Dozens of shuttered medical marijuana stores in Michigan face big sales losses, Oklahoma dispensaries could soon get MMJ customers from Arkansas, and a California government report nixes hopes that the state can find a solution for cannabis banking.
Here’s a closer look at some notable developments in the marijuana industry this week.
Michigan chaos continues
Fresh uncertainty in Michigan’s restructured medical marijuana program created costly disruptions for up to six dozen dispensaries that had been up and running while awaiting permanent licenses.
Michigan regulators warned that unlicensed businesses operating beyond Dec. 31 would jeopardize their chances to get a permanent license, so “most if not all” were closing for fear of not getting licensed, said Barton Morris, founder of the Cannabis Legal Group in Michigan.
Morris said the businesses now hope that new Gov. Gretchen Whitmer’s administration will act quickly to extend the deadline before they experience more financial fallout.
- The loss of loyal customers who relied on certain dispensaries for a variety of MMJ products.
- The potential loss of inventory if shuttered retailers must destroy product.
- Greater difficulty obtaining product once a dispensary reopens. That’s because there is “very little supply” right now, Morris said, due to a lack of licensed growers and processors.
Michigan regulators have been slow to approve permanent licenses under the state’s new regulatory regime.
So far, they have approved just 99 licenses: 52 dispensaries, 29 growers, 10 processors, four testing labs and four transportation companies.
The next meeting to consider license applications is Jan. 16.
Arkansas MMJ patients can’t buy in Oklahoma – yet
Oklahoma’s medical marijuana program offers out-of-state MMJ cardholders the ability to buy cannabis from dispensaries in the Sooner State.
So, recent reports highlighting Oklahoma’s reciprocity rules have piqued considerable interest among folks in neighboring Arkansas – which has been beset by delays in the launch of its own medical cannabis program.
In response, Arkansas MMJ patients called on regulators in their state to make cards available ASAP so they can buy medicine in Oklahoma.
However, Oklahoma’s MMJ retailers are unlikely to see any Arkansas customers just yet.
That’s because Oklahoma currently doesn’t allow Arkansas residents to visit and obtain a temporary 30-day registration to purchase, consume or grow medical marijuana, according to Melissa Miller, spokeswoman for the Oklahoma Medical Marijuana Authority.
“(Arkansas regulators) are not issuing the cards themselves yet. They’re only issuing letters, and that is not sufficient for us,” she said. “We’re not issuing Arkansans temporary licenses right now.”
Roughly 6,500 prospective patients in Arkansas have paid for and been approved to receive MMJ identification cards from their state, but they’ve not yet received them.
But that may change soon. Arkansas regulators have announced that registered patients will receive cards in the next 30 days.
California banking hits wall
The possibility of a state-run bank to offer services to California marijuana companies ran into a big barricade, both logistically and politically, when a working group convened by the state treasurer concluded the goal is basically impossible.
But that won’t stop lawmakers from trying.
State Sen. Robert Hertzberg, who ran a measure last year to establish state-run financial institutions to service the marijuana sector, has already reintroduced the bill for the 2019 legislative session as Senate Bill 51.
While Hertzberg’s bill last year passed the Senate with flying colors, it stalled in the State Assembly.
Still, the report puts the odds against a state-run bank in context for stakeholders, said Josh Drayton, communications director for the California Cannabis Industry Association.
“The reality of setting up a state-run public bank … is a silver bullet that we never really felt was going to be a reality,” Drayton said.
Drayton added that he’s hopeful Hertzberg’s bill will “get further discussion” at the capitol but added that he “wasn’t surprised” by the treasurer’s report.
“My concern is we won’t see (a long-term marijuana business banking solution) until action is taken at the federal level,” Drayton said.
Another factor that the California Legislature may take into account is the bipartisan STATES (Strengthening the Tenth Amendment Through Entrusting States) Act in the U.S. Congress, a bill that looks to resolve the banking situation nationwide for cannabis companies, and thus make Hertzberg’s bill a moot point.
That possibility was even taken into account by the state treasurer’s working group, according to a news release that warned a bill such as Hertzberg’s could actually prove a liability to the state instead of an asset if Congress passes a measure like the STATES Act.
“If federal regulations change … and cannabis banking becomes legal, the bank would most likely be closed at that point due to a decreased business demand for the bank and thereby incur a significant loss,” the treasurer’s working group report concluded.
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