By their own admission, Michigan’s cannabis caregivers work in a gray space between the legal and underground markets. Registered with the state and allowed to grow up to twelve flowering cannabis plants at a time for up to five medical cannabis patients, plus themselves (if they are a registered patient), caregivers are not required to track their plants with the state’s seed-to-sale system, Metrc, or test their product with a laboratory. As a result, many caregivers admit, a significant portion of their product ends up in the underground market and goes to non-patients.
Because they sometimes work in a legal gray area, few Michigan caregivers are willing to go on the record to discuss what they do. But, in Lansing last week, Grown In met with a group of six caregivers for a detailed conversation about how they came to the business, how they do it, and how they work in the legal gray area.
Rick Thompson, the current executive director of Michigan NORML hosted the meeting on the porch of a home near downtown Lansing. Thompson, besides being a registered caregiver himself, was a co-founder of Big Daddy’s dispensary in Oak Park, Michigan, an unlicensed dispensary that opened in 2009. In 2011 the dispensary was raided by police and subsequently closed.
Other caregiver participants include Debra Young, from Ferndale, Joe Sullivan, from Bay City, Jamie Lowell, from Detroit, and Toni and Mark Shananaquet from upstate Kewadin, near Traverse City.
This interview has been condensed and edited for clarity and brevity. Some names and locations have been redacted at the request of the interviewed.
Grown In: Joe, tell me about you.
Joe Sullivan: It’s all I know. Cannabis has been my education my whole life. I’m a third generation grower. When I was a baby, my parents moved to California to trade in weed. My mother would go to Tijuana and bring loads back and they would say they were buying tools to sell at the swap meets. It’s just where I come from.
The heat got on, when I was about 8 years old, I’d known us to be raided a few times, so my mom brought us back to Michigan. I would have to believe that her roots still continued because my mom never worked and we always had food. We always had nice Christmas presents. We wasn’t rich by no means, but she made sure things were OK.
I think she brought California weed to Michigan in the 80’s.
Grown In: So, you’ve been a grower and now you’re a caregiver. What does that mean?
Joe: For me, what it means to be a caregiver is that I’m supplying a specialty service for my patients. I can tailor-make medicine that most dispensaries are really just wanting the high THC value. I can tailor make medicine that’s going to be 5 milligrams, but it’s not desirable by a bunch of people so dispensaries, not all dispensaries, will carry something like that. That’s what it means to me.
Grown In: OK, Debra. You tell me your background.
Debra Young: So, I’m a patient and I’m a caregiver. So I’ve been a patient since 2009. We legalized in 2008. I became a caregiver in 2014, and that’s when I became involved with legalization, and I ran some petition drives in some cities that set the tone for statewide petition drives later on. The plan was we were going into certain cities and run legalization campaigns to kind of put it more in the public eye, soften up the electorate for the statewide later.
Grown In: Jamie, tell me about you.
Jamie Lowell: I came into this arena in late 2008. I was part of a real estate appraisal company, working with agents and brokers. The market busted around that time, and became different. And not profitable. Some of us were looking for something new to do. And meanwhile this law passed, and a group of us in the Ypsilanti area, the city next to Ann Arbor, thought hey, they’re doing this stuff in California. We passed it here. There’s this building, some friends that were brokers in the mortgage business. They were my main clients. Just a synergistic business situation. And so we interpreted stuff ourselves, and got moving on it. Started working the locals immediately. We ended up being the first licensed dispensary that had transparency with the government.
Grown In: What year was that?
Jamie: We started the dispensary in 2009. We didn’t get the license I want to say until 2011 or something like that.
Grown In: So this was when it was just like local licenses not state licenses.
Jamie: Yeah, that place was still operating. In Ypsilanti. It’s called Oz, and it’s still operating now. It changed hands. So, that’s kinda cool.
Grown In: Toni, tell me how you came to this.
Toni Shananaquet: I’m married to Mark, and we run Native Cultivations, a hemp farm. And my mom, she had blood pressure problems and a heart attack, and she came to Mark and asked if we could do research on cannabis. Because she knew in his youth he was a grower of cannabis. So we started researching. And after our kids grew up and left high school, we changed their rooms into grow rooms, and we did everything we needed to do to get medicine for my mom.
Mark Shananaquet: My whole family is involved in it.
Toni: The nieces and nephews come help prune the plants. It’s a community.
The Cost of Operation
After some introductions, the discussion touched on how much it costs to operate a caregiver operation.
Debra: I’m a caregiver so everything that goes along with that. I’ve been doing it since 2014.
Grown In: Caregiver in 2014. You became a patient in 2009.
Rick Thompson: And it is true that most caregivers are patients.
Debra: Yes, absolutely.
Jamie: It makes sense that people are able to figure things out and share with others.
Joe: I’m a patient, and my wife is also a caregiver.
Debra: To see it from the patient’s aspect too. If I had to buy my medicine at a dispensary, it would probably run me about $700-800 a week. Now who could afford that? I could never afford that. Mostly, I feel that people who use dispensaries are casual-use, recreational users. And there’s always a market for them, people will always be using stuff. Little novelty items. But medical patients are different. They’re different, and some of them require a lot of medicine. And I don’t know how anybody would afford that. I really don’t.
Black Market vs. Gray Market
The caregiver law was created with the 2008 referendum and Michigan Medical Marijuana Act. At the time, many interpreted the law so that it did not specifically bar sale and transfer to non-patients, launching hundreds of gray-area cannabis growers. Since then, the caregiver law has been clarified by courts and through the 2016 Medical Marihuana Facilities Act And Marihuana Tracking Act.
Many long-time caregivers still move in that gray space though, which a recent study by the Anderson Economic Group estimates is serving 30% of Michigan’s cannabis market. Our discussion moved to candid descriptions of how they work.
Joe: Honestly Debra, I was happy doing the black market thing. We were doing alright. There was, I don’t know if you ever heard of [name removed]? [He] was broken down by the side of the road, when I pulled over, and I asked do you need help, and I helped him out. I drove him to [removed] in Saginaw, he handed me a thousand dollars and said, you work for me now.
Debra: I kinda straddle both worlds.
Joe: I do too!
Grown In: I want to ask you guys, one of the things that is interesting to me is the space between the underground market and the caregiver market. It seems to me that Michigan is the only state that admits there is an underground market, and the caregivers say this is a membrane through which things can move.
Joe: But it’s not something that we have to admit. Because before there were commercial grows commercial dispensaries were supplied by caregivers.
Jamie: Before the state rules changed, as a result of an emergency rule, to help get the new commercial system off the ground, what had been working for years, like we had at 3rd Coast, we laid back on for a while, until commercial growers could provide.
Grown In: But is there even a gray area?
Debra: We straddle the line.
Jamie: This idea that MCMA [Michigan Cannabis Manufacturers’ Association] is going to peel back what caregivers are able to do, and attempt to stop that market or whatever activity, just doesn’t make any sense. If somebody is outside of those limitations, they’re already not allowed to do that, and there’s already mechanisms to deal with that.
Debra: If it’s already legal, why deal with it?
Joe: And there’s still dispensaries selling black market product.
Jamie: It’s already happened in Lansing, a few times. These places are kinda doing it.
Grown In: How much–
Debra: If a caregiver realistically goes into what they call the black market?
Grown In: The underground market.
Debra: About half is what I would think.
Grown In: Probably half. What do you think, Joe?
Joe: I would say the same, but I could also say I would have to bet that it’s the same for commercial. That there’s still caregiver product still going through, into the commercial markets.
Grown In: How big an operation. What would you say is an average size operation for an underground grower?
Debra: For a caregiver? Or somebody not a caregiver.
Grown In: Somebody not a caregiver.
Joe: Sky’s the limit, because they don’t care.
Grown In: What’s really big?
Joe: Old K-marts. We’re not talking houses.
Grown In: So like a 50,000 square feet space.
Joe: Yeah.
Debra: Those are not caregivers.
Jamie: Calling them caregivers feeds into the narrative of the MCMA.
Rick: In Michigan we have an abundance of available space on a commercial level as far as warehouse goes or unused former retail. And our industry is full of people who are opportunists and very intelligent folks in terms of how they leverage. So they can find a situation like that and make it work on the down low until they get discovered and then they can do exactly the same thing a block away in a different building because Michigan has all these different buildings. And it’s hard for me to criticize anyone in the middle of a pandemic hustling hard to make a buck. You can say unlicensed and unregulated. But these are all people who are working hard for this.
Grown In: Why Michigan? Why does Michigan have this culture of large, underground grows?
Debra: I think it’s everywhere, don’t you think?
Grown In: I don’t think it’s the same in Illinois and Wisconsin.
Joe: Just because you’re not in those niches, but they’re doing it.
Rick: But prior to 2008, we did have some cultivation in state, but almost all of it was an import situation. Coming from Cali, from some other place. Mexico. Canada. And after 2008, when we started to self cultivate our state, then we transitioned from being an import state to a self-sustaining state, and now we’re at the point I believe we’re not only a self-sustaining state, we’re an export state. The imports from Cali, and Mexico have gone way, way down, and now we’re self-sufficient, From a cannabis level.
Grown In: How do you know that?
Rick: First of all, I was in the game, in 2009, and when you wanted to buy five pounds of cannabis, and there was no one from Michigan, you got it from Colorado.
Joe: I got it from the post office in California.
Jamie: At 3rd Coast, we had to decide whether or not we were going to succumb to the California cannabis stuff or if we were going to stick it out with our Michigan caregivers, which meant paying more, not having it be as good at the time. But it was a matter of time, and they started producing much better cannabis, and it was better priced.
Joe: And anyone can grow shitty weed. That can flood a market. Until you know what they grow, you’ll buy it.
Jamie: Well, Big Daddy’s, which was the organization Rick was with, I thought. They had deals with many patients signed up with their caregivers. If they had some time of clear qualifying conditions, they would make sure those people got all of their free cannabis. They had like over 100 people like that.
Grown In: So this was a network of caregivers?
Jamie: There were caregivers that gave free cannabis to patients that needed it, and the additional stuff that wasn’t needed for them, went to the stores in a central location for others that might need it.
Grown In: I’ve heard stories that caregivers band together in a single location.
Rick: Yes.
Jamie: Sometimes, yeah.
Grown In: How often is that?
Debra: I think a lot of caregivers don’t want to get involved with others.
Jamie: A lot of people don’t want to be known.
Joe: We were taught for thirty years not to discuss anybody.
Debra: Just fly under the radar.
Rick: When you co-locate you also share air, which means if this guys not doing a good job, and he’s part of your building, there’s a chance his setup could hurt you.
Jamie: Depending on what his setup is.
Rick: When you have, 12, 24, or 36 plants, co-located, makes a lot of sense. But if you’re not a caregiver, you can’t grow as many plants as you want, you don’t need to share space.
Debra: A lot of people are growing in their basement. A lot of people.
Grown In: Is it in their basement? Or a shed?
Rick: Abandoned commercial buildings. Garages. Light industries buildings. Almost any place.
Grown In: Let’s say you have 72 plants, right? So I have 72. Am I doing a thing that is I’ve got 72 that are currently flowering, and I’ve got a veg room that I’m running too?
Joe: You gotta stagger it.
Grown In: So I’ve got a veg room, and I’ve got a nursery that I’m doing.
Debra: I don’t count my clones.
Grown In: So how much space is all that?
Debra: I have about 1,000 square feet.
Joe: I was going to say, I’m outdoors, and I could touch the porch from here with my plant line.
Jamie: But you’re much bigger outdoors.
Grown In: But a 1,000 square feet means you’re going to have separate rooms, two rooms. You have a veg room and a flower room.
Debra: And my cloning is done in the veg room.
Grown In: And do you have a mother’s room?
Debra: I keep a continuous clone. Every two weeks they go to flower, and I keep doing the same process over and over.
Grown In: Do you worry about light pollution or any of that other stuff.
Debra: Of course. The windows are blackened. It’s been in business for a while.
Joe: You’ve come a long way from the spray paint windows.
Grown In: What’s a power bill like for you?
Debra: $1,500.
Grown In: A month?
Debra: But there’s my household.
Grown In: Yeah, but how much are you running your washing machine?
Debra: It’s $1,300 in the summer, actually. ANd I’m running a couple of big refrigerated units to store my inventory.
Joe: I don’t grow indoors, my electricity bill is $285, and I have two commercial freezers.
Jamie: I’m $1,200, $1,300.
The Pervasive Underground
Finally, the conversation wrapped up with a discussion of what they think will happen to the underground cannabis market.
Grown In: So you think the underground market will continue to flourish no matter what?
Jamie: There are some scenarios where it is competitive enough for a lot of people to come to commercial markets for convenience and efficiency. But there’s always going to be some market where people do whatever they want to do.
Grown In: I want to ask you guys, let’s imagine this MCMA-supported bill does pass. What happens to the underground market?
Jamie: It continues exactly as it is.
Grown In: Does it get bigger? Nothing changes?
Toni: They’re not going to listen to regulations. Because the people unground that grow, can just get more plants.
Joe: Who knows how big it really is.
Grown In: Well, there’s actually some pretty good research on the size. It seems like they have pretty good data.
Toni: Licensing hasn’t been able to tap into the style and culture of cannabis.You need a caregiver.
Joe: It’s fool’s gold.
Toni: And the person you’re dealing with is really knowledgeable, so they’re going to give you a lot of information.
Debra: From the caregiver.
Toni: Yeah. From the caregivers. And the underground people.
Rick: The question is, are we going to generate more business for the underground market. The fact is this change is only going to affect about 70,000 patients who are taken care of by caregivers. We just had the Anderson Economic Group come out with a study that shows everyone lives about 20 miles away from dispensaries. They were using caregivers while they already had the option of the regulated market. They already had both choices available to them.
I don’t think there will be any use changes whatsoever. I also don’t think there’s going to be purchase location changes, because the caregivers are not going to stop growing for five patients. They’re not. They’re going to make accidental criminals out of innocent citizens by changing a law that doesn’t need to be changed. In a way that’s nonsensical and doesn’t favor the average guy.
Jamie: As the commercial system becomes more competitive, a few more people will use it. Whatever works for everybody.
Joe: The commercial system also feeds the underground market, because there’s many people that go to a dispensary that’s next door to their house, buys an ounce of weed, goes and sells it to their friend.
Grown In: How do people get to know an underground dealer?
Debra: Anywhere you go, if you know someone who smokes weed, you know a dealer.
Joe: Anyone want to buy a joint?
Rick: The underground market is really the people you eat pizza with, your fantasy football team, the person you carpool with to little league, the mom of the kid next door.
Jamie: It’s the same people who use cannabis.
Rick: That’s why you can never stop it, because it’s us.
Rick: We’re not afraid to break laws. We all broke laws before, we’re currently all breaking federal law. So, we’re not afraid to break law. When governments break laws without our advice, and they make laws that don’t make sense, we have no problem breaking those laws. This is why governments failed during the drug war because they made laws nobody wanted to comply with, not based on science or fact.
Joe: Right. We won that war.
Rick: So, the fact is this is not something that can be legislated away. The legacy of the black market has to slowly change over time, and you’re talking about the change in people’s purchasing habits. Not demographics, a change in employment, a change in anything else. It’s just a slow change over time, and no legislation will hurry it.
