Copyright M Live Michigan
LANSING, MI -- Michigan regulators want marijuana retailers to report customers who possess illegal amounts of cannabis. But they’re not asking the stores not to sell it. “It doesn’t really make sense, at all,” said the manager of a store in the Upper Peninsula, who asked not to be named over concerns that he may be perceived as criticizing Cannabis Regulatory Agency (CRA). “I think that what they’re saying is: if a customer comes through and wants more than what their daily limit is, they want us to call and tell on the customer. “Legally, you could sell more, but you’d have to report them.” The reminder, which retailers tell MLive is confusing in its vagueness, came in the form of a notice issued to licensed marijuana businesses on Monday, Nov. 3. The same communication was sent April 15, days before the annual 4/20 pot holiday. The notice reiterated an existing rule: a store must report suspected theft, diversion or criminal activity that occurs “at the marijuana business” to police and the Cannabis Regulatory Agency (CRA) within 24 hours of detecting it. But it included a caveat that caught the attention of some in the industry: “This includes, but is not limited to, individual possession of more than twice the amount of marijuana allowed under the Michigan Regulation and Taxation of Marihuana Act ... ” In Michigan, you may transport, gift or purchase (in a single transaction) up to 2.5 ounces, including a maximum of 15 grams of concentrate. Possession exceeding the limit is a civil infraction with possible fines. Once the quantity exceeds twice the legal limit, it becomes a misdemeanor crime. Store representatives who spoke to MLive interpret this to mean they may sell up to five ounces and 30 grams of concentrate to a customer. Because that amount would exceed single-transaction limits, stores split the sale into two transactions and issue separate receipts. “What the CRA’s position has been is that if you ring up more than one transaction and it keeps somebody at or under (the limit for a misdemeanor), that person is not committing a crime, yet,” said Lansing-based Dykema Attorney John W. Fraser, who assists cannabis businesses with regulatory guidance. “This has been percolating for the last six or seven months, and it’s been a topic of discussion that has come up in a lot of our calls with clients ... ” No stores MLive spoke to said they have reported customers to police or the CRA for exceeding personal possession limits. “You’re not gonna stay in business very long if you start calling the police on your customers—if you’re in any business,” Fraser said. The CRA wouldn’t answer MLive’s questions on the topic. “The CRA declines to comment beyond what is outlined in statute, administrative rule or agency bulletin regarding reporting requirements or enforcement processes related to personal possession limit violations,” spokesman David Harns said. This leaves answers to some questions in legal limbo. “What happens if (the customer) leaves the store, returns to their car and they come back in,” Fraser said. “I don’t know what CRA position is on that.” The U.P. store manager who spoke to MLive said his dispensary’s policy requires customers to leave the store and parking lot, which is under camera surveillance, before any additional purchases are allowed. After a customer leaves, it’s possible the marijuana was dropped off at home—where you may possess up to 10 ounces of store-bought weed—or legally gifted to someone. “We’re left to be able to assume they took it to their hunting camp or something,” the U.P. dispensary manager said. “We’ve got to play stupid to a point. They come in 10 minutes later (and say) I’d like to do another two orders.” Kate Hauck, vice president of operations for Emerald Fire, which has stores in Coleman and West Branch, said it’s a “very common practice” for customers to make a purchases up to their transaction limits, leave the store and return to purchase more. This is especially prevalent at border stores “because those stores are getting a lot of out-of-state traffic where folks are coming to buy significant quantities of marijuana and then leaving the state of Michigan,” Fraser said. If a customer reaches their possession limit while shopping at another store, there’s no way to tell when they arrive at yours, Hauck said. She said information sent to the state after a purchase doesn’t include distinct customer information, so regulators can’t immediately see if a store violates the two-transaction limit. So how does the CRA learn about stores that violate those rules? “In about 85% of all the formal complaints against clients I’m representing, the investigation starts with an anonymous complaint from a former employee who was terminated,” Fraser said. “So that would be my guess. The CRA picks that up and they request the camera footage.” All stores are required to maintain surveillance video of the sales floor that is accessible to the CRA. While the memo focused on personal possession limits, it also has businesses wondering how the CRA interprets “criminal activity.” It’s not clearly defined in the law and “criminal activity” is a blurry concept in the world of cannabis, where there is patchwork of state laws competing with a federal marijuana ban. “Every single one of the customers is committing criminal activity if you start looking at federal law,” Fraser said. “but I’m sure CRA would say: ‘We’ll never apply it in that fashion.’” If a store were to report a customer, the law requires employees file a complaint with a “local police agency,” which could include a municipal department, county sheriff or even state police, Fraser said. There’s a standardized form retailers also complete and send to the CRA, which includes a criminal activity description field. It’s unclear what the CRA or law enforcement do after the information is collected. Fraser and store owners believe the recent notice was prompted, in part, by recent complaints publicized by the CRA involving excessive retail sales. On May 20, police in Berrien County’s Chikaming Township stopped an Iowa-bound rental truck driven by a man hauling nearly eight pounds of marijuana and 466 grams of concentrate. That’s nearly 25 times the daily limit of marijuana and 16 times the daily limit of concentrate. Police notified the CRA because the marijuana appeared to be retail product. CRA investigators tracked the marijuana to a dispensary named Fire Creek in Battle Creek, according to the formal administrative complaint the CRA later filed. When contacted by phone, a Fire Creek representative declined comment. It’s not clear if it was the same person police later arrested, but the CRA complaint said a review of store surveillance showed a man filling a grey duffel bag with large amounts of marijuana and employees completing multiple order forms before accepting cash. During a July investigation of Muha Meds, which operates a store in Ypsilanti, CRA investigators identified two large transactions involving sales of between 800 and 1000 grams of concentrate. Both were removed from the store by customers, who would have possessed up to 33 times the legal limit for concentrate. A Muha Meds representative was unwilling to comment when contacted by phone. Both businesses were accused of rules violations for failing to report to police and the CRA sales in excess of legal personal possession limits. “Both of those cases have other stuff that’s going on but that was the part that a lot of folks in the industry latched onto,” Fraser said, “that they got dinged for not reporting criminal activity because a person within their store possessed more than five ounces of marijuana.” While the CRA communication about criminal reporting and personal possession limits has generated a large amount of industry discussion, Fraser doesn’t think enforcing it is a priority. “It’s led to a couple of really egregious examples,” Fraser said. “It’s one of those things that’s worth reiterating to everybody, because if folks are getting really kind of reckless with it, they’re probably not the only ones, I think, probably is the CRA’s thought process.”
