Michigan appeals court bars sales of medical marijuana patient-to-patient

Kim Kozlowski/ The Detroit News

Detroit — Medical marijuana dispensaries that engage in patient-to-patient sales cannot operate, the Michigan appeals court said Wednesday in a major ruling that led to a shutdown of scores of dispensaries statewide.

The decision fueled fears that the estimated 300-400 dispensaries serving nearly 100,000 eligible Michigan patients could close permanently.

In a 3-0 ruling, the court said Compassionate Apothecary, a cannabis dispensary in Mount Pleasant, violates the state's 2008 medical marijuana law.

The court said owners Brandon McQueen and Matthew Taylor not only facilitate sales between patients and caregivers but also sell the cannabis by taking a 20 percent cut in the transactions.

The 3-year-old law does not allow sales and therefore the dispensary can be shut down as a "public nuisance," the court said.

"The 'medical use' of marijuana, as defined by the (law), allows for the 'delivery' and 'transfer' or marijuana, but not the 'sale' of marijuana," the court said, adding "the 'sale' of marijuana is not the equivalent to the 'delivery' or 'transfer' of marijuana."

Scores of dispensaries shut down temporarily to seek the advice of attorneys, said Rick Thompson, spokesman for the Michigan Association of Compassion Centers, an organization of dispensaries in the state.

Among those that closed was Capital City Caregivers, and it won't reopen until it's clear it can, said director Ryan Basore. There are 40 dispensaries in Lansing, and most of them are shut down too, he said.

"There are a lot of upset patients today," Basore said. "We had about 70 patients today … and they all said, 'How are we suppose to get our medicine?' And they don't know how. What (the court) did today was put a lot of sick patients back into the streets and into the hands of drug dealers. The street dealers are the ones that won today."

But others said that most dispensaries should not be affected because they are not set up in the same way as the Compassionate Apothecary.

"There are not sales for these transfers," said Jamie Lowell of 3rd Coast Compassion Center in Ypsilanti. "People operate off of consulting fees and donations."

McQueen and Taylor — who also own dispensaries in Traverse City and Lansing — vowed to appeal the decision to the Michigan Supreme Court.

McQueen said the ruling "was bad for the patients, it's bad for the caregivers and it's bad for Michigan."

But state Attorney General Bill Schuette hailed the court's ruling as a step in patching a law with "more holes than Swiss cheese."

"The (judges) cleared the air and gave the local communities the tools to enforce the law," Schuette said. "The law was designed to help people with debilitating diseases, but it's been hijacked by those who want to make a profit, unscrupulous docs and those who wanted to legalize drugs."

It is unclear how Wednesday's ruling will impact the estimated 300-400 medical marijuana dispensaries that broker cannabis sales between those involved in the program.

But many agree that authorities' interpretation would vary by jurisdiction. The ruling adds to the confusion surrounding the state law that is widely criticized as vague. Since Michigan became the 13th state to allow for use of medical marijuana, the issue has had vastly different interpretations by municipalities.

The 26-member Court of Appeals — which typically works in panels of three to rule on more cases — has ruled on at least four other medical marijuana cases, but this is the first time it has weighed in on commercial sales.

The Michigan Supreme Court has agreed to hear an appeal of a case involving Owosso resident Larry King.

He has a state-issued medical marijuana card but has been charged with a crime for growing pot in a dog kennel.

Meanwhile, a group of lawmakers is planning to introduce a package of bills aimed at clarifying the law that would include provisions such as making it a felony for doctors to falsely certify a patient's debilitating condition if they know otherwise.

The crux of the court's ruling hinged on the "sale" of the medical marijuana, according to Lansing attorney Jeffrey C. Hicks.

"The dispensary itself is not illegal," said Hicks, who sits on a township board in Delta, which banned dispensaries. "It's the actions that are being conducted by the dispensary, the sale of the medical marijuana."

The law does not include the word "sale," Hicks said.

Matthew Abel, an attorney specializing in cannabis law, said even if the Supreme Court takes the case and upholds the ruling, there is no going back to the time before the law was passed.

"The patients are not going to go back to the back alleys and buy this off the street, and they shouldn't have to," Abel said. "Eventually, the Legislature is going to become educated as to the realities, and they are going to begin to license, regulate and perhaps tax (the industry)."