Caregivers and the DoDo
Cannabis and extinct birds would seemingly never come up in any conversation. However, in talking with our cannabis clients, most of them are inquiring about the stability of the Caregiver model, particularly 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 be the extinction event for the caregiver model as many have understood it for many years here in Michigan. While Caregivers will certainly continue to be able to grow and offer to their registered patients, and for themselves, if they are likewise registered qualifying patients, the "gray market" where they were marketing their excess, and making a pretty good profit, 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 five registered qualifying patients (the most you were enabled) and they were a registered patient too. In many cases, several caregivers would collect at one place and grow their plants together, separated by paint lines on the floor, or in more advanced circumstances, with each having a secured locked area within the bigger confined, secured facility. Numerous Caregivers might generate much more useful marihuana than their patients can use. Those caregivers would then sell their overages to dispensaries, many of which were operating with municipal approval throughout the State. This "grey" market led to considerable earnings for many caregivers and dispensary owners. Under Michigan's Medical Marihuana Facilities Licensing Act, nevertheless, caregivers were going to be phased out by 2021. Numerous Caregivers and sector insiders felt that suggested the "Caregiver Model" might remain to create those exact same profits for an additional two 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 industry. First, the Bureau of Licensing and Regulatory Affairs has actually taken a very scrutinizing strategy to licensing applications where any one of the applicants were Caregivers. A number of those applications have actually been refuted over the past several months since the Board has discovered that there were failings to reveal by most of these caregivers concerning how much money they made, how they made it, and for failing to proclaim that revenue on a State or Federal Tax Return. However, in a September 2018 posting, LARA and the BMMR posted that all facilities that are operating with municipal approval, but which have actually not obtained a State License, have to stop acquiring 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 purchased after the October 31, 2018 date by those facilities have to be appropriately labeled and coded as required by the policies, and must originate from a properly State Licensed grower or processor. The caregivers might still grow, however 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.
Outcomes and Repercussions
Some might argue that there are still licensed or unlicensed centers that are mosting likely to continue purchasing from caregivers, in spite of the State mandate. To make sure, there may be some that take that threat.
Nevertheless, the State has actually shown a dedication to enforcement and examination. If the State were to identify that a candidate 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 denied immediately by the Board. If a licensed center were to be caught breaking this mandate, the State would likely move on with sanctions against that facility's license, including a suspension or abrogation of the license. Given how much those licenses are worth, and the cost of getting any one of the allowed center licensing types, most owners will be very reluctant to take chances with the possible loss of their license, or expertise that their license will certainly not be restored.
If you are a caregiver and don't know what to do come October 31, 2018, are an individual thinking of requesting a MMFLA license, or are a candidate that requires representation or has concerns about exactly how these modifications will influence you, give us a call. We have the experience and expertise in the cannabis and marihuana regulation fields to help address your inquiries and provide you the guidance you require.
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