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 conversation. Nevertheless, in speaking with our cannabis clients, much of them are asking about the practicality of the Caregiver model, especially as it was promoted several years. What many in the industry have actually 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 actually known it for many years here in Michigan. While Caregivers will certainly 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 marketing their overages, and making a pretty good profit, 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. Sometimes, several caregivers would collect at one location and grow their crops together, separated by paint lines on the floor, or in more advanced situations, with each having a safeguarded locked space within the larger confined, secured center. Several Caregivers can generate much 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" marketplace led to significant profits for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were going to be terminated by 2021. Many Caregivers and industry insiders felt that suggested the "Caregiver Model" might continue to create those very same profits for an additional 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 marijuana market. First, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing technique to licensing applications where any of the candidates were Caregivers. A number of those applications have been rejected over the past several months since the Board has discovered that there were failures to disclose by many of these caregivers regarding how much money they made, just how they made it, and for failing to declare that earnings on a State or Federal Tax Return. However, in a September 2018 publishing, LARA and the BMMR posted that all facilities that are running with municipal approval, but which have actually not obtained a State License, have to quit 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 type of marihuana acquired after the October 31, 2018 date by those facilities must be correctly classified and coded as required by the policies, and must come from an appropriately State Licensed grower or processor. The caregivers might still grow, however they will have no ways by which to market their product legitimately to a provisioning facility 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 purchasing from caregivers, despite the State mandate. To be sure, there may be some that take that risk.

Nevertheless, the State has actually shown a dedication to enforcement and assessment. If the State were to figure out that an applicant or a licensed center was still taking caretaker excess and selling them, the State would likely do something about it. If an applicant were to be caught participating in this model, they would likely be rejected immediately by the Board. If a licensed facility were to be caught violating this mandate, the State would likely move on with sanctions against that center's license, including a suspension or abrogation of the license. Provided just how much those licenses are worth, and the cost of getting any one of the allowed center licensing types, most owners will certainly be extremely unwilling to take chances with the possible loss of their license, or expertise 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 considering looking for a mmfla license, or are a candidate that needs representation or has questions about just how these changes will influence you, give us a call. We have the experience and knowledge in the cannabis and marihuana law fields to help address your concerns and provide you the support you need.