If you’re a cannabis user of a certain age in Michigan you almost certainly carry some fond memories of making new friends and learning about how the different strains and products alleviate certain medical conditions at Compassion Clubs and Cannabis Farmers Markets. Places like OMS Dab House and G3C provided a venue for licensed caregivers and patients to meet, socialize, and try out medicine in a safe and secure environment. Walking into these spaces often felt like stepping into a crossover between the Mos Eisley Cantina on Tatooine and an open-air bazaar, with vendors displaying cannabis products in large jars beside impromptu lounge areas and hot dog carts. Some criticized these spaces as essentially an underground black market, however they met a very real need created primarily from a failure of the state government.
After voters passed the Medical Marijuana ballot initiative in 2008 it took almost three full years for the state's first locally licensed dispensary to open. Third Coast Compassion Center in Ypsilanti opened in July of 2011 over the objections of many cannabis opponents, who argued that the law passed by voters did not explicitly allow the centers to exist. In fact, all the medical dispensaries licensed and regulated by local governments under the 2008 law were operating in a legal grey area for years. Eventually the Michigan Supreme Court weighed in, ruling that medical dispensaries were not protected under the Michigan Medical Marijuana Act in February of 2013. It took until September of 2016 for the Michigan legislature to finally enact the MMFLA, which created the first legal framework for dispensaries in the state.
So, what happened to patients between December 2008 and July 2011, then again between February 2013 and September 2016? That’s almost seven full years where medical cannabis was legal for patients to buy and have, but illegal for anyone other than a specified caregiver to sell to them. Out of this need, Compassion Clubs and Farmers Markets arose. These places offered a space where patients could try out new medicine and new caregivers, before signing on with one. While the 2008 law made it illegal for caregivers to sell to anyone who wasn’t one of their five patients, this law and the subsequent acts by the state government ignored some pretty basic laws of capitalism; mainly that demand creates markets whether you regulate them or not.
While necessary, these spaces were operating in a legal grey area and the law passed in 2016 made them obsolete. Since the grey area they existed in had turned into an outright blackmarket, the Farmers Markets and Compassion Clubs were subject to much stricter enforcement. Now only a handful of membership based Compassion Clubs remain statewide, existing using the same legal loopholes that permit motorcycle clubs to keep a clubhouse with a private bar.
But Michigan’s latest recreational law passed in 2018 has brought some hope that something like the Farmers Markets could return. The new laws allow for the creation of social use lounges and temporary cannabis events, which would allow multiple legal vendors to sell products to consumers and allow for consumption on site. These rules combine the best of both worlds, with patients and recreational users able to sample a wide variety of products from legal, tested, and regulated vendors from all over the state. One issue though is that many municipalities have opted out of the consumption lounges, even while opting into the recreational provisioning centers and growing licenses. Another concern is just how successful these new businesses can be during the time of COVID-19 where any kind of social gathering, let alone one where people may be smoking, is a massive risk.
However, the businesses that will succeed will be the ones ready to open when the vaccine has become more prevalent, and events can start up again. And there is a lot of profit to be made for the businesses that are able to put on the first new farmers market that feature legal recreational cannabis sales and consumption.
If you have more questions regarding this, or any other type of cannabis business, give us a call at (313) 446-2235. If you’re looking for more general information about the cannabis industry here in Michigan, sign up for one of our Cannabiz Introduction Webinars held on the last Tuesday of each month.