Medical Marijuana Legislation
Over the past 11 years, the legality of marijuana in Michigan has changed several times. It began with medical caregivers in 2008, advancing to medical facilities in 2017, and finally the legalization of recreational marijuana in November 2018. Now that recreational marijuana has become legal, there has been an expansion of license types that are available for both medical and recreational marijuana use.
There is a substantial difference between the perspective on medical and recreational marijuana, and the licenses are treated very differently. By definition, medical marijuana is marijuana that is recommended (prescribed) by a doctor in order to treat a medical condition. This was approved in Michigan in 2008 through the MMMA (Michigan Medical Marijuana Act).
On the other hand, recreational marijuana is used to intentionally change one’s state of consciousness, often producing feelings of exhilaration. Initially, this was not allowed in Michigan. Now, with the passing of the Proposal 1 in 2018, recreational marijuana will be sold at recreational retailers to anyone who is 21 years or older, with a valid government issued ID.
In 2016, the MMFLA (Medical Marijuana Facilities Licensing Act) was passed. This law allowed for the licensing and regulation of medical marijuana growers, processors, provisioning centers, secure transporters, and safety compliance facilities. It also allowed for certain licensees to process, test and sell industrial hemp.
There are five different types of medical marijuana licenses: Cultivation & Growing, Processing, Provisioning Centers, Safety Compliance Laboratories, and Secure Transporters.
Cultivation & Growing: Cultivation licenses come in three different classes. Class A growers are allowed to grow up to 500 plants, while Class B growers are authorized to grow up to 1,000 plants, and Class C growers are able to grow up to 1,500 plants. A Michigan medical marijuana growing license allows licensed companies to sell marijuana products to a provisioning center or a processor. A grower is licensed to cultivate, dry, trim, cure and package marijuana to be sold to a processing or provisioning center. A grower, however, cannot be a registered primary caregiver. Class C growers are required to have $500,000 in assets per license that they hold.
Extraction & Processing: A medical marijuana processor is licensed to possess, process, package, and store marijuana. Processors purchase the marijuana from growers, then extract resin from it, and create marijuana-infused products. Processors are also licensed to sell, transfer, and purchase marijuana from other state licensed entities.
Secure Transporter: A secure transporter is authorized to transport marijuana between different facilities. Only these licensed entities can transport marijuana in the regulated system. A transporter cannot transport marijuana to a patient or caregiver. Each delivery must be completed within 48 hours. There are no set prices for transporters, as each individual charges per mile. All products must be kept in a locked container during the transport process, and all transactions must be entered into a statewide tracking system. All records and route plans must be available in the event of an inspection by LARA, or the Michigan State police. Each transporter is required to maintain general and product liability insurance, but many transporters have found it difficult to obtain insurance.
Provisioning Center: Known as a dispensary in most other states, a provisioning center for medical marijuana is a state operating license that authorizes the purchase or transfer of marijuana only from a grower or processor, and sale/transfer to a registered patient or registered primary caregiver. The license also authorizes the center to transfer marijuana to and from a safety compliance facility for testing. However, the compliance facility must come to pick up the products. As of May 2019, Michigan’s governor banned these centers from obtaining their products from a state approved caregiver. Now, the provisioning centers must purchase their products from a state licensed corporate grower or processor. Unfortunately, this will result in much higher prices for Michigan patients. Each city in Michigan also has a limit on how many provisioning centers are allowed. For example, in Detroit there can be no more than 75 provisioning centers.
Safety Compliance Facility: A safety compliance facility is licensed to receive marijuana, and pick up marijuana samples from other marijuana licensed facilities or registered primary caregivers. Once they receive it, the marijuana is tested for contaminants. The test results and product are then returned to the marijuana facility. Michigan currently has six safety compliance facilities. These facilities test medical marijuana to ensure that it does not contain potentially harmful levels of mold, pesticides, or heavy metals. They also test to see if each product has the correct amount of THC that is being marketed to the customer. All laboratories have strict compliance standards. Recently, Iron Labs in Walled Lake, received a license suspension. The state regulators claimed that on multiple occasions, the lab had passed marijuana which had actually failed to meet the state’s standards. Iron Labs failed to report when edibles had tested above the state’s potency limit. The lab president denied the allegations. However, an investigation is still ongoing.
Recreational Marijuana Legislation
With the passing of Proposal 1 in November of 2018, and the MRTMA law (Michigan Regulation and Taxation of Marijuana Act) effective in December of 2018, recreational marijuana is legal in the state of Michigan. Through this law, many new license types have become possible. The applications for these recreational license types will be accepted starting November 1st, 2019 . The license types for recreational marijuana are similar to medical marijuana licenses, but vary based on class type and facility. Unlike Medical marijuana financial requirements, recreational license holders will not be required to meet a capital requirement. License holders will, however, have to possess a medical facility license for the first two years.
Recreational Marijuana Cultivation: With recreational marijuana, Class A marijuana growers are only authorized to cultivate 100 plants. Class B growers can grow up to 500 plants, and Class C growers can grow up to 2,000 plants. It is also possible to obtain an excess marijuana grower license. With this license, it is possible to hold 5 stacked class C marijuana licenses.
Safety compliance facilities and secure transporters have the same role when dealing with both recreational and medical marijuana. However, with recreational marijuana, there are several new license types.
Designated consumption establishments are commercial spaces, which are licensed and authorized to permit adults 21 years of age and older to consume marijuana products at the location. This is indicated on the state license. Each applicant must apply for this license with the city and the state, before hosting any consumption onsite. Social cafe and marijuana bars will be able to open, and adults over 21 will be allowed to consume marijuana within the establishment. However, sales and distribution of marijuana is prohibited within these establishments.
A microbusiness is an entity that is licensed to cultivate, process, and sell products from up to 150 marijuana plants, as long as they do it completely in-house. The plants are processed, packaged, and sold to individuals who are at least 21 years of age. They are not authorized to sell or transfer products to marijuana establishments. These microbusinesses cultivate, process, and sell the marijuana out of their own storefront. These dispensary business owners are not allowed to have more than one storefront, and are not able to obtain more than one license type. Bricks and Mortar has several locations available for sale that qualify as a microbusiness. You can view them here.
If a group or company wants to hold an event or festival where they will have marijuana available for sale, or allow onsite consumption, they will need a marijuna event organizer or temporary marijuana event license. The event must be held at the location indicated on the license as well as on the date(s) indicated on the state license. There are several cannabis related events that happen every year in Michigan, which may now be able to receive a legal license to operate. Hash Bash is held in Ann Arbor every year during the first week of April. It includes musical performances, competitions, awards and more. As long as you have a medical marijuana card, or have your own marijuana when you arrive at the festival, you will be able to enjoy the festival and partake in marijuana products.
A marijuana retailer is an entity who is licensed to obtain marijuana from marijuana cultivators or processors and sell it to the public. (21 years or older.)
The Licensing Process
The Marijuana License Application Process requires two steps: the prequalification, and the final licensure. All main applicants (person or entity seeking to hold the state license) and supplemental applicants (any interested parties and affiliates) must fill out Part One of the application process, and become ‘prequalified’ with the state. A background check must be completed for all main and supplemental applications. There is a $6,000 nonrefundable application fee for the main applicant. There is no application fee for any supplemental applicants. All main applicants must remember not to submit their application fee payment until all supplemental applications have been submitted. If the MRA receives the payment before all supplemental applications are submitted, a notice of deficiency will be sent. The main applicant then has five days to submit all supplemental applications, or your application may be denied. The Marijuana Regulatory Agency(MRA) will begin to process prequalification applications once the $6,000 prequalification application payment is received.
Once step one has been completed, the applicant must purchase or lease a premises, obtain approval from the municipality, and complete their full construction buildout before they can submit the licensing application(s) for step two. The supplemental applicants will not be required to complete step two. The MRA will thoroughly vet the intended marijuana establishment for business specifications, proof of financial responsibility, municipality information and general employee information. Each establishment must pass an MRA approved inspection within 60 days of submission of the application. If you are seeking a license as a grower, processor or microbusiness, you must pass a Bureau of Fire Services plan review as well. You cannot be issued a state license until all requirements in the Michigan Regulation and Taxation of Marijuana Act and administrative rules are met. After step two is completed, an applicant will be required to pay an initial licensure fee for each license type they have been approved for.
Once all of the inspections and reviews have been completed, and the license fee is paid, the operator will receive their full license and be allowed to open.