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 show up in any type of conversation. Nevertheless, in speaking with our cannabis clients, much of them are asking about the feasibility of the Caregiver model, especially as it was promoted many years. What several in the industry 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 several have recognized it for several years here in Michigan. While Caregivers will continue to have the ability to grow and market to their registered patients, and for themselves, if they are additionally registered qualifying patients, the "gray market" where they were offering their excess, and making a fairly good revenue, 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 permitted) and they were a registered patient also. In some cases, several caregivers would collect at one place and grow their crops together, divided by paint lines on the flooring, or in more innovative scenarios, with each having a safeguarded locked area within the bigger enclosed, locked facility. Many Caregivers could produce far more useful marihuana than their patients can utilize. Those caregivers would certainly then sell their excess to dispensaries, many of which were running with municipal approval throughout the State. This "grey" market caused substantial revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were mosting likely to be terminated by 2021. Lots of Caregivers and industry insiders felt that indicated the "Caregiver Model" could continue to generate those exact same revenues for an additional 2 or two and a half years. The State, nonetheless, had other plans.

The State's Response

The State of Michigan, however, had other plans for the upstart cannabis market. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing approach to licensing applications where any of the candidates were Caregivers. Many of those applications have been denied over the past several months due to the fact that the Board has found that there were failures to reveal by most of these caregivers regarding how much cash they made, just how they made it, and for failure to declare that income on a State or Federal Tax Return. Nevertheless, in a September 2018 publishing, LARA and the BMMR published that all centers that are operating with municipal approval, but which have actually not gotten a State License, have to quit getting unlabeled and unauthorized medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any type of marihuana bought after the October 31, 2018 date by those facilities need to be correctly classified and coded as required by the guidelines, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, but they will have no methods whereby to market their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Effects

Some may argue that there are still licensed or unlicensed centers that are going to proceed purchasing from caregivers, regardless of the State mandate. To be sure, there may be some that take that risk.

Nevertheless, the State has shown a dedication to enforcement and examination. If the State were to identify that a candidate or a licensed center was still taking caretaker excess and selling them, the State would likely act. If an applicant were to be caught taking part in this model, they would likely be rejected immediately by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move on with sanctions against that center's license, including a suspension or revocation of the license. Given just how much those licenses are worth, and the price of obtaining any of the allowed center licensing types, most owners will certainly be really resistant 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 don't recognize what to do come October 31, 2018, are an individual considering applying for a MMFLA license, or are an applicant that requires representation or has questions concerning how these adjustments will influence you, give us a call. We have the experience and knowledge in the marijuana and marihuana legislation areas to help address your concerns and give you the guidance you require.