In this photo taken Tuesday, May 14, 2013, Medical marijuana vials are displayed at the Venice Beach Care Center medical marijuana dispensary in Venice, Calif. (AP Photo/Damian Dovarganes)
Jul 28, 2015
MLive - LANSING, MI — An evolving bill to allow medical marijuana dispensaries in Michigan could also provide a regulatory framework for full legalization of the drug, according to the sponsor.
State Rep. Mike Callton, R-Nashville, has been working on medical marijuana dispensary legislation
for several years — a version passed the Michigan House by a wide margin in late 2013 before stalling in the Senate — but recent discussions have led to major changes in the bill.
"I think we've gotten more buy-in from the police groups, because it looks like we need some regulation of marijuana in place before a possible legalization referendum," Callton said, referencing active petition drives seeking to put legalization proposals before voters in 2016.
"If we don't have anything in place, and suddenly it's legal, it's going to be the wild wild west. It's going to be hard to shove Pandora back in the box."
Callton wants to allow larger-scale marijuana growing operations and medical sales through "provisioning centers." The system would run parallel to — rather than replace — Michigan's voter-approved medical law that allows certified patients and caregivers to grow a limited number of plants.
The 2008 law did not address dispensaries, and a 2013 state Supreme Court ruling empowered county prosecutors to shut them down as a public nuisance. Some facilities continue to operate at the discretion of local law enforcement authorities.
Callton called the original medical marijuana law "insane" and is pushing for a dispensary system that includes product testing, packaging rules, signage restrictions and restrictions on felon participation in the trade.
"What other medicine does a doctor prescribe and then tell you to grow yourself? I really think it should be similar to a pharmacy system," he said, noting pharmacy sales are not an option because marijuana remains illegal at the federal level.
A recent draft of the bill, which Callton said has already seen some changes since it was circulated last month for feedback, calls for a multi-tiered medical marijuana system — similar to the model used to sell beer and wine in the state.
A new board would be created within the Department of Licensing and Regulatory Affairs to license growers, processors, distributors, product testers and dispensaries in municipalities that decide to allow such facilities to operate within their borders.
Only a distributor could sell marijuana to a dispensary, and gross receipts from those transactions would be taxed at 16 percent. The state would also impose a fee for licenses and require all transfers to be recorded in a statewide database.
The tiered system would provide a "break of ownership" in the supply chain, Callton said. For instance, he continued, growers should not be responsible for testing the safety of their own products because they would have a vested interest in approval.
The Michigan Cannabis Development Association, which describes itself as a trade organization made up of business leaders and entrepreneurs that formed in late 2014, has advocated for a tiered medical marijuana distribution system and supports Callton's efforts.
"Businesses involved in different phases of medical marijuana should be put into different categories," said Willie Rochon, secretary of MCDA and operator of the Michigan Wellness Group, a dispensary in Detroit. "It keeps the bad actors out and it keeps safeguards in place."
Rochon said the proposed system would "support small business and vigorous competition."
But the tiered model sounds "unduly burdensome," according to attorney Matthew Abel, a medical marijuana advocate and board member of the Michigan Comprehensive Cannabis Law Reform Committee, one of two separate groups circulating legalization petitions this summer.
"There's no reason why a cultivator couldn't sell directly to a retailer," Abel said. "It's the same problem we're having in the beer industry where Atwater Brewery can't sell to the 7-Eleven down the street. It adds another layer of expense, in this case, a double layer."
State Rep. Jeff Irwin, D-Ann Arbor, also said he opposes the tiered medical proposal, calling it "stupid on multiple levels" because marijuana and alcohol are unique products with unique histories.
A NEW PROPOSAL FOR FULL LEGALIZATION
Irwin, who sponsored marijuana decriminalization legislation last session, is preparing to introduce a full legalization bill
in the state Legislature, where he recently reached out to colleagues with a letter asking for their support and co-sponsorship.
"It is clear that marijuana prohibition is a colossal failure. Rather than wasting hundreds of millions of dollars every year arresting and prosecuting marijuana users, legalizing marijuana will bring a black market cash crop under regulated control," he wrote. "Not only will it create jobs, but it will redirect scarce law enforcement resources to protect citizens by going after our most violent criminals."
Irwin's bill may face an unlikely path in the Republican-led state Legislature, but it is sure to inform the ongoing debate over what legalization should look like if and when it comes to Michigan.
Four states have already legalized marijuana — Colorado and Washington were the first to implement their laws — and at least two Michigan groups are seeking to put proposals on the 2016 ballot that would legalize use by adults over the age of 21.
One of those measures would empower the state Legislature to regulate and tax marijuana sales, while the other would leave licensing up to local communities and establish a 10 percent excise tax on retail sales.
Irwin, who argues that higher taxes in Colorado have likely depressed legal transactions, is proposing a 5 percent excise tax that would ramp up to 10 percent over five years. The state would also collect sales tax and cover program costs through licensing fees.
He estimates the excise tax could eventually generate about $100 million in new revenue for the state, which would be devoted to early childhood education, road repairs and substance abuse treatment programs.
According to a draft copy of the bill provided by Irwin's office, the state would license marijuana growers and retail stores, but local communities could choose to prohibit them. The state would also offer a distributor license but would not require a middle man for transactions between growers and retail stores. Residents could grow up to 12 plants at home.
The goal, according to Irwin, is a regulatory system that includes important safeguards but is not so restrictive that it encourages consumers to continue participating in the black market, which has generally thrived despite a long-standing prohibition.
"If we want to strike a blow against the Mexican drug cartels and the people who are organizing a lot of the violence in our cities here, we have to drive this activity into the light, into the regulated space," he said. "The best way to do that is to set up a system where compliance is the rationale choice."
The Legislature will have the opportunity to consider marijuana legalization this session, one way or another. Along with Irwin's bill, both petition drives would send initiated legislation to Lansing, where lawmakers would have 40 days to approve the measure, propose an alternative or simply allow it to go before voters in 2016.
"I do think right now there is a sense that eventually this is an inevitable outcome," Irwin said, noting he will fight for a free-market model.