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

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never turn up in any discussion. Nonetheless, in speaking with our marijuana clients, much of them are asking about the feasibility of the Caregiver model, particularly as it was pushed for many 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 numerous have actually known it for several years here in Michigan. While Caregivers will continue to be able to grow and market to their registered patients, and for themselves, if they are also registered qualifying patients, the "gray market" where they were offering their excess, and making a fairly good earnings, 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 permitted) and they were a registered patient also. Sometimes, several caregivers would collect at one location and grow their crops together, separated by paint lines on the floor, or in more sophisticated scenarios, with each having a safeguarded locked space within the larger confined, locked center. Many Caregivers might create far more functional marihuana than their patients can make use of. Those caregivers would after that market their overages to dispensaries, many of which were operating with municipal approval across the State. This "gray" industry resulted in significant earnings for several caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were going to be eliminated by 2021. Numerous Caregivers and sector insiders really felt that meant the "Caregiver Model" can continue to create those same revenues for another two or two and a half years. The State, nevertheless, had other plans.

The State's Response

The State of Michigan, nevertheless, had other plans for the upstart cannabis market. First, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing approach to licensing applications where any one of the candidates were Caregivers. Most of those applications have been rejected over the past several months since the Board has discovered that there were failures to reveal by much of these caregivers pertaining to just how much money they made, exactly how they made it, and for failing to state that revenue on a State or Federal Tax Return. Nonetheless, in a September 2018 posting, LARA and the BMMR published that all centers that are running with municipal approval, but which have not obtained a State License, need to quit acquiring unlabeled and unauthorized 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 facilities should be appropriately classified 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 methods whereby to market their product legally to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some might say that there are still licensed or unlicensed centers that are going to continue buying from caregivers, in spite of the State mandate. To be sure, there might be some that take that danger.

Nevertheless, the State has actually demonstrated a dedication to enforcement and inspection. If the State were to determine that a candidate or a licensed center was still taking caretaker excess and marketing them, the State would likely act. If an applicant were to be caught participating in this model, they would likely be denied immediately by the Board. If a licensed center were to be caught violating this mandate, the State would likely move forward with sanctions against that center's license, including a suspension or cancellation of the license. Offered how much those licenses are worth, and the cost of obtaining any one of the permitted facility licensing types, a lot of owners will certainly be extremely unwilling to take chances with the possible loss of their license, or knowledge that their license will certainly not be renewed.

If you are a caregiver and don't understand what to do come October 31, 2018, are a person thinking about requesting a MMFLA license, or are an applicant who requires representation or has inquiries regarding how these adjustments will certainly affect you, give us a call. We have the experience and expertise in the marijuana and marihuana law areas to aid answer your concerns and offer you the guidance you require.