As we have reported on numerous occasions, one of the biggest issues as Michigan moves into a regulated system is how the State will treat license applicants who have operated prior to receiving a license.

Members of the Medical Marihuana Licensing Board have repeatedly made clear their view that such facilities are currently illegal, pointing to a 2013 Michigan Supreme Court decision that the Michigan Medical Marihuana Act does not permit sales of marihuana other than from a caregiver to his or her maximum five formally connected patients.

The State’s Department of Licensing and Regulatory Affairs (LARA) was asked by the Board to make its recommendation on licensing current operators today. As anyone following the industry in Michigan knows, this has been a source of great controversy. Existing dispensaries and their patients have argued that requiring them to shut down makes it more difficult for patients to acquire marihuana, placing patients at risk. Many potential applicants have argued that the existing dispensaries should not receive a competitive advantage for violating state law, and that by demonstrating contempt for the current law, they are showing that they are unlikely to comply with legal requirements going forward.

This morning, LARA issued a press release stating that it can only take regulatory action concerning existing operators through its emergency rules. LARA has announced that its emergency rules will consider any unlicensed operation after December 15 “as a potential impediment to licensure.” LARA explained that the December 15 date gives existing operators a chance to wind down, and patients time to find other sources for marihuana.

There will undoubtedly be further activity around this issue at today’s Board meeting. Check back with Dykema’s Cannabis Law Blog for updates.