Michigan: Caregivers Vs Big Cannabis

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There’s a legislative and philosophical feud boiling in the world of Michigan marijuana.

Caregivers, who are each authorized to grow up to 72 plants at a time for themselves and up to five registered medical marijuana patients, are facing off with some of the most powerful commercial producers who believe registered home growers can pose a risk to public safety and supply the black market.

Steve Linder, a longtime Republican lobbyist and director of the Michigan Cannabis Manufacturers Association, is vague about exactly what his organization’s legislative goals are, but alluded to altering the role of caregivers to align with the safety requirements and regulations faced by licensed marijuana producers.

“The number one principle that we were founded on was providing safe, clean, tested products to the marketplace, just like any other product that people inhale or ingest,” Linder said. “… We want Michigan to not only have high testing standards, we want to lead the nation in testing standards, so that the public is confident that whatever product they use is going to perform as anticipated and is not going to harm them. That’s our guiding principle. And everything we do, whether it’s legislative or statutory, is geared toward making certain that the industry’s protocols and procedures and standards are beyond reproach.”

Linder’s avoided naming specific changes he’d like to see implemented to the caregiver system.

While no laws have been formally proposed, lobbyists for the Michigan Cannabis Manufacturers Association, which includes some of the largest vertically integrated marijuana companies in the state, have been feeling out the Legislature with an eye on further restricting caregiver grow limits, requiring testing and tracking product similar to licensed businesses, said Jamie Lowell, a legalization pioneer and the director of social responsibility and advocacy at the Botanical Company, a marijuana retailer based in Lansing.

Lowell on May 29 obtained a form entitled, “Addressing Public Health Concerns and the Black Market,” that he said was distributed to lawmakers by representatives from the Michigan Cannabis Manufacturers Association. Lowell said rumors began swirling a month prior to his receipt of the proposals from a legislator he declined to identify.

The document includes proposals to impose stricter limits on caregivers and competition from micro-businesses, which are self-contained, recreational license holders able to grow, process and sell products derived from up to 100 plants. Linder declined to confirm or deny issuing the proposal.

If enacted, the measures would limit caregivers to three plants per patient and 12 plants total. Under the current law, caregivers may have 12 plants per patient and up to 72 total. It would also require caregivers to enter their harvests and plants into the state-monitored tracking system, undergo inspections and notify the state government and local municipalities where the caregiver grows exist.

Caregivers, created by the 2008 voter-approved Medical Marijuana Act, are given mostly free reign to provide untested products to their patients. Their marijuana isn’t tracked or tested. They pay no licensing fees and don’t answer to the Marijuana Regulatory Agency.

Several police and business executives say they believe some caregivers are using their medical moniker to subvert the system, in some cases teaming up with other caregivers to increase their cumulative plant limits and set up major grows in homes or warehouses that have the ability to produce as much marijuana as some licensed companies.

Caregiver advocates say the problem is overstated and the proposed remedies unnecessary.

Linder and his member companies have “suffered a little bit of abuse” on social media and have become the focus online boycotts based on “misinformation” campaigns. Caregivers and others within the industry have painted the association and its members as heartless capitalists who want to strip medical marijuana patients of their medicine.

Ryan Bringold, 49, of Oakland County, has worked as a caregiver since medial marijuana was legalized in 2008. He’s been a marijuana legalization advocate since the 1990s. He’s planning a rally at the Michigan Capitol in Lansing on Sept. 15 to urge legislators not to alter the caregiver law.

“We’re starting to see these big, licensed, retail, big-money guys coming in and they’re working with legislators in Lansing against caregivers now,” Bringold said. “It really boils down to greed. They feel like they’ve put so much money in to get their licensing to be retailers and they feel the cannabis caregivers in the medical program are hurting the bottom line.”

Steve Linder became the face of caregiver opposition when, during an interview with Grown In in May, he said: “We think everything should be in the regulated marketplace.”

“We have a huge supply of cannabis that’s not in the licensed marketplace,” Linder said. “And it’s not tested. We don’t know where it’s grown, we don’t know who’s growing it. People are not employing, they’re not investing in infrastructure, they’re not paying taxes. So, we have to get at the unregulated supply and that law needs to be passed. And we’re going to lead the charge.”

Linder admitted that changes to the current law might be difficult, but not impossible. Because the caregiver law was part of a voter-initiated ballot proposal, it would require a 3/4 majority vote to alter.

Cannabis companies don’t want black-market marijuana sales to eat into their profits, which they undoubtedly are, but caregiver supporters think efforts to restrict caregiver production is misguided.

The Michigan Cannabis Manufacturers Association, to illustrate the size of the illicit and caregiver sales, paid the Anderson Economic Group to analyze the market.

The resulting report found that nearly 70% of all marijuana sales in 2020, more than $2 billion worth, weren’t through licensed businesses.

Law enforcement officials say marijuana black market operations are prolific.

In Sterling Heights, Fire Marshal Shawn Allen said city officials are responding to complaints about grow houses on a nearly daily basis. Often, when confronted, suspects typically present caregiver registration and patient cards, but are often operating outside the bounds of caregiver parameters he said.

Allen said his city has “abated” more than 500 home grows since August 2020 and estimates more than 1,000 others are still in operation within the 132,000-resident, 37-mile city.

“All of these places are rentals, so they’re not even occupied,” Allen said. “We’re starting to see the repeat customers now with the people we dealt with from last August. They’ve started growing again because there’s no penalty.

“Prosecutors will not touch this for us. They won’t help us here at all in the county. Anything marijuana-related, they don’t care, so it’s kind of left on myself to try and make it as safe as possible. The other things I do is write citations and under extreme conditions pull the power.”

While some enforcement on illegal caregiver operations is taking place at the local level, the only statewide enforcement comes from the state police Marijuana and Tobacco Investigation Section, led by Detective First Lt. Chris Hawkins.

The unit was created in 2017 to shut down illicit marijuana operations that compete with the licensed market.

Between July 2020 and June 30 this year, the unit seized over 12,000 marijuana plants, over 6,400 pounds of marijuana flower — about a third of what’s sold in the recreational market each month — and over 55,000 other marijuana vapes, edibles and other products, Hawkins said.

“We are only scratching the surface on what may be out there,” he said. “These aren’t caregivers who are growing like five extra plants.

“There are certainly times when we will do an illicit market enforcement where an individual has at least taken the steps of obtaining a caregiver card or patients, but it’s very clear they are nowhere within the boundaries” of the medical marijuana law. “The individuals engaging in the activity we see – I don’t think are going to be any more deterred if their 12 plants are now six plants or four plants.”

Caregivers are the pioneers of legalized marijuana in the state, but find their role increasingly diminished as the licensed markets takes hold.

As of December 2019, when the first recreational shops opened, there were 268,566 registered medical marijuana patients and 36,392 registered caregivers. Those numbers had dipped to 252,330 and 30,670, respectively, as of June, according to state Marijuana Regulatory Agency statistical reports.

Under emergency rules created by the Marijuana Regulatory Agency, caregivers were allowed to sell products and excess marijuana to commercial companies when the recreational market first opened, but were phased out entirely by September 2020.

“The state was encouraging caregivers to bring cannabis to stores and then eventually through processors and cultivators, and then they were kind of unceremoniously cut off,” Lowell said. “And so, yes, a lot of them did kind of ramp up to do that because they were encouraged to keep the inventory flow going.”

As of November 2018, more than 97% of all retail sales were of caregiver-grown product. By the time recreational sales began in December 2019, caregiver product still accounted for 60% of all sales, according to Marijuana Regulatory Agency data.

Now that the caregiver flow to the commercial market has been cinched, Lowell told MLive it’s likely some have not halted operations and may continue to sell to the black market. If that is the case, however, he said they’re not acting within the scope of a caregiver, which is illegal and enforceable.

“You’re not allowed to do that,” Lowell said. “That’s already the case, so creating more restrictions for caregivers that could potentially hurt patients is not the answer.”

Caregivers under the medical marijuana law were originally meant to be the sole legal producers and distributors of marijuana to those who used it for medical reasons. At the time, there was no framework for commercial medical marijuana sales.

There is now. The retail framework and commercial licensing program was developed under the Medical Marihuana Facilities Licensing Act, passed in September 2016, and the Michigan Regulation and Taxation of Marihuana Act passed in 2018.

One of the most vocal companies regarding the caregiver-licensed market debate is Pleasantrees.

Pleasantrees CEO Randall Buchman, a one-time caregiver himself, resigned as president of the Michigan Cannabis Manufacturers Association in May when the debate erupted. The company said it wanted to control its own messaging.

In a public statement on Facebook, Pleasantrees said it supports caregivers “who responsibly grow for their five or less patients,” but also wants caregivers to be “transitioned to the licensed market so their efforts can generate legitimate jobs, income and welcomed competition in the legal marketplace.”

Pleasantrees is among the companies that have been targeted by boycotts.

“Any caregivers who is making millions is violating the rules of the caregiver program as they were intended to operate,” said Benjamin M. Sobczak, a legal adviser and attorney with Pleasantrees. “That begs the quest whether or not those persons are caregivers at all.

“But certainly, if confronted by any authority and asked to justify the existence of their operation, one can assume that they will present a caregiver card.”