Unlicensed medical marijuana delivery flourishes in Metro Detroit
Roseville — The state of Michigan has not yet approved any licensed medical marijuana provisioning centers for home delivery, but that's not stopping nearly four dozen cannabis businesses in Metro Detroit from cashing in.
Royal Oak-based Grow Cannabis Marketing has identified 44 medical marijuana delivery businesses currently operating in the region. They don't have state licenses, but many market themselves on online cannabis directories such as Weedmaps and Leafly.
Licensed brick-and-mortar provisioning centers say delivery operations are taking business from them after they've invested thousands of dollars into obtaining state approval.
But with the industry in transition and so few cultivators approved, these delivery services say they are filling a need.
"You're seeing so much of it because there are so few licensed facilities," said Alex Leonwicz, leader of the Cannabis Industry Group at Royal Oak law firm Howard & Howard. "There's such a high demand and high card number. (Dispensaries) can't even hold the product for their own sales of people who can walk in. Now you're asking them to deliver? I just don't think there's enough product in the system to meet demand at this time."
Mr. Nice Guy's Caregivers is a "network of caregivers," managing member Phil Russo explains, that formed in early 2017 and delivers to most of Macomb County. The organization, which does not have a state license, has up to 60 caregivers,who are people registered with the state to grow marijuana plants and provide the drug to up to five patients and themselves. Products are tested at Hazel Park's Steadfast Lab, Russo said.
Mr. Nice Guy's connects patients with caregivers and facilitates caregiver-to-caregiver sales of marijuana products so that the deliverers have access to the cannabis for their patients.
"We want to help move this industry and move it out of the shadow," Russo said. "You have to build trust and bridge that gap. It's not like ordering a pizza from Domino's. You know what your pizza is going to taste like. You go on Weedmaps and see pictures of marijuana, but you don't know what you're going to get. There has to be a level of trust."
To build that, the service offers consultations to sit down with patients and connect them with the best caregiver.
Patients said what they pay is about what they previously spent at the string of dispensaries lining Eight Mile in Detroit, but the delivery service saves them the time and mileage.
"Going into the city was rough," said Michael Stout, a 39-year-old patient with chronic pain in Clinton Township. "The roads are rough. You have to watch your back, and then you have to wait in the lobby. I didn't feel comfortable going. It's sketchy going to certain spots. I'm glad I found Phil. They're people I trust. They're like family."
Russo said he hopes over the next year to find a partner and open a provisioning center in Macomb County to deliver directly to patients.
"Everybody wants delivery," he said. "Everybody wanted it for the past half decade or so. It's like the popularity of Grubhub and Shipt. Home delivery is ultimately, it's the way people want things."
Caregivers legally can deliver marijuana to their patients. While many of the delivery businesses hire caregivers as their drivers, the patient's caregiver may not be the one who will deliver to their doorstep.
Russo said the caregivers have an agreement that another caregiver can deliver to a patient when they are unable since many have full-time jobs.
"I don't think there is anything illegal as long as the money is going to their caregiver," Russo said. "Any legal caregiver can carry their product around. We try to be as upfront as possible. We're not trying to not respect the process."
Gerry Rekowski is the owner of Natural ReLeaf, a delivery service in Macomb County that began three years ago and does not have a license. He grows his own marijuana and gets it tested, he said.
He is a caregiver and delivers to one or two patients a day. They email or text him photos of their license and medical marijuana card, and he will deliver if they are within the area.
"It's basically a way to expand and get to the people that need it, that need the care," Rekowksi said of his service. "(The state) has kind of made it tough on us (to open a provisioning center). It's always about the money. They've kind of shoved the little people away. They seem to want tobacco and big pharma to run it."
The 2008 Michigan Medical Marihuana Act passed by voters allows for caregivers to provide medical marijuana to their patients, said David Harns, communications manager for the Michigan Licensing and Regulatory Affairs Department. But with the legalization of recreational marijuana in December, those 21 or older can possess and give the drug to others who are of legal age.
Ferndale's Healing House Holistics delivers herbs, vitamins, alkaline water and toothpaste and soaps to people in the area. About seven or eight months ago, the unlicensed business began working with medical marijuana patients, said Jay Success, a partner of the company.
"There's a deficit of this in Detroit," Success said. "When the marijuana industry happened, it made sense for us to add this to the business. Many people don't like traditional medicine."
Healing House offers various strains, concentrates and edibles, according to Weedmaps. Success said the company tests the cannabis. It has two drivers and is looking to obtain a license from the state.
Weedmaps lists the price of one-eighth ounce at $40. Success says patients "donate" to cover the cost.
"It's against the law to sell it," Success said. "We're gifting it."
That is where things become hazy, said Matthew Abel, senior partner at Detroit-based Cannabis Counsel.
"If they are operating in that gifting realm, then that's a gray area at best," Abel said. "Gifting cannot be advertised or promoted."
Most delivery companies that list their products on websites such as Weedmaps charge a "donation."
Barton Morris, principal attorney at Royal Oak's Cannabis Legal Group, says it's not a donation if it requires the exchange of money. "It's only a gift if it happens without any transaction. Simply just calling it a donation doesn't make it a donation."
Caregivers, however, can charge patients the expenses they incur to bring them their product, Morris said.
"(Caregivers doing deliveries) is permissible if a caregiver who is registered to only five patients and is doing the delivery," Morris said. "It's the caregiver to the patient."
Leonwicz agreed: "Patients are supposed to be tied to caregivers. If you're matching up patients that aren't tied, I think you could have an issue with the (medical marijuana act)."
Morris added that Michigan law does protect patients who use such services, another likely reason for why these operations have flourished.
'Black eye' on industry
In November, the Medical Marihuana Licensing Board approved an administrative rule to allow state-licensed provisioning centers to receive approval from the state for home-delivery services. The rule allows those who receive approval from the Licensing and Regulatory Affairs Department to have one driver who can deliver up to 2½ ounces to 10 patients homes at a time, Harns said. The driver's vehicle must have a GPS tracker. The department has received no requests for such delivery services yet, Harns said.
The department declined to comment on other delivery operations.
Jerry Millen, co-owner of the Greenhouse Dispensary in Walled Lake, said medical marijuana delivery services have cost him business after investing nearly $1 million into a brick-and-mortar location and to obtain a license. After four years, the dispensary opened Feb. 1. Prices start at $10 for 1 gram. Millen said he plans to request approval to start deliveries in the future.
He believes unlicensed delivery services are unsafe for patients.
"It's people who are skirting the laws," Millen said. "They can go do delivery, and there's no regulation, no way to track where it's going. At some point, something is going to happen, and it'll be a black eye on the cannabis industry, and it's not going to be a licensed facility."
Millen said he was disappointed with law enforcement for shutting down illegally operating dispensaries in the past but ignoring these operations.
The Michigan State Police works closely with the Licensing and Regulatory Affairs Department to investigate any alleged criminal activity committed by licensed marijuana facilities, said Shanon Banner, public affairs section manager for the police.
"There is no one entity responsible for enforcement of unlicensed, black-market marijuana sales," Banner said in an email. "The MSP will continue to review potentially illegal marijuana sales with county prosecutors to determine when criminal enforcement is warranted and will investigate this activity as resources permit."
D.J. Hilson, president of the Prosecuting Attorneys Association of Michigan, said prosecutors rely on police and other investigation agencies to determine whether a crime has occurred.
"If patients are receiving marijuana from someone other than their caregiver, even if the person delivery is a registered caregiver," Hilson said, "they face the potential of losing their protections under the safe harbor provisions of the act."
It is unclear when licensed provisioning centers could begin offering delivery. The state has granted licenses to 59 dispensaries, 42 cultivators, 11 processors, five secure transporters and four safety compliance facilities to serve approximately 294,000 medical marijuana cardholders in the state.
"As more grow facilities are brought into the marketplace, I think you'll see more home deliveries become available," Leonwicz said. "In about six to eight months probably a few will come online. I'm sure those who have grow operations and are growing for their own stores will be first. It's been a slower process than anybody anticipated."