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 turn up in any conversation. Nonetheless, in talking with our marijuana clients, a number of them are inquiring about the practicality of the Caregiver model, especially as it was promoted years. What many 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 be the extinction event for the caregiver model as many have actually known it for years here in Michigan. While Caregivers will continue to have the ability to grow and offer 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 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 permitted) and they were a registered patient also. In some cases, multiple caregivers would gather at one location and grow their crops together, separated by paint lines on the flooring, or in more advanced situations, with each having a secured locked area within the larger confined, locked center. Many Caregivers could generate far more useful marihuana than their patients might utilize. Those caregivers would after that offer their excess to dispensaries, many of which were running with municipal approval throughout the State. This "gray" industry led to considerable profits for numerous caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were going to be phased out by 2021. Lots of Caregivers and sector insiders really felt that meant the "Caregiver Model" might remain to produce those same revenues for an additional 2 or two 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 cannabis industry. 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. A number of those applications have actually been refuted over the past several months because the Board has found that there were failures to reveal by most of these caregivers pertaining to how much money they made, just how they made it, and for failing to proclaim that revenue 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 not received a State License, must quit purchasing 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 need to be correctly classified and coded as required by the guidelines, and must originate from an appropriately State Licensed grower or processor. The caregivers might still grow, however they will certainly have no methods whereby to sell their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some might suggest that there are still licensed or unlicensed facilities that are mosting likely to continue purchasing from caregivers, despite the State mandate. To ensure, there might be some that take that threat.

Nevertheless, the State has shown a commitment to enforcement and assessment. If the State were to establish that a candidate or a licensed facility was still taking caretaker overages and offering them, the State would likely do something about it. If a candidate were to be caught taking part in this model, they would likely be rejected immediately by the Board. If a licensed center were to be caught violating this mandate, the State would likely progress with sanctions against that facility's license, including a suspension or retraction of the license. Given how much those licenses are worth, and the price of getting any one of the allowed center licensing types, the majority of owners will be really reluctant to take chances with the possible loss of their license, or knowledge 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 requesting a mmfla license, or are a candidate who needs representation or has inquiries concerning exactly how these modifications will affect you, give us a call. We have the experience and expertise in the cannabis and marihuana legislation fields to aid address your concerns and provide you the advice you need.