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

Caregivers and the DoDo

Cannabis and extinct birds would seemingly never turn up in any kind of conversation. However, in talking to our cannabis clients, most of them are inquiring about the stability of the Caregiver model, especially as it was pushed for years. What several 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 several have actually recognized 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 also registered qualifying patients, the "gray market" where they were selling their excess, 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 permitted) and they were a registered patient also. In some cases, numerous caregivers would gather at one location and grow their plants together, separated by paint lines on the floor, or in more advanced circumstances, with each having a protected locked room within the larger enclosed, secured facility. Many Caregivers could produce much more usable marihuana than their patients might make use of. Those caregivers would after that offer their overages to dispensaries, many of which were operating with municipal approval throughout the State. This "grey" marketplace led to considerable revenues for lots of caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nonetheless, caregivers were mosting likely to be phased out by 2021. Numerous Caregivers and industry experts felt that indicated the "Caregiver Model" might remain to produce those same profits for another two 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 actually taken a really scrutinizing approach to licensing applications where any one of the applicants were Caregivers. Many of those applications have actually been rejected over the past several months since the Board has located that there were failings to reveal by much of these caregivers relating to how much money they made, just how they made it, and for failing to state 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 operating with municipal approval, but which have not gotten 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 facilities should be properly labeled and coded as required by the regulations, and must originate from an appropriately State Licensed grower or processor. The caregivers might still grow, however they will certainly have no methods through which to sell their product lawfully to a provisioning facility or processor. The old "Caregiver Model" will, effectively, come to an end.

Outcomes and Repercussions

Some may say that there are still licensed or unlicensed facilities that are mosting likely to continue buying from caregivers, regardless of the State mandate. To make sure, there might be some that take that threat.

Nonetheless, the State has actually demonstrated a commitment to enforcement and inspection. If the State were to determine that an applicant or a licensed center was still taking caretaker excess and marketing them, the State would likely do something about it. If an applicant were to be caught participating in this model, they would likely be denied as soon as possible by the Board. If a licensed center were to be caught breaking 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 price of acquiring any one of the permitted center licensing types, the majority of owners will be really unwilling to take chances with the possible loss of their license, or expertise 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 considering getting a MMFLA license, or are an applicant that requires representation or has concerns concerning how these adjustments will certainly impact you, give us a call. We have the experience and knowledge in the marijuana and marihuana regulation areas to assist address your questions and provide you the guidance you need.

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