Dispensaries and the MMFLA – Part 2

“. . . my date remains September 15th.”

Donald Bailey, MMFLA Board Member

At the third meeting of the Medical Marihuana Facilities Licensing Board on September 12 the issue of existing “dispensary” operations and their eligibility for a license under the Medical Marihuana Facilities Licensing Act (“MMFLA”) was again addressed.  Some clarification was achieved, but many questions remain.

First, the clarification. 

The Director of LARA’s Bureau of Medical Marihuana Regulation (“BMMR”) informed the Board and the public that, according to the Michigan Attorney General, BMMR and not the MMFLA Board has the authority to develop a rule allowing or prohibiting licenses.  Based on that advice, BRRM posted a notice regarding existing dispensaries.  This notice says:

The department’s intent for the emergency rules is to consider any operation of a facility – that would otherwise need to be licensed under the MMFLA – as a potential impediment to licensure if continued after December 15, 2017.

In answering follow-up questioning by the Board the BMMR Director indicated that as a part of the application process, applicants will be asked about previous interest in and engagement in the industry. The answers will be provided to the Board.  Thus, it seems fairly clear that LARA intends to use December 15 as the deadline for a current “dispensary” operator to cease operations to avoid tainting a license application.

Next, what remains unclear?

First off, as we noted in Part I, the word “dispensary” is not defined in the Medical Marihuana Act of 2008 nor in the MMFLA.  Colloquially, the word often means a retail establishment where a patient may acquire medical marijuana from a person to whom the patient is NOT connected as a caregiver under a LARA registration.  But there are many conceivable ways in which medical marijuana could be delivered to a patient in accordance with the MMMA in a “retail” like environment. 

A potential applicant who is engaged in the delivery of medical marijuana to patients would be well advised to carefully review with capable marijuana legal counsel the precise scope of the applicant’s activities delivering medicine to patients, to assess the probability that such activities were or were not within the reasonable scope of the McQueen decision.  Based on that examination, they may choose to risk a fight about license eligibility and continue the operation. 

Moreover, to the extent the potential applicant determined that the needs of patients required continuation of medicine delivery even after December 15, they might well develop a defensive strategy to present to LARA and the Board.  Note that LARA’s language regarding dispensaries operating after the 15th is that such action would be “. . . a potential impediment to licensure.”  This is not the same as “if you operate after December 15, you won’t get a license.”   

Secondly, even though the BMMR position has established a December 15 effective date, at least one Board member said that operation of a “dispensary” even before that date will create eligibility risk.  Board member Donald Bailey, who previously asked the full Board to adopt a bright-line rule that any dispensary operating after September 5 would not be eligible for a license, spoke at the meeting in response to the BMMR deadline.  He stated that though the BMMR deadline was December 15, “. . . my date remains September 15th.” [Livestream video at minute 15:15]  Bailey continued:  “It’s a violation of the law[.]  Because of that, I am not going to support someone who stays open.”  [Livestream video at minute 15:47]  Operators should be aware that their applications will probably depend on the support of at least three of the five Board members.  Does Board Member Bailey have two other members who support his position on September 15?

The lack of clarity arising from the current tension between BMMR and some members of the Board potentially creates legal issues for applicants who are denied licensing for operating a “dispensary” after September 15.  A denial of a license application based on “operation” of a “dispensary” after September 15 could well result in an appeal alleging that the Board exceeded its authority and acted contrary to established rules of BMMR.  Will such an argument succeed?  Maybe.

Finally,

The many compelling comments of patient’s need for safe access to the type of medical marijuana that works best to treat their conditions will continue to resonate with LARA and the Board.  Some Board members seem to be very sensitive to the overarching purpose of the MMMA and the MMFLA to provide medical relief to the hundreds of thousands of Michigan citizens for whom marijuana is the best medicine.  Who knows what flexibility might greet an applicant who can make a strong case for the emergency nature of their provision of medicine to patients? 

As we observed when we last wrote on this topic, Michigan is not the first state to struggle with how to transition from outlawed marijuana to a licensed and regulated medical system.  Some clarity has now developed regarding dispensaries.  Time will tell if these measures are enough.