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 come up in any kind of conversation. However, in speaking with our marijuana clients, many of them are inquiring about the feasibility of the Caregiver model, especially as it was pushed for several 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 lots of have recognized it for several years here in Michigan. While Caregivers will certainly continue to be able to grow and sell to their registered patients, and for themselves, if they are additionally registered qualifying patients, the "gray market" where they were offering their overages, and making a fairly 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 also. In some cases, multiple caregivers would collect 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 secured locked space within the bigger enclosed, secured facility. Many Caregivers could create even more usable marihuana than their patients might make use of. Those caregivers would certainly after that offer their excess to dispensaries, many of which were operating with municipal approval across the State. This "grey" market resulted in significant revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were mosting likely to be phased out by 2021. Many Caregivers and sector insiders really felt that implied the "Caregiver Model" might remain to produce those very same revenues for an additional two or 2 and a half years. The State, however, had other plans.

The State's Response

The State of Michigan, nonetheless, had other plans for the upstart cannabis market. Initially, the Bureau of Licensing and Regulatory Affairs has actually taken a really scrutinizing method to licensing applications where any one of the applicants were Caregivers. Much of those applications have actually been refuted over the past several months since the Board has found that there were failings to divulge by a number of these caregivers concerning just how much cash they made, exactly how they made it, and for failing to proclaim that revenue on a State or Federal Tax Return. Nonetheless, in a September 2018 posting, LARA and the BMMR posted that all facilities that are running with municipal approval, but which have actually not obtained a State License, must stop 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 marihuana purchased after the October 31, 2018 date by those centers should be correctly labeled and coded as required by the guidelines, and must originate from a properly State Licensed grower or processor. The caregivers may still grow, however they will have no means through which to offer their product legally to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Consequences

Some may argue that there are still licensed or unlicensed centers that are going to proceed buying from caregivers, despite the State mandate. To ensure, there might be some that take that danger.

However, the State has shown a commitment to enforcement and inspection. If the State were to identify that an applicant or a licensed facility was still taking caretaker excess and offering them, the State would likely do something about it. If a candidate were to be caught participating in this model, they would likely be refuted asap by the Board. If a licensed center were to be caught breaching this mandate, the State would likely move forward with sanctions against that facility's license, consisting of a suspension or cancellation of the license. Given just how much those licenses are worth, and the price of acquiring any one of the permitted facility licensing types, most owners will be very 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 thinking about making an application for a MMFLA license, or are a candidate who needs representation or has concerns about just how these adjustments will certainly impact you, give us a call. We have the experience and understanding in the cannabis and marihuana law areas to help answer your questions and offer you the assistance you need.