New Laws In Michigan Shake Up The Marijuana Industry

[bobandtorey]

John Wallace stood in a small storage building with concrete-block walls and explained his vision for the first retail marijuana store in Buchanan.

Medical cannabis patients would have to check in at a front desk. After showing the proper identification, they would be shown to the display room, where friendly bud-tenders would help them choose from a selection of weed, oils or marijuana-laced foods.

With a shortage of authorized caregivers to provide medical marijuana services, patients could benefit from a retail outlet, he said, though city officials have yet to give it their blessing.

 

Wallace is among those who hope to benefit from three new Michigan laws passed last year to set up a framework for the state to legalize, regulate and tax a broader range of the medical cannabis industry. The change likely to get the most public attention is the legalization of retail dispensaries, which had been bogged down by legal questions since the state’s original medical marijuana law was approved by voters in 2008.

“This will clean up what’s happening out there with illegal dispensaries and create a legitimate industry in Michigan,” said former state Rep. Michael Callton, a Nashville Republican who sponsored the licensing measures. “From a patient’s perspective, they now have a safe place to go and buy their medicine.”

On one hand, the shake-up of Michigan’s medical cannabis market will provide patients with their greatest access yet to legal pot, and it appears to have put the state on the verge of the next big step — legalizing recreational marijuana.

On the other hand, the new laws have left local communities scrambling to decide how much to allow the industry to grow locally, if at all. At the same time, legalization advocates fear state officials have established a regulatory framework that limits the free market, shuts out small-time growers and passes on higher costs to patients.

“This policy was designed with business interests in mind,” said Matthew Abel, a lawyer and executive director of the Michigan chapter of the National Organization for the Reform of Marijuana Laws. “They’re not in favor of (marijuana) but they’re trying to get ahead of the curve so they can implement their system instead of something that’s more free and open.”

New commercial system

The changes will create licenses for commercial growers, processors, secure transporters, testing facilities and retail dispensaries. The state also will allow cannabis-infused edible products and more potent extracts and oils. In return, the state and local governments will collect a 3 percent tax on dispensary sales, plus licensing fees from those who take part in the system.

“You’ve got a lot of moving parts taking place,” said Michael Komorn, a Detroit lawyer and president of the Michigan Medical Marijuana Association. “To me, it represents a new era of the state unequivocally saying they’re in the business of selling medical marijuana and receiving revenue from it.”

In December, the state will begin accepting applications for licenses under the new commercial system, with the first licenses likely to be issued in 2018.

Up to this point, Michigan has allowed the growing of limited marijuana only by certified medical users or by caregivers who may serve a maximum of five patients at a time. A certified patient may grow up to 12 plants, while a caregiver may grow a maximum of 72 plants.

The new laws will create a bigger commercial system, but one that will be strictly controlled. A licensed grower may sell plants only to a processor or dispensary, for example, and patients and their caregivers will be able to buy products only from the dispensaries, rather than directly from a grower or processor.

For aspiring marijuana entrepreneurs like Buchanan’s John Wallace, the new system presents an opportunity to get in on a growing industry. An analysis of the new laws by the Michigan House’s nonpartisan fiscal agency estimated the state’s medical marijuana industry at $837 million. And those who can navigate the new legal framework hope to set themselves up as early players if the state legalizes the even larger market for recreational pot.

“I want to get into it now and get through all the little hiccups along the way, and then we can get into (recreational marijuana),” Wallace said. “Then maybe we can have medical and recreational all in one place.”

Participating in the new system will come at a cost. The state will charge applicants an undetermined licensing fee and annual “regulatory assessment,” which could total $10,000 for even the lowest class of commercial growers, those with 500 plants or fewer. Dispensaries will pay a 3 percent tax on gross sales, possibly on top of the existing 6 percent sales tax. And players in the new system will take on more costs to pay authorized transporters and testing facilities.

To some medical marijuana advocates, the new regulatory layers will add up to a financial burden on patients, though a cardholder will still be able to grow up to 12 plants for personal use or seek pot from a caregiver.

 

Cutting out caregivers?

In some ways, the new laws will legitimize dispensaries, which have operated in the legal shadows since the original medical marijuana law was approved by voters in 2008. In a series of rulings, state appellate courts said the medical marijuana law did not offer protection for retail stores, though caregivers and patients have tried to keep dispensaries open as nonprofit “collectives” or “clubs.”

In the more cannabis-friendly areas such as Ann Arbor and Lansing, dozens of dispensaries have operated without much interference from local or state authorities. But the facilities have remained illegal under state law, and in areas such as Grand Rapids they have shut down after raids by police.

Because processors and dispensaries will be allowed to buy marijuana and products only from the new commercial entities, existing medical marijuana caregivers will not have a legal outlet for their “overages,” or excess product after providing for their patients, said Komorn, the Michigan Medical Marijuana Association president.

When the new legal framework takes effect, it’s unclear if the state will allow any of the existing dispensaries to shift to the new system, or if some caregivers will try to keep operating underground with the same model.

“Nobody within the medical cannabis community ever supported a dispensary law that cut out the caregivers,” Komorn said. “You’ve got this group of individuals that has taken on risk just to be compassionate, and it would have been nice for the state to give those individuals a place in the system.”

Callton, the former House member, acknowledged that caregivers will still not be able to legally take part in the new system. But he said some caregivers pushed back against safety testing regulations and simply wanted lawmakers to legitimize their illicit business model.

“There will always be an underground or black market,” Callton said. “If you want to buy cheaper, untested marijuana from some guy named Biff in the back alley, there will always be that option, but it will still be illegal.”

Still, advocates acknowledged the new laws will offer more options than ever to Michigan’s medical cannabis users.

Cory Davis, a 35-year-old Buchanan resident and medical marijuana cardholder, grows his allotment of plants for personal use at home, but between harvests he travels as far as Kalamazoo to buy from a dispensary.

“You have to go to different cities you may not be familiar with and engage in activities a lot of the public doesn’t approve of, so it’s stressful,” Davis said. “If we had a dispensary here in Buchanan, to me that would be historic.”

Local control

Beyond the state’s licensing process, which has yet to fully take shape, local governments may decide whether or not to allow the newly legalized facilities in their communities. A city, township or village may set the number of facilities allowed in its jurisdiction, along with zoning laws to restrict where a grower, dispensary or other entity may operate.

Officials are weighing the benefits of the facilities — such as revenue from new taxes and fees and wider access for medical marijuana patients — against potential safety concerns and blowback from some members of the public.

Some local governments in southwestern Michigan are moving quickly to authorize or at least consider amending their laws to allow the retail dispensaries and other new entities, while others have opted to take no action, effectively excluding the facilities.

Buchanan City Manager Bill Marx said he expects the City Commission to hold its next discussion on the issue at the beginning of February, followed by a public hearing and a possible decision this spring.

“There’s a lot of compassion for medical marijuana users, and we don’t want to stand in the way of medical marijuana cardholders in our community having access to a dispensary,” Marx said. “That could change based on the blowback we get from the public, but that’s what a public hearing is for. We want to hear people’s comments and we’re keeping an open mind.”

Several people have approached Buchanan officials about opening new medical marijuana facilities in the city, including Wallace, who wants to set up his dispensary in a 1,000-square-foot building in the 1100 block of Red Bud Trail North.

In Niles, the city’s legal counsel has already drafted an ordinance for the city council to consider that would allow some or all of the licensed marijuana facilities, city Administrator Ric Huff said. But the council was not expected to discuss the issue further before its Jan. 23 meeting.

 

Huff said council discussion would likely focus on philosophical questions about which types of operations should be allowed in the city, while the city’s plan commission would discuss where possible facilities could operate, such as whether a dispensary would be allowed downtown or restricted to industrial areas.

Other communities, such as the village of Berrien Springs, have already decided to exclude new cannabis operations altogether.

“Our residents, the ones that have spoken to me, have said they really don’t care to have this kind of facility in our community,” said village President Milton Richter. “It’s a perception and a safety thing, and I can see where they’re coming from.”

Other municipalities, such as Cassopolis, Dowagiac and Ontwa Township, also have taken no action to allow the new facilities.

The local governments that do allow the marijuana industry to expand in their communities will be able to collect an annual licensing fee of up to $5,000 from each license holder, along with a sizeable share of the 3 percent tax on each dispensary’s total gross income.

The 3 percent tax and other fines and fees generated by the new system will go into a state excise fund. In its fiscal analysis, the state projected the 3 percent dispensary tax alone to generate more than $24 million a year, plus another $50 million if the regular sales tax is imposed on medical marijuana.

The financial incentives for local governments, Marx said, are “a hell of a carrot.”

Next steps

With marijuana advocates launching petition drives to put recreational legalization on Michigan’s 2018 general election ballot, and lawmakers talking of their own legalization measures, it’s unclear how long the new medical cannabis system will last before the industry gets another shake-up.

One group, MI Legalize, tried to place a legalization bill on the 2016 ballot, but the effort failed after state officials said many of the 350,000 signatures on the group’s petition were collected outside of a 180-day legal window.

The Washington, D.C.-based Marijuana Policy Project also is working to form a coalition to place recreational pot up for a vote. Komorn, the Michigan Medical Marijuana Association president, believes the groups have a realistic chance, and that they could even prompt state lawmakers to move forward with legalization on their own.

“The ‘x-factor’ is, because the legislature has created this infrastructure, will they act in anticipation so they can get it done their way?” he said. “Whatever happens, they want to have it fit into the existing infrastructure they’ve created.”

In fact, Callton, who was term-limited out of the state House but plans to run for the Senate in 2018, said he has had discussions with at least one lawmaker who plans to introduce a recreational marijuana law by this spring.

“Going from medical to recreational is going to be a much shorter distance,” he said. “I think people are seeing the inevitability of a referendum, so let’s act now.”

For now, people like John Wallace are looking toward getting licensed and, perhaps more importantly, trying to sell local communities on the growing industry.

“It’s a multi-billion-dollar industry,” he said, “and it’s not going away.”

 

http://www.southbendtribune.com/news/local/shaking-up-michigan-marijuana-industry/article_21fd1838-50a3-5281-a65a-06ebba9ca838.html

 

[Retroizzie]

Aww man... why would they go after caregivers... no... they need to rethink there plan

They actually take care of the patients. They are sent on by medical doctors explainging their either disease or drug abuse and alloeviate with proper dosages.. mistakes happen.. but then it gets fixed. Still,

 

I see it as hold on.. why arent caregivers sitting them down next to a computer... while they learn how to code for the furst time... while being medicated... they stay focus and on task.. and get to learn new stuff...

 

Oh.. how about give them there dosage... tell them to build this minature robot...

 

Oooh.. how about instead... teach them about e-commerce oppurtunities of the future .... if they just stop intaking other drugs while on cannabis.. might teach them new ways to exit out the system.. more acceptance to these types pf caregiver programs at the IT level ...

[bax]

i'm surprised people like budtenders. i dont need someone selling me what they think works for what, especially when most of them havent read a single research study nor have any idea what they are talking about.

[bobandtorey]

Sometime i just read between the lines and come out knowing it's all about the $$$$$$ 

[bobandtorey]

i'm surprised people like budtenders. i dont need someone selling me what they think works for what, especially when most of them havent read a single research study nor have any idea what they are talking about.

 

 

I also agree 

 

Thanks

[Smallbiz]

i'm surprised people like budtenders. i dont need someone selling me what they think works for what, especially when most of them havent read a single research study nor have any idea what they are talking about.

Change bud tender too Caregiver, statement works both ways.

[Restorium2]

Change bud tender too Caregiver, statement works both ways.

A caregiver specializes in their 5 (or less) patients. A budtender is much less specialized due the the actual nature of the work and the business model. They could deviate from the traditional roles but the norm is that a caregiver is more specialized than a pot store counter person. 

[Smallbiz]

But rest u have to understand that that is still very subjective, not fact at all.

[Restorium2]

But rest u have to understand that that is still very subjective, not fact at all.

That's an undo vague statement.

 

A dispensary has to serve a lot of patients to stay open and a caregiver has to serve few to be legal.

 

Like I said, some can vary from these traditional roles, but these roles are the norm. 

 

Everyone here can agree that a dispensary serves more patients than a caregiver (if reasonable). Therefore is less specialized for each individual they serve. 

 

I haven't even mentioned that a caregiver is the farmer too. Who knows more about a crop, the farmer or the salesman?

[Smallbiz]

i'm surprised people like budtenders. i dont need SOMEONE selling me what they think works for what, especially when most of them havent read a single research study nor have any idea what they are talking about.

I don't need someone selling me what they think works for me, be it bud tender or caregiver. Do your own research and buy what you know works for yourself be it caregiver or bud tender.

[Restorium2]

I don't need someone selling me what they think works for me, be it bud tender or caregiver. Do your own research and buy what you know works for yourself be it caregiver or bud tender.

And leave out the middle man when you can. Get your buds from the grower and you don't have to support some flashy dispensary owner, his hired sellers, building, insurance, advertising, etc. It's a no brainer to get your buds with less hands on it. Always has been true. One of the old standbys that has never failed. Less hands is better. 

[Smallbiz]

^^^^ If that's your boat float it.

[+Malamute]

Who needs budtenders anyway?

 

Just package and fill the shelves.  ;-p

 

It is illegal for commercial dispensaries to give medical advice or medical claims anyway.

[Restorium2]

And you have less cops drooling over your sale. Less cameras recording it. The advantages to having a caregiver, rather than a dispensary, are endless. I could think up many more.