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 show up in any discussion. Nonetheless, in consulting with our marijuana clients, many of them are inquiring about the feasibility of the Caregiver model, particularly as it was promoted many years. What many in the market have referred to 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 actually recognized it for several 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 additionally registered qualifying patients, the "gray market" where they were marketing their excess, and making a pretty good profit, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver might grow up to seventy-two (72) marihuana plants, if they had five registered qualifying patients (the most you were allowed) and they were a registered patient as well. Sometimes, several caregivers would collect at one location and grow their crops together, divided by paint lines on the flooring, or in more sophisticated situations, with each having a secured locked room within the bigger confined, locked facility. Many Caregivers could generate even more functional marihuana than their patients can use. Those caregivers would then sell their excess to dispensaries, many of which were operating with municipal approval across the State. This "gray" marketplace resulted in significant profits for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were going to be terminated by 2021. Lots of Caregivers and market experts really felt that implied the "Caregiver Model" could remain to produce those exact same earnings for another two or 2 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 industry. First, the Bureau of Licensing and Regulatory Affairs has actually 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 since the Board has located that there were failures to divulge by much of these caregivers pertaining to how much money they made, how they made it, and for failure to proclaim that revenue on a State or Federal Tax Return. However, in a September 2018 posting, LARA and the BMMR posted that all facilities that are operating with municipal approval, but which have actually not gotten a State License, must stop 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 marihuana bought after the October 31, 2018 date by those facilities must be effectively labeled and coded as required by the regulations, 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 market their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Repercussions

Some might suggest that there are still licensed or unlicensed facilities that are going to proceed buying from caregivers, regardless of the State mandate. To be sure, there may be some that take that risk.

Nevertheless, the State has demonstrated a dedication to enforcement and inspection. 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 a candidate 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 breaching this mandate, the State would likely progress with sanctions against that facility's license, consisting of a suspension or abrogation of the license. Given how much those licenses are worth, and the cost of obtaining any one of the permitted facility licensing types, the majority of owners will be very unwilling to take chances with the possible loss of their license, or knowledge that their license will certainly not be renewed.

If you are a caregiver and do not recognize what to do come October 31, 2018, are a person thinking of getting a MMFLA license, or are an applicant that needs representation or has concerns about how these adjustments will certainly influence you, give us a call. We have the experience and knowledge in the marijuana and marihuana law fields to aid address your inquiries and give you the support you require.