Please help me with the terms. Who is an "applicant"? What is an "affiliate"? Who must file an application? Who is subject to the disclosures in the application process for a medical marijuana facility? What is a "true party of interest"?
Persons wanting to operate a medical marijuana facility in the state of Michigan must file an application for a medical marijuana facility license.
An “applicant” is defined as a person who applies for a state operating license. For purposes of ineligibility for a license (MMFLA section 402), the term “applicant” includes an officer, director, and managerial employee of the applicant and a person who holds any direct or indirect ownership interest in the applicant.
The term “affiliate” is only used in section 305 of the MMFLA and is defined as any person that controls, is controlled by, or is under common control with; is in a partnership or joint venture relationship with; or is a co-shareholder of a corporation, a co-member of a limited liability company, or a co-partner in a limited liability partnership with a licensee or applicant.
The term “affiliate” will no longer be used in the context of license application. Persons who meet the statutory definition of “affiliate” are bound by the provisions applicable to affiliates found in Section 305 of the MMFLA. This term is completely unrelated to identifying persons who must disclose information in an application for a medical marijuana facility.
According to the MMFLA, those who are required to file disclosures in an application are as follows:
- the applicant
- an officer, director, and managerial employee of the applicant
- any person who holds any direct or indirect ownership interest in the applicant
- those persons who are a “true party of interest”
A “true party of interest” is defined as follows:
- For an individual or sole proprietorship: the proprietor and spouse.
- For a partnership and limited liability partnership: all partners and their spouses.
- For a limited partnership and limited liability limited partnership: all general and limited partners and their spouses.
- For a limited liability company: all members, managers, and their spouses.
- For a privately held corporation: all corporate officers or persons with equivalent titles and their spouses and all stockholders and their spouses.
- For a publicly held corporation: all corporate officers or persons with equivalent titles and their spouses.
- For a multilevel ownership enterprise: any entity or person that receives or has the right to receive a percentage of the gross or net profit from the enterprise during any full or partial calendar or fiscal year.
- For a nonprofit corporation: all individuals and entities with membership or shareholder rights in accordance with the articles of incorporation or the bylaws and their spouses.
A "true party of interest" does not mean:
- A person or entity receiving reasonable payment for rent on a fixed basis under a bona fide lease or rental obligation, unless the lessor or property manager exercises control over or participates in the management of the business.
- A person who receives a bonus as an employee if the employee is on a fixed wage or salary and the bonus is not more than 25% of the employee's pre-bonus annual compensation or if the bonus is based on a written incentive/bonus program that is not out of the ordinary for the services rendered.