THURSDAY, Feb. 21 — As state officials continue to collect far more money than they need to operate Michigan’s medical marijuana program, costs for licensed cardholders could soon get a whole lot cheaper.


Michigan’s Department of Licensing and Regulatory Affairs has proposed reduced costs for medical marijuana cardholders. Application fees could be trimmed from $60 to $40. Prior costs for caregiver background checks and various registry updates could be eliminated entirely. The renewal window could also be extended.


Industry advocates — like folks at the National Organization for the Reform of Marijuana Laws — lauded the proposal as a way to enhance medicinal access to patients across the state. But saving cash for pot-smoking cardholders wasn’t the only motivating factor for state regulators. They’ve simply collected too much money.


Millions in fees charged to patients and caregivers over the last several years have swelled the state’s Marijuana Registry Fund to the point of excess. Records show it holds nearly $32 million in unallocated cash. And regulators at LARA are determined to drive down the surplus revenue before it balloons out of control.


“The idea is to stop the fund from growing at this exorbitant rate and bring it more in-line with the actual costs of operating the (medical marijuana) program,” explained LARA spokesman David Harns. “As more people have applied for these cards, the costs to administer the program just haven’t been growing at the same rate.”


Michigan tallied about 120,000 licensed medical marijuana patients in 2011, three years after medical pot was legalized statewide. By last year, that number had more than doubled to nearly 280,000 patients — each one paying application and renewal fees into a fund specifically designed to defray the costs of running the program.


State law essentially prohibits LARA from dipping into the fund for anything other than administrative costs, leaving regulators to slash their own revenue stream in an attempt to strike a balance within the program budget.


Since 2008, the fund collected about $82 million but LARA only spent about $50 million to run the program. Those costs included about $5 million in grants for local law enforcement agencies. Another $8.5 million was appropriated to help jumpstart the retail pot market under the Medical Marijuana Facilities Licensing Act.


But the ongoing costs simply haven’t kept up with the lucrative geyser of patient fees that flow to the state annually. And it’ll ultimately take another legislative appropriation before those funds can head elsewhere. State Sen. Jeff Irwin, D-Ann Arbor, wants to see the cash used to help streamline Michigan’s marijuana industry.


“The program brings in massively more money than it requires,” Irwin said. “I’d really like to see LARA use that money to more aggressively staff up and deal with regulating the industry. Michigan has struggled to get these licenses out. Maybe some additional resources would speed that along.”


The five-member licensing board that approves dispensaries and other commercial elements operates outside of the fund created in 2008, but Irwin suggested some additional funding could help unclog a system that has long been bogged down with undecided applications.


The nature of the monthly or bimonthly licensing meetings has created a “bottleneck” in the system that Irwin and others have criticized for the slow rollout of the medical marijuana industry. It’s part of the reason Irwin voted against the law despite helping to sponsor it before it went to the House floor.


“There are higher and better uses for those dollars,” Irwin added. “It should be used to better the system itself.”


With the legalization of recreational marijuana, officials at the House Fiscal Agency also expect those grant dollars for police to dry up in 2019. Irwin labeled it “unreasonable” to use cash from patients to help fund marijuana-related investigations — especially when those investigated are sometimes in compliance with the law.


But even if the expenses shrink, what’ll happen to the money that has already stockpiled inside the account?

Officials at LARA said their hands are tied unless the Legislature decides to appropriate the cash elsewhere. State regulators ultimately have no discretion over how the fund is spent; they can only stop it from growing.


And no movement has yet been made among lawmakers to help slide the widening funding glut elsewhere.

“We use the funds appropriated by the legislature to fulfill our role as defined by the laws we administer and will continue to do so,” according to a statement from Bureau of Marijuana Regulation Director Andrew Brisbo.


The proposed changes to the medical marijuana program include…


Reduction of the patient application fee from $60 to $40.

Elimination of the $25 caregiver background check processing fee.

Elimination of the $10 fee to update or replace a patient registry card.

Expanded patient renewal period from 60 to 90 days.

Inclusion of email as a contact method for staff verification.

Inclusion of a provision that authorizes patient to change the designated person to possess plants.


A public hearing will be held in the next few months to receive public input on the proposed rules.


Visit lansingcitypulse.com for previous and continued coverage on statewide marijuana regulation.