Finally, medical marijuana regulations

November 28, 2017

Nearly a decade after voters approved a statewide ballot proposal making marijuana legal for medical purposes, state officials are finally rolling out license regulations for new medical marijuana facilities intended to support some 240,000 patients in Michigan.

 

Approved in 2008 by 63 percent of the state's voters and enacted in 2009, the Michigan Medical Marijuana Act has been rife with shortcomings, resulting in repeated requests from the Michigan Supreme Court and local governments for lawmakers to update and refine the law. After dragging their feet for eight years, legislators apparently saw the light in 2016 and created the Medical Marijuana Facilities Act. The law sets up a much-needed framework for a medical marijuana marketplace where patients can more easily access their medicine. Despite taking nearly 10 years to create the law, regulations being finalized by a board of governor appointees are attracting primarily big money interests that will inevitably dominate the new system.

 

At the heart of the issue is a problem of supply and demand. There are simply more patients than the current supply of some 38,000 certified caregivers can provide with medical marijuana. With each caregiver permitted to grow marijuana for up to six patients, including themselves, some current patients must either grow their own medicine or look for alternative sources. Consider also that the state Supreme Court in 2014 ruled that the state's 2009 law doesn't allow for medical marijuana dispensaries. And it wasn't until state legislators saw the potential for a $1-billion medical marijuana industry in the state, capable of generating tens of millions of dollars in new taxes, did lawmakers finally decide patient needs were worth enacting a new law.

 

Despite being deemed illegal by the state's Supreme Court, pioneers in the state's medical marijuana field took matters into their own hands and created their own marketplace of dispensaries. Supported by certified caregivers and often receiving permission from local municipalities to operate, there are dozens of medical marijuana dispensaries operating today in the metro Detroit area.

 

Under the new facilities act, those who want to stay or get into the medical marijuana business must obtain a license from the state's department of Licensing and Regulatory Affairs (LARA), which will begin accepting applications on December 15. Under the new law, licenses will be required by anyone who wishes to grow, process, sell, transport or test marijuana from the state, other than caregivers who will still be permitted to grow marijuana for up to five patients.

 

While the new regulatory system was no doubt needed to provide for a legal and reliable medical marijuana marketplace in Michigan, there are some specific details that ultimately give a leg up only to big businesses. For instance, capital requirements for licensees are set at a minimum of $150,000 and as much as $500,000 for a grower who wants up to 1,500 plants. Those requirements are sure to hamstring some caregivers or small business hopefuls looking to enter the market, especially since they must show significant liquidity.

 

Further, licensees with notable resources will have additional advantages over small competitors. For instance, the state will permit license holders to "co-locate" up to three different license types at one location, allowing for a grow operation, processing center and provisioning center at one location, as long as they can afford license fees and show adequate financial statements.

 

Additionally, the new regulations will allow growers to apply for and receive multiple grow licenses, allowing them to stack licenses at one location and conduct mega grow operations. Such operations would potentially be able to control the supply of medical marijuana in the marketplace and create monopolies.

 

For municipalities, the new law and regulations help to determine what types of medical marijuana businesses will be located in their community, where they will zoned and how to better regulate them. However, the last-minute timing of the release of the regulations has many locals delaying any action or adopting a reactive "wait and see" policy.

 

While grow operations won't be practical for most municipalities in Oakland County to consider, many should consider whether allowing licensed dispensaries in their community is beneficial. The additional tax revenues will have an appeal once the cash registers start ringing.

 

We urge local municipalities to start a proactive discussion on how new medical marijuana facilities may impact their community, both pro and con, and whether their residents would benefit by their presence. With many law enforcement officials, politicians and others praising the medicinal benefits of marijuana, local discussions should be able to move past whether medical marijuana is moral or legitimate – it is – and into what is best for residents of their community.  

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