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Lansing — Recreational marijuana shops could start selling product as soon as Dec. 1 after state regulators said Wednesday they could transfer some of their medical marijuana product to their new adult use supplies.

The change has some industry stakeholders worried about medical marijuana shortages.

Newly licensed recreational pot shop owners with an equivalent medical marijuana facility license will be able to transfer up to 50% of their product to use for recreational sales, according to a bulletin that will be sent Wednesday to licensees.

The Marijuana Regulatory Agency expects roughly a dozen licensees will be eligible to transfer product on Dec. 1.

“Similar to the medical market, we expect it be a slow build out as the production of plants and products increases,” agency spokesman David Harns said in a statement. “This will create an environment where businesses can supply the market as quickly as possible.”

The allowance, provided for in the emergency rules issued by the state in July, would apply only to tested product from growers, processors and provisioning centers.

Without the allowance, newly licensed recreational pot shop owners would have to wait a few months to grow new product from seed to plant. The state is expected to give the first recreational license before the end of the month.

The transferred items would be limited to certain THC concentrations and require proper labeling. Any equivalent license holder must request a transfer prior to making one by contacting the Marijuana Regulatory Agency.

The transfers could begin as soon as Dec. 1 and last until the state agency stops the practice through an advisory bulletin. All transferred product sold as recreational marijuana would be subject to the appropriate excise tax on adult use marijuana.

The Michigan Cannabis Industry Association was not overly enthusiastic about the transfer allowance, noting it could deprive more patients of medicine in a medical marijuana market that is already struggling with shortages.

Medical marijuana advocates and industry insiders were “completely blindsided” by the announcement and are speaking with patient groups to determine “how bad this is actually going to affect patients or not,” said Robin Schneider, executive director for the association, which represents approximately 200 members.

“When a state is regulating an industry like ours, it’s probably a good idea to give business owners as much notice as possible,” Schneider said. “We need more notice than less than 30 days before this takes effect.”

The Marijuana Regulatory Agency anticipates there will be demand in both medical and adult use markets and is working to “limit the appeal of illicit-market marijuana,” Harns said.

“By only allowing a transfer of 50%, it will keep production and sales on the medical side moving as well,” he said. “Businesses will make decisions to move products where the demand exists, including the non-flower products that are currently in abundance.”

As of Monday, the state had received 58 applications for pre-qualification and 43 for operating licenses for adult use facilities and had approved 41 applications for pre-qualification. It expects to award its first adult use marijuana operating license before Thanksgiving, Harns said.  

eleblanc@detroitnews.com 

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