As many as three adult-use initiatives could hit 2016 ballot
By Thomas Lavigne
With a population of nearly 10 million residents, Michigan is a significant cannabis market. Patients and primary caregivers continue to be prosecuted for technical violations of the Michigan Medical Marihuana Act (MMMA). Dispensaries have been prosecuted for selling to licensed patients because the seller was not the patient’s primary caregiver through the state’s medical marijuana registry.
The MMMA has been twisted by the state Supreme Court, which ruled that dispensaries were not protected under state law that was supposed to grant immunity to patients.
The Michigan Court of Appeals ruled that patients, including those with serious illnesses such as cancer, lose their immunity for extracts and medibles. This angered many, including the parents of children suffering from seizures.
However, momentum changed this fall.
The Michigan House of Representatives passed three bills, now being debated in the Senate (House Bills 4209, 4210 and 4827). Among the reforms that would be enacted, HB 4209 provides for seven licenses:
– Three grower licenses based on plant counts (1,500, 1,000 and 500 plants);
– Provisioning center license (retail only);
– Processor license (which would only allow sales to provisioning centers);
– Secure transporter license (storage, transport and possibly armored cars); and
– Safety compliance facility license (testing laboratories).
Municipalities may or may not enable the act. If they do, they may zone and limit the number of licenses allowed. Local municipalities must first license an entity before the state can issue the proper license.
The fiscal impact analysis by the House Fiscal Agency, a nonpartisan legislative research group, made some interesting points:
– The Michigan Department of Licensing and Regulatory Affairs (LARA) has estimated that the costs associated with the bill would total approximately $21.1 million annually with $726,000 in one-time information technology expenses. This estimate utilizes a “worst-case scenario” which assumes LARA would employ 113 full-time equivalent employees for licensing and enforcement duties under the bill at an annual cost of $13.3 million. This assumption is based on the personnel employed by the Licensing and Enforcement Divisions of the state Liquor Control Commission, which oversees approximately 17,250 retail liquor licensees. The Department of State Police would provide 34 FTEs for criminal enforcement activities related to medical marijuana at an annual cost of $6 million.
– The medical marijuana market may not bear the regulatory costs as estimated by LARA, as medical patients could opt to continue to grow cannabis or obtain it from caregivers or the black market, rather than pay potentially higher prices charged by provisioning centers. Perhaps this influenced the last-minute change to reduce the excise tax from 8% to 3%, which is being added to the state’s 6% sales tax.
Meanwhile, there are some legal protections in place for patients and business owners. On Oct. 20, a federal court in California upheld the Rohrabacher-Farr Amendment, which prevents the federal government from prosecuting dispensaries that are compliant with state and local laws.
This adds to Michigan’s Supreme Court ruling in City of Wyoming v. Ter Beek that the MMMA is not preempted by the federal Controlled Substances Act. The Ter Beek ruling also limits what a city can and cannot do. It cannot penalize anything allowed in the state statute.
There may end up being three competing ballot proposals for adult-use cannabis legalization on the 2016 ballot. MI Legalize is a large, united grassroots group, led by a 17-member board of directors that includes lawyers, patients and their parents, caregivers, entrepreneurs, journalists, retired teachers, athletes, dynamic young leaders and old-time cannabis and industrial hemp activists.
MI Legalize is seeking signatures for a petition that would, among other changes, re-legalize industrial hemp for production and all uses. Industrial hemp has a long history in Michigan. Henry Ford favored industrial hemp for fuel, fiber and car bodies, and demonstrated hemp as being 10 times stronger than steel by taking a sledge hammer to the body at an engineering conference. With all of the engineers and inventors in Michigan, industrial hemp has a bright future.
The MI Legalize petition would also:
– Open the new market to small entrepreneurs on a level playing field with large entrants;
– Raise tax revenues for education, roads and local government with 6% sales tax and a new 10% excise tax;
– Decriminalize would-be violators, ending the mass incarceration felony madness of today;
– Re-legalize extracts, topicals and edibles;
– Allow people 21 and older to grow and harvest no more than 12 plants;
– Allow people 21 and older to give up to 2.5 ounces to another adult;
– Allow local government to pass licensing and zoning ordinances authorizing the sale of cannabis to adults 21 and older; and
– Allow ballot petitions to pass such ordinances if the city council or township board fails to do so.
The Michigan Cannabis Coalition, an investor group, had also been circulating a petition, which may confuse voters and signers. The Michigan Responsibility Council, another investor group, is scheming to corner the market, and will likely circulate another ballot petition. This is why MI Legalize needs the support of the national cannabis community, in order to win over two well-financed competitors.
Thomas Lavigne, of Cannabis Counsel, has been practicing litigation, appeals and business law for nearly 25 years. Cannabis Counsel represents patients, caregivers, clubs, collectives, dispensaries, suppliers and more in the medical cannabis field (www.cannabiscounsel.com).