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

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never ever come up in any discussion. Nevertheless, in talking with our cannabis clients, a lot of them are asking about the practicality of the Caregiver model, particularly as it was promoted several years. What several in the sector 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 recognized 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 likewise registered qualifying patients, the "gray market" where they were selling their overages, 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 permitted) and they were a registered patient also. In some cases, several caregivers would gather at one area and grow their plants together, divided by paint lines on the flooring, or in more advanced scenarios, with each having a safeguarded locked area within the bigger enclosed, locked center. Lots of Caregivers can produce much more functional marihuana than their patients might use. Those caregivers would certainly then sell their overages to dispensaries, many of which were operating with municipal approval across the State. This "grey" marketplace led to significant revenues for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were mosting likely to be terminated by 2021. Lots of Caregivers and market insiders felt that indicated the "Caregiver Model" can continue to produce those very same earnings for an additional 2 or two and a half years. The State, nonetheless, had other plans.

The State's Response

The State of Michigan, nevertheless, had other plans for the upstart cannabis sector. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing approach to licensing applications where any one of the candidates were Caregivers. Much of those applications have been refuted over the past several months because the Board has discovered that there were failings to disclose by a number of these caregivers pertaining to just how much money they made, how they made it, and for failure to proclaim that income on a State or Federal Tax Return. However, in a September 2018 posting, LARA and the BMMR posted that all centers that are operating with municipal approval, but which have actually not received a State License, should stop buying 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 purchased after the October 31, 2018 date by those centers should be effectively labeled and coded as required by the rules, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, however they will certainly have no ways whereby to offer their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Effects

Some might argue that there are still licensed or unlicensed facilities that are going to continue buying from caregivers, in spite of the State mandate. To make sure, there may be some that take that threat.

However, the State has shown 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 offering 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 center were to be caught breaching this mandate, the State would likely move on with sanctions against that center's license, consisting of a suspension or abrogation of the license. Given just how much those licenses are worth, and the expense of getting any one of the permitted center licensing types, most owners will 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 an individual thinking about obtaining a MMFLA license, or are a candidate who requires representation or has concerns regarding exactly how these changes will influence you, give us a call. We have the experience and knowledge in the marijuana and marihuana law fields to help answer your questions and offer you the guidance you need.