Forty medical marijuana businesses across Michigan got an unpleasant visit Thursday from state officials and the Michigan State Police, ordering them to stop operating.
And those visits are just the beginning. Hundreds more are expected to get cease and desist letters in the coming days.
The state Department of Licensing and Regulatory Affairs began the process of shutting down medical marijuana facilities that are operating illegally and haven't submitted applications to the state for a license.
"Any business that didn't apply for a license by Feb. 15 isn't in compliance with the emergency rules that were set up," said David Harns, spokesman for the department. "We did 40 today all throughout the state and there will be hundreds more."
Harns wouldn't say what kind of businesses got the cease and desist letters or how the state had identified them, but most were probably dispensaries that have been operating outside of Michigan's medical marijuana laws.
The emergency rules "permits an applicant for a state operating license to temporarily operate a proposed marijuana facility under certain conditions," the cease and desist letter read. "In order to comply with this rule, a temporarily operating facility must have applied for a state operating license by February 15. ... A person that does not comply with this rule shall cease and desist operation of a proposed marijuana facility."
If the business owner doesn't shut down, he or she risks not being able to get a license at all from the state, the letter said, and could also result in a "referral to local, state, or federal law enforcement and other penalties or sanctions as provided in the MMFLA (Medical Marijuana Facilities Licensing Act) and Emergency Rules."
When LARA and the Michigan State Police visited the businesses, they only delivered the cease and desist letter and did not confiscate any products from the businesses, said Harns.
Michigan voters passed a medical marijuana law in 2008 that allowed caregivers to grow up to 12 plants for each of five patients who had obtained medical marijuana cards. There are more than 277,000 people who have medical marijuana cards in the state.
Some of those caregivers banded together to set up dispensaries, some with the blessing of the communities where they were open for business. Others got busted, including many in Oakland County over the years, by police in towns that were more wary of the medical weed.
In 2016, the Legislature decided it needed to get a handle on the medical marijuana business and passed bills to regulate and tax medical marijuana. It's expected to be a lucrative business with revenues exceeding $700 million a year. That could rise even more dramatically if a proposal to legalize marijuana for adult recreational use gets on the November ballot and is passed by voters.
The state began accepting applications for licenses in December and is in the process of doing background checks on the business owners. The Medical Marijuana Licensing Board is meeting next Thursday and will begin considering some of the applications. But licenses aren't expected to be handed out until the board's April meeting.
The licenses are in five categories: growers, processors, testing facilities, secure transporters and dispensaries.
So far 378 applications have come in to pre-qualify for a license, which means that the business owners are going through the state background check, but still need to get approval from a town that has passed an ordinance allowing medical marijuana businesses. Another 117 applications — including 43 growers, 20 processors, 49 dispensaries, 2 secure transporters and 3 testing facilities — have been turned in that include approval from a local community.
Contact Kathleen Gray: 313-223-4430, email@example.com or on Twitter @michpoligal.
Watch: California's marijuana market is expected to be bigger than beer
Recreational cannabis sales began at the start of the New Year in California, and the market is already expected to bring in billions in revenue this year. Veuer's Sam Berman has the full story.Buzz60