Michigan Phasing Out Caregiver Marijuana in Dispensaries

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On Sunday, March 1st, the Marijuana Regulatory Agency began the phase-out process for caregiver products in licensed stores. The phase-out aims to eliminate the transfer of caregiver-sourced marijuana and marijuana products into the regulated market. The process continues until September 30, 2020, by which time, all marijuana transfers from caregivers will be terminated.

The phase-out is sure to affect Michigan’s supply of cannabis. Currently, the cannabis grown by caregivers makes up over 60% of the marijuana in the marketplace. Under previous rules, the caregivers were allowed to supply marijuana flower and infused products to state licensed growers and processors to supply the medical and recreational marketplace. As legal supply is already struggling to keep up with demand, many Michigan residents and business owners are worried the phase-out will lead to a supply shortage and increased prices.

The MRA does not seem to be concerned about a decreased supply of cannabis products. 

“Caregiver-produced infused products that are already on the shelves of medical and recreational dispensaries can be sold until the product is gone,” says David Harns, spokesman for the Marijuana Regulatory Agency. “Whatever they have on their shelves, they can sell. By the time caregiver flower is phased out, licensed growers should be able to fill the difference.” 

Business owners, on the other hand, are worried.

Dennis Zoma, one of the owners of Liv, a medical marijuana dispensary in Ferndale, says, “The first impact is going to be on price. The caregiver product has been much cheaper because it isn’t subject to state mandated regulatory fees and assessments, and doesn’t have the same overhead costs. It’s going to drive up pricing on the distillate oil, which is going to affect the price of vape carts, edibles, and everything else. When the caregiver flower is phased out, that’s going to really hurt.”

"Most of the wholesalers are vertically integrated, and they're only going to supply their own shops. So there is definitely a big concern about product availability. Once the MRA shuts down the caregiver market entirely, then we’re at the mercy of any of the suppliers out there."

Rush Hasan, The Reef Dispensary of Detroit

The MRA gave notice in December, that beginning on March 1, 2020, growers and processors who obtain marijuana plants, concentrates, vape cartridges, or infused products from caregivers would be subject to disciplinary action.

The idea behind the phase-out is that products like cartridges and concentrates made by caregivers are unregulated. During the ongoing transition to a regulated market, the MRA allowed licensed medical marijuana facilities to accept caregiver products so patients would always have access to necessary medicine. Now that nearly 200 grower licenses and over 25 processor licenses have been issued, the supply of medical marijuana has increased dramatically. Therefore, the MRA will now eliminate the caregiver products to ensure quality and safety for patients

Licensed businesses will have seven months to make the necessary plans to maintain a sufficient supply of medical marijuana in Michigan. During this time, the MRA will work with licensees to provide outreach and assist licensees during the transition. The phase-out process will occur in two steps. 

Phase one is now in effect, which mandates licensed stores to stop buying caregiver products, excluding flower. Flower products, which include bud and shake, will still be allowed without fines from the MRA. Phase two will take effect on June 1, 2020. In this phase, the total weight of marijuana flower that processors obtain from caregivers must be less than, or equal to, 50% of the total weight of marijuana flower the licensee obtained from caregivers during phase one. After phase two ends, any licensee who accepts an external transfer will be subject to disciplinary action by the MRA.

PHASE 1: March 1, 2020 – May 31, 2020 

Growers & Processors:

During Phase 1, which takes effect March 1, 2020 and ends May 31, 2020, a grower or processor licensed under the Medical Marihuana Facilities Licensing Act (MMFLA) who obtains marijuana flower (defined as bud, shake, and trim only) directly from a caregiver who produced the flower will not be subject to disciplinary action by the MRA under the following circumstances: 

-The licensee enters all inventory into the state-wide monitoring system immediately upon receipt, and documents the receipt of caregiver flower as an external transfer.

-The licensee only transfers marijuana flower between MMFLA licensed facilities that has been tested in full compliance with the law. 

-The licensee tags or packages all inventory that has been identified in the state-wide monitoring system, and transfers marijuana flower by means of a secured transporter, except where exempted under the MMFLA. 

PHASE 2: June 1, 2020 – September 30, 2020

Growers:

During Phase 2, which begins June 1, 2020 and ends September 30, 2020, a grower licensed under the MMFLA who obtains marijuana flower directly from a caregiver who produced the flower will not be subject to disciplinary action by the MRA under the following circumstances: 

-The licensee enters all inventory into the state-wide monitoring system immediately upon receipt, and documents the receipt of caregiver flower as an external transfer. 

-The licensee only transfers marijuana flower between MMFLA licensed facilities that has been tested in full compliance with the law. 

-The licensee tags or packages all inventory that has been identified in the state-wide monitoring system, and transfers marijuana flower by means of a secure transporter, except where exempted under the MMFLA. 

-The total weight of marijuana flower a licensee obtains from caregivers is less than, or equal to, the total weight of marijuana flower that the licensee harvested (both wet and dry) between March 1, 2020 and May 31, 2020 plus the projected harvest weight (dry) of all plants that are in the flowering process on May 31, 2020. 

Processors:

During Phase 2, a processor licensed under the MMFLA who obtains marijuana flower directly from a caregiver who produced the flower, will not be subject to disciplinary action by the MRA under the following circumstances:

-The licensee enters all inventory into the state-wide monitoring system immediately upon receipt, and documents the receipt of caregiver flower as an external transfer.

 -The licensee only transfers marijuana flower between MMFLA licensed facilities that has been tested in full compliance with the law and administrative rules.

 -The licensee tags or packages all inventory that has been identified in the state-wide monitoring system, and transfers marijuana flower by means of a secure transporter, except where exempted under the MMFLA.

 -The marijuana flower obtained from caregivers is processed and not sold or transferred as marijuana flower. 

-The total weight of marijuana flower a licensee obtains from caregivers is less than, or equal to, 50% of the total weight of marijuana flower the licensee obtained from caregivers during Phase 1.

Effective October 1, 2020, any licensee who accepts an external transfer will be subject to disciplinary action by the MRA. 

The MRA Phase-out Process Advisory Bulletin may be viewed in it’s entirety HERE.

While Provisioning Centers will no longer be permitted to bring in marijuana flower, concentrates, vape cartridges, or infused products from caregivers, licensees must continue to obtain patient consent on a form provided by the MRA prior to selling any marijuana or marijuana products obtained from a caregiver before April 1, 2019, that have not been tested in full compliance with the law and administrative rules.

“We have always put patients first when we make decisions regarding medical marijuana,” said MRA Executive Director Andrew Brisbo. “This phase out process is an important next step in implementing the will of Michigan voters and making sure that patients continue to have access to their medicine.”

As caregiver products are phased out, the demand for cannabis from state-licensed facilities will increase greatly. If you are interested in owning a grow facility or outdoor grow, view our listings HERE!

Disclaimer: This article is not intended to be used as legal advice. Always check with your attorney and view the current state laws to get up to date information!

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