There are two major hurdles in Michigan’s medical marijuana supply chain. First, the physical act of transporting cannabis is quite an undertaking with strict regulations that must be adhered to. And second, banking for cannabis businesses is virtually non-existent leading to an industry that is dependent upon cash which must also be transported. What’s the solution to both of these problems? Secure transporters.
Anyone looking to apply for a medical marijuana facility license in Michigan should become familiar with LARA Rule 25, but it’s even more important if you’re looking to obtain a secure transport license. We’ll take a look at an overview of how Rule 25 applies to secure transporters.
Appropriate Place of Business
As with all facility licenses, secure transporters must have a primary place of business located in a municipality that has opted into the Medical Marijuana Facility Licensing Act (MMFLA) and approved secure transporters to operate within its limits. Even though you may not be growing or selling marijuana product, you must abide by the same guidelines that apply to a grower or dispensary when searching for a location.
Care, Custody, and Control
When a secure transporter picks up marijuana or cash, it takes over physical custody of the product while in its possession, but not legal custody. This is an important distinction as it may have some costly effects on protecting a secure transporter in the event of stolen or damaged product.
You cannot sell or buy any marijuana product
This does not apply to just the organization either. The applicant or any investor may not have an interest in any other type of facility (grower, processor, dispensary, or testing facility) and they cannot be a registered primary caregiver or qualifying patient. In other words, anyone tied to a secure transporter cannot be involved in any other aspect of the marijuana industry. This prevents a fully vertically-integrated industry in Michigan as this stipulation applies to labs as well.
Product must be secured
All product must be kept in a locked, secured, and sealed container that is inaccessible during transport. Cash must be kept in a separate sealed container accessible only by its employees. Cash and product can never be transported in the same container.
Shipments must be tracked
All transactions must be entered into the statewide tracking system and records must be made available to authorities upon request. Cash shipments must be logged and tracked and the records must be made available to authorities upon request.
Route plans and manifests are required
Transporters must have route plans and manifests available for inspections by LARA or the State Police. A copy must also be carried with the transporter as they can be subject to inspection by law enforcement at any point during the transport process. The transporter must stick to the manifest, however, if a change is required, you must notify all parties as well as update the statewide monitoring system and revise the manifest.
You have 48 hours to make the delivery
LARA has provided a definition of the “reasonable timeframe” a transporter is allowed to maintain custody of a shipment. This definition allows for not more than 48 hours. However, an exception may be granted by LARA on a case-by-case basis if additional time may be required.
You must report your vehicles
All vehicles must be registered with the Secretary of State along with proof of insurance required by State law. In addition to this, you must also identify and report the vehicles to LARA as secure transport vehicles. You must also file Form E with the State which can have an impact on the amount of insurance coverage you must carry on the vehicles.
No markings allowed
The vehicle may not have any markings that indicate it is carrying cannabis, cannabis-infused products, or cash.
Requirements for employees
All shipments must be made with two people and at least one person must remain with the vehicle at all times during transport. Employees with custody of product and cash during transport must not have been convicted of or released from incarceration due to a felony or have been convicted of a misdemeanor related to a controlled substance within the past five years.
Required types of insurance
All Michigan licensees must maintain general liability and product liability insurance. Secure transports must also maintain commercial automobile coverage on all vehicles used to transport cannabis and cash.
Other recommended insurance
Secure transporters face some unique risks that don’t apply to other licensees. Cargo coverage is the primary coverage we recommend. This protects secure transporters in the event of lost, stolen, or damaged product or cash. Also known as Care, Custody, and Control coverage, this is recommended since transporters do not take legal custody of the product while in its possession and a standard commercial property policy provides no coverage for a product that is not legally owned by the transporter.
If you are interested in obtaining an insurance quote for your secure transport business, complete our online application to get started and one of our agents will contact you. Contact us to discuss other types of insurance for your specific situation.