The Future is Still Hazy for Michigan’s Medical Marijuana Dispensaries

But it could become clearer in 2018 with a new licensing process


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Metro Detroit developed somewhat of a fairly large green thumb soon after Michigan voters legalized cannabis for medical use in 2008. Green crosses, signifying the location of marijuana dispensaries, sprouted along 8 Mile Road like competing convenience stores.

Last year, as many as 280-plus dispensaries were reported operating in Detroit alone. But more recently, many had shuttered, and more faced a deadline to close by Dec. 15 — the day the Michigan Medical Marihuana Licensing Board (they spell it with an “h”) starts accepting applications for licenses in categories such as growing, processing, selling, testing, and securely transporting marijuana and cannabis-based products.

“Next year, once we have licensed facilities, those provision centers will be able to sell to anyone with a card without fear of prosecution, at least under state law,” says Matthew Abel of Cannabis Counsel, a Michigan law firm. (The “under state law” caveat is because marijuana is still forbidden by federal law. But that’s another can of worms.)

Until the new licenses are granted, Michigan shops are and have been operating in a gray area.

Why were stores getting raided by police and being encouraged or forced to close, even though voters deemed medical marijuana legal?

A 2013 Supreme Court ruling of State of Michigan v. McQueen turned what was supposed to be a legalized industry into a sticky situation.

“Brandon McQueen was running a place in Mount Pleasant and … the prosecutor was trying to shut them down for violating the law, claiming that they were a nuisance,” Abel says. McQueen lost; the ruling held that patient-to-patient sales are prohibited. Since then, township and county municipalities have had discretion as to whether or not they believe a dispensary is a “nuisance.”

Detroit was initially lenient, then passed an ordinance that gave the city the authority to close dispensaries and start granting licenses to a much smaller number than had first sprung up.

Meanwhile, the state’s Department of Licensing and Regulatory Affairs created a new set of guidelines and a number of licenses that entrepreneurs can apply for.

The state originally wanted all shops to close before the Dec. 15 application process began. But in early November, after receiving numerous complaints from among the 200,000-plus medical marijuana cardholders, LARA decided to let dispensaries stay open during the process. Even that is a fuzzy notion, since the new ruling only covers existing dispensaries that have gone through an approval process in the communities where they operate.

The picture should, in theory, become clearer in early 2018 when the state starts issuing licenses.

Some look forward to the clarity. “We are hoping that we will be looked at in the eyes of the state as a legit business,” says one Ann Arbor dispensary owner. “Because they look at us right now as an illegitimate business.”

What’s also not clear is the cost. At press time, potential licensees have to fill out pre-qualification applications so the state can do a background check and also determine if an applicant has enough personal assets to ensure financial viability. Initial proposed amounts for growers ranged from $150,000 to $500,000.

So, while the licensing process and cost isn’t yet clear, what’s apparent is that the potential for profits, plus the benefits from taxing marijuana, is high. 

 

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