Michigan has been struggling to get a handle on the illegal cannabis market and their latest action has seen them instruct medical marijuana provisioning centers to stop accepting cannabis grown by caregivers and instead only accept supplies from growers licensed by the state.
LARA (Licensing and Regulatory Affairs) also says that caregiver growers can start selling cannabis to the licensed growers and processors, but the caregiver growers will have to meet the cost of testing their cannabis before the licensed processors and growers can accept it.
Rejecting the cannabis grown by caregivers is just another twist in the regulatory chaos as the state struggles to move from a largely informal industry to a regulated one. Their efforts in this direction have been met by legal challenges initiated by the unlicensed cannabis businesses which the regulators wanted to close.
Judge Stephen Borrello of the Court of Claims has variously described what the regulators are doing as “freakish or whimsical.” The Judge has so far made several rulings against LARA, the most recent being one in which unlicensed dispensaries can continue operating for 60 days after LARA has rejected their application for a license.
During that court session, the judge gave the regulators the liberty to decide whether caregiver growers could continue supplying medical cannabis to dispensaries. The regulators promptly acted on that and issued their guidelines barring caregiver growers from taking their cannabis to dispensaries.
This action by LARA has stirred what is an already sour relationship between the “corporate cultivators” and the caregiver cannabis growers. The caregiver growers see the large corporate cultivators as being only interested in making profit at the expense of patients while the big growers see caregiver growers as people who supply cannabis of questionable quality to undercut their profits.
Those accusations have some basis, because some of the cannabis from caregiver growers has tested positive for mold, E-coli, Salmonella and other contaminants. Nonetheless, consumers prefer the cannabis from caregiver growers because it is more affordable and is in tune with the needs of patients.
Critics of the action taken by LARA now say that the caregiver growers are simply going to start supplying the unlicensed sellers, to the detriment of the legal cannabis industry since these products will not have to undergo the costly testing processes required in the regulated market.
Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) and Cannabis Strategic Ventures, Inc. (OTC: NUGS) hope that the regulators take well-considered decisions so that the medical cannabis industry in Michigan can finally stabilize.
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