Agriculture/Jul 28, 2020

Michigan Marijuana Regulatory Agency Phasing Out Caregiver Sales to Licensed Marijuana Facilities

On June 22, 2020 Michigan’s Marijuana Regulatory Agency (MRA) updated an advisory bulletin that announced a phase out of its relaxed enforcement of the prohibition against primary caregivers selling medical marijuana to licensed medical marijuana growers and processors.

Prior to March 1, 2020 the MRA had stated that it will not pursue disciplinary action against medical marijuana growers and processors that purchased marijuana products from primary caregivers licensed under the Michigan Medical Marihuana Act (MMMA) to help keep up with demand for medical marijuana. Between March 1 and May 31, the MRA began phasing out the amount of purchases from primary caregivers, and on October 1, 2020, the MRA will begin to enforce the stricter standards originally required by statute.

How does this new advisory bulletin affect medical marijuana growers?

Until September 30, 2020, medical marijuana growers will still be able to purchase marijuana flowers from primary caregivers and not face disciplinary action, but they cannot transfer any caregiver produced products to their equivalent recreational-use licensed establishments. They also cannot purchase marijuana concentrates, marijuana vape cartridges, marijuana-infused products, or marijuana plants (other than seeds, seedlings, or tissue cultures) from primary caregivers. A medical marijuana grower is only able to take advantage of this opportunity if it does all of the following:

  1. documents the receipt of caregiver flower as an external transfer and enters it as inventory in METRC immediately upon receipt;
  2. only transfers marijuana flower that has been tested in compliance with all laws and administrative rules to other Medical Marihuana Facility Licensing Act (MMFLA) licensed facilities;
  3. tags or packages all inventory that has been identified in METRC; AND
  4. only transfers marijuana flower by means of a licensed secure transporter, except where exempted under the MMFLA.

In addition, the weight of marijuana flowers a grower purchases from primary caregivers cannot be greater than the total of the weight of the marijuana flowers that grower harvested between March 1, 2020 and May 31, 2020 (both wet and dry) plus the projected harvest weight (dry) of the marijuana flowers the grower will harvest from its marijuana plants that are in the flowering process on May 31, 2020.

On October 1, 2020 medical marijuana growers will begin facing disciplinary actions for purchasing marijuana flowers from primary caregivers. Under MCL 333.27501(2) of the MMFLA, however, medical marijuana growers will continue to be able to purchase marijuana seeds, seedlings, and tissue cultures from primary caregivers.

How does this new advisory bulletin affect medical marijuana processors?

Until September 30, 2020 medical marijuana processors will be subject to the same requirements for purchases from primary caregivers listed in 1-4 above, and they also can no longer transfer any caregiver produced products to their equivalent recreational-use licensees.

In addition to requirements 1-4 above, however, the marijuana flower obtained from primary caregivers must be processed and not sold or transferred as marijuana flower, and the total weight of marijuana flowers a processor purchases from primary caregivers cannot be more than 50% of the total weight of marijuana flowers that processor purchased from primary caregivers between March 1, 2020 and May 31, 2020.

On October 1, 2020 medical marijuana processors will begin facing disciplinary actions for purchasing marijuana flowers from primary caregivers.

How does this new advisory bulletin affect primary caregivers?

 Primary caregivers are no longer able to sell marijuana concentrates, marijuana vape cartridges, marijuana-infused products, or marijuana plants (other than sales of marijuana seeds, seedlings, or tissue cultures to medical marijuana growers).

Until September 30, 2020 primary caregivers will still be able to sell marijuana flowers to medical marijuana growers and processors, but because these growers and processors face restrictions on the weight of marijuana flowers they are allowed to purchase from primary caregivers during this period, primary caregivers will likely see significantly less demand for their marijuana flowers than previously.

On October 1, 2020 the original statutory requirements for primary caregivers will be enforced. Any licensed facility purchasing marijuana flowers from a primary caregiver will be subject to disciplinary action. Under the original statutory scheme, primary caregivers will only be able to receive compensation for providing marijuana flowers to their registered qualifying patients, and receiving payment for transfers to anyone else will not be protected under the Michigan Regulation and Taxation of Marihuana Act (MRTMA) or the MMMA. Primary caregivers will continue to be able to sell seeds and seedling, however, to licensed medical marijuana growers under MCL 333.26424a(2)(b) of the MMMA and to licensed recreational marijuana growers under MCL 333.27960(1)(a) of the MRTMA.

More Questions?

 If you have any more questions regarding this change, or if this upcoming phase out has convinced you to pursue licensing under the MMFLA or MRTMA, the experienced attorneys at Gielow Groom Terpstra & McEvoy in Muskegon are well equipped to help.

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