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

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never show up in any type of conversation. Nevertheless, in talking with our cannabis clients, a lot of them are inquiring about the feasibility of the Caregiver model, especially as it was pushed for many years. What many in the market have referred to as the "Caregiver Model" is going the way of the Do-Do bird on October 31, 2018. Halloween this year will be the extinction event for the caregiver model as lots of have understood it for several years here in Michigan. While Caregivers will certainly continue to be able to grow and sell to their registered patients, and for themselves, if they are also registered qualifying patients, the "gray market" where they were offering their overages, and making a pretty good revenue, 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 enabled) and they were a registered patient too. In some cases, multiple caregivers would gather at one area and grow their plants with each other, divided by paint lines on the floor, or in more advanced circumstances, with each having a safeguarded locked area within the larger enclosed, secured facility. Numerous Caregivers might produce far more functional marihuana than their patients can make use of. Those caregivers would certainly after that offer their excess to dispensaries, many of which were operating with municipal approval across the State. This "grey" market led to substantial revenues for several caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were going to be phased out by 2021. Numerous Caregivers and sector experts really felt that meant the "Caregiver Model" could continue to produce those same earnings 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 cannabis market. First, the Bureau of Licensing and Regulatory Affairs has taken a very scrutinizing method to licensing applications where any one of the applicants were Caregivers. Much of those applications have been rejected over the past several months because the Board has located that there were failures to disclose by a number of these caregivers relating to just how much money they made, how they made it, and for failure to proclaim that revenue on a State or Federal Tax Return. Nonetheless, in a September 2018 publishing, LARA and the BMMR posted that all centers that are operating with municipal approval, but which have not gotten a State License, need to 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 type of marihuana bought after the October 31, 2018 date by those centers need to be correctly identified and coded as required by the regulations, and must come from an appropriately State Licensed grower or processor. The caregivers may still grow, yet they will certainly have no ways whereby to sell their product lawfully to a provisioning center or processor. The old "Caregiver Model" will, effectively, come to an end.

Results and Effects

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

Nevertheless, the State has shown a commitment to enforcement and examination. If the State were to figure out that an applicant or a licensed facility was still taking caretaker overages and marketing them, the State would likely act. If an applicant were to be caught participating in this model, they would likely be rejected immediately by the Board. If a licensed facility were to be caught violating this mandate, the State would likely move forward with sanctions against that facility's license, consisting of a suspension or cancellation of the license. Provided just how much those licenses are worth, and the cost of getting any one of the permitted facility licensing types, a lot of owners will certainly be extremely unwilling 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 don't know what to do come October 31, 2018, are an individual considering obtaining a MMFLA license, or are an applicant who requires representation or has inquiries regarding how these changes will affect you, give us a call. We have the experience and knowledge in the cannabis and marihuana law areas to assist answer your inquiries and give you the support you need.

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