Michigan’s registered medical marijuana caregivers have permission to grow more than one million cannabis plants, while licensed commercial cultivators are authorized to grow one tenth of that number.
These figures are crucially important to understand as Michigan ramps up efforts to boost the industry prior to licensing businesses for the state’s adult use cannabis market later this year. Even with accelerated licensing approvals it seems highly unlikely that commercial production of cannabis will be sufficient to satisfy the needs of the adult use market for quite some time.
In August of 2017 Director Andrew Brisbo of the Bureau of Medical Marijuana Regulation reported in a direct communication that approx. 93,000 medical cannabis patients had designated a caregiver to grow on their behalf. Each caregiver has permission to grow 12 plants for the patient’s use. That indicates there are a potential 1.14 million cannabis plants under the control of the state’s registered caregiver population.
That was two years ago. Director Brisbo now oversees the Marijuana Regulatory Agency (MRA), the number of caregivers has risen from 43,000 to roughly 47,000- nearly a 10% increase- and the number of patients which have designated a caregiver likely increased by a corresponding percentage. The number of plants assigned to the state’s caregivers is almost certainly greater than the number projected above.
Caregivers are almost always patients themselves. 47,000 caregivers each growing 12 plants for their own use in addition to cultivating for designated patients potentially elevates the number of plants under caregiver control to over one and a half million.
By comparison, commercial cultivation operations in Michigan have received a total of 78 licenses from the MRA and have a maximum cultivation limit of 108,000 plants. That data is provided per the MRA website and was updated on July 5, 2019.
The process of approving commercial centers for retail, production and other license types was boosted earlier this year when the obstructive Licensing Board was disbanded by order of the governor. That group of legislatively-designated watchdogs was routinely criticized for rejecting business applications in an inconsistent and discriminatory manner.
The new faster-track process still will not empower enough commercial entities before the end of the year to supply the adult use market’s anticipated demand for cannabis.
Currently all the caregivers and commercial entities licensed by the state are serving the medical cannabis market in Michigan. That market, the second strongest in the nation, is nearly 300,000 patients large.
The number of Michigan’s recreational or adult use consumers of cannabis dwarfs that figure. A study published in 2018 in the Annals of Internal Medicine journal reports that 14.6% of American adults in medical marijuana states use cannabis each year, and that number jumps to 20% in states with legalized cannabis use for adults. A similar study published earlier determined that 52% of adult Americans had tried cannabis at some time in their lives.
Michigan has legalized adult use cannabis and 7.7 million adults, per worldpopulationview.com, indicating 1.54 million Michigan residents use cannabis each year. When Michigan opens the doors to the first recreational cannabis retail outlets in late 2019, the cannabis customer base will instantly grow five times larger.
Fortunately, Michigan’s cannabis production program allows caregivers to contribute cannabis to the medical marketplace and into the adult use program, too. Currently, medical cannabis sold in the state’s provisioning centers is more than 80% caregiver sourced, according to Director Brisbo’s recent speech at the Detroit Canna Con event.
That situation is not likely to change much between now and the beginning of adult use cannabis sales later this year or in early 2020. It takes nearly four months to grow a cannabis plant, so commercial cultivation entities licensed in August or after will not have had enough time to grow, process and distribute plants prior to the launch of the adult use market.
Supply chain problems have plagued other states which have graduated from a medical use to an adult use program, as Michigan is doing. Typically the initial demand by adult use consumers draws down the stockpile of cannabis in short order. This leads to supply deficits, which trigger cultivation spikes, which then create market gluts and initiate wild price fluctuations in the cannabis marketplace.
“Caregivers ought to be formally included in the commercial system and supply chain in some reasonable manner,” said Jamie Lowell of MILegalize, one of the authors of 2018’s Prop. 1 “It would be counter productive to deny the experience, quality, and diversity of product that could be permanently added to the to the regulated market place. Caregivers have proven to be reliable and resilient producers. They have repeatedly come through for patients and the state to help with supply as the commercial system is implemented despite being consistently targeted by law enforcement, the legislature and cannabis business interests.”
Michigan can avoid the chaos and disruption other states have experienced by stabilizing the supply chain prior to launching the adult use marketplace. Caregivers and their more than a million plants will be that stabilizing influence in Michigan’s emergent legalized cannabis retail world.