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

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never come up in any kind of discussion. Nevertheless, in talking to our cannabis clients, a number of them are inquiring about the feasibility of the Caregiver model, particularly as it was promoted many years. What several in the market 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 several have actually known it for many years here in Michigan. While Caregivers will certainly 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 offering their excess, and making a pretty good revenue, 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 permitted) and they were a registered patient also. In some cases, numerous caregivers would gather at one location and grow their crops with each other, divided by paint lines on the floor, or in more innovative circumstances, with each having a secured locked area within the larger enclosed, secured center. Lots of Caregivers could generate far more useful marihuana than their patients could make use of. Those caregivers would after that sell their overages to dispensaries, many of which were running with municipal approval across the State. This “grey” market caused significant profits for several caregivers and dispensary owners. Under Michigan’s Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were mosting likely to be phased out by 2021. Numerous Caregivers and industry insiders really felt that meant the “Caregiver Model” might continue to create those exact same revenues for another 2 or 2 and a half years. The State, nevertheless, had other plans.

The State’s Response

The State of Michigan, nevertheless, had other plans for the upstart marijuana industry. Initially, the Bureau of Licensing and Regulatory Affairs has actually taken a really scrutinizing method to licensing applications where any of the applicants were Caregivers. A lot of those applications have actually been rejected over the past several months because the Board has found that there were failures to divulge by a number of these caregivers pertaining to just how much money they made, just how they made it, and for failure to proclaim that earnings on a State or Federal Tax Return. However, in a September 2018 posting, LARA and the BMMR published that all facilities that are running with municipal approval, but which have not gotten a State License, have to quit purchasing unlabeled and unsanctioned medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any kind of marihuana bought after the October 31, 2018 date by those facilities have to be appropriately labeled and coded as required by the policies, and must come from an appropriately State Licensed grower or processor. The caregivers might still grow, yet they will have no ways through which to offer their product lawfully to a provisioning facility or processor. The old “Caregiver Model” will, effectively, come to an end.

Outcomes and Consequences

Some might argue that there are still licensed or unlicensed facilities that are mosting likely to continue purchasing from caregivers, regardless of the State mandate. To be sure, there might be some that take that danger.

However, the State has demonstrated a dedication to enforcement and examination. If the State were to identify that a candidate or a licensed center was still taking caretaker excess and marketing them, the State would likely act. If an applicant 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 violating this mandate, the State would likely progress with sanctions against that facility’s license, including a suspension or retraction of the license. Provided just how much those licenses are worth, and the cost of acquiring any of the allowed facility licensing types, most owners will certainly be extremely unwilling to take chances with the possible loss of their license, or understanding that their license will certainly not be renewed.

If you are a caregiver and don’t recognize what to do come October 31, 2018, are an individual considering looking for a mmfla license, or are a candidate that requires representation or has concerns concerning how these modifications will certainly impact you, give us a call. We have the experience and knowledge in the cannabis and marihuana regulation fields to aid address your concerns and offer you the guidance you require.