The new cannabis licensing and regulatory system created last year by Michigan State House Bills 4209, 4210, and 4827 has been in effect since December 20, 2016. On December 15, 2017, a five-person board appointed by the governor will begin accepting applications for the five new licensing classifications that were created by the new law: cultivating, processing, retail, testing, and transport.
What does the new law mean to members of the cannabis community? What effect will it have on dispensaries? On caregivers? And what do you do with that petty drug bust that was expunged years ago?
Sandra McCormick and Brian Fenech visited the April 2017 meeting of Women Grow-Southeast Michigan chapter to answer these questions and more.
McCormick is executive director of Michigan Cannabis Development Association and MCDA’s liaison to the Michigan legislature, regulatory bodies, local elected officials, and the media. As chief of staff to Michigan Senator Rick Jones, she helped to edit the bills that are now known as the new regulatory structure for Medical Marihuana.
Fenech is an Ann Arbor criminal defense and medical marijuana attorney as well as a member of Ann Arbor’s Medical Marijuana Ordinance Review Committee. He is also a consultant for cannabis entrepreneurs who are setting up businesses. In this role, he helps license applicants determine which localities are friendly and what to avoid in the licensing process.
But First a Marijuana Flashback
My mind wandered as I waited for the meeting to begin. It was a hot summer day in 1976, forty-one years ago. I was hitchhiking through Houston, Texas. Hitching was illegal in Texas. It probably still is. My ride dropped me off about six miles from the center of town, on a road that ran parallel to the freeway. I crossed the street and was walking toward the on-ramp when a cop approached me from my left. He drove past me, pulled into a parking lot, and motioned for me to approach him.
It happened so quickly I didn’t have time to lean my backpack against a post and hide my stash in the grass as every seasoned hitchhiker from the seventies knew you should do so that, if a cop hassled you or busted you, you wouldn’t be carrying.
grey granite towers impose constricting borders of silence
ulceric paralysis steps into leftover pot of stew
wading but not wanting
prune face, the tale untold,
Also, “Shit, I can’t believe this is going to happen.”
This cop was a big guy, probably as strong as a tractor, although I guessed he wasn’t much smarter, a little chubby, and he had a baby face.
I probably would have liked him if he hadn’t been a cop.
And he wasn’t about to bust me.
Every high school has its Moose.
He was his.
But he was a cop.
And he was about to bust me.
I hated his guts.
“You’re not allowed to be hitchhiking,” he bellowed before I could say a word.
So I went through my routine of trying to act dumb because I’m from out of town and “Honest, Officer, I heard it was legal here, and I didn’t know,” hoping that he would buy it and let me off.
Meanwhile, he was already frisking me to see if I was carrying any weed. When he shoved his hand down my front pocket, he discovered two roaches that I had saved because they were all I had left and a pack of matches.
I didn’t say a thing. I just tried to good vibe him into letting me off after having busted me for illegal hitchhiking and then finding marijuana in my possession.
It didn’t work. It never does.
He ordered me to get in the back seat of his car as he proceeded to give a quick check of the top of my pack (main section), and every zipper pocket, and the case where I carried my journal. He got off on the following: my hand ax (that I thought he was going to steal); my one rubber
(that I also thought he was going to steal); and the fact that he couldn’t read my writing.
I told him I was a disgruntled doctor.
He didn’t get it.
He put my pack in his trunk, the ax in my case, the case on the front seat, and his ass next to my case, and drove away.
Two days later I got out thanks to the combined talents of a pretty bail bondswoman and a shyster lawyer. They told me I would never have to worry about that incident again. And I didn’t.
Until this meeting.
Did I need to mention that adventure on my application? I made a note to find the answer.
Sandra McCormick: New Law “Huge Step Forward”
As the chief of staff to Senator Rick Jones, Sandra McCormick had the distinction of being the lead staff for the chair of the committee that had the final set of edits on the bill. She was also instrumental in working the issue on the Senate floor to coordinate the votes for discharge and final passage.
According to McCormick, the three separate bills that make up the new law were passed and adopted because: “Over the last ten years, no matter what side a legislator was on regarding the MMMA [Michigan Medical Marihuana Act of 2008], everyone agreed that inconsistency and confusion to the public were a result of the MMMA and subsequent court rulings. As a result the legislature wanted to indicate that, while issues were overlooked, they could offer some guidance and direction for this emerging industry, particularly involving manufacturing, growing, and processing.”
McCormick considers passage of the three bills to be a huge step forward but acknowledges that there are still shortcomings. “We created a whole new industry and now we have a responsibility to manage and foster one that is open and free to the public. I have heard it will cost a couple hundred million dollars and then a few hundred thousand. We don’t know for sure because there are variables we don’t know.”
She believes the new law will have an effect on caregiver-operated dispensaries. “The implementation is going to be up to each municipality, but if I had to guess I would say for the next year caregiver dispensaries will be fine if they are operating with the permission of the municipality. One requirement of the Cole memo is that the state is regulating marijuana operations; in Michigan that is done under the MMMFLA [Michigan Medical Marihuana Facilities Licensing Act of 2016]. So while the system is getting set up I see dispensaries being allowed to operate but eventually they will need to merge into the new structure. The trick is going to be getting them set up and established.”
The Cole memorandum, issued during President Obama’s last term, determined that the Department of Justice would let state and local law enforcement handle marijuana cases in states with legal marijuana.
With caregivers, she is less sure. “We shall see how this affects them. Technically the legislature has changed nothing on them. However, due to good negotiating efforts by lobbyists, caregivers cannot interact with the new system. How they survive and what happens with them we shall see over time.”
At present, she says, we are waiting on ordinances to be passed, board appointments to be made, and rules to be issued. “This has been a quick process, relative to any other industry or legislative process. We have just moved into phase two, implementation. This will take some time.”
She encourages entrepreneurs to consider residency, criminal records, and other factors when looking for partners: “Keep the list small. I know everyone needs to meet whatever financial threshold is necessary via the board, but the process to check ten, twenty, or more members is going to take a lot of time. If you keep the list small then it could mean less time.”
Without knowing for sure, she believes that applications will be accepted in part “on who gets the background checks done first and then first-come-first-served. Having a good application will make all the difference.”
She suspects the process will take six to eight months. “The first licenses will probably be approved in June and July. There will be confusion the first year. Start putting together your license application now: background, business partners, business plan, tax returns, operating agreements. Whatever you would be asked for a liquor license expect to be asked for a marijuana license and more.”
According to McCormick, who describes herself as a pro-business Republican, cannabis is a hot-button issue. Medical, under Trump/Pence/Sessions “will be left alone and there will be some issues for recreational. If they go after medical, they will drive people to the polls.”
Fenech: Not So Positive about Aspects of New Law
Brian Fenech is more skeptical about some aspects of the new law but he understands how to live with it. “The state law is silent to zoning issues but for mandating that cultivation facilities be in areas zoned industrial or agriculture. Therefore, it is imperative that all prospective licensees know zoning requirements of municipalities before you begin investing there. For instance, may you have four Class C 1,500-plant licenses at one large facility? It can go either way depending on the locality.”
He understands that the first hurdle comes at the local level. “If they don’t want you, find someplace else or get someone to go in and soften the ground. Present them with actual data. Numbers speak loudly. Law enforcement has already fed them with Reefer Madness propaganda. Combat it with facts.”
Other issues that fall short of clarity or practicality abound, he points out:
- “If you are a cultivator and a processor at the same site, you will literally have to hire a secured transporter to move the product from one side of the building to the other.
- “If you are any small operation, you may find that it is cost-prohibitive to have your merchandise transported at all.
- “The law makes no mention of how dispensaries and other businesses will acquire medical cannabis in the very beginning once licenses are issued. Where will the initial inventory, or plants, or seeds come from?
“Questions remain as to how the law will be implemented and rolled out. It’s important for prospective licensees to stay up to date with both local and state laws in order to be best prepared to move forward once the rules are clear.”
As far as the law’s effect on dispensaries and caregivers:
Dispensaries should be okay as long as
- currently operating dispensaries aren’t excluded from obtaining state licenses under the new rules that are yet to be announced;
- municipalities where they are operating enact enabling acts allowing for dispensaries; and
- dispensaries obtain licenses in their municipalities.
Caregivers that are operating purely for their patients and not selling overage to currently running dispensaries likewise should be fine. However, seed-to-sale tracking of all medical cannabis products that are sold to dispensaries will necessitate licenses and this may make it cost-prohibitive for many current caregivers to continue to operate if they had worked with dispensaries previously.
Fenech scoffs at the idea that anyone in existence can predict the direction of any issue in the current Trump/Pence/Sessions political climate, then adds, “If we are to take Sean Spicer at his word regarding the administration’s approach, it’s that they will be hands off regarding medical and instead focus on enforcing federal law with respect to recreational. Attorney General Sessions makes it sound like anything is possible in regard to how they will enforce federal law. The federal question has been the elephant in the room for decades. I don’t see that changing anytime soon.”
He points to one encouraging new sign, at least for now. On May 4, 2017, the U.S. Senate passed the omnibus spending bill that was approved in the House earlier that week. It includes a provision that intends to protect patients, caregivers, and businesses that are acting in compliance with valid state medical cannabis laws from arrest and prosecution by the DOJ and DEA.
“However, the bill expires in September 2017.”
The Answer to My Question
Fenech must have heard me thinking before the meeting. In reviewing your license application, he said, the department may consider past drug-related charges when assessing your character.
But: “The cover up is worse than the crime. They likely won’t care if you have an old misdemeanor pot possession conviction from 1999. They do care if you lie about it. Tell them even if it was expunged. Otherwise, it speaks to your character.”
Okay, I confess.