On Thursday, dozens of cannabis dispensaries across Michigan were hit with cease and desist letters demanding they immediately halt all operations. And that’s just the tip of the spear. Over the coming weeks, Michigan officials plan to deliver letters to hundreds of more dispensaries they say are violating the rules. How could this state just shut down 40 medical marijuana dispensaries in a single day, with little warning? And how will this action impact medical cannabis patients?
Michigan Officials Say Hundreds Of Cannabis Dispensaries Are Operating Illegally
Michigan’s medical marijuana program has been in place since 2008. Now, more than 277,000 people have registered with the state’s program.
In the program’s decade-long existence, lots of unregistered, unlicensed dispensaries have popped up. Sometimes, these dispensaries are valued establishments in the communities they serve. Elsewhere, where residents may have more reservations toward legal cannabis, police have cracked down on these off-the-books dispensaries.
Then, in 2016, a conservative state legislature began crafting bills to better regulate, tax, and license Michigan’s medical cannabis industry. Passage of those bills put in place what the Department of Licensing and Regulatory Affairs call “emergency rules.” For one, the rules aim to ease the transition to the new licensing policies. But they also grant some leeway to formerly illegal businesses that try to get above board.
For example, the rules state that businesses can operate temporarily so long as they’ve submitted an application for a state operating license. The catch, however, was that businesses had to submit their applications by February 15 of this year.
Hundreds of businesses did, from growers to processors to transporters. But hundreds more did not, and now they’re on law enforcement’s to-do list.
David Harns, spokesperson for the Department of Licensing and Regulatory Affairs, explains: “any business that didn’t apply for a license by Feb 15 isn’t in compliance with the emergency rules that were set up.”
Anyone not in compliance with that rule must cease and desist all operations. And the penalties for refusing to shut down are severe. A business can lose its chance at a license entirely and even face federal charges and other penalties.
According to Harns, the 40 dispensaries Michigan State Police shut down yesterday are just the beginning. “There will be hundreds more,” he told the Detroit Free Press. So how could this state just shit down 40 medical marijuana dispensaries so effortlessly? That is, how did they know which dispensaries to target?
Harns declined to comment on exactly how the state identified which business to hit, or which kinds of businesses took priority. Dispensaries, or maybe growers? Either way, the numbers suggest state officials are casting a wide net.
Law enforcement didn’t confiscate any cash or product, they just delivered cease and desist notices. And besides, many of the businesses hit with the order to shut down had established themselves in their communities over several years. It’s easy to say that dispensaries who failed to apply for a license by the deadline had it coming. But the application process is cumbersome and costly.
Companies that can afford it will often hire attorneys and consultants to help them assemble their applications. Smaller medical marijuana businesses, on the other hand, sometimes struggle to cover the costs of the process. For those businesses that did get their applications in, the state is currently in the process of conducting background checks on their owners.