wish to obtain. For example, the initial fee for a marijuana retailer license is $15,000. It costs $8,300 for a license to run a marijuana microbusiness, and $1,000 to obtain a license to operate a designated consumption establishment.

There are also annual renewal fees associated with all these licenses. These fees are actually exactly the same as the initial fee for all types of businesses mentioned.  Finally, we cannot forget the costs to acquire the local city license, which may ultimately be the most costly part depending on the license you are seeking to acquire. 

Do you need a license to sell to dispensaries in Michigan?

Yes, all people/businesses that want to sell to dispensaries in Michigan must have a license to do so. Which license you need, though, depends on the structure of your business.

If you are a marijuana processor, for example, you would need a license that would have a $24,000 initial fee and a $24,000 annual renewal fee. If you are a grower, your license could range anywhere from $1,200 to $24,000.

How do I sell to a dispensary in Michigan?

Once you have the proper licenses — or have partnered with a processing center that holds those licenses — you are free to sell your products to a dispensary in Michigan. This will give you the right to do so. How you market your products, brand them, package them and sell them will be your own decision — just like any other business.

Can you sell homemade edibles in Michigan?

In order to sell any type of edibles in Michigan, you will need to first obtain a license to do so. If you intend to sell direct-to-consumer, you can apply for a marijuana microbusiness retailer, which costs $8,300.

This would allow you to possess and process the amount of marijuana that you would need to process your edibles and then sell them to consumers in Michigan.

Can you sell infused food?

Yes, Michigan law allows microbusinesses to grow as much as 150 cannabis plants and then process them into multiple products, including edibles, concentrates and other products that are infused with marijuana. 

Is it legal to mail edibles in Michigan?

While both medical and recreational marijuana is legal in Michigan, no one is allowed to send it in the mail. It doesn’t matter what type of product you’re selling or whether you have a license to sell it legally, you are prohibited from sending it via mail.

The reason for this is because the U.S. Postal Service is an agency of the federal government. Since marijuana is still illegal according to federal law, the USPS is required to report if they find marijuana in any piece of mail.

If you are found to have done this, you will be charged with a federal crime.

Can caregivers sell to dispensaries in Michigan?

As of April of 2019, caregivers were prohibited from transferring or selling their products to dispensaries in Michigan.

Following the legalization of recreational marijuana in 2018, caregivers were allowed to sell or transfer their products to licensed processors and growers of cannabis in the state. However, that was phased out, too, after the Marijuana Regulatory Agency found there was a sufficient number of processors and cultivators to meet the medical demand for marijuana products.

Initially, caregivers were allowed to do this so that patients who used medical marijuana wouldn’t run out of their supply. 

 

Can You Have a Medical Card and Concealed Weapons Permit in Michigan?

Michigan is one of 37 states in the U.S. that allows cannabis products to be used for medical purposes. Michigan now allows recreational cannabis use to an individual who is 21 years or older. It also provides concealed weapons permits to certain gun owners and users.

But, can a person in the state of Michigan hold both a medical marijuana card and a concealed weapons permit at the same time? The simple answer to that question is yes, but under certain circumstances only. 

It’s very important that you understand the laws in Michigan in relation to these two specialty licenses, and how they apply to certain situations and locations.

What are the Federal Laws That Govern Firearm Sale and Possession?

The most important thing to understand is that there are two sets of laws that apply to medical marijuana and concealed weapons permits — those at the federal level and those at the state level.

What is legal in Michigan may not be legal at the federal level. In other words, Michigan’s state laws allow for people to have a medical card and concealed weapons permit at the same time. However, those laws do not apply outside the state’s borders, since there are no federal laws that provide these same privileges.

The two main federal laws that govern the sale and possession of firearms are the the National Firearms Act of 1934 as well as the Gun Control Act of 1968. The former was the first federal law that sought to curb violence by regulating firearm sales and possession. The latter sough to do the same by putting prohibitions on who could own firearms.

These two laws form the basis of all firearm sale and possession regulations at the federal level.

Wilson v. Lynch 

In 2016, the U.S. Court of Appeals for the Ninth Circuit ruled in the case of Wilson v. Lynch that people who have a medical marijuana license card were prohibited from purchasing guns. 

The plaintiff in the case, S. Rowan Wilson, tried to legally purchase a firearm in Nevada, where she lived. The firearms dealer wouldn’t sell her a gun, though, because she had a medical marijuana card. The dealer acted under the federal law that prohibits the sale of firearms to anyone who is known to be a drug user.

Wilson challenged that decision — and the federal law — through a federal lawsuit. She was challenging the federal statute that prohibited her sale from going through. She also challenged regulations set by the ATF — the Bureau of Alcohol, Tobacco, Firearms, and Explosives — which said in 2011, that firearms dealers who held federal licenses couldn’t sell guns to medical marijuana users because it is considered an unlawful drug.

Even today, as marijuana has been legalized for both medical and recreational usage in many states including Michigan, it still remains an illegal drug on a federal level. This means that any state that doesn’t explicitly allow for the sale of firearms to a medical marijuana card holder is prevented from doing so according to federal law. 

The appeals court ultimately determined that Wilson’s Second Amendment rights weren’t impeded upon, even though she wasn’t a user of marijuana and only obtained the card to support the legislation. The court ruled that federal law didn’t prohibit the possession of firearms by medical marijuana card holders, only the purchase of new firearms.

She could, therefore, have legally purchased firearms before obtaining the card and still possessed them according to the law. Wilson, according to the court, also could drop her medical marijuana card at any time willfully and regain her legal right to purchase firearms.

What this means, essentially, is that Michigan’s state law is in contradiction to federal law. It’s unlawful to not only purchase but also possess a firearm, whether concealed or not, if you’re a marijuana user, even if for medical purposes.

In fact, the ATF rescinded an exemption that Michigan Concealed Pistol License “CPL” holders once enjoyed. Before the state legalized the use of recreational marijuana, CPL holders in Michigan didn’t have to undergo a background check through NICS for each new firearm they purchased.

That privilege was rescinded following the recreational marijuana law going into effect in late 2019, because marijuana is still illegal at the federal level.

What Disqualifies You from CPL in Michigan? 

There are certain requirements one must meet in order to qualify for a CPL in Michigan. While there are some exceptions to the rule here, a person will generally be disqualified from obtaining a CPL in Michigan if they have a felony conviction or have one pending; have been deemed to have a mental health illness; have been dishonorably discharged from the military; been convicted of domestic assault within eight years from applying for the CPL; and been convicted of DUI in the last three years.

There are some other things that would disqualify someone from obtaining a CPL in Michigan, but those are the main categories of disqualification.

Can You Get a CPL with a Misdemeanor in Michigan?

There are instances in which you could get a CPL in Michigan if you have a misdemeanor offense on your record. There is a long list of misdemeanor offenses on the state of Michigan’s website that outlines which misdemeanor offenses would disqualify you from obtaining a CPL.

Even if you have been convicted of one of the misdemeanors on the list, though, you could still gain a CPL in Michigan after a certain period of time. For example, some of the offenses require you to wait eight years since the charge while others require offenders to wait three years.

Where Can I Carry a CPL in Michigan?

Michigan issues CPLs only to residents of the state, with some exceptions. Residents of other states who have similar CPLs in their home state may carry a concealed firearm, too.

Michigan provides some relatively liberal rules for where a legally-licensed holder of a CPL can carry a concealed weapon. Generally speaking, you can carry a CPL in most places in Michigan, except for some places such as hospitals and schools.

You are allowed to carry a CPL in a bar or restaurant that serves alcohol, as long as you’re not actually considered to be under the influence. There also aren’t any specific statutes that address possession at hotels. As a result, you should check with the hotel to see its policy.

Can You Carry a Gun in a Dispensary in Michigan?

It is not explicitly illegal to carry a gun in a dispensary in Michigan according to state law. However, it is according to federal law, as mentioned above. So, it’s generally not a good idea to carry a gun in a dispensary in Michigan.

 

FHA Advance Loan Modification or COVID-19 ALM

Mortgages are huge responsibilities that shouldn’t be taken lightly. In many instances, borrowers agree to 15- or 30- year loan terms. So if you’re ever unhappy with your mortgage, it may feel like you’re stuck and have no choice but to manage and just cope.

The COVID-19 Advance Loan Modification is a permanent change in terms offered to both owner and non-occupant borrowers that reduces their monthly P&I payments by at least 25 percent, without the borrower having to take any action.

If the borrower qualifies for a payment reduction, servicers will send revised mortgage papers to those who can make the required payment reduction. The COVID-19 ALM is only used if the borrower agrees to accept it.

What happens when you do an advanced loan modification?

A loan modification is a change to your original mortgage terms. A loan modification differs from a refinance in that it does not pay off your current mortgage and replaces it with another. Instead, it immediately updates the terms of your loan.

Eligible borrowers who participate in this modification program will see at minimum a 25% reduction in their monthly mortgage payments. The program is automated, so lenders must evaluate qualifying borrowers for this option and provide loan modification papers that would significantly decrease the borrower’s monthly repayments. This change does not require the borrower to contact his or her lender or servicer.

If your FHA-insured loan is delinquent by 90 days or more, under a new HUD directive, your loan servicer has to evaluate you for a COVID-19 Advance Loan Modification (COVID-19 ALM). Servicers have been able to start using the COVID-19 ALM option from June 25, 2021, onward.

 

Who qualified for a COVID-19 ALM?

If the borrower qualifies for an Advanced Loan Modification (COVID-19 ALM), the servicer must have assessed them by August 24, 2021.

Borrowers who qualified are those who have left or requested to leave their COVID-19 forbearance, whose COVID-19 forbearance has expired by August 24, 2021, or borrowers who were not on a COVID-19 forbearance at the time of application.

Borrowers must not have been asked for any information by the servicers to determine their ALM eligibility.

If you’re looking to take advantage of the COVID-19 ALM, remember that the property must be owner-occupied or non-owner-occupied and that the borrower has to have been delinquent for at least 90 days.

Pros of FHA Loans

You can acquire a home with an FHA mortgage if you no longer want to rent. Because FHA loans make it simpler to get a mortgage, you may start accruing equity faster. You won’t have to wait as long as you would if you were attempting to save money or improve your credit score.

It’s not the end of the world if your credit score is low: If you don’t have a good credit history or have experienced some difficulties in making on-time payments, 620 may appear to be an unreachable objective for a typical mortgage. Most FHA-approved lenders will still deal with you if your credit score is 580.

With an FHA loan, you can make a lower down payment than with other types of loans. If your credit score is at least580, you can put down 3.5 percent. Even if your credit score falls between 500 and 579, you may still get an FHA-backed mortgage by making a 10 percent deposit.

Cons of FHA Loans

When you compare the interest rates of FHA and conventional loans, you might find that the FHA loan has a lower interest rate. However, it is important to look at the APR instead because it represents the total cost of borrowing. On FHA loans, the APR can sometimes be higher than on conventional loans.

Since your credit score is lower, you will have to pay mortgage insurance. This protects the lender in case you can’t make your payments. The insurance premium can be rolled into your closing costs, but you will have to pay the annual premiums in monthly installments that will show up on your mortgage bill.

 

In conclusion

 

The FHA’s ability to help Americans buy and keep their homes in the face of adversity serves as a reminder of why it was created during the Great Depression: to ultimately assist Americans in purchasing and keeping their houses.

 

Servicers must have as many tools at their disposal as possible to help homeowners recover from the economic effects of the pandemic. This policy provides issuers with clear guidance on how to move forward and help tens of thousands of FHA homeowners who are coming out of forbearance benefit from the FHA Advance Loan Modification.

 

TSA Guidelines for CBD Oil 2022

Cannabidiol (CBD) oil is a product used today by many people for many different reasons. For some people who are facing serious and significant medical conditions, CBD oil is quite literally a life saver.

Each state in America has different rules and regulations when it comes to who is allowed to possess and use CBD oil, where it can be purchased and where it can be transported. If you’re flying on a plane within the U.S., it’s important to understand what you are and aren’t allowed to do, so that you abide by all the laws pertaining to CBD oil.

Here are the TSA guidelines for CBD oil in 2022.

The Federal Status of CBD

The 2018 Farm Bill made all CBD oil that is derived from hemp legal on the federal level. CBD oil that comes from marijuana is still considered illegal on the federal level.

You can tell the difference between the two by reading the label on the product. Any CBD product that contains 0.3% or less of THC is considered federally legal. This means that as long as the product you are transporting contains less than this amount, you will not be subject to prosecution on a federal level. 

State laws

Another thing to consider is what the state laws are in regard to CBD. Some states may have stricter standards, while others might be more lenient. These are the laws that will come into play on a local basis. 

For example, if you get through security at your destination, you should be following the local CBD laws of the state(s) you’ll be traveling to or through. Keep in mind that these laws may be different than the ones that dictated what you were allowed to purchase, and how much you were allowed to possess, in the state from which you came.

Airport rules

Airports need to abide by local laws in the jurisdictions in which they reside. Some airports are located in cities that have more liberal policies in regard to CBD than the rest of the state, and the opposite also may be true. 

So, if you plan to travel with CBD oil, it’s important to research not only the states’ laws but also the laws of the jurisdictions of where the airports are located. Keep in mind, too, that the airports in some cities are not always located within the confines of the city.

Also keep in mind that if you are traveling internationally, you’ll need to research the laws of the foreign countries you’re traveling to. CBD is actually illegal in a number of countries.

Does the TSA Check for CBD?    

As the Transportation Security Administration, the TSA is focused more on overall security of planes and passengers. The screening procedures used, then, attempt to identify threats to the passengers and overall aviation. This means that TSA won’t specifically be looking for CBD through security checkpoints.

Can Airport Scanners Detect CBD?

Airport scanners are not designed to detect CBD. They are used to see through bags and clothing for threats to safety.

What Happens if TSA Finds CBD on You at the Airport?

Even though TSA won’t be specifically searching for CBD through security checkpoints, they are required to report a suspected violation to local, state or federal authorities. If, for instance, a TSA official believes you are carrying a CBD product that is illegal on either a local, state or federal level, they may force you to speak with law enforcement officials.

This is why it’s important to know all the local and federal laws in regard to the specific product you want to transport. It’s also important that you are able to prove what the product you are transporting is. If you can prove that you’re meeting all applicable laws, you should have no problem in the end.

Can You Fly with CBD Oil in Carry-On?

Yes, you can fly with CBD oil in your carry-on luggage. If you choose to do so, make sure that it’s properly packed so that it doesn’t shatter and spill. Make sure that the original label is on it, and that it lists the ingredients in case someone asks you what it is. Finally, make sure it meets the regulations for liquids, which is typically 3 ounces.

Can I Fly with CBD in My Checked Bag? 

   

You can also fly with CBD oil in your checked bag. The same basic rules apply to a carry-on bag. Pack it in a safe and secure way so that it doesn’t break. Make sure that an airport official can easily access it if need be, and that you have all the pertinent information to prove you’re not breaking any laws.

You won’t need to abide by the limit on liquids if you’re flying with CBD in your checked bag.

Bringing Different Types of CBD on a Plane

CBD comes in a number of different forms. It’s important to understand how each form applies to flying on a plane with it.

CBD Oil

CBD oil is one of the most common forms. Because it is a liquid, it will need to conform to TSA’s standards if you are keeping it in your carry-on luggage. If it exceeds that limit, it can be confiscated.

CBD Tinctures

Since a CBD tincture is alcohol-based, it’s a liquid that will be subject to TSA’s limits and guidelines. Further, because of its alcoholic nature, you may have a much tougher time flying with it than you would other forms of CBD.

CBD Creams

CBD creams may also be subject to the above TSA limits for liquids. To be safe, you should either place it in your checked luggage or ensure it doesn’t exceed the limit.

CBD Vapes

CBD vapes fit into the same category as CBD Oil in terms of flying. It should meet the TSA limits for carry-on luggage.

CBD Gummies (Edibles)

You’ll have more leeway with CBD edibles because they are not liquid. As such, you won’t be subject to the same limits as the liquid or cream versions of the product. This is why many people prefer to fly with gummies if they want to bring CBD with them.

CBD Drinks

As a liquid, CBD drinks are subject to TSA’s limit. Because most individual drinks are well above this limit, it’s often difficult to travel with CBD drinks. You may want to consider a different form if you want to bring CBD with you on a plane.

CBD Flower

Flying with CBD flower can sometimes be a tricky situation, if only because the product itself looks like an illicit drug. TSA agents who aren’t well-versed on CBD flower may give you problems if they find it in your luggage, even if you aren’t breaking any laws. 

 

What Are Some Alternatives To Foreclosure?

If a homeowner falls behind on mortgage payments and cannot catch up, the lender may take back the home. The bank can take the property away from the homeowner if they do not pay back the money they owe. This is called foreclosing the property.

A foreclosure is when a lender, especially a mortgage lender, takes back the property being used as collateral on a loan after payments have not been made or if the borrower defaults.

Fortunately, there are several alternatives to foreclosure that may be available to you, depending on your situation. Here we are going to discuss a few of the more common alternatives to foreclosure.

Forbearance

Forbearance refers to stopping the exercise of a statutory right, such as the pursuit of a debt. This option allows you time to make up for any shortfalls while temporarily suspending payments. If you can agree to the conditions and fulfill them, the lender should not pursue foreclosure against you.

For example, your typical mortgage payment might be $500 monthly. With a lump-sum forbearance plan, your first payment could be anywhere from $400-$700. Each month following that until you’re caught up on payments would then be $800 ($500+$300). Most forbearance plans last from three to six months.

Repayment plans

If you have fallen behind on payments, you can negotiate a repayment plan with the lender that will allow you to catch up. The lender will add a percent of the overdue amount to each of your monthly payments for some time.

Loan modification

A mortgage loan modification is often the most popular alternative to foreclosure. This is a long-term solution for a homeowner who cannot make the required installments.

A loan modification is when you and the mortgage company agree to change the terms of your loan. This can make it so you have to pay over a longer period of time, which makes the monthly payment amount lower.

 Loan modifications can also reduce the mortgage interest rate, and principal balance and even defer a portion of the principal balance to the end of the loan.  The purpose of this is to give the borrower a second chance to honor the mortgage loan agreement since the homeowner suffered a previous or even ongoing hardship.

Quitclaim deed 

By signing a quitclaim deed, you give up any ownership interest in a specific piece of property. The buyer accepts all risks by accepting such a deed. Such a document makes no warranties regarding the title; rather, it transfers whatever ownership rights the donor has to the buyer.  This option, however, does not alleviate the homeowner/borrower of the personal liability from the mortgage note.

Refinance

Refinancing will have a less harmful impact on your credit report, but it’s something you should do before your lender starts the foreclosure procedure. By the time a bank files a foreclosure, it generally wants you off its books, and your best option is to seek a loan modification.

 

Short sale

A short sale occurs when a borrower sells their property for an amount that is less than the full amount they owe, and it is often used when property values have declined since the mortgage was first taken out.  

The mortgage company needs to approve the final short sale, since the mortgage company is the one taking less than what they are owed.  The borrower will also be responsible for potential tax liability to the IRS for any debt forgiveness associated with the short sale.

 

Deed in lieu

A deed in lieu of foreclosure occurs when the borrower deeds the property back to the investor or government instead of going through with a foreclosure. This relinquishes their obligations under the mortgage.

Although you may be forced to sell your home due to a mortgage default, it is typically preferable to foreclosure because of the financial and psychological strain that comes with it. It has a lesser effect on your credit rating.

Chapter 13 Bankruptcy

By filing for bankruptcy you can stop a foreclosure in its tracks by invoking the automatic stay.  If the mortgage company forecloses on your home anytime after you filed bankruptcy, then they will be required to set aside the foreclosure to make it as if it never happened. 

 

Chapter 13 bankruptcy offers an array of options to assist in reorganizing a person’s debt obligation and while in bankruptcy you can even apply for a loan modification with the assistance of your attorney from start to finish. 

 

There you are. You’ve got a handful of options to stay in your home and keep it from going into foreclosure. You can use these foreclosure alternatives to avoid the negative consequences that come with a foreclosure on your credit report.

FAQ

What is the simplest solution for a foreclosure?

The easiest way to stop a foreclosure is to request the total amount you owe to the mortgage company and pay it. This is called reinstatement.

How can I stop a foreclosure auction immediately?

If a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. The automatic stay will stop the foreclosure in its tracks. Once you file for bankruptcy, an “automatic stay” goes into effect.

Can you recover from a foreclosure?

A foreclosure may significantly impact your credit scores, but it is feasible to recover from one. You can begin taking action to repair your credit the moment your house is foreclosed upon.