- Proof of at least $100,000 liability insurance policy due within 60 days of issuance of state operating license
- Capitalization now mirrors the state’s requirement
- Marijuana inventory is a liquid asset
- Application and supporting documents must be legible
The marijuana industry is growing and changing
This means rule changes are regularly occurring, whether on a state or municipal level. The latest of these changes comes from amendments to the City of Albion’s medical marijuana ordinance. At last night’s City Council meeting, multiple amendments were approved as an emergency rule. This means the changes go into effect immediately and apply to the applications that have already been submitted.
Most of the changes were made to clarify ambiguities in the original ordinance. However, a couple new sections were added that may affect applicants who already submitted their application. Likewise, changes to the existing proof of insurance and capitalization requirements may also affect these applicants.
Does my liability insurance need to change?
Proof of liability insurance was required under the original ordinance but there were concerns regarding the wording. The original ordinance stated proof of insurance “not exceeding the requirements addressed in the Medical Marijuana Facilities Licensing Act” was required. This would effectively limit Cannabusinesses in Albion to only $100,000 of liability insurance.
This section now states “in the amount not less than one hundred thousand ($100,000) dollars”. The City must also be listed on the policy as an additional insured. Albion will issue a provisional license without the proof of insurance, however, valid proof must be provided within 60 days of a state operating license being issued. If proof of insurance is not provided within 60 days, the City will revoke the provisional license.
What about the capitalization requirement?
The second change was to Albion’s capitalization requirement. The original ordinance required not less than $250,000 of immediate, liquid, available funds. This requirement has changed to more closely mirror the state’s requirement with the following capitalization amounts for each type of facility:
- 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
The verification of funds has loosened up as well. Instead of requiring liquid assets for the full amount, applicants must show at least 25% in liquid assets. These liquid assets can also now contain up to 15 ounces of usable marijuana or 72 marijuana plants held in inventory. The remaining capitalization amount can be made up of other liquid (except any additional marijuana inventory) and non-liquid assets. This opens the door to applicants that could not provide the full amount in liquid assets alone but have the other assets necessary to meet the state’s requirement.
How’s your handwriting?
The last section that was added to the Albion ordinance under this amendment requires all supporting documents submitted with an application to be legible. Those penmanship lessons in school actually turned out to be necessary after all!
Read the full Albion amendment here.