In spite of all the amazing benefits of legalizing recreational marijuana, working out all of the logistical and bureaucratic crap hasn’t gone well for Michigan.

To be fair, no state has been immune to a variety of problems that come with legalizing pot.

But the latest move by Whitmer’s new state Marijuana Regulatory Agency (MRA) last week has many wondering, will licensed dispensaries be able to survive?

What the MRA Decided

Opening a dispensary is tough enough.

But now, for some reason (i.e. money interests perhaps?), the MRA made the decision to “immediately” ban provisioning centers from buying marijuana from any of the over 41,000 state-approved caregivers.

The move feels, for lack of a more technical term, bone-headed.

Caregivers have been the primary source for medical cannabis. And their patients trust them. After all, knowing the source of one’s medicine is priceless.

And speaking of priceless, caregiver marijuana is far more affordable. This is especially pertinent to those who rely on medical marijuana to deal with serious conditions like MS and cancer.

But now, dispensaries must purchase all marijuana products from any of the roughly 20 state-licensed corporate growers and processors. And by all, they mean ALL. This includes everything from flower and hash to edibles and concentrates.

“It is now very difficult for provisioning centers to not only remain competitive but to give patients products at a competitive price,” says Evan Pilot, financial controller of The REEF. “I truly think some of these fully licensed businesses that have done everything right are going to shut down.”

And this from an employee at the The REEF – one of the largest and most highly respected dispensaries in Michigan.

So What Does This Mean?

Almost certainly a victory for the black market.

“Licensed dispensaries are going to go out of business,” says attorney Michelle Donovan says. Donovan is a lawyer for Butzel Long who sued Michigan over this issue. “They aren’t going to compete with the black market. The giant growers don’t have the products that patients want.”

This last point is especially poignant.

Rather than focusing on ointments, edibles, tinctures, cannabinoids and concentrates – the products of choice for many of the state’s 293,000 medical marijuana cardholders – corporate growers are all about the bud.

So what’s a caregiver to do?

Join all the others in flooding the black market. In fact, they’ll be in good company with the dozens of illegal delivery services that have popped up as a result of Lansing not enforcing a law that was supposed to create a safe, regulated system.

Yep.

State regulators seem to be discouraging cardholders from getting their cannabis from dispensaries. These are businesses which pay state sales tax, regulatory overhead costs for testing and labeling, and hefty licensing and attorney fees.

What the MRA Has to Say

In the spirit of viewing both sides of the coin, we’ll address what drove state regulators to this decision to switch to corporate growers. (Hint: the word “corporate” speaks volumes.)

They claim that their interest is to “protect the health and safety of the public” because cannabis products from growers are required to be tested for contaminants.

Okay. But contaminants have never been a problem with caregiver product.

They also insist that corporate growers and dispensaries have a veritable wealth of this tested cannabis available. Like a Scrooge McDuck room’s worth. But their insistence comes with no records to cake up such claims. So there’s that.

It all comes back down to this question:

Will Licensed Dispensaries Be Able to Survive?

As cannabis marketing and public relations specialists, we believe in the essential services that dispensaries provide.

At this point, we can only hope that the answer to the question of will licensed dispensaries be able to survive this mess is YES.

They’ve proven resilient in the past.

But it’s disappointing that the new The Marijuana Regulatory Agency is putting corporate interests before patient interests.

At least, that’s sure how it seems.

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It’s been something that rhymes with flustermuck.

So Whitmer put pen to paper on Friday to sign an executive order that could making things go a bit more smoothly.

Because even “a bit more smoothly” would be a vast improvement over the current state of affairs.

Why Has Marijuana Licensing Been So Tough?

That would take the sort of political analysis for which we simply don’t have the chops.

But here it is in a nutshell:

The marijuana licensing board under LARA was created in 2016 to regulate and tax the medical marijuana market. Its five members were politically appointed by former Senate Majority Leader Arlan Meekhof, R-Grand Haven, former Speaker of the House Tom Leonard, R-Dewitt and Gov. Rick Snyder.

All Republicans.

Meekhof went ahead and recommended a former Speaker of the House who was also a Republican, as well as a registered lobbyist. This same guy had also been involved in negotiating the sale of his stake in the lobbying firm to a lobbyist for the medical marijuana industry.

This, of course, raised concerns about whether lobbyists would seek to then curry favor with him through the price paid for the stake in the firm.

In the meantime, Leonard nominated an executive board member of the Police Officers Association of Michigan – which only may connote “marijuana supporter.” It certainly doesn’t scream it.

And our old buddy Snyder figured a pharmacist, the CEO of a consulting firm, and a retired sergeant for the Michigan State Police would be just dreamy as his appointees.

We’re not suggesting that every member of the volunteer five member board is power hungry in their denying applicants licenses. But there were certainly a lot of inconsistencies.

For instance, a minor brush with the law 25 years ago could be grounds for an applicant not getting a license. Even if the charges were dismissed.

And it shouldn’t come as any big surprise that the retired police sergeant has been particularly stringent. He consistently denies people seeking licenses who are registered caregivers.

These caregivers were permitted to grow up to 72 plants for five medical marijuana cardholders. They are supposed to be able to recoup the costs of growing these plants. But the sergeant feels that many of them are profiting beyond those expenses and should therefore be ruled out for getting a license.

The result is that these caregivers who have been the mainstay of the medical marijuana market since 2008 are suddenly unable to get licenses.

What Does Whitmer Propose?

Right now, the number of licensed growers is pretty limited. And since crops take up to six months to grow, licensed dispensaries are justifiably concerned about an impending shortage of product for their patients.

As a result, the state is currently permitting around 60 unlicensed dispensaries to continue to operate. This has been an ongoing game for many months. The dispensaries now have until March 31st to get a license or shut down.

Through her executive order, Whitmer is proposing that a new entity within the state Department of Licensing and Regulatory Affairs handle all licensing for both medical and recreational marijuana licensing. It would be called the Marijuana Regulatory Agency. She feels certain that combining the licensing authority under one body will put the kibosh on some of the inefficiencies.

“To avoid licensing delays and to better coordinate varying sources of authority for the enforcement of state law, the administration of state laws relating to marijuana can more effectively and efficiently be administered by a dedicated state agency,” she said in her executive order. In turn, the needs of Michigan’s medical marijuana patients will be better met.

The retired police sergeant feels Whitmer’s order is political payback for marijuana industry lobbyists who supported her campaign. He also lamented that, “Public safety just took a huge hit.”

But Washtenaw County Sheriff Jerry Clayton sees things in a different light. He feels that the new system allows for more predictability. And this will ultimately enhance public safety and keep communities safe.

If the Legislature doesn’t veto the order, Whitmer is expected to appoint a director to run the agency in the coming weeks.

More Efficient Days Ahead?

We can only hope that the Legislature will see the benefits of increasing the efficiency of marijuana licensing.

In the meantime, if you’d like to see increased efficiency in the marketing and promoting of your cannabis business, contact us. We’ll get you moving in the right direction.

And nobody can veto that.

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