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

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never turn up in any discussion. Nevertheless, in speaking to our marijuana clients, much of them are asking about the stability of the Caregiver model, especially as it was pushed for many years. What many in the market 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 many have understood it for years here in Michigan. While Caregivers will continue to be able to grow and sell to their registered patients, and for themselves, if they are likewise registered qualifying patients, the "gray market" where they were offering their overages, and making a pretty good revenue, is coming to an end.

What was the "Caregiver Model?"

Under the old "Caregiver Model," a Registered Caregiver can 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 also. Sometimes, numerous caregivers would collect at one place and grow their plants with each other, divided by paint lines on the floor, or in more sophisticated situations, with each having a secured locked space within the larger confined, locked center. Several Caregivers could create much more functional marihuana than their patients can use. Those caregivers would certainly after that offer their overages to dispensaries, many of which were running with municipal approval across the State. This "grey" industry resulted in considerable earnings for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were mosting likely to be eliminated by 2021. Numerous Caregivers and market insiders felt that implied the "Caregiver Model" could remain to produce those very same earnings for another 2 or 2 and a half years. The State, however, had other plans.

The State's Response

The State of Michigan, however, had other plans for the upstart marijuana industry. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing approach to licensing applications where any 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 failures to reveal by a lot of these caregivers relating to how much cash they made, just how they made it, and for failing to declare that income on a State or Federal Tax Return. Nevertheless, in a September 2018 posting, LARA and the BMMR posted that all facilities that are operating with municipal approval, but which have actually 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 kind of marihuana acquired after the October 31, 2018 date by those centers must be effectively classified and coded as required by the rules, and must originate from a properly State Licensed grower or processor. The caregivers may still grow, yet they will certainly have no means whereby to offer their product legitimately to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Consequences

Some may say that there are still licensed or unlicensed facilities that are mosting likely to proceed purchasing from caregivers, regardless of the State mandate. To make sure, there might be some that take that risk.

Nonetheless, the State has actually shown a dedication to enforcement and inspection. If the State were to figure out that a candidate or a licensed facility was still taking caretaker overages and selling them, the State would likely take action. If an applicant were to be caught participating in this model, they would likely be denied immediately by the Board. If a licensed center were to be caught breaching this mandate, the State would likely progress with sanctions against that facility's license, consisting of a suspension or retraction of the license. Provided just how much those licenses are worth, and the price of getting any of the allowed facility licensing types, the majority of owners will certainly be extremely 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 don't understand what to do come October 31, 2018, are an individual thinking about applying for a mmfla license, or are a candidate who needs representation or has questions regarding exactly how these adjustments will certainly influence you, give us a call. We have the experience and understanding in the cannabis and marihuana law areas to help address your inquiries and provide you the advice you require.