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

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never come up in any discussion. Nonetheless, in speaking with our marijuana clients, a number of them are asking about the feasibility of the Caregiver model, particularly as it was pushed for many years. What several in the sector have 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 recognized 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 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 can grow up to seventy-two (72) marihuana plants, if they had five registered qualifying patients (the most you were enabled) and they were a registered patient too. Sometimes, numerous caregivers would gather at one place and grow their crops with each other, divided by paint lines on the floor, or in more advanced conditions, with each having a protected locked area within the larger confined, secured center. Lots of Caregivers could create far more functional marihuana than their patients could use. Those caregivers would then market their excess to dispensaries, many of which were operating with municipal approval throughout the State. This "gray" market caused considerable revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were going to be terminated by 2021. Numerous Caregivers and industry experts felt that suggested the "Caregiver Model" could continue 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, 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 one of the applicants were Caregivers. Many of those applications have actually been refuted over the past several months since the Board has found that there were failings to disclose by much of these caregivers concerning just how much money they made, exactly how they made it, and for failing to declare that income on a State or Federal Tax Return. However, in a September 2018 publishing, LARA and the BMMR posted that all centers that are running with municipal approval, but which have actually not obtained 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 marihuana purchased after the October 31, 2018 date by those centers should be correctly identified and coded as required by the regulations, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, however they will certainly have no methods through which to offer their product legally to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Effects

Some might say that there are still licensed or unlicensed centers that are going to continue buying from caregivers, in spite of the State mandate. To ensure, there might be some that take that danger.

Nevertheless, the State has shown a commitment to enforcement and inspection. If the State were to determine that a candidate or a licensed facility was still taking caretaker overages and marketing them, the State would likely take action. If a candidate were to be caught taking part in this model, they would likely be denied immediately by the Board. If a licensed facility were to be caught breaching this mandate, the State would likely move on with sanctions against that center's license, including a suspension or abrogation of the license. Provided just how much those licenses are worth, and the expense of acquiring any one of the allowed center licensing types, many owners will be very resistant to take chances with the possible loss of their license, or expertise that their license will not be restored.

If you are a caregiver and do not understand what to do come October 31, 2018, are a person thinking about looking for a mmfla license, or are a candidate that needs representation or has concerns regarding how these adjustments will certainly affect you, give us a call. We have the experience and expertise in the cannabis and marihuana regulation areas to help address your inquiries and give you the assistance you need.