One in four applications for a license to run a medical marijuana facility made it to the state licensing board in 2018 as state officials conducted extensive vetting and fielded inquiries from 900 prospective businesses.
Last year the industry welcomed new regulations and legal clarity from a 2016 law — the Medical Marihuana Facilities Licensing Act (MMFLA) — and the state saw the first retail sale of medical marijuana in October.
The 2018 launch of the commercialized medical marijuana industry ended with a marijuana shortage and the closure of at least 72 dispensaries. Starting 2019, patients are having trouble finding their medicine.
“It cannot be described as anything but a failure,” said Michael Komorn, president of the Michigan Medical Marijuana Association, of the state’s progress in 2018.
Industry insiders are holding out hope that Michigan’s medical marijuana program will be reformed in 2019 as Democratic Gov. Gretchen Whitmer’s administration takes power, and as the recreational marijuana program launches.
“Governor Whitmer has been a supporter of medical and recreational marijuana for years. The administration is exploring any and all options to ensure patients are protected and have access to medical marijuana,” said Tiffany Brown, Whitmer’s spokeswoman.
Interest was high in gaining a business license to sell and grow medical marijuana in Michigan in 2018.
“I think people began (2018) with the idea that the Medical Marijuana Facilities Licensing Act was going to create opportunities for people who were operating in the dark to now give them a chance to operate in the light,” said Neil Rockind, a criminal defense attorney. “I don’t think the pace or the manner in which the applicants have been treated have proven that to be true.”
Michigan ended 2018 with the same problem it started with: dispensaries full of medical marijuana supplied by caregivers that don’t have a license. At least 72 provisioning centers were advised that they should shut down by Dec. 31, 2018.
Andrew Brisbo, director of the Bureau of Marijuana Regulation who oversees the state’s licensing program, said he believes regulators have been successful in their efforts to launch the licenses while maintaining safe access for patients.
“Being such a divisive issue, we knew there would be people who didn’t agree,” Brisbo said. “It was a very delicate balance to continue to allow the regulated model to be successful while maintaining patient access. It’s frankly impossible to keep everyone with an opinion on it happy.”
Out of the 532 complete license applications the state received last year, the state’s licensing board reviewed 138 from July to December. The board approved 99 and denied 39 licenses.
“I don’t think anyone considers it enough — but it’s what we have,” said Denise Pollicella, a lawyer with Cannabis Attorneys of Michigan, regarding the number of licenses.
Far more preliminary applications were reviewed during the board’s initial screening process for businesses: of the 304 inquiries considered, 101 were denied.
Brisbo is proud that his department was able to present 304 preliminary applications to the board, as each required heavy scrutiny of a lengthy application.
“When we started taking applications the intent was to process as quickly as we could,” Brisbo said. “The review and determinations to be made on existing facilities turned out to be a more complicated endeavor.”
The licensing board — a group of five individuals appointed by Snyder — has drawn fire from applicants and their lawyers as state law allows them to reject applications based on subjective criteria. Minor issues have also cost applicants their chance as well. For example, the board denied license applications from former-Lion Calvin Johnson to grow, sell and process medical marijuana due to out-of-state traffic tickets that he resolved prior to the board meeting.
As of Jan. 8, 2019, there are 50 provisioning centers with active licenses spread across the state. Still, Grand Rapids and its metro area — similar to most of West and Mid-Michigan — is a medical marijuana desert. North of Cadillac, there are two licensed provisioning centers: one in Frederic and one in the Upper Peninsula in Houghton.
“My biggest frustration is we’ve had this law on the books since 2016. I feel like we as a state should have gotten it going sooner,” Pollicella said. “Clearly it’s not enough provisioning centers to serve everyone in the state.”
Although nearly 100 medical marijuana businesses have licenses to operate in Michigan, the market has been slow to launch — and there’s a shortage of licensed medical marijuana to sell. Half of the 24 licensed growers in the state received approval in December to move forward.
That’s an issue because of the lag time between when licenses are approved and the product makes it to a store. For instance, the first licensed grower in the state — High Life Farms — received state approval in July. Marijuana from its first harvest was sold in late October at Healing Tree Wellness Center on 8 Mile in Detroit.
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State regulators took steps to ameliorate the supply problem, announcing in early December that provisioning centers could keep stocking their shelves with medical marijuana grown by caregivers through the end of 2018 without jeopardizing their license applications. Legally, caregivers aren’t allowed to sell the medical marijuana they grow to anyone but the five patients they serve.
“In 2019 the fact that there’s no marijuana on the shelves — I don’t blame LARA I blame the legislature,” Komorn said. “The legislature wrote that law that precluded the caregivers as sources. LARA took steps to try and fix it.”
But compounding the marijuana shortage was another late-breaking development in 2018: dispensaries that regulators had allowed to operate unlicensed were told to shut down by Dec. 31. The state’s order affected at least 72 dispensaries — all of which had applied for a license in February with the state. Their license applications were in various stages of consideration and approval, and some were considered inactive, said David Harns, spokesman for the BMR.
“We have received communication from medical marijuana stakeholders requesting that action be taken to address the problems caused by the removal of the stay and the department is in the process of determining whether continued operation in violation of current administrative rules could affect an applicant’s future licensure,” Harns said in a statement.
In the background of 2018, medical marijuana businesses weathered multiple storms. The deadline for businesses to become licensed constantly changed as regulators gave businesses leniency and then a judge intervened.
Resistance from local governments also played a factor, as more than 400 communities have opted out of medical marijuana, and more than 100 opted in during 2018.
“There has been a disconnect … between the way people in government view marijuana and the way that the public views it,” Rockind said. “That disconnect really reared its head in 2018.”
Proposal 1 had a chilling effect on local governments’ acceptance of the MMFLA. Many communities decided to take no action with regards to the medical marijuana program as they waited to see if recreational marijuana would be legalized — which voters ultimately approved Nov. 6.
Entering 2019, patients are having trouble accessing their medicine. There are 297,515 card-carrying medical marijuana patients in Michigan — and nearly 93 percent of them are using medical marijuana to address their severe and chronic pain.
Courtney Bosse’s daughter, Jasmine, was diagnosed with childhood epilepsy at the age of four in January 2017. For a year and a half they tried pharmaceutical drugs that came with severe side effects, and didn’t seem to work.
They turned to cannabis; and waited for Jasmine’s medical marijuana card to come in the mail. Bosse drove from their home in Lowell to a shop in Ann Arbor — the closest place available with the products Jasmine needed. They tested several throughout December, and finally found one that worked: a THCA tincture.
But when she called the shop to re-stock, they didn’t have the tincture any more: the shop had its state license, and could only sell state-licensed products that had been tested. Other shops that were open in December didn’t have the product she needed for her daughter’s epilepsy. Finding a caregiver was difficult and risky.
“I can’t even buy marijuana flowers and bud for me to try and make it itself,” Bosse said. “It’s an experiment that I don’t have time for.”
Ultimately, Bosse found someone who would gift her the tincture she needs for Jasmine, now age 6. It’s a temporary solution.
“It really just blows my mind that we’re even having this conversation,” said Amie Carter of Burton. “In the end it’s medicine for our children.”
Carter, who has a 12-year-old son with autism, successfully petitioned the state to add autism to the list of conditions that qualify for the medical marijuana program.
“That’s what I think the state is missing in this whole thing,” Carter said. “We’ve had a medical marijuana program since 2008; here we are in 2019, the state just voted on recreational and now we’re at a loss for getting our children medication.”
As Gov. Whitmer’s administration takes office this January, many in the medical marijuana industry are hopeful for change.
“The existing administration finds itself in power in conjunction with the Proposal 1 passage,” Komorn said. “In my view this is a mandate to the governor, attorney general and secretary of state to fix this problem.”
Whereas medical marijuana facility licenses are approved by an appointed board, recreational marijuana business licenses will be approved by staff. At first, certain licenses for recreational marijuana businesses will only be awarded to medical marijuana facility license holders.
Komorn said the state should unify the licensing process for both businesses as it prepares to launch the rules and oversight for recreational marijuana companies.
Thomas Nafso is an attorney representing three Detroit provisioning centers who previously worked for the Michigan Attorney General’s office advising the state’s Liquor Control Commission. He believes the medical and recreational marijuana programs could be combined in the future.
“I think the way that the recreational initiative language was written — there’s pretty broad authority for rule promulgation,” Nafso said.
Conversations have already begun between the Bureau of Marijuana Regulation and the new administration on how to launch the adult-use program, officials said. Work groups will be established to provide feedback, Brisbo said.
The bureau is under the guidance of the new director of the Department of Licensing and Regulatory Affairs, Orlene Hawks. Whitmer appointed her to the role.
Additional legislation passed in the 2018 lame duck session may speed up the application process for medical marijuana facilities in the mean time, Nafso said. Senate Bill 1262 removes background checks and financial vetting for applicants with less than a 10 percent stake in a company.