Banks in California are feeling the squeeze from the federal government.  Presently, several government agencies are asking banks to report any suspicious activity pertaining to the sale of marihuana.  Instead of complying with the requests, banks have opted to take the easier route and close all accounts of medical marihuana dispensaries.  Further, a recent push by the IRS to audit the books of medical marihuana dispensaries has resulted in an overall denial of business tax deductions.  The federal tax code precludes business deductions to those engaged in activities connected with the manufacture and delivery of drugs listed in Schedule I of the federal Controlled Substances Act.  Marihuana is such a drug.  One dispensary in California plans to fight the IRS in court.  The dispensary would like the court to review whether marihuana should continue to be classified as a Schedule I drug. 

     Other advocacy groups are working with legislators to introduce five new marihuana reform bills.  One proposed bill, the Truth in Trials Act, would make evidence of the medical use of marihuana admissible in federal court.  Others bills include an effort to declassify marihuana from a Schedule I to a Schedule II substance, a federal decriminalization bill, an outright legalization bill, and a bill that would shape the way banks treat dispensaries.  For more information, please read the following article.

     On May 21, 2010 Rodney Koon was charged with driving under the influence of a drug (OUID).  After being pulled over for speeding, Koon admitted to smoking marihuana earlier in the day.  A blood test revealed that Koon had active THC in his system.  At trial, the judge required the Grand Traverse County Prosecutor prove Koon was actually impaired.  Unlike alcohol, there is currently no objective standard to establish that a driver of a vehicle is impaired by marihuana. The Prosecutor has requested leave to appeal the trial court's decision.  Michigan Attorney General, Bill Schuette, filed a brief in support urging the Court of Appeals to grant leave and reverse.  Schuette argues that any amount of THC in a driver's system is a crime.  This case presents a difficult balance between public safety and the rights of patients under the Michigan Medical Marihuana Act.  On one hand, Michigan drivers should not be put at risk by those who choose to operate a vehicle while under the influence of marihuana.  On the other, THC may stay in a patient's system for up to a month after ingestion and long after the psychotropic effects of the drug have worn off.  If adopted, Schuette's interpretation would make it generally unlawful for medical marihuana patients to operate motor vehicles.

     On March 7, 2011, the 19th Judicial District Court held that the entire Michigan Medical Marihuana Act (MMMA) is void under preemption principles.  The defendant was stopped by police on January 19, 2010 and charged under a Dearborn municipal ordinance for illegal possession of marihuana.  Defendant did not obtain a doctor's recommendation that he would benefit from the medical use of marihuana until 4 months after his arrest.  Instead of resolving the issue by resort to the Court of Appeals' January decision in People v Kolanek (i.e., in order to assert the affirmative defense, an individual must receive a physician recommendation to use marihuana prior to his arrest and subsequent to the MMMA's effective date) the District Court concluded that the entire MMMA was preempted by federal legislation.

     In the court's view, because Congress banned the manufacture, distribution, and possession of all schedule I narcotics there is no room for States to regulate those substances.  Secondly, the court stated that "it is simply beyond credulity to believe the MMMA has any practical effect other than to officially sanction, encourage and facilitate the manufacture, distribution and possession of a Schedule I narcotic in direct violation of federal law.  Therefore, not only has Congress expressed its intent to preempt the field, but the MMMA is in direct conflict with Congressional efforts to ban those substances from interstate commerce.  As a consequence, it is impossible to comply with both the MMMA and Federal law. 

Michigan Municipalities continue to struggle with how to properly regulate medical marihuana in their communities.  Below is an update of recent municipal action:

• City of Holland: City Council approved a three month extension to the medical marihuana dispensary moratorium.
• Village of Kalkaska: Village Council voted last week to establish a six month moratorium on the sale and dispensation of medical marihuana.
• City of Flint: City Council passed a six month moratorium banning new dispensaries from opening their doors.  The City Council is hopeful that this will be enough time to establish a zoning ordinance for dispensaries. 
• Union Township: Passed a six-month medical marihuana moratorium to ensure safe usage and to take proper zoning measures.
• East Lansing: City Council extended its moratorium for another 90 days to consider an ordinance that would confine dispensaries to certain zoning districts.  The Council will reexamine the issue at its March 15 meeting.
• Bay City: To temporarily stop any more dispensaries from opening, the Bay City Commission approved a six month moratorium to discuss regulations.
• Grand Blanc Township: Allows dispensaries in an area around Genesys Health Park
• Delhi Township: Approved an ordinance allowing marihuana distribution under the category of "home caregiver."
• Village of Dimondale:  Village Council adopted an ordinance that prohibits dispensaries but allows registered caregivers to deliver medical marihuana to the homes of registered patients.

On February 16, 2011, Andria M. Ditschman spoke to Union Township planners about the current status of the Michigan Medical Marihuana Act.  Ditschman is working with several different communities to develop licensing and zoning rules that regulate medical marihuana uses.  For more information about Ditschman's meeting please see the following article and accompanying video.

On February 11, 2011, Judge Robert Jonker declined to create a new protected class for medical marihuana patients in Michigan.  Joseph Casias, who suffers from an inoperable brain tumor, worked at a Wal-Mart store in Battle Creek.  The former associate of the year was injured while on the job and was subsequently required, under Wal-Mart's national policy, to submit to a drug test.  After testing positive for marihuana, Wal-Mart's corporate office made the decision to terminate Mr. Casias.   

Mr. Casias brought an action for wrongful discharge alleging that Wal-Mart's application of its drug testing policy violated the Michigan Medical Marihuana Act (MMMA).  The Court disagreed, holding that the MMMA did not create a private right of action for wrongful discharge because it was intended to address potential adverse action by the state, not to regulate private employment.  The Court opined that the plaintiff's theory would create a new protected class for medical marihuana users and mark a radical departure from the general rule of at-will employment.

The Court reached this decision by interpreting the word "business" in Section 4(a) of the MMMA to modify "licensing board or bureau" rather than as a stand-alone term.  Whenever the word appeared in the statute, it was followed by that qualifying phrase thus precluding the term from incorporating the entire realm of private employment. 

The plain language of the MMMA does not give medical marihuana patients the same kind of employment protection offered to other protected classes such as religion, race, color, national origin, age, sex, height, weight, or marital status.  This type of safeguard would extend the statute's protection beyond its intentions.  Therefore, a medical marihuana patient may be discharged from an at-will position even if the patient is qualified under the MMMA.

Because this opinion specifically addressed the rights of private at-will employees, it is unclear whether the same reasoning would apply to public or state employees; however, it is likely that this opinion could be used as guidance when making a more definitive decision regarding public employment rights.

On February 10, 2011, the Michigan Court of Appeals released its unpublished opinion in People v Walburg (PDF). Here, the defendant, who was charged with the delivery and manufacture of marihuana, did not possess a medical marihuana registry identification card or a statement from a doctor regarding his medical need for marihuana at the time of arrest.  Despite those facts, the circuit court granted the defendant's motion to dismiss the charges pursuant to the Michigan Medical Marihuana Act's affirmative defense provision. The appellate court reversed the court below. 

While many issues surrounding the MMMA remain unresolved, the courts have recently provided guidance on the legal status of patients lacking a registry identification card or a doctor's recommendation. For example, in People v Redden, issued September 14, 2010, the Court held that possession of a registry identification card is not required to assert the affirmative defense.  Further, in People v Kolanek, issued January 11, 2011, the Court held that in order to assert the affirmative defense, an individual must receive a physician recommendation to use marihuana prior to his arrest and subsequent to the MMMA's effective date.

With Redden and Kolanek as guidance, the Court of Appeals reinstated the charges because the defendant failed to obtain a physician recommendation prior to his arrest.

On February 3, 2011, the Michigan Court of Appeals published a decision clarifying the definition of an "enclosed, locked facility" pursuant to the Michigan Medical Marihuana Act (MMMA).

In May 2009, and acting on an anonymous tip, local police observed marihuana plants growing in a dog kennel in defendant's backyard.  The 6 foot tall dog kennel was made of chain link fence, had an open top which was covered with black shrink wrap, and was not anchored to the ground.  Defendant also had multiple plants growing inside an unlocked closet in his home.

Defendant, a qualifying patient pursuant to the MMMA, was charged with two counts of manufacturing marihuana.  The trial court determined that defendant's dog kennel and house constituted enclosed, locked facilities and dismissed the charges pursuant to the affirmative defense available under Section 8 of the MMMA.

The MMMA defines "enclosed, locked facility" as a closet, room, or other enclosed area equipped with locks or other security devices that permits access only by a registered primary caregiver or registered qualifying patient. 

The Court of Appeals reversed the lower court ruling, finding that defendant's dog kennel did not satisfy the statutory definition of an enclosed, locked facility.  The court limited the definition to those "things of the same kind, class, character, or nature" as the specifically enumerated items, being a "closet" or "room."  In coming to its decision, the court found the dog kennel lacked the characteristics of a closet or room.

The court further held that the marihuana plants cultivated within a closet did not meet the statutory requirements because the closet, and the house as a whole, was not secured by locks.

In a dissenting opinion, Judge Fitzgerald opined that the dog kennel did fit the definition of an "enclosed, locked facility" because the fence was six feet high and by definition, a top is not required to enclose something.  Further, the kennel was locked, the plants were obscured from view, and the police officers were only able to gain access to the plants after the defendant retrieved a key from inside his home.  Additionally, Judge Fitzgerald noted that defendant's home was not required to have a lock because the MMMA contemplates the use of "other security devices" to secure marihuana plants.

With its moratorium set to expire on February 16, the City of East Lansing will hold a public hearing on February 15, 2011, to consider an ordinance that would regulate commercial medical marihuana operations.  The proposed ordinance would allow dispensaries in East Lansing's B-4 zoning district, an area comprised of professional office buildings, as a special use.  The proposed ordinance would not limit the number of dispensaries that may open or restrict the number of caregivers that may operate a dispensary.  The ordinance does provide that a dispensary may not be located within 1,000 feet of a school zone or 500 feet of another dispensary.  For more information on the East Lansing ordinance please read the following article.

On January 25, 2011, the City of Royal Oak passed an ordinance - aimed at preventing medical marihuana dispensaries and growing operations - that prohibited all enterprises contrary to federal law.  Reliance on federal law to prohibit the medical use of marihuana is nothing new and similar ordinances are being challenged by the ACLU and by individuals in Lyon Township; however, the Royal Oak ordinance is slightly different.

The Royal Oak ordinance makes two exceptions to the federal prohibition by permitting qualifying patients to possess and use marihuana in his or her home.   However, the ordinance does not provide an exception for the cultivation of marihuana. 

According to the Daily Tribune, the City Commission agreed to the regulations at 1:05 am, 5 ½ hours after the meeting started.  An attorney present at the meeting threatened litigation arising from the City's prohibition on the cultivation of medical marihuana as contrary to the Michigan Medical Marihuana Act.