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

Caregivers and the DoDo

Marijuana and extinct birds would seemingly never ever show up in any kind of conversation. Nevertheless, in speaking to our marijuana clients, a lot of them are asking about the practicality of the Caregiver model, especially as it was pushed for many years. What several in the industry 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 many have recognized it for many years here in Michigan. While Caregivers will continue to be able to grow and offer to their registered patients, and for themselves, if they are likewise 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 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 place and grow their plants together, separated by paint lines on the flooring, or in more advanced situations, with each having a safeguarded locked room within the bigger enclosed, locked facility. Many Caregivers might produce far more usable marihuana than their patients can use. Those caregivers would certainly then market their excess to dispensaries, many of which were operating with municipal approval throughout the State. This "gray" industry caused significant revenues for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were going to be phased out by 2021. Numerous Caregivers and sector experts really felt that meant the "Caregiver Model" might continue to generate those same profits for an additional 2 or 2 and a half years. The State, however, had other plans.

The State's Response

The State of Michigan, nonetheless, had other plans for the upstart marijuana sector. Initially, the Bureau of Licensing and Regulatory Affairs has taken a very scrutinizing approach to licensing applications where any one of the applicants were Caregivers. Much of those applications have been denied over the past several months because the Board has discovered that there were failures to disclose by a lot of these caregivers regarding just how much money they made, how they made it, and for failure to proclaim that revenue 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 obtained a State License, should quit getting 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 bought after the October 31, 2018 date by those centers should be effectively identified and coded as required by the rules, and must come from an appropriately State Licensed grower or processor. The caregivers might still grow, however they will have no means whereby to market their product legitimately to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Repercussions

Some might suggest that there are still licensed or unlicensed facilities that are going to continue purchasing from caregivers, despite the State mandate. To make sure, there might be some that take that risk.

However, the State has actually demonstrated a commitment to enforcement and inspection. If the State were to identify that an applicant or a licensed facility was still taking caretaker overages and marketing them, the State would likely act. If a candidate were to be caught engaging in this model, they would likely be refuted asap by the Board. If a licensed center were to be caught violating this mandate, the State would likely progress with sanctions against that center's license, including a suspension or retraction of the license. Given just how much those licenses are worth, and the expense of getting any one of the allowed facility licensing types, many owners will be really unwilling to take chances with the possible loss of their license, or understanding that their license will certainly not be restored.

If you are a caregiver and do not understand what to do come October 31, 2018, are a person thinking of requesting a mmfla license, or are an applicant who requires representation or has questions regarding how these changes will affect you, give us a call. We have the experience and expertise in the marijuana and marihuana regulation areas to aid address your concerns and supply you the advice you need.