Requiring someone to be a resident of Michigan before they qualify for a business opportunity is a Constitutionally sketchy move- so why did MPP insert that requirement into their Michigan legalization proposal? Intentional failure is the suspected motive
photo caption: Hash Bash 2017
by Rick Thompson/April 4, 2017
FLINT- The Marijuana Policy Project is in Michigan quietly working on a petition for marijuana legalization. The petition they have drafted contains gifts to business, concessions to special interest groups and two business models which have been supported by many medical marijuana businessmen and registered patients.
A time bomb is included in the bill- a requirement for state residency which legal experts and others have determined could be ruled a violation of federal law. If so, licenses for the business models which use residency as their sole requirement for operation could be completely halted before any of them are issued. The two business models which cite this residency clause are the two businesses models most advantageous to small business- the micro grow operations (100 plants) and the microbusiness concept (150 plants and vertical integration).
Here's the rub: that dangerous and potentially unlawful residency language was removed from other parts of the previous draft because of the belief that it IS vulnerable to being overturned, so inserting a dangerous section of law into these business model descriptions is seen by some as an act of sabotage against the small business interests in Michigan.
The language featuring this unique definition is contained in Public Draft 2 of the petition language drafted by the MPP coalition, which was released March 22. The final draft of the petition language will be issued by MPP soon. There is time to fix it before the petitions are printed. If MPP chooses to do that, or not, will tell the entire story of this petition and the process by which it was derived.
THE ISSUE
The MPP Coalition petition outlines 5 different business models: secure transporter, cultivator, processor, testing facility and distribution services. These business titles match the five noble businesses described in the new laws regulating Michigan's medical marijuana marketplace, the MMFLA. That group of laws became effective in December and are undergoing the process of adoption, including the naming of an Administrative Rules panel and a Licensing Board by the Governor and legislative leaders.
The MMFLA is a set of laws which were initiated by citizens in 2011 through the MACC organization to give protections to the individuals and existing small businesses participating in the medical marijuana program begun in 2008. The language of the original bill was created by MPP's Karen O'Keefe and Michigan activists. During the course of three legislative cycles the language was twisted from the citizen-protection format into a business-protection program which alienates small businessmen and the existing medical marijuana caregiver network in Michigan.
One of the failures of the MMFLA was its high barrier to entry for business participants. Instead of adding a citizen-friendly 100 plant cultivation business model, the legislators set the lowest available medical marijuana growing license at 500 plants- a mark which is widely acknowledged as requiring capital and real estate investments beyond the means of most patients and caregivers who are current participants in the Michigan Medical Marihuana Program (MMP). The MMFLA also excludes caregivers from being business owners and from acting as employees in some of the business models it outlines, and is broadly looked upon with disgust by the rank-and-file medical marijuana patient population in Michigan, who number over 200,000.
Who loves this MMFLA program? Medical marijuana industry trade groups the MCDA and the NPRA, the alcohol and tobacco distributors and retailers, and conservative Republicans like Senator Rick Jones, who introduced many of the worst pieces of the MMFLA in his Judiciary Committee. His former office secretary now runs the MCDA, which should indicate to observers where that organization's loyalties lie.
When the 2017 Coalition was formed by MPP, the concept of the small cultivation business was introduced into the marijuana legalization petition language by citizen groups including MILegalize and Michigan NORML. Many of the registered patients and caregivers in the medical program hailed these small business models as a valid upgrade to the MMFLA program- and as a saving grace for the MPP legalization proposal, which is otherwise seen as a giant gift to corporate money interests.
Support for the MPP proposal among citizens is largely based on the belief that these two models will 'solve' the problem NPRA and the MCDA left us with- the exclusion of working-class people in the business community generated by the new medical marijuana business laws. This residency trap could sink those two models.
THE LANGUAGE AT QUESTION
When Draft 1 of the petition was introduced on February 17 it contained descriptions for each of the business proposals outlined above. When Draft 2 was issued by MPP the language was significantly adjusted. Look at the two different versions below. From Sec. 10 (6) of the first public draft:
(a) for a class A marihuana cultivator, from persons with experience cultivating marihuana in compliance with the Michigan medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430;
(b) for a marihuana retailer, marihuana processor, class B marihuana cultivator, or class C marihuana cultivator, from persons holding a state operating license pursuant to the medical marihuana licensing act, 2016 PA 281, MCL 333.27101 to 333.27801;
(c) for a marihuana microbusiness, from persons holding a state operating license pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801; and
(d) for a marihuana secure transporter, from persons with experience cultivating marihuana in compliance with the Michigan medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430 or from persons holding a state operating license for a secure transporter pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801.
Also in Draft 1, section 10(3)(f) includes residency in the state of Michigan as a proposed requirement for ALL businesses included in the MPP legalization program.
In Public Draft 1 the ownership requirement for the 100-plant grow operation (Class A) is merely to be a caregiver or a patient who cultivates under the medical marijuana law. The only requirement for a marijuana microbusiness is being licensed by the MMFLA, which is the same requirement as a Class B grower (500 plants), a Class C grower (2,00 plants), a dispensary operator or a cannabis processor license.
Look at the new requirements for ownership of those same business models contained in the March 22 draft:
for a class A marihuana grower or for a marihuana microbusiness, from persons who are residents of Michigan;
for a marihuana retailer, marihuana processor, class B marihuana grower, or class C marihuana grower, from persons holding a state operating license pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801;
for a marihuana secure transporter, from persons holding a state operating license for a secure transporter pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801, and who have experience transporting products upon which an excise tax is collected, remitting excise taxes to the department of treasury, and applying tax stamps to identify when taxes have been paid; and for a marihuana safety compliance facility, from any applicant.
Evaluate these changes:
*Notice that the new draft has completely removed a patient or caregiver's stated right to qualify for a license. The phrase "persons with experience cultivating marihuana in compliance with the Michigan medical marihuana act" is taken away from the two businesses where it used to apply- the small grower and the secure transporter. One of the most attractive features of the MPP petition is gone.
*Also removed from Draft 2: the section 10(3)(f) language requiring
all businesses to be owned by Michigan residents.
*Now to qualify for the 100-plant grow one merely has to be a state resident with no experience in growing cannabis. The qualifications for a marijuana microbusiness have been changed, too, removing the reference to the MMFLA and instead inserting the residency requirement.
Why remove the residency requirement for 6 business types? Insiders tell this journalist that the Coalition drafters are aware that residency requirements in any Michigan law could be deemed illegal. Making residency a requirement for ALL businesses could sink the entire legalized marijuana proposal.
Why leave the residency requirement in for the two smallest types of licenses? Because the two citizen-friendly business models are disfavored by the advocates of big business grow operations (500, 1500 and 2000 plant grows). The perception is that small grow operations will steal market share from the large industry players. If the residency requirement sinks the 100-plant and 150-plant grow models it would leave only the corporate-friendly businesses as legal to operate under the MPP legal marijuana proposal. Big business wins, the people lose.
Marijuana Policy Project enabled a protection for the 6 big business licenses and left vulnerable the two most citizen-friendly business models. Since NPRA is a big part of the MPP Coalition it's no surprise that they are pushing for a personal possession limit which contains less plants than the MMMA allows citizens and that they have insisted on inserting a first-in-the-nation 24 months ban on national monetary investment in Michigan. Finding out that they engineered this time bomb to eliminate the two business models would be no surprise to me.
The petitions have not been printed; MPP still has time to correct this issue. Contact former Michigan House Representative and now-MPP employee Jeff Irwin to express your opinion regarding the draft language.
