LANSING, MI — The Michigan House on Wednesday signed off on sweeping plans to create a highly-regulated medical marijuana industry and allow patients to purchase the drug at storefront dispensaries, which would be taxed.
“These are regulated, inspected facilities where patients can feel safe obtaining their medicine,” said Rep.. Mike Callton, R-Nashville, who sponsored the dispensary legislation.
House Bill 4209, approved in a 95-11 vote and now heading to the Senate, would create a new state board to license dispensaries, large-scale growers, processors, distributors and testing facilities in communities that allow them.
The House also approved bills to create a “seed-to-sale” tracking system for medical marijuana and extend legal protections to registered patients who prefer to use non-smokable forms of the drug, including edibles and oils.
A series of state court rulings have clouded the legal status of dispensaries and marijuana-infused products, which some patients — and parents with sick kids — find more effective and healthier than smoking.
“This is not a criminal justice issue, this is a health issue, and even more it’s a moral issue,” said Rep. Lisa Lyons, R-Alto, who sponsored the edibles bill. “Put yourself in these peoples’ place. What would you do if it was your child?”
Combined, the three-bill package proposes the most significant changes to Michigan’s medical marijuana program since voters approved use of the drug in 2008, but it would not eliminate the current patient-caregiver system that allows for limited home growing.
Dispensary owners would be required to pay a 3-percent tax on their gross retail income, and proceeds would be divided between local municipalities, counties, sheriff’s and the state’s general fund. Patients would also be required to pay Michigan’s 6-percent sales tax on dispensary purchases.
An earlier draft of the bill would have seen the state impose an 8 percent tax on dispensaries, but critics argued the higher rate would have led to unreasonable prices for patients and encouraged continued trade on the black market.
State Rep. Jeff Irwin, D-Ann Arbor, called the updated bills “imperfect , but a good compromise,” a sentiment also expressed by Robin Schneider of the National Patients Rights Association.
“I think it’s a workable system,” Schneider said earlier Wednesday before the vote. “It will provide safe access for patients and require testing, proper packaging and labeling. This will be good for patients.”
But some long-time medical marijuana advocates remain unhappy the the proposed distribution system, which would create additional bureaucracy and prohibit registered caregivers from selling their excess home-grown pot to dispensaries.
“The biggest problem we’re concerned about is the criminality of people involved in medical marijuana,” said Matthew Abel, an attorney and executive director of Michigan NORML. “While these bills go quite far in allowing infused products and dispensaries, they freeze out of the system all the people who are currently growing. All of them.”
The regulatory system would not be cheap to maintain. The House Fiscal Agency estimates that the Department of Licensing and Regulatory Affairs, Michigan State Police and the attorney general’s office would have to employ more than 100 full-time employees to handle licensing, enforcement and prosecution related to medical marijuana.
To cover those costs, the state would require licensees to pay application fees and an annual regulatory assessment. One bill specifies that the assessment for a CLASS A grower, who would be allowed to maintain 500 plants, could not exceed $10,000, but other rates are not specified.
The House approved less strenuous dispensary and edible legislation last year, but the bills were buried in the Senate when law enforcement officials raised concerns about the “uncharted course” they would forge.
This time around, Callton made it a point to seek input from law enforcement groups earlier in the legislative process, and he said the looming possibility of full legalization in Michigan — there are already two petition drives underway — made police officials more willing to consider medical regulations.
“They saw it happen in Colorado, they saw it happen in Washington, and they said it’s not a matter of if, it’s a matter of when,” Callton said.”So let’s create some sort of regulation and some sort of oversight that makes sense before this happens.”
Still, the new-look bills face an uncertain future in the Senate, where previous proposals stalled out last year. Senate Judiciary Committee Chairman Rick Jones said he’ll likely study the bills for a couple of weeks before taking any action, but does not expect to wait too long.
“I’m disappointed that they lowered the tax. I think that was a mistake, and we’re going to revisit that,” Jones, a Grand Ledge Republican and former sheriff, said earlier Wednesday before the House vote.
“I’m going to make sure that Michigan State Police, the sheriffs, the chiefs of police and the prosecutors are on board, so I may have to tighten it up a bit, but I do anticipate passing the bills.”