On April 8, 2020 the MRA released its latest bulletin regarding the phasing-out of caregiver product from the adult-use market. The bulletin specifically prohibited products “derived” from caregivers to enter the Adult-Use cannabis market. Throughout this year the MRA has been inching closer and closer to removing caregiver product from adult-use facilities all together. This bulletin, along with the new “phase” we have entered, places an immediate ban on caregiver produced or derived product from entering the adult-use market.
As of June 1, 2020, we are in Phase 2 of this process. This means the MRA will not permit any MRTMA licensee with equivalent licenses to transfer caregiver produced or derived products from their medical facility to their adult-use facility. However, licensed medical growers may continue to receive seeds, seedlings, tissues, bud, shake, and trim from caregivers.
There is one exception to this rule however, and that is transferring caregiver plants and genetics to a Michigan marijuana microbusiness. The MRTMA rules allow a caregiver on the microbusiness license to do a one-time transfer of caregiver plants to the microbusiness when it’s first opening up.
Back to the issue at hand—how exactly are adult-use facilities going to receive genetics without caregivers? Well, it seems the only avenue left is medical facilities. The issue then becomes what exactly the MRA means when it says “derived” from caregiver products. Can a medical facility buy a clone from a caregiver, grow it into a mother plant, then transfer cuttings from that plant over to the Adult-Use market, or would that qualify as “caregiver derived”? At the time of writing, we’ve reached out to MRA with this specific question three times, only to receive the same non-answer answer quoting the language about “caregiver derived.” While this is certainly frustrating as a Cannabis Business Attorney, since this puts us in a position where we simply need to do it and then see what happens, this is common practice for MRA, which often needs time to flesh out these issues to the point that they can give written guidance.
Nonetheless, it has become common practice for caregivers to provide seeds or cuttings to licensed facilities which in turn benefits Michigan patients may creating a more diverse pool of marijuana genetics available to them. As a matter of fact, every single plant growing in a licensed facility in the State of Michigan was “derived”, at some point, from a caregiver. Thus, if MRA were to take the position that even a clone from a plant derived from caregiver genetics would be included in this ban, they would effectively make illegal every single plant grown in an MRTMA grow facility in the State of Michigan. This would certainly be an absurd position to take.
The best way licensees can handle this ban while we wait for MRA to find the plants that are at least one clone / parent distant from the caregiver product they have. This means that until MRA is willing to provide guidance on this issue, cuttings taken directly from a mother plant that is a caregiver derived product could be interpreted by MRA as being “caregiver derived.” Also, keep in mind that medical facilities are still allowed to receive caregiver products. So, any clones that can be transferred to an adult-use facility can easily be replaced by caregiver genetics.
As Michigan cannabis attorneys, we understand the need for licensees to get genetics and products over to the adult-use market. We are diligently communicating with the MRA to get a clear picture of what will and will not work when requesting transfers and may already have one by the time you read this article. While we suspect that the caregiver genetics example described above would be permissible, making those kinds of assumptions when it comes to dealing with the MRA can be dangerous.
Mr. Roberts is the founder and managing member of Scott Roberts Law, a Detroit-based Cannabis Business Law Firm founded in 2014. Scott has spent his entire career representing businesses and helping them comply with municipal, state and local regulations, as well as assisting on transactional corporate and real estate matters. Scott is an accomplished attorney, author and public speaker, having spoke at CannaCon, Cannabis Industrial Marketplace, CannabisAid, and 420 Canna Expo, to name a few. He has also taught Continuing Legal Education on Marijuana business matters, meaning other attorneys see him speak to learn about the nuances of cannabis business law.