A Republican state lawmaker is introducing a bill today that would allow individual cities to decide if medical marijuana dispensaries can operate within their boundaries. Under the bill, municipalities could also set up regulations covering the location of dispensaries and possibly institute other operational rules.

The proposal by Rep. Mike Callton comes just two weeks after the state Supreme Court essentially ruled that MMJ centers are illegal under Michigan’s medical marijuana laws, a devastating decision that could force all of the estimated 75-100 dispensaries currently operating to close.

What’s particularly encouraging about the latest bill is that it has an unusually high level of bipartisan support: Eight Democrats and eight Republicans are cosponsoring the measure. That gives this proposal a much better chance at passage than a similar one that died in committee last year.

But that doesn’t mean the bill will sail through the legislature. The state attorney general is a vociferous opponent of dispensaries and plans to send out letters to all county prosecutors in Michigan instructing them to close dispensaries in light of the court ruling. A spokeswoman for Attorney General Bill Schuette’s office also told the Detroit Free Press last week that they see no need for new legislation at this time.

At the very least, expect a vigorous debate on the issue.

So far, reports indicate that only a handful of dispensaries have closed their doors as a result of the Supreme Court ruling. Many are waiting to see how the state and local law enforcement officials respond.

There’s a chance that some cities will basically ignore the Supreme Court ruling and in effect look the other way while dispensaries continue to operate. But that situation can only exist for so long, and if the state does not modify its medical marijuana rules it’s probably only a matter of time before all dispensaries in Michigan close.

Proposal Would Pave Way for Michigan Marijuana Dispensaries in MMJ-Friendly Cities is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

So now what?

That’s the question many medical marijuana professionals in Michigan are asking after the state Supreme Court ruled on Friday that dispensaries are illegal. Theoretically, all of the estimated 75 to 100 dispensaries in Michigan will have to shut down. In reality, whether all, most of some of those MMJ operations actually close will depend on how the state and individual counties/cities respond to the court’s decision.

So far, we haven’t seen mass closures since the court decision. In fact, most dispensaries are taking a wait-and-see approach, as in wait and see if anyone tells them to shut down, and then do so accordingly.

Several lawyers told Medical Marijuana Business Daily that many of the state’s dispensaries will stay open because they are located in areas where there is little political will to prosecute centers. Some of these cities even have laws that allow dispensaries to operate.

“Ann Arbor for instance is very pot friendly,” said Michigan MMJ attorney Josh Jones. “Are we going to see that county or city push to close dispensaries? I don’t think so.”

Other municipalities could look to crack down on the industry, and they would have the legal justification to so. The state also could ramp up enforcement and close dispensaries. Michigan Attorney General Bill Schuette said he will send letters to 83 county attorneys “explaining that the ruling clearly empowers them to close dispensaries and include instructions on how to file similar nuisance actions to close dispensaries in their own counties,” according to a release responding to the court decision.

The upshot is that the state could see a rise in the number of caregivers – who are still able to serve up to five patients and receive compensation – creating “business” opportunities on a nano scale. There currently are 26,000 licensed caregivers in the state. Some of these people make a decent amount of supplemental income (each caregiver can have five patients).  A rise in caregivers could also create a bigger market for hydroponics shops and other companies targeting that side of the market. Some businesses are now looking to adapt to the changing conditions. MediSwipe – an MMJ-focused software and services provider that just moved its headquarters to the state - said it will now shift its focus from dispensaries to patients and caregivers.

Regardless of what happens next, this represents the first major setback for the medical marijuana industry in the new year. The tide has changed significantly for MMJ nationwide since Colorado and Washington legalized cannabis. But, as we’ve seen in Michigan, that doesn’t mean the industry is in the clear. There will no doubt be many more bumps – some of them significant – along the way.

Also last week, we wrote about the introduction of two new bills at the federal level that would allow states to set their own marijuana regulations and have the US government tax cannabis sales. Kudos to the lawmakers behind these measures. They are at the forefront of a drive to reform the nation’s approach to cannabis. Don’t expect either of these bills to pass, as there simply isn’t enough support for such drastic change in the halls of power. But this type of legislation will further the conversation and could pave the way for meaningful debate – and changes – in the future.

Other top stories in Medical Marijuana Business Daily last week:

WA Could See Regulatory Changes Modeled After I-502 Rules

MMJ Demand Outpaces Supply in New Jersey

Michigan Collects $10M From Medical Cannabis Program

Dispensary Bans in Spotlight as CA Supreme Court Takes Up MMJ Case

Weekly Wrapup: 1st Major Setback for Cannabis in New Year + Pushing Change at the Federal Level is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

The ruling leaves no doubt about the legal status of the estimated 75-100 dispensaries in Michigan. These centers have been operating under hazy conditions for several years, given that the state’s medical marijuana law doesn’t specifically mention dispensaries. Now, local officials have clear justification for closing these dispensaries down.

But how many dispensaries actually close will depend on how aggressive the state and individual cities are in enforcing the laws.

“I think we’ll continue to see the same type of patchwork we see now, where dispensaries are in some cities and not in others,” said Matthew Abel, a local MMJ attorney. “Some municipalities have even licensed them, and I don’t think they’re going to change anything.”

Still, there will likely be casualties. It’s a shocking development for many cannabis professionals, who felt the momentum had shifted in their favor in recent months amid numerous positive developments. Just this week, a report revealed that Michigan generated $10 million in revenue – and a roughly $6 million surplus – from MMJ patient registration and renewal fees. The stats show the potential of the medical cannabis industry to lift the state our of the economic doldrums if Michigan decided to regulate and tax dispensaries.

The Supreme Court upheld a previous appeals court decision that the state’s MMJ law does not allow marijuana sales. Many dispensaries across Michigan closed after the ruling, but dozens stayed open in cities that chose not to target centers.

“The Court of Appeals reached the correct conclusion that defendants are not entitled to operate a business that facilitates patient-to-patient sales of marijuana,” the court wrote in the ruling (you can read the decision in its entirely here).

While the Michigan cannabis industry has lost a very large battle, the larger war is not over. Medical marijuana advocates will now redouble efforts to persuade lawmakers to overhaul the state’s medical marijuana act in a way that would allow dispensaries to exist in a regulated system.

Michigan Bombshell: Supreme Court Says Dispensaries Are Illegal, Many Centers Could Close is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

The state collected $10 million in application fees from medical cannabis patients during its most recent budget year, which ended Sept. 30. After subtracting costs, cash-strapped Michigan netted a surplus of more than $6 million through the program, according to a new report.

If there’s ever an argument for states to legalize and regulate medical marijuana, it’s this type of data. The numbers show the potential for MMJ to lift states and cities out of the economic doldrums via registration fees and tax dollars.

In fact, these figures could come into play down the road in Michigan, as they might help convince lawmakers to rewrite the state’s cannabis laws in a way that is favorable to the MMJ industry (and particularly to dispensaries). Michigan could make tens of millions of dollars more by putting a system in place to regulate dispensaries and collect special taxes on cannabis sales rather than hinder the industry by cracking down on it.

Revenues from the program are on the rise, increasing more than 10 percent from the $9 million recorded during the previous previous fiscal year, because of a spike in the overall number of patients.

According to the state’s MMJ website, there are currently 124,417 active registered patients – up from 60,000 two years ago – and another 25,857 caregivers. Several areas of the state saw particularly large patient growth, including Cass County (which reported a 56% increase during the last fiscal year), Muskegon County (44%) and Berrien County (37%), according to the Associated Press.

Most patients in Michigan pay an annual fee of $100 for their medical marijuana cards, although some low-income residents qualify for a reduced rate of $25. Caregivers also pay a fee. That money is then used to cover the cost of the program, and any surplus goes into the state’s coffers.

Behold, the Power of MMJ: Michigan Collects $10M in Revenue Fom Marijuana Applications is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

More than 500 dispensaries in several states closed after their landlords received civil forfeiture notices. Federal agents raided the well-known cannabis school Oaksterdam University. Major credit card companies shut out the industry because of government pressure. And a US attorney in California moved to close the nation’s largest MMJ center, Harborside Health Center, via civil forfeiture laws.

Many cities and states – taking a cue from the federal government – began their own crackdowns on medical marijuana dispensaries, cultivation operations and similar businesses.

Those were some dark days, and a handful of industry professionals openly wondered if the whole thing was on the verge of collapse.

But something strange happened: The crackdown began to ebb as the presidential elections drew closer and then eventually stopped completely in some areas of the county.

Last week, we saw further evidence of a changing MMJ climate:

- A federal judge essentially ruled that Harborside Health Center can stay open while its forfeiture case plays out in the courts, handing the government a major legal defeat. The ruling will make it much harder for the government to simply threaten landlords with property seizure to force dispensaries out of business. The feds will have to put much more time, resources and money into this type of action going forward, making it less likely they will pursue this strategy.

- The new mayor of San Diego ordered local police to stop prosecuting dispensaries for zoning code violations, which could revive the city’s decimated MMJ industry. More than 200 dispensaries shut down in San Diego alone last year after the local US attorney’s office began a crackdown and a judge ruled that cannabis centers are illegal under local zoning laws. The mayor’s move sets the stage for dozens of centers to reopen.

There are several possible reasons behind the slowdown in the government’s crackdown. Perhaps the Obama administration wanted to simply appear tough on medical cannabis during the reelection campaign to offset any criticisms that he let the industry grow out of control under his watch. At the same time, the government’s case against Harborside has backfired so far – as have legal challenges to MMJ  in Arizona – making it more difficult to shut down dispensaries.

And the legalization of marijuana in Colorado and Washington represents a whole new headache for the government. Suddenly medical cannabis doesn’t seem quite so bad. Also, the fact that two states voted to legalize marijuana – and several more are considering it this year – signals a shift in public opinion about the drug. Maybe the government is finally paying attention.

To be clear, many risks remain, and cannabis professionals should not be lulled into a false sense of security. There have been a handful of raids in the past few weeks, and the crackdown could theoretically intensify at any time. Everyone dealing directly with marijuana potentially faces prosecution and jail time.

But this marks a turning point for the entire industry, and optimism about the future of the cannabis business is at its highest point in years.

Other top stories in MMJ Business Daily last week:

Medical Cannabis Company Bypasses Industry Hotspots for New HQ

Q&A With Attorney Henry Wykowski

5 Advertising Strategies for Dispensaries

Weekly Wrapup: Is the Crackdown on Medical Cannabis Businesses Ending? is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

Many entrepreneurs would no doubt pick Colorado or Washington, which offer ample opportunities not only in the medical marijuana space but also in the emerging recreational cannabis industry. Others might select Arizona, where nearly 100 dispensaries are slated to open up this year, or newer MMJ states on the East Coast like Connecticut and Massachusetts.

But some industry professionals and companies are bucking the trend, bypassing the obvious choices and instead selecting states that are flying under the radar.

Case in point: MediSwipe, which defied conventional wisdom recently by moving its headquarters from Florida to Birmingham, Michigan, of all places.

The publicly traded company provides services and software that help medical marijuana dispensaries manage patient records, handle customer payments via cashless kiosks and offer coupons using mobile products. It’s the type of business that could transition easily into the recreational marijuana market or tap the large patient base out West by relocating to a state in the area.

MediSwipe executives did in fact consider moving to Colorado or Washington. But, in the end, they felt Michigan offered a better opportunity.

It’s an interesting choice, given that the state’s MMJ industry is in turmoil. Dozens of dispensaries have closed over the past two years, and only 50-75 remain. Lawmakers are trying to change and clarify Michigan’s vague MMJ regulations, but it’s unclear what shape the overhaul will take. The state Supreme Court has even taken up the issue, and its ruling could either destroy the remaining market or lead to its revival.

Despite the volatility, MediSwipe is optimistic for several reasons.

Residents in a handful of cities recently voted in favor of moves to decriminalize marijuana or make it a low police priority. Additionally, lawmakers passed several bills that help clear up parts of the state’s convoluted medical cannabis law. One deals with patient requirements for getting registration cards and could help speed up a backlog in applications, while the other focuses on the type of doctor-patient relationship needed to obtain a card.

Although some advocates decry the new laws, saying they are unfriendly to patients, MediSwipe believes they help stabilize the industry and create new business opportunities. The company also hopes its new location will help it penetrate some new markets in the region, including Connecticut, Massachusetts and New Jersey.

“While the states out West…figure out total legalization, we would prefer to focus on and be the dominant player within the East Coast and Midwest markets like Michigan, New Jersey, Massachusetts and potential new emerging markets like Ohio and Vermont,” MediSwipe CEO B. Michael Friedman said in a release.

Friedman added that staying closer to New York will help the company maintain solid relationships with “our investment banking partners on Wall Street.

Investors seemed to welcome the move (though it’s often hard to tell with thinly traded penny stocks).

The company’s stock, which trades under the symbol MWIP on the over-the-counter market, is currently hovering around 3 cents a share vs. 2 cents before the announcement. Trading activity has been particularly large over the past few days, signaling stronger investor interest in the stock.

Unconventional Wisdom: Cannabis Company Bypasses MMJ Hotspots for New Headquarters is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

Here’s a recap of the latest cannabis news in Michigan:

- While Colorado, Washington and Massachusetts grabbed the spotlight during the elections, Michigan made plenty of headway as well, though in an indirect way. Voters in four cities – Detroit, Grand Rapids, Flint and Ypsilanti – backed initiatives to decriminalize marijuana or make cannabis a low priority for law enforcement officials.

It’s worth pointing out that all of the measures passed by a wide margin. This of course doesn’t alter state or federal laws, and local officials have said that little will change as a result. But it’s a huge symbolic win that sends a clear message to the state’s leaders about attitudes towards MMJ and marijuana in general. Although state Attorney General Bill Schuette and other officials have attempted to shut down the entire industry, they face increasing resistance from residents and will have a more difficult time doing so now.

- In another election-related development, residents of Kalamazoo voted in favor of a proposal allowing dispensaries to operate in the city under a regulated system. It doesn’t mean new dispensaries will open any time soon, as there will likely be court battles over the issue. But it’s a big step in the right direction towards creating a dispensary infrastructure and further underscores changing perceptions about MMJ.

- This week, a judge threw out a case against four dispensary employees accused of illegal drug dealing, representing a major blow – and an embarrassing setback – to Schuette’s crackdown on MMJ operations. The judge essentially said Michigan’s medical marijuana laws are a mess and must be clarified, echoing what others have been saying for a long time. Medical cannabis is quickly becoming a thorn in the side of Schuette, and the pressure is growing on him to revise his strategy and work with the industry rather than against it.

All in all, November was a good month for medical cannabis in Michigan. The MMJ industry there is now focused on the state Supreme Court, which is examining a case that will determine the near-term future of Michigan cannabis dispensaries. The good news: Even if the court rules against the industry, the will of the voters will likely win out in the long run.

Momentum Swings in Michigan Medical Marijuana Industry’s Favor After Numerous Setbacks is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

#1. In Michigan, the Supreme Court heard oral arguments in a case focused on the legality of dispensaries in the state. At issue is whether medical cannabis sales are allowed under Michigan’s medical marijuana law, which doesn’t specifically mention dispensaries or other distribution methods aside from caregivers allowed to serve a limited number of patients. A lower court previously ruled that the law does not permit dispensaries, throwing the industry into turmoil and forcing scores of dispensaries to close.

#2. In Arizona, the cannabis community is gearing up for the start of a court case pitting the medical marijuana industry against local government officials. Dispensaries are scheduled to open up in Arizona soon, but some officials are attempting to prevent that from happening and are hoping to dismantle the entire program.

#3. In California, the City of Oakland sued the federal government last week in an effort to prevent it from shutting down Harborside Health Center. U.S. Attorney Melinda Haag recently sent a warning letter to Harborside’s landlord threatening civil forfeiture if the dispensary is not evicted, claiming the operation is simply too big. The city, however, charges the federal government with “acting beyond its authority.”

These cases are very different from each other and reflect the unique challenges to MMJ in each area. But they will all likely have a significant impact on the medical marijuana industry in their respective states. And the lawsuits in Arizona and California could set legal precedents that will be used elsewhere to chart the course for MMJ.

Aside from these cases, the MMJ community is paying particularly close attention to a federal lawsuit that could help legitimize medical marijuana. On Tuesday, the US Court of Appeals will begin hearings on a lawsuit over the government’s classification of cannabis as a highly dangerous drug that does not have any medical benefits. Many MMJ advocates are hoping the federal government will reclassify the drug and recognize that it is indeed useful from a medical perspective.

Also last week, MMJ Business Daily wrote about the outlook for a medical marijuana initiative in Massachusetts. The measure appears set to win by a landslide and could garner the highest levels of voter support ever for a state MMJ measure. According to one poll, nearly 70% of likely voters support legalizing medical marijuana in the state. Even if the poll is off by a good measure, it still appears that Massachusetts will become the 18th state with MMJ laws.

Weekly Wrapup: Landmark Medical Cannabis Court Cases + Momentum in Massachusetts is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

Blame it on a controversial appeals court ruling that determined the state’s MMJ law doesn’t specifically permit the sale of medical cannabis at storefront dispensaries (or anywhere else, for that matter). In other words, the court said dispensaries are illegal.

But that wasn’t the final word on MMJ in Michigan.

This week, the Michigan Supreme Court began examining the issue, hearing oral arguments on Thursday tied to the appeals court’s decision.

The state’s beleaguered medical marijuana industry is hoping the court will overturn the previous ruling, which would breathe life back into the MMJ business in Michigan. If the Supreme Court upholds the ruling, however, Michigan’s remaining dispensaries could be forced to close down.

Now that the ball is rolling, a decision on the matter could come by the end of the year or even earlier.

The court will essentially decide whether dispensaries can exist despite the fact that the state’s medical marijuana law is extremely vague when it comes to how the drug is to be distributed. Medical marijuana advocates argue that dispensaries should be allowed because a) most patients have no other way to get cannabis because the rules are so vague and b) the MMJ law doesn’t specifically ban them.

The law allows individual caregivers to grow a limited number of plants for a handful of patients. But finding a caregiver can be difficult, and many patients don’t have the time, skills or resources to grow their own.

State lawmakers are also trying to clear up confusion over Michigan’s medical cannabis program and are considering new regulations.

Michigan Medical Cannabis Dispensaries Look to State Supreme Court for Help is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News

That’s how the National Patients Rights Association (NPRA) views House Bill 5681, which would set up a regulatory and permitting system for dispensaries and caregivers.

The NPRA came out against the bill this week, saying it was “introduced under the guise of helping ensure the quality and purity of medical marijuana” but that in reality it “would essentially lead to the equivalent of a big box retailer opening next door to a small family-owned business.” In other words, the bill would make it nearly impossible for smaller businesses and caregivers to meet costly requirements for obtaining a license to distribute medical marijuana.

The fear is that large-scale drug companies with plenty of capital and an established infrastructure would enter the market and dominate the distribution scene in the state. The bill calls for classifying medical marijuana as a pharmaceutical-grade medicine, meaning individuals and companies selling it to patients would have to meet numerous requirements tied to dosage, purity and safety.

“HB 5681 is simply an attempt by corporate enterprise to completely undermine the spirit of Michigan’s Medical Marihuana Act by changing various structures of the law in a manner that could harm patients and caregivers,” NPRA spokesman Adam Macdonald said in a release. “We have already watched a very similar strategy play out in the dietary supplement industry in which the pharmaceutical businesses have continued trying to put manufacturers out of business, drastically raise costs, and limit access by lobbying for regulation that requires them to have the same quality control as medical drugs.”

The group argues that another bill – HB5580 – recently introduced in the state would ensure patients receive safe, reliable medicine but would make it easier for smaller players to cultivate and distribute cannabis.

NPRA’s opposition to the bill underscores the difficult task state lawmakers have ahead of them as they try to overhaul Michigan’s MMJ laws and regulate dispensaries. While everyone agrees something must be done, there’s much disagreement on how to go about it.

Group Fears Bill to Regulate Michigan Marijuana Industry Will Hurt Small Dispensaries, Caregivers is a post from: Medical Marijuana Business Daily - Legal, Financial and Dispensary News