Caregivers and the DoDo

Marijuana and extinct birds would seemingly never ever show up in any type of discussion. Nevertheless, in consulting with our cannabis clients, many of them are inquiring about the stability of the Caregiver model, specifically as it was promoted many years. What many in the market have actually described 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 be able to grow and market 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 fairly good earnings, is coming to an end.

What was the “Caregiver Model?”

Under the old “Caregiver Model,” a Registered Caregiver can grow up to seventy-two (72) marihuana plants, if they had 5 registered qualifying patients (the most you were allowed) and they were a registered patient also. In some cases, multiple caregivers would gather at one location and grow their plants together, separated by paint lines on the flooring, or in more innovative circumstances, with each having a protected locked room within the bigger confined, locked facility. Many Caregivers might produce far more functional marihuana than their patients could utilize. Those caregivers would certainly after that offer their excess to dispensaries, many of which were running with municipal approval across the State. This “gray” marketplace caused substantial revenues for many caregivers and dispensary owners. Under Michigan’s Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were going to be eliminated by 2021. Lots of Caregivers and industry insiders really felt that implied the “Caregiver Model” can remain to create those very same profits for an additional 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 cannabis market. Initially, the Bureau of Licensing and Regulatory Affairs has taken a really scrutinizing strategy to licensing applications where any of the applicants were Caregivers. Many of those applications have been rejected over the past several months due to the fact that the Board has discovered that there were failures to disclose by a number of these caregivers pertaining to just how much cash they made, just how they made it, and for failing to proclaim that revenue on a State or Federal Tax Return. Nevertheless, in a September 2018 posting, LARA and the BMMR published that all facilities that are operating with municipal approval, but which have not obtained a State License, need to quit buying 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 acquired after the October 31, 2018 date by those centers must be correctly identified and coded as required by the regulations, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, but they will have no means by which to offer their product legally to a provisioning center or processor. The old “Caregiver Model” will, effectively, come to an end.

Results and Effects

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

Nonetheless, the State has demonstrated a dedication to enforcement and evaluation. If the State were to identify that an applicant or a licensed center was still taking caretaker excess and offering them, the State would likely act. If a candidate were to be caught engaging in this model, they would likely be rejected asap by the Board. If a licensed center were to be caught violating this mandate, the State would likely move on with sanctions against that facility’s license, including a suspension or cancellation of the license. Provided just how much those licenses are worth, and the expense of acquiring any one of the allowed center licensing types, the majority of owners will certainly be really resistant 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 applying for a mmfla license, or are a candidate that needs representation or has inquiries about just how these adjustments will certainly influence you, give us a call. We have the experience and knowledge in the cannabis and marihuana regulation fields to help address your concerns and offer you the support you require.