October 31, 2018 Deadline for Caregivers and The Changing Marihuana Dynamic in Michigan

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never show up in any kind of conversation. Nonetheless, in consulting with our cannabis clients, many of them are asking about the stability of the Caregiver model, specifically as it was promoted several years. What several in the market have actually described as the "Caregiver Model" is going the way of the Do-Do bird on October 31, 2018. Halloween this year will certainly be the extinction event for the caregiver model as lots of have known it for many years here in Michigan. While Caregivers will certainly continue to be able to grow and sell to their registered patients, and for themselves, if they are additionally registered qualifying patients, the "gray market" where they were selling their excess, and making a pretty good profit, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver can grow up to seventy-two (72) marihuana plants, if they had 5 registered qualifying patients (the most you were permitted) and they were a registered patient too. In many cases, several caregivers would gather at one place and grow their crops with each other, separated by paint lines on the floor, or in more advanced conditions, with each having a protected locked area within the larger confined, secured center. Numerous Caregivers could produce far more useful marihuana than their patients could utilize. Those caregivers would after that offer their overages to dispensaries, many of which were operating with municipal approval throughout the State. This "gray" industry led to considerable revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were going to be terminated by 2021. Many Caregivers and market insiders felt that suggested the "Caregiver Model" could remain to generate those same revenues for another 2 or two and a half years. The State, nevertheless, had other plans.

The State's Response

The State of Michigan, nonetheless, had other plans for the upstart marijuana sector. Initially, the Bureau of Licensing and Regulatory Affairs has taken a very scrutinizing approach to licensing applications where any one of the applicants were Caregivers. Many of those applications have been refuted over the past several months due to the fact that the Board has located that there were failures to disclose by a number of these caregivers regarding how much cash they made, exactly how they made it, and for failure to proclaim that revenue on a State or Federal Tax Return. Nonetheless, in a September 2018 posting, LARA and the BMMR posted that all facilities that are operating with municipal approval, but which have actually not obtained a State License, should stop getting unlabeled and unsanctioned medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any type of marihuana acquired after the October 31, 2018 date by those facilities should be properly identified and coded as required by the regulations, and must originate from an appropriately State Licensed grower or processor. The caregivers may still grow, however they will have no ways whereby to sell their product legally to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Effects

Some might suggest that there are still licensed or unlicensed facilities that are mosting likely to proceed purchasing from caregivers, in spite of the State mandate. To ensure, there may be some that take that threat.

However, the State has demonstrated a commitment to enforcement and examination. If the State were to establish that a candidate or a licensed center was still taking caretaker excess and offering them, the State would likely act. If a candidate were to be caught participating in this model, they would likely be rejected asap by the Board. If a licensed facility were to be caught breaking this mandate, the State would likely move on with sanctions against that facility's license, including a suspension or revocation of the license. Offered just how much those licenses are worth, and the cost of acquiring any one of the permitted facility licensing types, most owners will certainly be very reluctant to take chances with the possible loss of their license, or knowledge that their license will not be restored.

If you are a caregiver and don't recognize what to do come October 31, 2018, are a person thinking about getting a mmfla license, or are an applicant who requires representation or has concerns concerning how these changes will affect you, give us a call. We have the experience and expertise in the cannabis and marihuana regulation areas to help address your inquiries and provide you the assistance you require.