The State of Michigan is opening its medical pot industry to massive-scale grow operations. This is according to a Thursday-released advisory. Last year, when the state Legislature passed bills to allow medical marijuana, it provided for three different classes of growing licenses:
- Class A permits up to 500 plants.
- Class B allows up to 1,000 plants.
- Class C licenses up to 1,500 plants.
However, the legal advisory, released just last week, specifies that a single individual or business is able to apply for as many Class C licenses as they desire, which will open the medical cannabis market in Michigan to mega cultivation. The state Department of Licensing and Regulatory Affairs justifies this move through its spokesperson, David Harns.
Harns said, “The stacking of Class C grow licenses is a more efficient way for the Department of Licensing and Regulatory Affairs to keep track of large grows in the state.” He also said that, “Stacking will allow businesses to operate more efficiently, which in turn will allow for a better consumer experience.” However, not everyone agrees.
Some smaller farmers consider the ruling an attempt to push them out of Michigan’s lucrative pot industry. Many are voicing their concerns. Jason Durham, a legitimate caregiver and medical marijuana cardholder, is just one of them. He grows medical weed for five patients in his care, but he needs a Class A license to cultivate up to 500 plants and can only hope he gets one.
According to Durham, “They are doing everything they can do to shut down the mom and pops. They want it to be one corporation that has control so they only have to babysit and monitor one business.” Getting into the business is going to cost mega bucks for large-scale growers, though. It will certainly be more expensive for them.
Application fees apply to all license applicants, who will each pay, depending on how many applications the department receives, between $4,000 and $8,000 in application fees alone. However, there are also assessment costs, which range on a sliding scale cost model from $10,000 for the smallest applicants to $57,000 for bigger cultivators, distributors, and sales outlets.
To have their applications considered, all applicants must provide evidence that they have sufficient capital to invest in the business, and they that have enough security and insurance coverage. There will be five license categories for medical marijuana in the state: For dispensaries, testers, distributors, processors, and cultivators.
Applications for any type of medical marijuana license will begin on December 15 this year. However, the Michigan Medical Marijuana Licensing Board will review applications and only start awarding licenses in the spring of next year. Once the newly created pot market is up, running, and generating profits, experts predict it will generate $711 million in annual sales and $21 million for state coffers.
Legislative liaison for the National Patients’ Rights Association, Robin Schneider, understands why the department wants to adhere to the letter of the law, which prohibits the mandating of license numbers. However, as an advocate for safe and legal access to pot, Schneider thinks, “There is the potential that they will take away opportunities for smaller business owners.”
Mega growing is already occurring in other states. They are well underway in southern California. Candescent, a pot firm, has 9,600 square feet of space to grow marijuana. Its facility opened for business in September, and it plans now to expand its grow space to 100,000 square feet since voters legalized recreational weed in November last year. There are several others.
In Massachusetts, another large-scale business, Americann, is deciding whether to purchase 52-acres of land, which it would turn into processing facilities and big greenhouses. Durham does not want that landscape to dot the Michigan countryside, and he explains that, “It will make it almost impossible for us small guys to get into the market.”