Whitmer administration changing tone around Michigan marijuana regulation

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As Michigan moves toward legal sale of recreational marijuana in 2020, new developments in pot regulation only reinforce expectation the industry will find a more sympathetic ear in Democratic Gov. Gretchen Whitmer.

The most obvious evidence is her backing of Proposal 1, which state voters approved in November to legalize recreational weed.

But Whitmer has now weighed in on the regulatory mess surrounding medical marijuana, successfully pushing last week to reopen 70 shuttered dispensaries through the end of March while they seek state licenses.

After prodding from Whitmer and the Department of Licensing and Regulatory Affairs (LARA), the state’s medical marijuana licensing board voted to allow dozens of the medical dispensaries to reopen. That brings the number of these storefront retail outlets to 104 ‒ where there once had been 300.

“This is certainly a step in the right direction,” Matthew Abel, executive director of the Michigan chapter of the National Organization for the Reform of Marijuana Laws (NORML), told Bridge Magazine.

Abel regards the board’s decision as a sea change from oversight practice under the administration of GOP Gov. Rick Snyder, which saw the board move to close nearly a hundred unlicensed dispensaries at the end of 2018.

Advocates for Michigan’s 300,000 medical marijuana cardholders decried that ruling, warning that it would choke off supply for thousands of patients who use physician-approved marijuana for everything from skin rashes to chronic pain to cancer.

Abel credited Whitmer – and newly appointed LARA director Orlene Hawks – for advocating a second look at policies by the Snyder-appointed board which he views as needlessly restrictive.

“It’s pretty clear that Snyder was slow-pedaling this,” Abel said. “We replaced the governor and Gretchen Whitmer replaced the director of LARA and even in this first month they already have taken action to benefit patients.”

State regulatory officials have said they were just enforcing guidelines approved in 2016 that as implemented required unlicensed medical marijuana outlets to apply for a license by Feb. 15 of last year or be shut down.

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Last March, LARA closed 40 such outlets, issuing letters that said in part: “A person that does not comply with this rule shall cease and desist operation of a proposed marijuana facility."

2019 has been far different. A day before the medical board’s vote this month, LARA issued a recommendation that the board allow the 70 newly closed dispensaries to reopen.

It included a statement by Whitmer: “We have heard from Michiganders closely affected by the ongoing transition to licensed marijuana facilities. It is important that we ensure that patients have access to their medicine while the medical marijuana industry continues to develop.”

The board also agreed to allow marijuana retail storefronts to sell untested medical marijuana supplied by caregivers - individuals legally entitled to grow up to 12 marijuana plants each for up to five patients - until March 31.

But that decision was not without controversy, no surprise given there have been four recalls by LARA this month for medical marijuana grown by caregivers that the agency said was tainted by mold and chemical contamination. As of last week, there had been no reports of illness from untested marijuana to the bureau.

The Michigan Coalition of Independent Cannabis Testing Laboratories condemned the decision to allow sale of untested marijuana, saying it would “undoubtedly flood Michigan's (medical marijuana) marketplace with unsafe, untested cannabis products.”

But Michigan NORML praised the ruling. Board member Rick Thompson said: “This is the system working properly.”

“All the cannabis provided in 2018 was all from caregivers. If we didn’t hear of any illnesses in 2018, then it doesn’t rise to the level of emergency or concern in my mind.”

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Under regulations that took effect at the end of 2017, licensed growers were to supply medical marijuana only to licensed retailers and previously unlicensed outlets were put on notice they had to apply for licenses. But as the first licenses were granted in July, pot patient and industry advocates said this regulated market was squeezing supply.

And as licensing rules took effect, that peak number of approximately 300 retail dispensaries fell sharply as some were denied licenses and others decided not to apply.

These rules changes come as the state shifts from the loosely regulated system that grew up after voters approved medical marijuana in 2008 to a more tightly run network for both medical and recreational marijuana.

The legalization of recreational pot allows those age 21 and up to possess up to 2.5 ounces of pot a day and keep up to 10 ounces in their home. Michigan is the 10th state in the nation and first in the Midwest to legalize recreational marijuana.

But under terms of Proposal 1, residents likely won’t be able to legally buy recreational pot until early 2020.

Under the new law, LARA’s newly formed Bureau of Marijuana Regulation is to oversee licensing of commercial outlets. The law requires the bureau to make license applications available by December.

Given that Michigan has more than a million pot smokers, the economic stakes are considerable.

The state Senate Fiscal Agency estimates recreational pot sales will reap $262 million more in annual tax revenues by 2023. An estimate by a Colorado-based consulting firm put the estimated revenue much lower, at about $135 million by the time the market matures.

Proposal 1 stipulates that tax revenues are first to be spent on implementation and enforcement of commercial sales. For two years, the next $20 million would go towards research the use of marijuana in treating veterans and preventing veteran suicide.

The unspent balance is to be spent as follows: 15 percent to municipalities where a marijuana retail store is located; 15 percent to counties where a marijuana retail store is located; 35 percent to K-12 education; 35 percent to the Michigan Transportation Fund.

Still, opponents of recreational marijuana warn of risks. If its implementation goes badly, they say, much of the blame will fall on Whitmer.

Scott Greenlee, president of Healthy and Productive Michigan – which opposed Proposal 1 – pointed to evidence that legal pot in Colorado is making the roads there more dangerous.

Analysis by the Denver Post found that marijuana figured into more fatal crashes in the wake of legalization in Colorado in late 2012. In 2013, it found drivers tested positive for the drug in about 10 percent of all fatal crashes. By 2016, it was 20 percent.

“Around the country, wherever this has been legalized for recreational purposes, that’s what we are seeing. There’s more use, more people on the roads that are impaired,” Greenlee said.

Indeed, in Detroit on Sunday, a 26-year-old driver admitted to smoking marijuana before he reportedly lost control of his vehicle, careened up an embankment and sideswiped a state police patrol car on the shoulder of I-75.

Greenlee also noted reports in Colorado and other states with legalized recreational marijuana that foreign drug cartels are moving in under the cover of legal sales to establish their own black market supply of the drug.

“I think Whitmer should be held accountable, if it’s positive or negative. I think overall it’s going to be negative,” Greenlee said.

Bridge Magazine reached out to a spokesperson for Whitmer for comment but was referred to LARA.

On the issues raised by Greenlee, LARA spokesperson David Harns said: “We work closely with (Michigan State Police ) on criminal issues related to the marijuana industry in Michigan. We would defer to them on issues of criminal law enforcement.”

As for the recalls of tainted medical marijuana, Harns said patients may take marijuana products to be analyzed at a state-licensed test facility - of which there are four in Michigan.

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