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The Michigan Supreme Court Decides the Fate of Medical Marijuana Dispensaries

February 10, 2013 Medical Marijuana

The Michigan Supreme Court Ruled that patient-to-patient transfers of medical marijuana sales are not protected under the Michigan Medical Marihuana Act in People v. McQueen.

As McQueen made its way from the Court of Appeals to the Supreme Court, the medical marijuana community braced itself for what it thought would be the end of commercial marijuana dispensaries.

The Court of Appeals had ruled that the sale of medical marijuana was not permissible under the Michigan Medical Marihuana Act. Prosecutors and police across communities in Michigan began closing dispensaries after the opinion was issued.

On appeal, the Supreme Court ruled that although sales of medical marijuana are permitted under the MMMA, patient-to-patient transfers are not permitted. So although this opinion theoretically allows dispensaries to continue operations, the reality is that without patient-to-patient transfers a dispensary will have a difficult time making enough money to stay in business, as a caregiver may only have five patients at the most.

Here’s what happened and the Court’s analysis.

Defendants owned and operated Compassionate Apothecary, LLC, where qualifying medical marijuana patients kept marijuana in lockers and made sales to other qualifying patients. All persons involved with CA were either registered caregivers or qualifying patients. Defendants charged a membership fee as well as a percentage-based service fee on all marijuana sales.

The Isabella County Prosecuting Attorney filed a complaint alleging that CA constituted a public nuisance because it did not comply with the MMMA.

In general, any building used for the sale of controlled substances constitutes a public nuisance under the Michigan public health code Marijuana is a controlled substance, but the MMMA carves out a limited exception for medical use.

The MMMA does not explicitly allow for businesses to sell marijuana to patients.  Nevertheless, defendants argue that the MMMA allows for businesses to facilitate patient-to-patient sales, as the Act provides that the medical use of marihuana is allowed under state law to the extent that is carried out in accordance with the provisions of the MMMA.  Medical use is defined in the statute as

“the acquisition, possession, cultivation, manufacture, use, internal possession, delivery, transfer, or transportation of marihuana or paraphernalia relating to the administration of marihuana to treat or alleviate a registered qualifying patient’s debilitating medical condition or symptoms associated with the debilitating medical condition.”

The issue for the Supreme Court to decide was whether the sale of marijuana is an activity that falls within this definition of “medical use.”

The Court of Appeals below concluded that the sale of marijuana is not permitted under the MMMA, reasoning that the word “sale” is not mentioned in this definition of medical use. The word “transfer” comes close, the Court of Appeals said, but “transfer” is only one part of a sale.

The Supreme Court disagreed, stating that the word “transfer” in the MMMA does envision a sale. A common dictionary definition of “sale,” is the “transfer of property or title for a price.” Therefore, although a transfer is one part of a sale, a transfer can also be a sale itself.

Moreover, other sections in the MMMA specifically contemplates that sales of marijuana will be permitted. For instance, Section 4 allows a registered primary caregiver to “receive compensation for costs associated with assisting a registered qualifying patient in the medical use of marihuana,” but states that “[a]ny such compensation shall not constitute the sale of controlled substances.”

The Supreme Court therefore held that the MMMA permits the sale of marijuana between registered caregivers and qualified patients.

This was not the end of the inquiry for the Court, however. The Court still needed to decide specifically whether patient-to-patient sales were entitled to Section 4 immunity.

Section 4 of the MMMA grants qualifying patients and registered caregivers immunity from arrest and prosecution where a person has been issued and possesses a registry identification card, has no more than the permitted amount of marijuana, and keeps plants in an enclosed, locked facility.

Compliance with Section 4 creates a rebuttable presumption of medical use of marijuana.  The Court found that Section 4 creates a personal right and protection for a registered qualifying patient’s use of medical marijuana, but that right is limited to medical use that has the purpose of alleviating that patient’s own debilitating medical condition. If the medical use of marijuana is for some other purpose, such as to alleviate the medical conditions of another patient, then the presumption of medical use is rebutted.

Thus, the sale of marijuana to a patient by a patient with whom there is no registered caregiver connection is not protected by the MMMA.

Despite the Court’s holding as to Section 4, the possibility that Defendant’s business operation may be protected by the affirmative defense set forth in Section 8 was left open.  Section 8, however, only applies to criminal proceedings, which was not the action before the Court, and so the Court did not discuss that possibility further.

Courts will continue to require strict compliance with the Michigan Medical Marihuana Act. It is important that both patients and caregivers understand the law and its requirements.

Contact ArborYpsi Law at 734-883-9584 or at to speak with attorney Sam Bernstein.

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