The Evolution of Caregiver Product Sourcing in Michigan

After the Michigan Medical Marihuana Act (MMMA) was passed in 2008, eligible individuals could become a “primary caregiver” for up to five (5) “registered patients” with certified chronic or debilitating conditions. This designation allows an individual to grow up to twelve (12) plants and possess up to two-and-a-half (2.5) ounces per connected patient.

In other words, a caregiver with the maximum number of connected patients, including the caregiver him or herself, may cultivate up to seventy-two (72) plants and possess up to fifteen (15) ounces of marijuana.

The Gray Area Between Caregivers and Law Enforcement

However, it has always been a violation of the law for a caregiver to transfer marijuana to anyone who is not his or her connected patient. The MMMA contains immunities and defenses for patients and caregivers depending on the circumstances, but these legal protections never changed the underlying fact that those who have not been in compliance with the MMMA are technically committing a crime.

Due to several flaws and unanswered questions regarding the law, there was confusion and inconsistent enforcement which resulted in a “gray area” for individuals, municipalities, law enforcement, and the State of Michigan itself.

After the Medical Marihuana Facilities Licensing Act (MMFLA) became effective and the now-Marijuana Regulatory Agency (MRA) began accepting applications and implementing rules and guidance, this “gray area” only grew wider after the MRA issued various bulletins regarding the ability of licensed facilities to “source” caregiver product.

Resolution on Marijuana Product Access for Patients

The first resolution was passed by the Regulators on March 21, 2019, “Resolution on Marijuana Product Access for Patients.” This Advisory Bulletin contained the following, in summary:

Licensed Provisioning Centers

• Could obtain product from caregivers only up to March 31, 2019.
• Had to obtain patient consent that the products had not been tested prior to sale and enter all inventory into METRC immediate upon receipt from caregivers.

Licensed Growers and Processors

• Could obtain product from caregivers for an undetermined amount of time.
• Had to enter all inventory into METRC immediately upon receipt and only transfer to other licensed facilities once the product had passed testing and all packaging and labeling was 100% compliant.

In other words, the Regulators issued guidance stating that licensees would not be issued fines, citations, or other disciplinary action for sourcing caregiver product into the system. However, this practice is still, based on the plain language of the MMMA and MMFLA, unlawful. 

Additionally, this regulatory guidance did not change the fact that it has always been a violation of the law for a caregiver to transfer marijuana to anyone who is not his or her connected patient.  

Why Caregivers Are Vital for Michigan’s Marijuana Supply 

Regardless of this undeniable truth about Michigan law, this practice between licensed facilities and caregivers has been allowed to continue for the sake of ensuring an adequate supply of cannabis to Michigan’s patient population. Over time, the MRA has issued other guidance narrowing the different types of caregiver product that may be sourced into the MMFLA framework depending on license type, and only recently has the MRA set a date for these activities to come to an end.

On March 1, 2020, the MRA issued an Advisory Bulletin, “Guidance on the Phase-Out Process Ending External Transfers to the Regulated Market.” This Advisory Bulletin contains the following, in summary:

Phase 1 – starting March 1, 2020 through May 31, 2020

• Licensed growers and processors can source flower (bud, shake, and trim only) from caregivers.
• Must enter all inventory into METRC immediately upon receipt as an “external transfer” and only transfer to other licensed facilities once the product passes testing and all packaging and labeling is 100% compliant.

Phase 2 – starting June 1, 2020 through September 30, 2020

• Licensed growers can source flower (bud, shake, and trim only) from caregivers.
• Must follow the same procedures listed above for inventory tracking, testing, and packaging/labeling.
• Total weight of flower obtained must be less than or equal to total weight of flower (both wet and dry) harvested by licensee between March 1, 2020 and May 31, 2020 plus the projected harvest weight (dry) of all plants in the flowering process on May 31, 2020.

Licensed processors can source flower (bud, shake, and trim only) from caregivers

• Must follow the same procedures listed above for inventory tracking, testing, and packaging/labeling.
• Flower cannot be sold or transferred, must be processed into a different form.
• Total weight of flower obtained must be less than or equal to 50% of the total weight of flower licensee obtained from caregivers between March 1, 2020 and May 31, 2020.

Phase 3 – starting October 1, 2020

• No external transfers from caregivers allowed.
• All licensed facilities will be subject to disciplinary action if caregiver product is sourced.

The MRA has stated that the goal of this Advisory Bulletin “is to stimulate business growth while protecting patient safety.” What about the caregivers who the MRA and licensed businesses have relied upon to keep the supply somewhat stable in Michigan? Remember: it has always been a violation of the law for a caregiver to transfer marijuana to anyone who is not his or her connected patient. 

Yet, despite this reality, caregivers have been supporting Michigan’s emerging cannabis industry since its inception.

What is Next for Caregivers in Michigan?

While this writer truly believes that this practice was a “necessary evil” in order to boost an otherwise-slow starting industry, it is unclear what will happen to caregivers next. As has been the case since 2008, caregivers have always been allowed to grow cannabis for their connected patients in compliance with state law.

I expect that practice to continue for those who wish to provide a service to individuals in Michigan who have chronic and debilitating conditions and those who may desire to enter the licensed market in the future with the know-how to cultivate or process cannabis products.

However, with the looming Michigan Supreme Court decision in DeRuiter v. Byron Township, a case that could potentially restrict or eliminate a caregiver’s ability to grow medical cannabis in a non-residential location, it is unclear how practical lawfully growing cannabis as a caregiver will be in the future.  

With the high cost of entering Michigan’s medical marijuana industry, restrictions on the types of licenses that can be obtained in Michigan’s adult-use marijuana industry without an MMFLA license, and the fact that majority of municipalities in Michigan failing or unwilling to “opt in” and the price to rent or obtain property is through the roof; there is no “easy” way for a caregiver to be a caregiver in 2020.

Only time will tell whether caregivers will slowly decrease in number or whether caregivers will continue to exist; unfortunately, this writer believes that the latter is only achievable through legislative change to amend the MMMA and MMFLA in order to allow legal “external transfer” from caregivers, which is no easy task since it will require cooperation on both sides of the aisle in Michigan’s legislature.