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August 17, 2018 MJ Shareholders
Medical cannabis businesses still awaiting state licenses in Michigan may be running out of time, as the state’s Sept. 15 deadline for licensure rapidly approaches.
Any unlicensed businesses operating after that date will likely receive cease and desist notices from the state and be forced to close, according to Matthew Abel, attorney with Cannabis Counsel, P.L.C., a boutique marijuana law firm in Detroit, and executive director for Michigan NORML.
“On the deadline, they’re likely to get cease and desist shut down notices, and it’s not their fault,” Abel told Cannabis Business Times. “The law said if they [were] open by last Dec. 15 [and] they [applied for a license] by Feb. 15 and they got licensed originally by June—now by September—they could stay open as long as they’re not denied. But that presumed good faith on the part of the state government, … that they would at least have the necessary personnel to process these applications in a timely manner, and that’s not happening.”
The Sept. 15 deadline has been in place since June, when the state’s Department of Licensing and Regulatory Affairs’ (LARA) Bureau of Medical Marihuana Regulation (BMMR) extended its emergency regulations for another six months. The extension bumped the original licensing deadline from June 15, and industry stakeholders are trying to extend it further, Abel said.
“People are trying to get them to change [the deadline], but even if [regulators] had the desire to change it, it’s not an easy process because the rules are legislation passed by the House and Senate and signed by the governor,” Abel said. “In order for them to move that Sept. 15 date, they’ll have to get a bill through the legislature—passed by the House [and] the Senate and signed by the governor. I don’t think that’s likely to happen.”
The emergency rules are set to expire in December, Abel said, and the state published a draft of permanent rules earlier this week. Key regulations in these proposed rules set a daily purchase limit of two and a half ounces per patient and a monthly purchase limit of 10 ounces, Abel said. The state’s seed-to-sale tracking system is still in the process of being implemented, he added, and none of the required tracking tags have been issued to be attached to the plants.
The licensing process has been slow, painstaking and time-consuming for the state’s businesses, Abel said.
“[The state is] asking a lot of invasive questions,” he said. “They want to know if people have been caregivers, how much they’re growing, where they’re growing. People are having to submit electric bills. People who have been in the business may be having a harder time than newer entries.”
In Detroit, about 60 temporary operators are permitted to continue operating until the Sept. 15 licensing deadline, when they either must be licensed or shut down, Abel said.
“At this point, there are only four dispensaries that are licensed in the City of Detroit, so the other 50 or so—I don’t think they’re all going to be licensed next month,” he said. “I don’t think half of them are going to be licensed next month. Maybe there will be another five in the City of Detroit which get licensed next month.”
Meanwhile, state regulators have completed the cannabis supply chain by licensing a handful of testing labs, growers and processors, but Abel said this is not enough to ensure adequate supply for the state’s patients.
“There are three or four growers, a couple of processors, one transporter, two labs and a handful of dispensaries,” he said. “So, something’s got to give in a month. Either things are going to go back to the black market because the state is not licensing the necessary facilities, or the state really needs to pick up the pace.
“By Sept. 15, I think we’ll have not more than 50 facilities in the entire state that are up and running and licensed—maybe only half that.”
Then there are the state’s medical marijuana patients, who may have their local dispensaries shut down next month. Those who found products that work for them at an unlicensed retailer may be forced back to the illicit market, Abel said.
“It’s unfortunate,” he said. “The government [is] theoretically … instituting these programs to reduce the black market, but they’re doing it in a very ham-handed way that is working contrary to their purposes.”
Looking ahead, Michigan voters will decide on adult-use legalization this November, and Abel, who also serves on the board of directors for MI Legalize, is “cautiously optimistic” that the measure will pass.
“We’re in the process of raising money and educating voters,” he said. “The polls seem to be well in our favor, but we’re not taking anything for granted and anything can happen to affect an election.”
Top Image: © Roman Sigaev | Adobe Stock
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