By Jamie Goswick
It’s been a whirlwind of a month in Michigan. First, the state passed a set of bills (HB4209, HB4210 and HB4827) implementing a new licensing system for the state’s medical marijuana program, which was then quickly passed by the house and then signed by Governor Rick Snyder. The same week the bills were passed by the senate, MiLegalize, the people’s initiative to put marijuana legalization on the ballot in November was rejected by both the Michigan Court of Appeals and the Michigan Supreme Court. For a lot of people, the state’s ability to put a halt on a grassroots effort to legalize marijuana for adult use and to move forth their effort to so-call “correct” Michigan’s dysfunctional medical marijuana program felt like a punch straight to the gut. For others, it was looked at as a step in the right direction. Whether the people like it or not, it’s a done deal and now patients, caregivers and business owners are left with two options: make the best of the situation as it stands or wallow in their sorrow and refuse to have any part in the new program.
I’ve taken the liberty of breaking down the good things about Michigan’s new licensing system, as well as the bad things. My list of negatives versus positives is about 50/50, but it’s important to remember that it’s progress nonetheless. Because I am a half glass full type of person myself, I am going to go ahead and start with some of the things I consider to be positive.
THE GOOD
- Patients will now have safer access to their medicine.
In 2008, the people of Michigan voted for medical marijuana, however, it didn’t exactly provide the best protection for patients. Legally, the only way patients could have medicine was to grow it themselves or have a caregiver grow it for them. So what exactly happens when an entire crop is destroyed by powdery mildew? You’re pretty much S.O.L., but dispensary owners still choose to open up shop, despite the risks and of course, that risk depends on where you live and whether or not your city or township has an ordinance in place.
Under the new law, provisioning centers will be able to obtain a license and distribute legally to patients, while patients will finally be able to walk into a shop and get the medicine they need. Licenses will also be offered to cultivators, processors, transportation services and testers (safety compliance). The state has a whole year to prepare before they’ll even accept licenses. Although optimistic, it’s looking like cultivation could begin the beginning of 2018.
(Timeline courtesy of Brad Forrester, Michigan NORML)
- Concentrates and infused-products are (finally) legal.
Concentrates, edibles, tinctures and topicals were some other elements left out of the 2008 medical marijuana act, and boy did law enforcement have a hay day with that one. And let’s not forget the fact that this forced Michiganders to treat a lot of their conditions ineffectively. Major illnesses such as cancer, seizures and Crohn’s Disease are treated effectively with cannabis oil, not cannabis flower. Would a doctor recommend a lung cancer patient to smoke? No. Would a doctor recommend a child who suffers from epilepsy to smoke? No. And a doctor who knows what is best, would recommend a Crohn’s patient use oil-infused suppositories to effectively treat its life-altering condition. Concentrates and infused-products becoming legal is, by far, the biggest win from this set of bills. Thankfully, this is something that goes into effect in December, 90 days after the bills were signed by the governor. Unfortunately, until licenses are issued, the commercial process to make concentrates and infused products remains illegal. It will be important that products are properly labeled during transportation, which I will explain in a bit.
- Our state needs the tax money.
There’s no denying the fact that Michigan has seen some troubling times over the last decade, considering the state hit significant economic turmoil the year medical marijuana was voted by the people. When that happened, funding was taken away from improving schools and roads. Then you add in the Flint crisis, which is still making nationwide headlines, and the fact that a large amount of money is given to law enforcement to crack down on patients and caregivers, it’s a financial nightmare in the eyes of the medical marijuana community. A state fiscal agency reports Michigan could see as much as $64-million in revenue from the new medical marijuana program, which could generate up to $23-million in taxes.
- Products you buy in a dispensary will now come with testing results.
Right now if you walk into a Michigan dispensary and buy product, there’s a good chance that product wasn’t tested. This could be a bad thing, considering patients can suffer from adverse reactions to cannabis. Under the new regulations, product will need to be tested to make sure it is free of pesticides, mold, as well as THC, CBD and other cannabinoid content testing. Labeling requirements will be determined by LARA and the new licensing board which will be appointed by Governor Rick Snyder. Caregivers are not required to test their product.
- You can still grow your own medicine or have a caregiver.
The good news is; the caregiver system isn’t completely gone….YET. It’s believed that Senator Rick Jones, the Senate Judiciary Chair who has been a strong force behind these bills, wants to get rid of Michigan’s caregiver system as a whole. Under the new law, a patient still has the choice to grow their own product or have a caregiver grow it for them.
- Expungement and dismissal of ongoing cases.
Another huge win out of this, is the fact that a lot of ongoing cases might be dismissed and criminal records might be expunged. I spoke with a few lawyers and most believe this likely be dealt with on a case-by-case basis, but there’s a good chance a lot of cases might be swept under the rug in an effort to keep Michigan’s court system a little less cluttered.
- You have a chance to be a part of the booming business.
The set of a bills was music to the ears of those wanting to do business in Michigan, especially those who have been distributing product to patients for a while now. While some establishments might be a little upset that they now have to pay licensing fees and taxes, others are happy to. A lot of people in the industry feel the new requirements will make it really difficult for smaller businesses to be a part of the booming industry, however, this opens business owners up to more investment opportunities. Now that the state has implemented a legal framework for marijuana businesses, a lot of investors feel their money will be a little bit safer, as long as they invest in someone who can produce legitimate plans on how they will earn their investment back. So don’t let the Debbie Downers make you feel like there’s not a chance in hell you will be able to be a part of doing business in the marijuana industry in Michigan. It’s possible, but be prepared to prove you are worthy of receiving an investment. The absolute minimum cost to obtain the lowest grow license will be just under $15,000, no more than $10,000 paid to the state and no more than $5,000 paid to the city or municipality. Other licensing fees are still up in the air and will be decided by the state’s licensing board. If you intend on getting just the 500 plant cultivation license, I would plan on having $500k – $1 million at hand to help cover your operational costs, licensing fees, equipment and real estate.
THE BAD
- Price will be higher for patients.
The biggest hit the marijuana community took was the fact that patients will now be taxed when they buy their medicine out of convenience. Dispensaries will be taxing patients 3% on what they buy from the dispensary. This move made a larger portion of the Michigan marijuana movement angry, because they believe patients should never be taxed. New product transportation requirements and seed-to-sale tracking will also drive up cost for the end consumer by as much as 50%. Cultivators, dispensaries and processors will be required to foot the costs to transfer their product to be processed, tested or sent to dispensaries.
(Diagram courtesy of Brad Forrester, Michigan NORML)
- Patients and caregivers can no longer sell their overages to dispensaries.
Let’s say you are patient yourself and a caregiver for one other person and you grow one plant for yourself and another plant for your patient. Each of your plants produces 10 ounces and you harvest once a month. That’s a total of 20 ounces (By the way, you’re already breaking the law, which I’ll get to in a second). Now let’s say you need two ounces for yourself and two ounces for your patient each month, which leaves you with an overage of 16 ounces per month. You can no longer sell that overage to a dispensary. You can only keep it for yourself or provide it to your patient. You also can’t sell infused products to dispensaries without a license. You can, however, sell seeds and clones.
- Grey area still lies within the law.
Now how is the above breaking the law? As a patient, you can grow 12 plants for yourself. As a caregiver, you can grow up to 12 plants for each of your patients. So if you’re a patient and a caregiver for five people, this means you can legally grow 72 plants. Now one plant can harvest five ounces to one pound of useable bud, depending on your growing abilities. A patient and caregiver can also legally possess up to 2.5 ounces of dry, smokeable material per patient. In the eyes of the state, it is deemed dry and smokeable four days after it’s harvested. So if you’re one plant produces more than 2.5 ounces, which is likely, then you’re breaking the law.
- Your edibles and concentrates will have to be ridiculously labeled for transport.
Don’t get me wrong, I am all about product testing. In fact, I am ecstatic product distributed for profit will be tested for pesticides, mold and cannabinoid content. Caregivers will not be required to test their products, but licensees will. Commercial labeling requirements will be determined by LARA but labeling requirements during transport are clear as day for caregivers and patients, and they’re pretty ridiculous. The label on you or your patient, spouse, parent or child’s product must include the weight of the infused product, name of the manufacturer, date of manufacture, name of the person from whom the product was received and date of receipt. Caregivers will also be required to carry a manifest that states the weight of the infused product, name and address of the manufacturer, date of manufacturer, destination name and address, date and time of departure, estimated date and time of arrival, and the name and address of the person from whom the product was received and date of receipt. If you don’t follow these guidelines, then you could face a $250 civil infraction.
- Law enforcement will be given more money to enforce patients and caregivers.
As if Michigan’s law enforcement doesn’t have enough money already to target patients and caregivers. Now, state police will be given 5% of the taxes to crack down on people they feel are operating illegally or feeding the black market. Another 5% will go toward training law enforcement officials. Perhaps some of that money should be put toward educating law enforcement officials about cannabis and its benefits.
- A city or township can make the decision to stay a dry county.
I live on the west side of Michigan, where there are barely any communities who have ordinances in place allowing businesses to legally operate, so this fact really worries me for patients. Cities and townships will be the ones who ultimately decide how many establishments they want and who they will allow to do business. This means it will be very important for business owners to present their plans professionally. They’ll need to be prepared with county patient and caregiver numbers, tax revenue projections, patient testimonials and business structure. Potential licensees should also consider ways they can give back to the community and present those plans as well.
- If you’re planning to do business, you have a while to wait.
Licensees will not be able to even submit their applications to the state until December 2017. This could be good, as the state and business owners have a lot they need to prepare for, before submitting or accepting applications. In this article, I included a very optimistic timeline on how the licensing process could pan out. If the state is quick with accepting and approving applications, cultivation could begin early 2018 and commercial distribution could begin in the Summer of 2018.
2017 and 2018 ould be an exciting year for Michigan. Not only will businesses be preparing for the new licensing system, but MiLegalize announced they will be launching another petition drive for recreational legalization Spring 2017. The organization says it still plans to take their current case to the federal courts or appeal to the United States Supreme Court and win, but in the meantime, it would like to strengthen their organization and launch a new people initiative, with hopes of being on the 2018 ballot. Jeff Hank, MiLegalize’s Executive Director says the group plans to hold town hall meetings across the state to better learn the needs for reform in the eyes of the community. If the initiative makes the ballot and succeeds, the state’s new framework will still exist, but it will remove some of the criminality and state bureaucracy that exists now.
About Jamie Goswick:
Jamie Goswick is a dedicated mother, marijuana advocate and entrepreneur. Jamie is the Owner and Chief Executive Officer for Canna Media Works, a marketing and consulting company for cannabis businesses. She is also Chairwoman for West Michigan Women Grow and a Consultant for Healthy Headie Lifestyle.
