SB 1243 : Why to Watch the Bill Attempting to Dismantle Home Grow

By |2018-12-27T18:32:57+00:00December 12th, 2018|Latest Articles|
  • Adult-use marijuana is legal in Michigan but SB 1243 could put our rights in jeopardy
  • SB 1243 stands to drastically change the ballot initiative the people passed on November 6, 2018
  • Michigan’s Senate may be attempting to abolish home grow and tax revenue for schools

December 14, 2018 Update:

Thursday, December 13, was the last day for the Michigan Senate to vote to put forward their own legislation and still have time to get through the House before the session ends next week.  Senator Meekof, the bill’s sponsor, was unable to get the 29 votes needed to get the bill through the Senate. Because of this, the bill has officially been dropped and cannot be passed this session.  This is a huge win for Michigan voters who legalized adult-use, cultivation, and commercial sale of marijuana!  There is a small chance a similar bill could be introduced in the next session, but it’s unlikely as the votes simply aren’t there to pass it.

New Legislation

On November 6, 2018, Michigan voters approved Proposal 1 by a 12% margin.  More perspective: fifty of Michigan’s eighty-three counties voted to legalize the recreational use, cultivation, and commercial sale of marijuana by adults 21 years or older.  Prop 1 establishes the basis for a regulatory system regarding adult-use of marijuana.  Additionally, it creates a 10% excise tax on all recreational sales and removes the current 3% tax on medical marijuana.  Prop 1 went into effect on December 6, 2018.

While the end of prohibition is drawing a lot of excitement and attention, there may be a threat to legal cannabis in Michigan.  On November 29, 2018, State Senator Arlan Meekof introduced Senate Bill 1243 (SB 1243). This bill was introduced with the intent to amend and/or repeal multiple sections of the Michigan Regulation and Taxation of Marihuana Act (Prop 1).  Here’s what you need to know about SB 1243:

The “Stigma”

Prop 1 uses the term marijuana accessories to describe products like rolling papers or pipes.  This creates a new way of looking at these products instead of the stigmatized words currently used in our culture.  SB 1243 changes this language. Instead of marijuana accessories, it would revert back to “paraphernalia”. This might not seem like a huge change, but to advocates in the marijuana community, this doesn’t aid in the destigmatization of responsible marijuana use.  Furthermore, one major point behind Prop 1 is to regulate marijuana like alcohol. Shot glasses and whiskey stones aren’t referred to as “alcohol paraphernalia”, so why should a marijuana vaporizer be referred to as such?

Personal Cultivation and Use of Marijuana

The bill makes no changes to persons 21 years or older legally possessing or using marijuana recreationally.  However, if this bill passes, you would lose your right to cultivate 12 plants in your home for personal use. This wouldn’t just limit personal cultivation, this would completely remove it from the language of Prop 1.

To those concerned about the “smell in the neighborhoods”, this might sound like a good thing, but there’s more to consider than just the smell.  Regardless, adult-use marijuana is legal in the State of Michigan. Legal commercial cultivation and sale of adult-use marijuana won’t begin until 2019 at the earliest with the more likely timetable being some time in 2020.  Those who desire to consume recreational marijuana before those facilities open currently have the option to be gifted up-to 2.5oz of homegrown marijuana or grow their own. Without the ability for home growing, the adult-use cannabis consumers are left with two choices: (1) continue on like prohibition is still in effect until retail locations open; or (2) buy from the black market.

Marijuana Businesses

Prop 1 adds a new Microbusiness license type for potential business owners.  A marijuana microbusiness is defined by the state of Michigan as “a person licensed to cultivate not more than 150 marihuana plants; process and package marihuana; and sell or otherwise transfer marihuana to individuals who are 21 years of age or older or to a marihuana safety compliance facility, but not to other marihuana establishments”.  Think of it as a microbrewery. This allows for small, vertically integrated, craft cannabis companies. Cities like Grand Rapids have already begun talking about these types of businesses in their public meetings. SB 1243 would remove this license type completely, leaving less opportunity for smaller companies.

Additionally, currently under Prop 1, the licensing and regulatory decisions are solely placed under elected officials and the Department of Licensing and Regulatory Affairs (LARA).  This keeps officials accountable to do what their constituents elected them to do. In contrast, SB 1243 undermines this by attempting to create a licensing board like that which was established by the Medical Marihuana Facilities Licensing Act (MMFLA).  This board would be appointed by the governor along with senate and house majority leaders. If you’ve been following the “progress” of the Medical Marihuana Licensing Board, you probably understand why having a bureaucratic system in charge of this sector would be a mistake.

Municipal Effect

Under Prop 1, municipalities must establish an ordinance prohibiting marijuana establishments if they don’t want commercial marijuana within city limits.  Because of this, many cities and towns in Michigan have already begun to “opt-out” of allowing marijuana establishments as laid out in Prop 1. Many of them citing wanting to wait until the state has regulations in place.  A language change to Prop 1 requires these municipalities to “fix” the ordinances they now have in place in order to remain compliant with the state.

For areas that wish to allow recreational marijuana establishments, there is a provision in Prop 1 that will allow them to license businesses in their city or town and bypass the state if the state doesn’t begin accepting applications by December 6, 2019.  This provision would likely speed up the process and some municipalities would probably love the opportunity to be the first to receive the tax benefits and lower their black market. Because of the addition of a marijuana licensing board, SB 1243 would remove this provision likely leading to similar lack-luster progress as we’ve seen with the rollout of the MMFLA.

Marijuana Tax

Additionally, one of the biggest incentives for municipalities to opt-in is the tax revenue that can be generated.  The tax revenue was also a big pull for voters as a total of 70% of that tax revenue is provisioned to go towards schools and Michigan’s pot-hole speckled roadways.  Furthermore, under Prop 1, Michigan’s 10% excise tax rate for adult-use marijuana is currently the lowest in the country. This was a huge complaint from opponents of the ballot proposal.  The Senate Bill would lower this tax rate even further to 3% and change the structure of where that money would go. 

10% Excise Tax Under Prop 1:

A. Until 2022 or for at least two years, to provide $20 million annually to one or more clinical trials that are approved by the FDA and sponsored by a non-profit organization or researcher within an academic institution researching the efficacy of marihuana in treating the medical conditions of United States armed services veterans and preventing veteran suicide.

B. 15% to municipalities in which a marihuana retail store or a marihuana microbusiness is located, allocated in proportion to the number of marihuana retail stores and marihuana microbusinesses within the municipality;

C. 15% to counties in which a marihuana retail store or a marihuana microbusiness is located, allocated in proportion to the number of marihuana retail stores and marihuana microbusinesses within the county;

D. 35% to the school aid fund to be used for K-12 education; and

E. 35% to the Michigan transportation fund to be used for the repair and maintenance of roads and bridges.

Proposed 3% Excise Tax Under SB 1243:

A. 25% to municipalities in which a marihuana facility is located, allocated in proportion to the number of marihuana facilities within the municipality.

B. 30% to counties in which a marihuana facility is located, allocated in proportion to the number of marihuana facilities within the county.

C. 5% to counties in which a marihuana facility is located, allocated in proportion to the number of marihuana facilities within the county.  Money allocated under this subdivision must be used exclusively to support the county sheriffs and must be in addition to and not be in replacement of any other funding received by the county sheriffs.

D. 30% to this state for the following:

  1. Until September 30, 2019, for deposit in the general fund of the state treasury.
  2. Beginning October 1, 2019, for deposit in the first responder presumed coverage fund created in section 405 of the worker’s disability compensation act of 1969 (1969 PA 317, MCL 418.405).

E. 5% to the Michigan commission on law enforcement standards for training local law enforcement officers.

F. 5% to the department of state police.

With the allocations to schools and roads being such a large pull for Michigan voters, to remove the provisions completely – like SB 1243 would do- is a complete undermining of the wishes of the people.  

Where is the Bill Now?

After being introduced in the Senate, SB 1243 was referred to the Government Operations Committee for discussion (where it sits today).  The Committee can send it to the legislature to be voted on as is, amend it before submitting for a vote, or take no action on the bill. Because Prop 1 was a ballot initiative, state law requires a supermajority (at least ¾ majority vote) of both the Senate and House in order to make any changes to it.  While it would be difficult, with over a week left of “Lame Duck Session”, they could pass this if they have the votes in the House.

What Can You Do?

Call your state senator, call your state representative.  Make your voice heard and tell them how you feel about SB 1243. The people spoke, we wanted Prop 1. SB 1243 is not Prop 1. This isn’t what we, the people passed on November 6th.

Because the bill is currently waiting to be discussed by the Government Operations Committee, contacting the senators on this committee is crucial right now.  The committee consists of the following members:

  1. Sen. Arlan Meekof – Committee Chair, 30th District
  2. Sen. Geoff Hansen – Vice Chair, 34th District
  3. Sen. Mike Kowall – 15th District
  4. Sen. Jim Ananich – Minority Vice Chair, 27th District
  5. Sen. Morris W Hood III – 3rd District

About the Author:

Jessica Pendleton