Nearly a year after a landmark Michigan Court of Appeals ruling, Michigan’s illicit marijuana dealers have an economic edge.
In a 3-0 opinion, the court ruled in October 2023 that Shaaln Kejbou, who was growing more than 1,100 marijuana plants without a commercial license — and protecting those plants with a 12-gauge shotgun and dogs — could not face felony charges due to voters passing the 2018 Michigan Regulation and Taxation of Marihuana Act.
Instead, black market dealers like Kejbou could only face a 90-day misdemeanor charge.
Nearly a year after a landmark Michigan Court of Appeals ruling, Michigan’s illicit marijuana dealers have an economic edge.
In a 3-0 opinion, the court ruled in October 2023 that Shaaln Kejbou, who was growing more than 1,100 marijuana plants without a commercial license — and protecting those plants with a 12-gauge shotgun and dogs — could not face felony charges due to voters passing the 2018 Michigan Regulation and Taxation of Marihuana Act.
Instead, black market dealers like Kejbou could only face a 90-day misdemeanor charge.
The ruling, which the court admitted was “unjust” to the state’s legal market, has created a blending of the legal and illegal weed markets in the state with nearly no repercussions for unlicensed large-scale growers to operate.
Nearly a year after a landmark Michigan Court of Appeals ruling, Michigan’s illicit marijuana dealers have an economic edge.
In a 3-0 opinion, the court ruled in October 2023 that Shaaln Kejbou, who was growing more than 1,100 marijuana plants without a commercial license — and protecting those plants with a 12-gauge shotgun and dogs — could not face felony charges due to voters passing the 2018 Michigan Regulation and Taxation of Marihuana Act.
Instead, black market dealers like Kejbou could only face a 90-day misdemeanor charge.
The ruling, which the court admitted was “unjust” to the state’s legal market, has created a blending of the legal and illegal weed markets in the state with nearly no repercussions for unlicensed large-scale growers to operate.
For law enforcement, the ruling cut the legs off of criminal prosecution and is leading to a boom of illegal growers flooding the market with bad intentions and bad weed that could impact the health and safety of Michiganders.
“The dirty product that is infiltrating the licensed market is being sold to unwitting consumers,” said First Lieutenant Tom Kish, commander of the Michigan State Police Marijuana & Tobacco Investigation Section. “I have real concerns about organized crime coming in Michigan more than it already has and the violent crime that will follow. We’re talking multimillion-dollar operations. Once we’re talking about dollar amounts like that, people are going to get shot. It’s an unfortunate consequence of the way our laws are written.”
Nearly a year after a landmark Michigan Court of Appeals ruling, Michigan’s illicit marijuana dealers have an economic edge.
In a 3-0 opinion, the court ruled in October 2023 that Shaaln Kejbou, who was growing more than 1,100 marijuana plants without a commercial license — and protecting those plants with a 12-gauge shotgun and dogs — could not face felony charges due to voters passing the 2018 Michigan Regulation and Taxation of Marihuana Act.
Instead, black market dealers like Kejbou could only face a 90-day misdemeanor charge.
The ruling, which the court admitted was “unjust” to the state’s legal market, has created a blending of the legal and illegal weed markets in the state with nearly no repercussions for unlicensed large-scale growers to operate.
For law enforcement, the ruling cut the legs off of criminal prosecution and is leading to a boom of illegal growers flooding the market with bad intentions and bad weed that could impact the health and safety of Michiganders.
“The dirty product that is infiltrating the licensed market is being sold to unwitting consumers,” said First Lieutenant Tom Kish, commander of the Michigan State Police Marijuana & Tobacco Investigation Section. “I have real concerns about organized crime coming in Michigan more than it already has and the violent crime that will follow. We’re talking multimillion-dollar operations. Once we’re talking about dollar amounts like that, people are going to get shot. It’s an unfortunate consequence of the way our laws are written.”
Michigan’s cannabis market is oversaturated; the number of active plants being grown by legal growers in the state up 47% year-over-year in August.
Dope dealers and weak pricing
The Michigan market is lucrative already. The state is on track to sell more than $3.3 billion in marijuana in the legal market this year — with consumers averaging a monthly weed expenditure of nearly $110, well above California’s at $37 per person monthly.
Michigan’s established and expansive network of marijuana processors and retailers make clandestine operations like Kejbou’s and others’ valuable, especially if there are no potential criminal charges.
In the Kejbou case, a Tuscola County judge ruled — and the appeals court concurred — that the state’s marijuana laws simply make severe prison sentences not an option. The state’s legal marijuana laws were designed to reduce felonies for marijuana possession and growing. The punishments, often viewed as draconian and severe, from the state’s Act 368 of 1978 that included up to 15 years in prison for possessing more than 99 pounds or 200 marijuana plants, no longer applied thanks to the voter-passed MRTMA.
“After the appeals court decision, there’s been reduced interest form prosecutors involving marijuana cases,” Kish said. “They simply do not feel there is a mechanism in place to follow through with criminal prosecution. The court ruling effectively puts up a sign at the border, ’Grow your dirty weed here.’”
The state’s basement-low marijuana prices are likely impacted by the influx of illegal, and untracked marijuana, in the legal system.
The average price for an ounce of marijuana flower in August was $80.14, up from the lowest price on record $79.70 in July, according to data from the Michigan Cannabis Regulatory Agency.
Prices have fallen since legalization in 2019. The average price for an ounce of flower was $116.84 in August 2022 and more than $400 in August 2020.
Those price declines are driven by oversupply. The market is already saturated with the number of active plants being grown by legal growers in the state up 47% year-over-year in August to 3.83 million plants.
With illegally grown plants entering the legal market, price compression is even higher and is shoving some legal market operators out. Dozens of legal marijuana businesses have buckled under the cost pressure.
David Morrow, CEO of the state’s largest marijuana grower Lume Cannabis Co., said the inability to stymie illegal grows is a disincentive for many growers to operate above board.
“They are sending a clear message that following the rules and being compliant is optional,” Morrow told Crain’s. “The last time I checked, paying our licensing fees and excise taxes are not optional. Very few cannabis operators follow the all the rules.”
Messages to prosecutors in Calhoun County and Oakland County were not returned on the subject.
This story was published in Crain’s Detroit