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

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never ever turn up in any conversation. However, in talking with our marijuana clients, many of them are inquiring about the viability of the Caregiver model, especially as it was promoted years. What many 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 lots of have actually understood it for many years here in Michigan. While Caregivers will certainly continue to have the ability to grow and market to their registered patients, and for themselves, if they are additionally registered qualifying patients, the “gray market” where they were selling their excess, and making a fairly good revenue, 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 permitted) and they were a registered patient as well. In some cases, numerous caregivers would gather at one place and grow their crops together, separated by paint lines on the flooring, or in more sophisticated circumstances, with each having a safeguarded locked room within the larger enclosed, secured facility. Several Caregivers might create even more useful marihuana than their patients could utilize. Those caregivers would certainly then sell their excess to dispensaries, many of which were running with municipal approval throughout the State. This “gray” industry led to considerable profits for lots of caregivers and dispensary owners. Under Michigan’s Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were mosting likely to be phased out by 2021. Numerous Caregivers and industry insiders really felt that indicated the “Caregiver Model” can remain to create those very same earnings for another 2 or 2 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 cannabis market. First, the Bureau of Licensing and Regulatory Affairs has taken a very scrutinizing approach to licensing applications where any one of the applicants were Caregivers. Many of those applications have actually been refuted over the past several months due to the fact that the Board has located that there were failings to reveal by a lot of these caregivers concerning just how much cash they made, exactly how they made it, and for failure to state that earnings on a State or Federal Tax Return. Nonetheless, in a September 2018 posting, LARA and the BMMR posted that all facilities that are running with municipal approval, but which have actually not received a State License, have to quit buying unlabeled and unauthorized medical marihuana on October 31, 2018. https://www.michigan.gov/lara/0,4601,7-154-79571_79784-479748–,00.html. Any type of marihuana acquired after the October 31, 2018 date by those centers need to be effectively classified and coded as required by the rules, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, however they will have no methods through which to sell their product legitimately to a provisioning facility or processor. The old “Caregiver Model” will, effectively, come to an end.

Outcomes and Consequences

Some may suggest that there are still licensed or unlicensed centers that are mosting likely to proceed purchasing from caregivers, in spite of the State mandate. To make sure, there might be some that take that risk.

However, the State has demonstrated a commitment to enforcement and inspection. If the State were to establish that an applicant or a licensed facility was still taking caretaker excess and selling them, the State would likely take action. If an applicant were to be caught participating in this model, they would likely be rejected immediately by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move forward with sanctions against that center’s license, including a suspension or cancellation of the license. Given just how much those licenses are worth, and the cost of obtaining any one of the allowed facility licensing types, a lot of owners will certainly be really reluctant to take chances with the possible loss of their license, or understanding that their license will not be renewed.

If you are a caregiver and don’t know what to do come October 31, 2018, are a person thinking of making an application for a mmfla license, or are an applicant who needs representation or has inquiries regarding exactly how these modifications will affect you, give us a call. We have the experience and knowledge in the cannabis and marihuana regulation areas to assist address your questions and give you the support you need.

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