Michigan has released emergency rules that will govern the medical cannabis industry less than two weeks before the state is set to accept applications for business licenses under its new regulatory system. The Department of Licensing and Regulatory Affairs (LARA) will start taking applications for cannabis growers, transporters, testers, processors, and dispensaries on December 15.

According to Andrew Brisbo, Bureau of Medical Marihuana Regulation (BMMR) director, these emergency administrative rules have been designed to provide patients access to safe medical cannabis as well as preserve patient protections. At the same time, he said that these rules will also allow processors, growers, secure transporters, safety compliance facilities, and provisioning centers to have a clear picture of what’s expected of them as they operate their businesses.

The 51 emergency guidelines regulate various topics and aspects in the cultivation, processing, sale, transport, and testing of medical cannabis, including advertising, capital requirements, and security requirements.

For example, under the emergency rules, all applicants must subject themselves to a thorough background check. License applicants also need to demonstrate capitalization of anywhere from $150,000 to $500,000, depending on the kind of business they have. At least 25% of the total capital should be in liquid assets, like cannabis inventory, investments, or cash. Additionally, only up to 15 ounces of usable cannabis or 75 plants can be used in order to meet capital requirements.

Other rules include:

Businesses need to have surveillance cameras both at the entrance and the exit of their facility as well as do background checks on all their employees.

Any form of advertising for cannabis products that can be seen from the park, street, sidewalk, or any other public place is not allowed.

Each business needs to carry an insurance policy with proof of $100,000 for liability coverage and $100,000 in coverage for bodily injury.

A registered patient can purchase up to 2.5 ounces of medical cannabis per day from a licensed dispensary.

In case of theft or criminal activity in a facility, applicants and licensees need to notify the state police, local law enforcement, and LARA within 24 hours of the incident.

Drive-through or mobile medical cannabis operations are not permitted.

Marijuana-infused products like gummies, oils, and brownies should comply with the guidelines for THC levels and these should be packaged in a way that does not appear to be marketed to minors.

Applying for a license will cost each business $6,000. Applicants who have been denied a license have 21 days to seek a hearing on the matter.

While applications will be received starting December 15, the state’s marijuana licensing board is expected to begin awarding licenses in the first quarter of next year. This is expected to propel the state’s cannabis industry with $711 million in estimated sales and $21 million in estimated tax revenues.

These emergency guidelines will be in effect for six months, at least, until permanent ones have been put in place and finalized. The Medical Marihuana Licensing Board and the BMMR are working hand in hand to put into effect a set of permanent rules.

The Coalition to Regulate Marijuana like Alcohol has also collected and submitted to the Secretary of State over 365,000 petition signatures seeking to get legalization of cannabis for recreational use on the November 2018 ballot. If this passes, Michigan will be the second biggest state after California to fully legalize cannabis. With full legalization, cannabis sales are estimated to go beyond $1 billion a year.