The state of Michigan on Tuesday gave medical marijuana businesses until Dec. 15 to close or potentially risk not obtaining a license under a new regulatory system aimed at increasing oversight and imposing new taxes on the industry.
The decision means registered patients will have to grow their own pot or obtain it from caregivers — as allowed for under existing law — until the state issues the licenses, likely in the first quarter of next year. It will accept license applications starting Dec. 15.
After learning of the decision, a new state licensing board that met near Lansing on Tuesday, dropped a member's proposal to tell shops they would not get a license if they stayed open beyond this Friday — which had been criticized by frustrated patients, shop owners and others. They expressed concern, however, with the new deadline as well, questioning how patients will find their marijuana.
The dispensaries — which are not explicitly addressed under a 2008 voter-approved medical marijuana laws — have gone unchecked in some municipalities and have been blocked in others under a Michigan Supreme Court ruling that questioned their legality.
A five-tiered licensing system is being developed under a 2016 law that further regulates medical marijuana. It will impose a new 3 percent tax on provisioning centers and establish licenses to grow, process, sell, transport or test marijuana.
Roughly 218,000 patients registered with the state to grow their own marijuana or obtain it from 38,000 designated caregivers who can supply a limited number of people. The industry could generate more than $800 million in revenue annually once the new regulations are fully in place, according to the nonpartisan House Fiscal Agency. That would translate into an estimated $74 million in sales and dispensary taxes.
Andrew Brisbo, director of the state's medical marijuana bureau, said dispensaries still open after Dec. 15 will face a "potential impediment to licensure." Three months affords enough time for existing operations to wind down their affairs and for patients to connect with caregivers, he said.
"The department will not shut down facilities," Brisbo told licensing board members. "However, continued operation is a business risk as they may be shut down by law enforcement or denied licensure."
The state's approach drew concerns from a large crowd of medical marijuana proponents who attended the meeting at a golf course banquet hall.
"If you're all going to shut down every shop after attacking the caregivers for a decade, maybe you should think about the people that are going to die," said Keith Olson, a 42-year-old from Royal Oak who described himself as a patient and caregiver.
Also Tuesday, the state provided more information about licensing fees. The nonrefundable application fee will likely cost between $4,000 and $8,000. One type of grower license is capped at $10,000 under law. Other grower, processor, transporter and provisioning center licenses could be as low as $10,000 or as high as $57,000.