FILE - Marijuana plant

Michigan State Police Lt. Chris Hawkins said the boys in blue are cracking down on dispensaries that are operating illegally.

Hawkins, who is in charge of the State Police’s Marihuana and Tobacco Investigation Section, said his department has limited resources to address a large black market for marijuana.

Hawkins said he’d seen brick-and-mortar dispensaries operating without a license and without ever applying for one.

“I think what’s even more important though is that it’s confusing to our cannabis consumers because I think a lot of people assume, especially if they see a store, they are operating legally,” Hawkins said.

Hawkins compared it to buying alcohol; most people don’t check the business’ liquor license, and you assume that the products are safe and tested.

Much of the marijuana on the black market comes from patients or caregivers who have grown too much marijuana for their own needs, Hawkins said. A 2008 law allows caregivers to grow up to 12 plants per up to five patients – a total of 72 plants – and Michigan adults can grow up to 12 plants.

Some outright grow illegally, while some pretend to be caregivers with others blatantly breaking the law, Hawkins said.

Dispensaries and provision centers can't make direct purchases from caregivers, according to a rule change earlier this year, Michigan Cannabis Business Development Owner Rick Thompson told The Center Square. 

"Caregivers must sell to processors so the cannabis is tested and goes through the processing system," Thompson said.

Hawkins said that most imported marijuana is vape THC cartridges from California, which aren’t currently legal in Michigan.

Hawkins said there’ll be a black market as long as marijuana is federally illegal due to arbitrage over state borders.

Attorney General Dana Nessel said in a press conference that Michigan must prosecute those operating illegally, Mlive reported.

“We talked about, at some point we really have to start coming down on those who are operating illegally,” she said. “Just the same way we would, by the way, if you were selling cigarettes illegally. Just the same way we would if you had manufactured moonshine in your bathtub, and nobody had tested that to find out if it was safe, and you didn’t have a license to sell it,”

David Harns, communications manager at the Michigan Department of Licensing and Regulatory Affairs (LARA), told The Center Square their goal is to protect consumers.

“We believe creating a regulatory environment that focuses on consumer safety but builds in flexibility will help business succeed,” Harns said. “Safe, consistent access to products in the regulated market will be key to reducing the black market. We also work closely with our law enforcement partners to support their efforts in combating illegal, unsafe operations.”

The black market is one of many problems that projects unreliable tax revenue, according to a Pew Research Study.

Hawkins said that buying marijuana illegally may be cheaper than buying it legally, but that marijuana prices depend on supply and demand.

Hawkins said he knows of no state with recreational marijuana that drained its black market.

“I’m not aware of any state that has legalized medical or recreational marijuana that has made a claim that it’s even slightly diminished its black market,” Hawkins said. “In fact, most states will tell you that their black markets have significantly grown since legalization.”

Hawkins said his organization focuses on large-scale criminal enterprises.

Staff Reporter

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.