According to an advisory released on Thursday, Michigan is welcoming medical marijuana companies warmly and inviting them to grow large-scale operations. When the Legislature passed bills for medical cannabis last year, it created three license-classes for cultivators: Class A permits up to 500 plants, Class B up to 1,000 plants, and Class C up to 1,500 plants.
This week’s rules advisory release, however, has specific language written into it that allows one individual or company to apply for as many Class C licenses as they desire, which will open up Michigan’s marijuana market to mega cultivation. A spokesperson for the State Department of Licensing and Regulatory Affairs, David Harns, explained in a statement:
“The stacking of Class C grow licenses is a more efficient way for the State Department of Licensing and Regulatory Affairs to keep track of large grows in the state.” He said that “Stacking will also allow businesses to operate more efficiently, which in turn will allow for a better consumer experience.” Not everyone agrees: Smaller operators believe the ruling an attempt to squeeze them out of Michigan’s profitable medical pot market.
Jason Durham, a legitimate medical marijuana caregiver, and cardholder, says, “They are doing everything they can do to shut down the mom and pops.” Durham, who cultivates for five patients and wants a license for up to 500 plants, also said, “They want it to be one corporation that has control so they only have to babysit and monitor one business.”
Large-scale cultivators will have to pay a lot more to get into the business, though. Everyone wanting a license will have to pay an application fee of between $4,000 and $8,000, depending on how many licenses he or she wants. The regulatory assessment will work on a sliding-scale cost model, which can range from $10,000 for small growers and up to $57,000 for big cultivators, dispensaries, and distributors.
Applicants will have to provide proof that they have sufficient capital to invest in the operation, as well as enough security and insurance. For local counties, officials will need to decide whether they want medical cannabusinesses in their jurisdictions before the state starts issuing any licenses next year. If they miss this deadline, the state will decide for them whether to issue licenses in their areas or not.
The state intends issuing five different types of medical marijuana licenses – for cultivators, processors, distributors, testers, and retail outlets – and applications will begin on December 15. The state will review all applications it receives, and the Michigan Medical Marijuana Licensing Board will start issuing licenses in the spring of 2018.
The medical weed industry, once up, running, and efficiently regulated, will generate estimates of $711 million in annual sales. The state will collect $21 million of that every year in tax revenues. Robin Schneider, legislative liaison for the National Patients’ Rights Association, an organization advocating for safe, legal access to medical pot, understands why the state does not want to mandate license numbers.
Schneider knows the department just wants to adhere to the letter of the law, but by not mandating the number of licenses it issues, she says, “There is the potential that they will take away opportunities for smaller business owners.” Large-scale cultivators are already hard at work in other states, with operations well underway.
Candescent, a 9,600-square-foot cannabis cultivation facility in southern California, opened its doors this month and plans to extend its cultivation space to 100,000 square feet now that voters approved recreational marijuana last November. In Massachusetts, American has the opportunity to buy 52 acres of land, which it would turn into processing facilities and greenhouses.
Many residents in Michigan do not want large-scale commercial pot farms becoming the state’s landscape, and Durham hopes it will never happen. “It will make it almost impossible for us small guys to get into the market,” he reiterated. If Michigan makes it worth their while for large-scale marijuana operations to invest in the state, they will likely come in droves, pushing small farmers out completely.