Government, Law, and Small Business & Startups

Marijuana agency spells out emergency rules

Information will help municipalities decide whether they want to allow adult-use businesses.

July 12, 2019
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A Michigan agency is giving municipalities some time to weigh their options when it comes to allowing companies to plant marijuana in their communities for recreational use.

The Marijuana Regulatory Agency (MRA) announced emergency rules that detail the guidelines for the recreational marijuana proposal that Michigan residents voted in favor of in 2018.

“The release of the rules … provides local municipalities and prospective licensees with the information they need to decide how they want to participate in this new industry,” said Andrew Brisbo, MRA executive director. “Since we plan to start taking business applications Nov. 1, stakeholders will have four months to evaluate these rules and make their decisions. These rules set Michigan’s marijuana industry on a path for success while ensuring safety for marijuana consumers.”

The emergency rules are shaped to reflect what the regulations would be for adult use of marijuana if a municipality approves. The rules will be in effect for six months, with the possibility of an extension, but not less than six months.

There are new license types within the emergency rules that residents can apply for through the MRA if municipalities approve. They are Temporary Marijuana Event Licenses, Designated Consumption Establishment Licenses and Excess Grower Licenses.

Individuals who have a marijuana license can apply for a temporary event license. That license allows for a marijuana event organizer to host an event at a specific location where the sale and/or consumption of marijuana can take place for a limited time.

The Designated Consumption Establishment License permits the operation of commercial space and authorizes the allowance of adults 21 and older to consume marijuana and marijuana products on their premises. If the licensee also has a retailer or microbusiness license, they can sell or distribute marijuana products.

Individuals who already have five adult-use Class C grower licenses can apply for an Excess Marijuana Grower License, which allows them to expand their plant count.

At first glance, Josh Hovey, Michigan Cannabis Industry Association communications director, said the rules are well-thought out, but the association will thoroughly review the rules in the next few days before giving its in-depth analysis and feedback to the MRA.

“The newly created Excess Grower License will help address the product shortage issue that we’ve been experiencing in the medical marijuana market,” Hovey said. “There is a strong demand for on-site consumption and cannabis-friendly special events, so we also are thankful that there will be licensing available for businesses that cater to this need. And the fact that licensees will be required to submit social equity plans that detail how they plan on making their business inclusive to people disproportionately impacted by prohibition should help encourage a more diverse industry.”

The rules also allow for those who have equivalent medical and marijuana licenses, such as any classes (A, B, C) of growers, processors, secure transporters and safety compliance facilities with common ownership, to operate from the same location.

Adult-use retailer and medical provisioning center licensees who have equivalent licenses at the same location must physically and visually separate their entire medical marijuana inventories on sale from the adult-use recreational marijuana inventories that are on sale.

There are similarities and differences from medical marijuana and recreational marijuana in the emergency rules, according to the MRA. They include:

There are no capitalization requirements for adult-use licenses and fewer financial documents are requested from applicants.

Adult-use home delivery includes Designated Consumption Establishments and any residence. Medical home delivery is to registered marijuana cardholders only.

Adult-use license renewal fees are divided into three tiers in which larger volume licensees will pay more on renewal and smaller volume licensees will pay less.

Growers and microbusinesses may accept the transfer of marijuana seeds, tissue cultures and clones from another grower licensed under the adult-use law or the medical marijuana law.

Class A growers and microbusinesses may accept the transfer of marijuana plants one time from a registered primary caregiver so long as the caregiver was an applicant for that license.

Current medical marijuana licensees who apply for adult-use licenses will be expedited through the application process if there are no changes in ownership.

All adult-use applicants are required to submit a social equity plan. The social equity plan must detail a strategy to promote and encourage participation in the marijuana industry by people from communities that have been disproportionately impacted by marijuana prohibition and enforcement and to positively impact those communities.

Adult-use safety compliance facilities are required to hire a laboratory manager.

“We particularly like that there are no capitalization requirements, which should help make licenses more accessible to small business owners,” Hovey said.

Although the Marijuana Regulatory Agency has provided the guidelines for recreational marijuana, Jamie Cooper, the founder of Cannabiz Connection and pro-marijuana activist, said it is up to the municipalities to decide whether they would like recreational marijuana in their community.

“I am really impressed with what the state has put out for us, and we couldn’t have done it without the people who went out to the polls and said they wanted it,” she said. “Our biggest hurdle, though, is still going to be the municipalities because they have control. They get to decide whether they will allow consumption lounges and whether they will allow these marijuana businesses. My goal is to be a resource for these municipalities.”

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