Court Eviscerates Michigan’s Medical Marijuana Dispensary System

Michigan’s highest court issued a decision Friday that will likely shutter most of the state’s medical marijuana dispensaries. In a 4-1 ruling, the Michigan Supreme Court held that transfers of marijuana between two authorized medical marijuana patients are not legal under the Michigan Medical Marihuana Act.

To serve the state’s estimated 124,000 patients, businesses and not-for-profits have emerged that operate as “membership organizations” by facilitating the transfer of marijuana between various authorized patients and authorized caregivers. Members would rent lockers and set the price of their transaction with fellow members on their own. The court held that because patients cannot sell to one another, nor can designated “caregivers” sell to patients not their own, defendant Cannabis Collective is not immune from public nuisance actions:

In contrast to several other states’ medical marijuana provisions, the MMMA does not explicitly provide for businesses that dispense marijuana to patients. […]

Defendants transferred and delivered marijuana to patients by facilitating patient-to-patient sales; in doing so, they assisted those patients in acquiring marijuana. The transfer, delivery, and acquisition of marijuana are three activities that are part of the “medical use” of marijuana that the drafters of the MMMA chose not to include as protected activities within § 4(i). As a result, defendants’ actions were not in accordance with the MMMA under that provision.

In light of the court’s interpretation of the law, it appears the only ways in which a registered patient may obtain medical marijuana are by growing their own, or working with a caregiver, who is authorized to provide marijuana for up to five patients. According to Denise A. Pollicella, a Michigan lawyer specializing in marijuana law, some two-thirds of the state’s patients do not have an authorized caregiver. Pollicella points out that while medical marijuana dispensaries are able to operate economically to provide the range of options relevant to different types of patients, a caregiver who is providing marijuana to just five patients lacks the economies of scale to effectively serve patients.

Michigan’s law is not the only one that, while authorizing patients to legally possess and consumer marijuana, is hazy about how they can actually obtain that marijuana. In several states, including Washington and California, dispensaries have operated under a “collective gardens” provision in the laws that allows users to band together to produce and consume marijuana. Others, such as Colorado’s and Maine’s explicitly authorize dispensaries.

Seattle City Attorney Pete Holmes has cited legal uncertainty about this collective gardens justification as one of the many reasons why law enforcers prefer Washington’s new medical marijuana legalization law, which clearly authorizes licensed dispensaries and producers.

In response to the ruling, State Rep. Mike Callton (R), said he would propose a bill to legalize dispensaries. He proposed a bill last year that never made it to the hearing stage. The legislature is already considering a bill to decriminalize marijuana. Just last week, reports showed that Michigan’s medical marijuana program netted state revenue of $6.3 million in application and renewal fees in the last fiscal year.