The Gift Of Pot? Marijuana Gift Businesses Look To Expand Into Southwest Michigan

By Mary Beth Spalding South Bend Tribune, Ind.

WWR Article Summary (tl;dr) Michigan law allows for gifts of up to 2.5 ounces of cannabis between adults, but not private sales. With that in mind, cannabis entrepreneur Stephanie Swearengin has found a very creative way to launch a book business that "gifts" a little extra enlightenment.

ANN ARBOR

Stephanie Swearengin, of Ypsilanti, Mich., is always running to Kroger.

But not for more coffee or to pick up a head of lettuce.

She finds the parking lot a convenient place to meet many of her customers who have purchased used books from her online.

She tells them to park to the left in the lot, and they recognize one another by vehicle descriptions.

As Swearengin delivers a package of, say, three randomly selected used books that she sells for $80, she also hands the buyer a little something extra with the purchase. She calls it a "high demand" gift: marijuana.

The transaction sounds partly like a safe exchange meetup for an internet purchase, partly like an illicit drug deal.

But entrepreneurs like Swearengin maintain it's not illegal at all -- or at least it's open for debate as a "gray area" of Michigan's new recreational marijuana law that went into effect Dec. 6.

The law allows for gifts of up to 2.5 ounces of cannabis between adults, but not private sales. Specifically, the law allows for "transferring without remuneration."

And for about the next year, receiving a gift of marijuana is really the only legal way to get some. State-regulated retail marijuana sales aren't expected to start until early 2020.

So gift businesses are stepping into the void, using the so-called gray area of the law to try to answer demand for marijuana. Other states where cannabis has been legalized have seen similar enterprises spring up.

At least a couple of them based in or near Ann Arbor are growing quickly and hope to serve southwestern Michigan -- including the so-called "dry" deep corner of the state, which has no provisioning centers yet -- as well as customers who are driving up from Indiana.

"We actually talked to multiple lawyers," Swearengin said about the business, Blaze Michigan, which she started with her partner, Chris Rau. "They all said the same thing. It is in the gray area."

But is it?

"That's just a subterfuge for selling marijuana," Berrien County Prosecuting Attorney Michael Sepic said. "I'm certainly willing to take that kind of a case to court and let a judge decide."

Sepic's not only willing, he thinks it might be important to do so to help tame a "wild West" mentality about marijuana in Michigan.

Blazing ahead

Swearengin and Rau were selling used books on Amazon when they read about marijuana gifting businesses. Some sell candy, or items that are advertised as custom "vape" and "baked" T-shirts, or "high art" prints that may come with a muffin and orange juice. A marijuana freebie is offered with the merchandise, such as flower or a pot brownie.

They opened Blaze Michigan in early January, doing pickups and deliveries in the Ypsilanti area, and then orders started coming in from the west.

One day, Swearengin said, they made 35 deliveries around Lansing, Grand Rapids, Muskegon and Kalamazoo. On another recent day, Swearengin headed to Sturgis to make two deliveries and possibly meet with a customer coming up from Indiana.

Swearengin said they get the marijuana they gift from friends and family who are caregiver growers under the state's medical cannabis law.

Marc Bernard, owner of Smoke's Chocolate in Ann Arbor, debuted his business on Dec. 6 -- the first day of adult-use legalization -- and began selling chocolate truffles online, delivering candy in the Ann Arbor-Ypsi area, along with a gift of marijuana. He's gradually been expanding his territory and hopes to begin deliveries in southwestern Michigan by the end of February.

Bernard contracts medical marijuana patients to deliver his chocolate, and says it's up to them if they offer a gift of pot. They generally do, if the buyer has ID to show they are age 21 or older.

Jan Eisen, one of the drivers, said he gets the marijuana he gifts from his caregiver grower supply or what he can buy at provisioning centers that are open in Ann Arbor.

"It's legal for the drivers to gift marijuana at their discretion and it's legal for me to sell chocolate," Bernard said.

Remuneration Michigan's recreational marijuana law forbids the person-to-person transfer of marijuana for remuneration. "It's very clear. It's absolutely not gray," attorney Denise Pollicella said about the language and intent of the law.

Pollicella, founder and managing partner of Cannabis Attorneys of Michigan, Howell, Mich., which specializes in legal services for cannabis-related businesses, said she wouldn't advise anyone to get into a marijuana gifting business because she thinks what they're doing is illegal.

"I wouldn't even call them businesses," she said.

Anything of value, not just cash, counts as remuneration, according to Pollicella.

Another problem is that if you sell a cotton T-shirt that's worth only $20 for $100 and include a marijuana gift, it seems clear you're really selling the marijuana, not the T-shirt, Pollicella said.

The question might get a little murkier if the item could have a subjective value, such as art, she said. Josh Hovey, communications director for the Michigan Cannabis Industry Association, said different lawyers could argue the remuneration question different ways.

He thinks the gifting businesses operate in a "definitely gray" area of the law. But he also thinks the issue of them is short-lived anyway.

"Once the adult-use market is fully established there really won't be any need for these businesses to exist," Hovey said.

It's up to county prosecutors, he said, to decide if it's "worth their time and energy" to pursue marijuana gift businesses they might deem illegal given the fact the state will see "full legalization" in early 2020 with retail shops operating.

A message Sepic, the Berrien County prosecutor, thinks it very well could be worth the time and trouble to prosecute such a business.

It would send a message that marijuana law enforcement at all levels is taken seriously, he said. And that should help to discourage a public safety concern he has, which is marijuana-impaired driving.

Sepic said he's not aware of a marijuana gift business in Berrien County, and he hasn't instructed area police to be on the lookout either.

"I'm not the marijuana police," Sepic said.

Still, he'd consider prosecuting a case if one was brought to him. The suspected seller, not buyer, probably would be the party prosecuted, he said.

Bernard of Smoke's Chocolate said his business really doesn't raise any eyebrows in Ann Arbor, which has had marijuana-friendly local ordinances for decades.

"We want to stay on the right side of the law no matter where we're at," Bernard said about expanding delivery services. "We're not interested in angering or setting off the local law enforcement."

One reason for that is because Bernard would like to stay in business in the future, maybe as a retail dispensary or working in conjunction with one. Since his business sells chocolates, he likes the idea of expanding into marijuana edibles.

Because of the questionable legality of pot gift businesses, Hovey thinks state regulators might not look favorably on marijuana business license applications from people who've been engaged in those enterprises.

A spokesman for Michigan's Bureau of Marijuana Regulation said the state is officially not commenting on marijuana gift businesses.

Swearengin said she and her partner hope to pursue a marijuana seller license, but she isn't sure if their current business model will be needed once the recreational market is open.

She could envision taking it elsewhere, though, into states where pot becomes legal but there's a gap of time between legalization and retail access, when demand isn't otherwise being met.

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