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 come up in any kind of discussion. Nonetheless, in speaking with our marijuana clients, a lot of them are asking about the practicality of the Caregiver model, particularly as it was promoted years. What several in the industry have actually 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 certainly continue to be able to grow and market 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 earnings, 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 enabled) and they were a registered patient too. 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 innovative circumstances, with each having a safeguarded locked area within the bigger confined, locked facility. Several Caregivers can generate even more usable marihuana than their patients might utilize. Those caregivers would certainly after that market their overages to dispensaries, many of which were running with municipal approval across the State. This "grey" market caused significant profits for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were mosting likely to be eliminated by 2021. Lots of Caregivers and market insiders felt that meant the "Caregiver Model" can continue to produce those same earnings for another 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 marijuana market. First, the Bureau of Licensing and Regulatory Affairs has actually taken a very scrutinizing strategy to licensing applications where any of the candidates were Caregivers. A lot of those applications have been rejected over the past several months because the Board has discovered that there were failings to disclose by a number of these caregivers pertaining to just how much cash they made, how they made it, and for failing to state that earnings on a State or Federal Tax Return. Nonetheless, in a September 2018 publishing, LARA and the BMMR published that all centers that are running with municipal approval, but which have actually not obtained a State License, should stop getting 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 facilities have to be properly identified and coded as required by the policies, and must come from a properly State Licensed grower or processor. The caregivers may still grow, but they will have no methods by which to market their product legitimately to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Consequences

Some may argue that there are still licensed or unlicensed facilities that are mosting likely 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 determine that an applicant or a licensed facility was still taking caretaker excess and offering them, the State would likely take action. If a candidate were to be caught participating in this model, they would likely be refuted as soon as possible by the Board. If a licensed facility were to be caught breaking this mandate, the State would likely progress with sanctions against that center's license, consisting of a suspension or cancellation of the license. Provided how much those licenses are worth, and the expense of getting any one of the allowed center licensing types, many owners will certainly be extremely unwilling to take chances with the possible loss of their license, or expertise that their license will certainly not be renewed.

If you are a caregiver and don't understand what to do come October 31, 2018, are an individual thinking about looking for a mmfla license, or are a candidate that needs representation or has concerns about just how these adjustments will impact you, give us a call. We have the experience and knowledge in the cannabis and marihuana regulation fields to help address your questions and give you the advice you need.