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

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never ever turn up in any discussion. However, in speaking with our marijuana clients, a lot of them are inquiring about the viability of the Caregiver model, specifically as it was promoted several years. What many in the sector have referred to as the "Caregiver Model" is going the way of the Do-Do bird on October 31, 2018. Halloween this year will be the extinction event for the caregiver model as many have recognized it for many years here in Michigan. While Caregivers will continue to have the ability to grow and sell to their registered patients, and for themselves, if they are likewise registered qualifying patients, the "gray market" where they were marketing their excess, and making a pretty good earnings, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver could grow up to seventy-two (72) marihuana plants, if they had 5 registered qualifying patients (the most you were allowed) and they were a registered patient too. In some cases, numerous caregivers would gather at one place and grow their crops with each other, divided by paint lines on the floor, or in more advanced circumstances, with each having a safeguarded locked area within the bigger enclosed, secured facility. Lots of Caregivers could produce much more useful marihuana than their patients might make use of. Those caregivers would then sell their overages to dispensaries, many of which were operating with municipal approval across the State. This "gray" market caused significant profits for several caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were mosting likely to be phased out by 2021. Lots of Caregivers and market insiders felt that suggested the "Caregiver Model" could remain to generate those exact same earnings for another two or 2 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 cannabis industry. First, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing approach to licensing applications where any one of the applicants were Caregivers. Most of those applications have actually been denied over the past several months due to the fact that the Board has located that there were failures to disclose by a lot of these caregivers concerning just how much cash they made, just how they made it, and for failing to proclaim that earnings 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 not received a State License, have to quit buying unlabeled and unsanctioned medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any kind of marihuana bought after the October 31, 2018 date by those centers must be appropriately labeled and coded as required by the regulations, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, yet they will have no ways by which to market their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some may argue that there are still licensed or unlicensed centers that are mosting likely to continue buying from caregivers, despite the State mandate. To make sure, there may be some that take that threat.

However, the State has demonstrated a dedication to enforcement and assessment. If the State were to figure out that an applicant or a licensed facility was still taking caretaker excess and marketing them, the State would likely do something about it. If a candidate were to be caught participating in this model, they would likely be denied as soon as possible by the Board. If a licensed center were to be caught breaking this mandate, the State would likely progress with sanctions against that center's license, including a suspension or abrogation of the license. Provided how much those licenses are worth, and the expense of getting any one of the permitted facility licensing types, most owners will certainly be really reluctant to take chances with the possible loss of their license, or knowledge that their license will certainly not be restored.

If you are a caregiver and do not know what to do come October 31, 2018, are a person thinking about requesting a MMFLA license, or are an applicant that requires representation or has inquiries concerning just how these adjustments will impact you, give us a call. We have the experience and expertise in the cannabis and marihuana law fields to help answer your inquiries and give you the guidance you need.