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 turn up in any type of conversation. Nonetheless, in speaking with our cannabis clients, many of them are inquiring about the stability of the Caregiver model, particularly as it was pushed for many years. What many in the sector 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 certainly be the extinction event for the caregiver model as many have known 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 overages, and making a fairly 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 enabled) and they were a registered patient as well. 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 situations, with each having a secured locked space within the bigger enclosed, locked center. Several Caregivers might generate even more functional marihuana than their patients might use. Those caregivers would then offer their overages to dispensaries, many of which were operating with municipal approval across the State. This "grey" market caused considerable revenues for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were going to be terminated by 2021. Several Caregivers and industry experts felt that suggested the "Caregiver Model" might remain to generate those very same profits for an additional two or two and a half years. The State, nevertheless, had other plans.

The State's Response

The State of Michigan, nonetheless, had other plans for the upstart marijuana market. Initially, the Bureau of Licensing and Regulatory Affairs has actually taken a very scrutinizing approach to licensing applications where any of the candidates were Caregivers. Many of those applications have been denied over the past several months because the Board has found that there were failings to disclose by much of these caregivers relating to just how much cash they made, how they made it, and for failing to declare that revenue on a State or Federal Tax Return. Nonetheless, in a September 2018 posting, LARA and the BMMR published that all centers that are operating with municipal approval, but which have not received a State License, must quit acquiring 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 acquired after the October 31, 2018 date by those facilities have to be effectively classified and coded as required by the guidelines, and must come from an appropriately State Licensed grower or processor. The caregivers may still grow, however they will have no means whereby to market their product legitimately to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Repercussions

Some might say that there are still licensed or unlicensed centers that are mosting likely to proceed buying from caregivers, in spite of the State mandate. To make sure, there may be some that take that threat.

Nevertheless, the State has shown a commitment to enforcement and evaluation. If the State were to figure out that a candidate or a licensed center was still taking caretaker overages and marketing them, the State would likely act. If a candidate were to be caught engaging in this model, they would likely be refuted as soon as possible by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move forward with sanctions against that facility's license, including a suspension or cancellation of the license. Offered how much those licenses are worth, and the cost of getting any of the permitted center licensing types, a lot of owners will be very resistant to take chances with the possible loss of their license, or expertise that their license will not be renewed.

If you are a caregiver and don't understand what to do come October 31, 2018, are an individual thinking of making an application for a mmfla license, or are an applicant who needs representation or has inquiries regarding just how these changes will affect you, give us a call. We have the experience and expertise in the cannabis and marihuana legislation areas to help address your questions and offer you the guidance you require.