The new medical marijuana laws, according to Sen. Patrick Colbeck, R-Canton, an opponent of the bills, take a small home-grown industry created by a 2008 ballot proposal "and puts that cottage industry on steroids."
Indeed, under the old law, a caregiver could grow up to 12 marijuana plants for each patient and couldn't serve more than five patients. The law was vague about dispensaries, leading to a glut in some cities like Detroit and Lansing that basically turned a blind eye to the businesses in their communities and a police force in other towns that shut down businesses with impunity
The new laws create three classes of growers: people who can grow up to 500 plants, up to 1,000 plants or up to 1,500 plants. They also create five classes of licenses — those for growers, testing facilities, transporters, the seed-to-sale tracking and dispensaries. Communities can decide whether and where they'll allow dispensaries to operate and charge an annual fee of up to $5,000 per dispensary.
The laws provide for a state tax at the dispensary level of 3% on gross receipts, of which 30% will go to the state general fund and much of the balance will go to local governments and police departments to help cover the cost of enforcement.
License fees will support an extensive bureaucracy that is expected to cost the state about $21 million a year, including 113 full-time state licensing employees, 34 employees with the Michigan State Police to do background checks on applicants, and $550,000 to the Attorney General's Office for legal expenses.
For the most part, licensing fees haven't been set yet, except that the state can charge no more than $10,000 per license for the class of growers who cultivate up to 500 plants.
Across the nation, eight states have legalized marijuana for medical and recreational uses. Another 20 states have medical marijuana laws and 17 more have laws legalizing medical cannabidiol — a strain of marijuana that provides pain relief without the psychoactive high that accompanies traditional marijuana.
The regulatory structures differ from state to state. In 17 of the 20 states that have only medical marijuana, the state Health Departments approve licensing and in three others — Arkansas, Maryland and Michigan — independent commissions deal with licenses, said Karen O'Keefe, director of state policies for the Marijuana Policy Project, a Washington, D.C., organization that advocates for marijuana legalization.
Of those three, Maryland's 16-member commission is appointed by the governor and has already run into controversy over the awarding of licenses. Two applicants who didn't get licenses have filed a lawsuit saying they were passed over for more politically connected businesses. The laws in Michigan and Arkansas call for the appointment of five-member boards with the Senate, House and governor making recommendations for those appointments.
"We support a structure that gives the patients the most options," O'Keefe said, citing Colorado, the first state to legalize marijuana for recreational use, as a role model. "Anyone who meets the requirements can get a license. As long as you qualify you can get a license and that's best for patients."
Under Michigan's law, the five-member licensing board, which will be appointed soon by Gov. Rick Snyder, cannot limit the number of licenses available to qualified businesses, who will have to go through an extensive background check before they can be considered for a license.