Over the past fifteen years, Michigan’s stance on marijuana has drastically changed and the laws have been quite fluid as the issue garners more attention from citizens and the State legislature, alike.  In 2008, Michigan voters approved a ballot initiative, which ultimately became the Michigan Medical Marijuana Act, legalizing medical marijuana for patients suffering from serious health issues.  The Michigan Medical Marijuana Act allowed for individuals to become licensed medical marijuana patients within the state if a licensed physician signed off on the fact that it was their belief that the patient would benefit from medical marijuana.  Additionally, individuals could apply for a caregiver license with the state, and if they were approved, this allowed for the individual to grow certain amounts of marijuana for their own personal use as well as growing 12 marijuana plants on behalf of their patients.  However, the patients were required to register with the State of Michigan as a patient of a specific caregiver.

In 2016, Michigan’s legislature passed a bill which expanded the state’s existing medical marijuana program to include both licensing and regulation of medical marijuana businesses.  At the time, this was a large indication that Michigan was leaning heavily towards further legalizing marijuana, for both medicinal and recreational purposes.

In 2018, the Michigan voters again approved a ballot initiative legalizing recreation marijuana for adults 21 years old and older.  From the time that the ballot initiative passed in 2018, marijuana laws in Michigan have been hazy at best.  What was once potentially a misdemeanor or felony offense, became seemingly completely legal in the eyes of the State of Michigan, overnight.  Since the ballot initiative passed, the state has done a good job to ensure that medical patients would not lose their ability to obtain their medicine while an efficient system and process was formulated for a seamless transition for the new and growing industry.  In addition, citizens could begin to submit their applications with the Michigan Department of Licensing and Regulatory Affairs, specifically the Marijuana Regulatory Agency (MRA), for licenses related to the production and sale of recreational marijuana.  These licenses include licenses to grow, process, transport, test, and sell marijuana commercially.  Applicants must complete a rigorous application process and meet all the state-mandated requirements to receive consideration of obtaining one of the aforementioned licenses.  To date, the state has approved over 300 licenses to grow marijuana.

On March 1, 2020, the MRA began the process of phasing out caregiver products to licensed stores.  The primary focus of the phase-out process was to bring legitimacy, safety and regulation to the new industry to catapult consumer confidence.  Currently, and since the ballot initiative was passed in 2018, medical marijuana caregivers could legally sell their marijuana products to licensed provisioning centers (commonly referred to as “dispensaries”), provided they comply with the regulations in place.  However, the phase-out process will drastically change that process.  Starting October 1, 2020, caregivers will no longer be able to sell their marijuana products to state-licensed dispensaries.  The idea behind this measure is to ensure that every product sold is accurately tested for the safety of the consumer.  By no longer allowing marijuana products provided by caregivers to be sold in licensed facilities, the state believes that it will provide an enhanced and safer product, as well as being able to track the complete process from the marijuana seed to final product sold to the consumer, and everything in between.  Moreover, caregivers who do not comply with this Order will face criminal penalties and risk losing their license.

Initially, those opposed to the phase-out process believed that by phasing out caregiver products, there would be a substantial shortage of products for consumers and medical patients.  The MRA does not share that belief.  It has cited that fact that there have been more than 300 licenses to grow issued in Michigan and that those license-holders will be able to provide ample product for marijuana consumers in the State.  Further, the MRA has noted that licensed caregivers can still grow and provide marijuana products for any of their licensed patients.

With this significant change in marijuana law in Michigan, there will assuredly be growing pains and bumps in the road.  What is important, however, is that the MRA has a well-developed plan and the interested parties are aware of the laws and regulations of the industry.

Our Firm has assisted clients in obtaining their recreational marijuana license, as well as creating corporations and operating agreements to help their new business get started.  If you have any questions, comments or concerns related to this article, recreational licensing or medical marijuana law, please contact our office at (734) 422-5900.