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 conversation. However, in speaking with our cannabis clients, a lot of them are inquiring about the feasibility of the Caregiver model, specifically as it was pushed for years. What many in the industry 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 several have actually known it for several years here in Michigan. While Caregivers will continue to be able to grow and sell to their registered patients, and for themselves, if they are also registered qualifying patients, the "gray market" where they were marketing their overages, and making a fairly good profit, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver might grow up to seventy-two (72) marihuana plants, if they had five registered qualifying patients (the most you were enabled) and they were a registered patient as well. In some cases, several caregivers would collect at one location and grow their plants with each other, separated by paint lines on the floor, or in more innovative situations, with each having a protected locked area within the bigger enclosed, locked center. Several Caregivers might produce even more usable marihuana than their patients might use. Those caregivers would after that sell their overages to dispensaries, many of which were operating with municipal approval across the State. This "grey" market led to significant earnings for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were going to be phased out by 2021. Several Caregivers and sector insiders really felt that suggested the "Caregiver Model" might continue to generate those exact same profits for another 2 or two and a half years. The State, however, had other plans.

The State's Response

The State of Michigan, nevertheless, had other plans for the upstart cannabis sector. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing technique to licensing applications where any of the applicants were Caregivers. Many of those applications have been refuted over the past several months because the Board has located that there were failings to reveal by a number of these caregivers relating to how much money they made, exactly how they made it, and for failure to proclaim that income on a State or Federal Tax Return. However, in a September 2018 publishing, LARA and the BMMR posted that all centers that are operating with municipal approval, but which have not gotten a State License, should stop purchasing unlabeled and unsanctioned medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any marihuana bought after the October 31, 2018 date by those centers need to be appropriately classified and coded as required by the policies, and must originate from an appropriately State Licensed grower or processor. The caregivers might still grow, yet they will certainly have no methods through which to sell their product lawfully to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Effects

Some may suggest that there are still licensed or unlicensed facilities that are going to continue buying from caregivers, regardless of the State mandate. To be sure, there may be some that take that danger.

Nevertheless, the State has demonstrated a dedication to enforcement and examination. If the State were to establish that a candidate or a licensed facility was still taking caretaker excess and offering them, the State would likely take action. If a candidate were to be caught engaging in this model, they would likely be refuted as soon as possible by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move forward with sanctions against that center's license, including a suspension or revocation of the license. Offered how much those licenses are worth, and the price of getting any one of the permitted center licensing types, a lot of owners will certainly be very unwilling to take chances with the possible loss of their license, or expertise that their license will certainly not be renewed.

If you are a caregiver and do not know what to do come October 31, 2018, are an individual considering looking for a mmfla license, or are an applicant who needs representation or has questions regarding exactly how these changes will certainly impact you, give us a call. We have the experience and expertise in the marijuana and marihuana law fields to assist address your questions and offer you the advice you need.