Focus, Government, Health Care, and Law

Medical marijuana law may receive upgrades

Attorney says bills may ‘shore up’ some issues occurring at the federal level.

November 27, 2015
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A series of three bills that passed through the Michigan House and are now expected to be taken up by the Senate would enhance the state’s medical marijuana law, possibly paving the way for lucrative business ventures.

The bills, HB 4209, HB 4210 and HB 4827, would establish regulations for licensed dispensaries, allow for edibles and create seed-to-sale tracking regulations.

The Michigan House passed the bills in October.

Reps. Mike Callton, Lisa Lyons and Klint Kesto served as the bills’ primary sponsors, respectively.

HB 4209 calls for the creation of a new state board to license and regulate dispensaries, large-scale growers, processors, distributors and testing facilities. It also establishes a 3 percent tax on retail income for dispensaries and applies Michigan’s 6 percent sales tax to purchases from these facilities.

HB 4210 would allow for the sale of medical marijuana in non-smokeable forms.

HB 4827 establishes a seed-to-sale tracking system for commercial marijuana and marijuana products.

“I’ve read the bills and I think they are a good start in addressing the half-baked medical marijuana law we have right now,” said Brian Lennon, Warner Norcross attorney and chair of the firm’s criminal practice group.

Lennon has worked on both sides of marijuana law, serving first as a federal prosecutor and now as a defense attorney. He said Michigan’s medical marijuana law, passed by voters in 2008, has left things murky for law enforcement as well as for users and sellers of medical marijuana.

Lennon said the bills address issues that were not addressed when the law was first passed and that may have left Michigan’s medical marijuana business in the federal government’s crosshairs.

“Clearly it had a lot of things that were not addressed and lots of room for interpretation that I think has given federal prosecutors support for prosecution, in general,” he said. “I think these proposed bills are a step, in my opinion, to close up some of those gaps and address some of those issues that I think the feds have probably had some problems with.”

He noted the Cole Memo, which was issued in 2013 by the Department of Justice, provided a list of priorities for prosecutors regarding going after marijuana prosecutions. Essentially, it’s been a belief that the federal government is less likely to pursue marijuana prosecution in states that pay attention to those priorities and institute robust regulatory systems.

“I think Michigan, up until now, couldn’t have argued we have a robust system that would take the feds’ eye off what is going on here,” Lennon said. “I think the three proposed bills are shoring up some of those issues.”

Lennon also noted the bills appear to open the door to greater revenue opportunities for the state and for larger business-minded ventures to occur around medical marijuana.

He said, based on his reading of the bills, they “would open it up to more commercial operation opportunities than what we currently have now.”

The state also could garner greater revenue than what is possible under the current structure.

“Up until now, other than the state collecting its license fees for issuing the cards, we really haven’t captured revenue from this,” he said. “I think the proposed laws envision a much larger regulatory scheme, so more licenses. Maybe a large-scale grower might have to pay a hefty license to be able to do that.

“My understanding is 4209 is postured … to capture significantly more revenue than what is being captured by the state now.”

There are multiple efforts underway to get recreational marijuana on the 2016 ballot, and there has been speculation that the three medical marijuana bills are an effort to get ahead of legalized recreational marijuana in Michigan.

“That is my feeling — that they are preparing for a recreational marijuana bill,” Lennon said. “We have to fix our half-baked medical marijuana laws before we get to recreational marijuana.”

The Michigan House passed all three bills with a significant bipartisan majority, but Lennon said the most contentious issue was the 3 percent and 6 percent taxes, and he expects that could remain an issue in the Senate.

“I think you are going to have pushback both ways on the tax,” he said. “Some people are saying why are we taxing a pharmaceutical and others are saying we should be taxing a lot more, like we do with alcohol and cigarettes. That’s where I expect to see some of the vigorous debates.”

While the bills would provide a much more robust framework for medical marijuana and likely open the door for more commercial gain, Lennon noted federal law still prohibits the use and sale of marijuana, so people need to be careful.

He said the federal government retains the right to go after anyone, anywhere, anytime when it comes to marijuana, and a new president could reverse the leniency on marijuana prosecutions ushered in by the Obama administration.

“I don’t care what the Department of Justice says, until Congress changes the law, it’s illegal federally,” he said.

“So if I’m asked, ‘Hey is this something to get into,’ all the licensing actions and anything else the state does doesn’t change the fact that it’s illegal under federal law to cultivate, to distribute, to transport and to possess. Really, until Congress acts, you need to tread lightly, and I’d be leery of relying even on these enhanced regulatory measures a state has taken.”

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