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 conversation. However, in speaking to our marijuana clients, much of them are inquiring about the feasibility of the Caregiver model, specifically as it was promoted many years. What many 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 several 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 also registered qualifying patients, the "gray market" where they were marketing their excess, and making a fairly good earnings, 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 permitted) and they were a registered patient also. In some cases, several caregivers would gather at one area and grow their plants with each other, divided by paint lines on the floor, or in more innovative circumstances, with each having a secured locked room within the larger confined, locked center. Several Caregivers could generate even more functional marihuana than their patients might use. Those caregivers would after that offer their overages to dispensaries, many of which were running with municipal approval throughout the State. This "gray" industry caused substantial revenues for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, however, caregivers were mosting likely to be phased out by 2021. Several Caregivers and market experts felt that implied the "Caregiver Model" could remain to produce those same revenues for an additional two or two and a half years. The State, nevertheless, had other plans.

The State's Response

The State of Michigan, however, had other plans for the upstart marijuana sector. Initially, the Bureau of Licensing and Regulatory Affairs has actually taken a very scrutinizing method to licensing applications where any one of the applicants were Caregivers. Many of those applications have been rejected over the past several months due to the fact that the Board has located that there were failures to disclose by most of these caregivers regarding how much cash they made, just how they made it, and for failing to declare that revenue on a State or Federal Tax Return. Nevertheless, in a September 2018 posting, LARA and the BMMR published that all centers that are running with municipal approval, but which have actually not gotten a State License, have to stop 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 purchased after the October 31, 2018 date by those facilities have to be properly labeled and coded as required by the guidelines, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, but they will certainly have no ways whereby to offer their product legally to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Effects

Some might argue 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 danger.

Nevertheless, the State has actually 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 take action. If an applicant were to be caught participating in this model, they would likely be refuted immediately by the Board. If a licensed facility were to be caught breaching this mandate, the State would likely move forward 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 getting any of the allowed center licensing types, many owners will be extremely resistant to take chances with the possible loss of their license, or understanding that their license will not be restored.

If you are a caregiver and don't recognize what to do come October 31, 2018, are an individual thinking about requesting a mmfla license, or are an applicant who needs representation or has concerns regarding just how these modifications will certainly impact you, give us a call. We have the experience and understanding in the marijuana and marihuana law fields to assist address your concerns and supply you the advice you need.