Congratulations, you’ve successfully become an MRA approved State of Michigan licensed Marijuana Grower! Now what? The first obstacle many state licensed Growers face is where to obtain plants, seeds, seedlings, or tissue cultures. If you are a caregiver or you hire a full-time employee that’s a caregiver, you can transfer the caregiver product to the facility when the caregiver license is surrendered. This can give your facility a “running start” such that not all of your plants have to be started from scratch.
However, if you are a 1500 plant facility, and only have two caregivers with 144 total plants, you are still going to need to access more genetics for your grow. Currently, the only way for a commercial grower to obtain seeds in Michigan is from someone already legally growing marijuana, including other licensed Growers and Caregivers. Although licensed Growers may currently accept any product directly from a registered Caregiver or another Grower without use of a Secure Transporter, this is only a temporary provision. Pursuant to the Medical Marijuana Facilities Licensing Act (“MMFLA”), the only permanently approved source for plants and seeds is from other licensed Growers, and the sale must be completed through a licensed Secure Transporter.
MMFLA licensed growers may be tempted to purchase from larger online retailers, but marijuana seeds are considered cannabis products just like flower, edibles, and concentrates. Cannabis product may not legally cross state lines so long as marijuana remains illegal at the federal level, meaning a licensed grower cannot legally purchase seeds online for their MMFLA facility. Growers licensed and operating in Michigan are limited in product selection and may only purchase, produce, and sell seeds within the state. If a Grower holds a valid medical marijuana card, he or she may purchase seeds from a licensed dispensary, but widespread commercially available seeds is a distant reality until overseas and US based seed banks can ship nationwide, which won’t happen any time soon.
Now you may be asking—if that’s the case, how does Michigan get access to top quality genetics from other states? Well, there is a backdoor way to do it, at least for now. Unlike MMFLA and MRTMA licensees, caregivers are not subject to the same intense regulatory requirements and inspections that MRA licensed businesses are. Essentially, caregivers still operate in the wild west and can get away with things that MMFLA licensees simply cannot. They can therefore serve as the conduit for out of state genetics. To illustrate, a caregiver may purchase out of state genetics (which is still illegal by the way), and then sell those genetics to a MMFLA licensed grower.
While this solution isn’t great—it is at best a legal grey area, and at worst simply illegal—it is the only workable solution for out of state genetics to come into Michigan’s regulated cannabis market. Unfortunately for Michigan cannabis cultivators, MRA seems to be one (or perhaps several) steps behind in identifying and addressing problems in Michigan’s regulatory scheme.
Now let’s assume you are able to get a hold of good genetics for your MMFLA cultivation facility from a caregiver or another MMFLA licensee. How do you ensure you still have access to genetics without having to continue to purchase them from other Michigan licensees? You will need to carefully cultivate and breed the plants to ensure a constant supply of new seeds or utilize cuttings from your existing plans. Otherwise, as a professional cultivator, you will need to continue to purchase seeds from another Michigan licensed grower or caregiver.
Once a Grower obtains a stable strain that expresses consistent traits, that licensed Grower may start selling those seeds to other licensed Growers that are beginning a commercial grow. A start-up Grower may spend years crossing and breeding plants, but the best of these strains will be highly sought out by other commercial growers. This means a licensed grower could experiment with genetics, cross-breeding, and produce his or her own unique strains and results for resale to other growers, as opposed to producing merely for flower production. This is a business model we have yet to see get much traction among licensed MMFLA or MRTMA businesses, but we expect this to change soon, especially if the “caregiver backdoor” is shut down. Until then, licensed growers will be forced to purchase from other licensed facilities as well as caregivers who were able to obtain desired genetics, even if the source of those genetics was not entirely legal.
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.