December 15 is a crucial day for the state of Michigan because on that day, the process for medical marijuana licensure will begin. The licenses that will be granted are going to change the face of economics in the state of Michigan but with the new prospect for economic growth comes potential pitfalls that some people are overlooking. The reality is with a conservative Medical Marijuana Board in place, the applicants are going to have to come from different walks of life and getting licensure will not be an easy task. To delve deeper into the issue, we examined how licensure will affect the cannabis community and what we found out was that there is a lot of misinformation that is being spread. Let’s break down some of the issues that we as litigators will have to face for our clients:
I. Can out of state financing come in?
The state of Michigan is expecting a huge influx of revenues for the new entity but there are issues that need to be addressed. Ravi Gurumurthy, a successful attorney from Cadillac, Michigan, was asked about the issue. Gurumurthy stated, “What people do not understand is that cannabis is still illegal on the federal level. More importantly, if someone thinks that they are just going to be able to obtain out-of-state financing, they need to think again. There are Commerce Clause implications that could literally destroy Operating Agreements and projections could be nothing more than useless words on a page. The whole goal here is to generate income for the legislature and the citizens of Michigan; the non-domiciled individual will not be able to just come in and make a strong investment and just walk away. Our state and the United States Constitution alike will be tested and while there are many positives on the horizon, obtaining those benefits will be present many cases of first impression for our judiciary.”
II. What if you have a criminal history but are talented in the field and have not been accused of a crime in many years?
Matt McManus, a partner of Ann Arbor Legal in Ann Arbor, Michigan, has a number of clients that have asked this question. McManus has been one of the more vocal attorneys on the issue of licensure. When asked, McManus said, “The screening procedure is going to be the most difficult our state has ever seen. If you have even a misdemeanor or obtained a 7411 in the past there is a chance you will not qualify for a license. The marijuana game has transitioned from the guy selling a dime back to the CEO running a corporation. The aspect of social media will be imperative because the oversight will make strict scrutiny look like an easy hurdle in comparison. That’s how serious the cannabis game is about to become.”
III. Where does the Michigan criminal field stand?
Scott Grabel of Grabel and Associates is arguably the top criminal lawyer in the state of Michigan spoke on this issue. Grabel explained, “This is a field where civil and criminal law will intersect. While there is a lot of debate on how this will affect the state of Michigan, it is clear that the Cannabis License will be more difficult to obtain than a Liquor License or even a Gaming License. From our experience in those fields, it will be critical to obtain an expungement and beware of the federal law aspect for even the most minor offense. We have already seen the Supremacy Clause and the Contracts Clause experience a collision course in our state and in the licensure procedure that occurred and in Minneapolis and Ohio is any indication of what is to come, a mistake in the past could hurt economics in the future. The criminal lawyer will have to be on top of statutory interpretation to provide diligent representation. This is not a set it and forget it industry.”
There is no question that with opportunity will come a great deal of risk. One thing is certain: The law in the state of Michigan is changing and we will need to evolve with it.
Bill Amadeo is a partner at McManus PLLC in Ann Arbor, Michigan and an Associate Attorney at Grabel and Associates in Lansing, Michigan. Bill also owns and operates BAT Tutoring in Lansing, Michigan with fellow-attorney Ashley Johnson.