MICHIGAN MEDICAL MARIHUANA FACILITIES LICENSING ACT

Oct 26, 2021 | Blog

MEDICAL MARIHUANA FACILITIES LICENSING ACT (MMFLA)
Act 281 of 2016

AN ACT to license and regulate medical marihuana growers, processors, provisioning centers, secure transporters, and safety compliance facilities; to allow certain licensees to process, test, or sell industrial hemp; to provide for the powers and duties of certain state and local governmental officers and entities; to create a medical marihuana licensing board; to provide for interaction with the statewide monitoring system for commercial marihuana transactions; to create an advisory panel; to provide immunity from prosecution for marihuana-related offenses for persons engaging in certain activities in compliance with this act; to prescribe civil fines and sanctions and provide remedies; to provide for forfeiture of contraband; to provide for taxes, fees, and assessments; and to require the promulgation of rules.

The People of the State of Michigan enact:

PART 1. GENERAL PROVISIONS

333.27101 Short title.

Sec. 101.

  This act shall be known and may be cited as the “medical marihuana facilities licensing act”.

Sec. 102.

  As used in this act:

  (a) “Advisory panel” or “panel” means the marijuana regulatory agency.

  (b) “Affiliate” means any person that controls, is controlled by, or is under common control with; is in a partnership or joint venture relationship with; or is a co-shareholder of a corporation, a co-member of a limited liability company, or a co-partner in a limited liability partnership with a licensee or applicant.

  (c) “Applicant” means a person who applies for a state operating license. Applicant includes, with respect to disclosures in an application, for purposes of ineligibility for a license under section 402, or for purposes of prior marijuana regulatory agency approval of a transfer of interest under section 406, and only for applications submitted on or after January 1, 2019, a managerial employee of the applicant, a person holding a direct or indirect ownership interest of more than 10% in the applicant, and the following for each type of applicant:

  (i) For an individual or sole proprietorship: the proprietor and the proprietor’s spouse.

  (ii) For a partnership and limited liability partnership: all partners and their spouses. For a limited partnership and limited liability limited partnership: all general and limited partners, not including a limited partner holding a direct or indirect ownership interest of 10% or less and who does not exercise control over or participate in the management of the partnership, and their spouses. For a limited liability company: all members and managers, not including a member holding a direct or indirect ownership interest of 10% or less and who does not exercise control over or participate in the management of the company, and their spouses.

  (iii) For a privately held corporation: all corporate officers or persons with equivalent titles and their spouses, all directors and their spouses, and all stockholders, not including those holding a direct or indirect ownership interest of 10% or less, and their spouses.

  (iv) For a publicly held corporation: all corporate officers or persons with equivalent titles and their spouses, all directors and their spouses, and all stockholders, not including those holding a direct or indirect ownership interest of 10% or less, and their spouses.

  (v) For a multilevel ownership enterprise: any entity or person that receives or has the right to receive more than 10% of the gross or net profit from the enterprise during any full or partial calendar or fiscal year.

  (vi) For a nonprofit corporation: all individuals and entities with membership or shareholder rights in accordance with the articles of incorporation or the bylaws and the spouses of the individuals.

  (d) “Board” means the marijuana regulatory agency.

  (e) “Cutting” means a section of a lead stem or root stock that is used for vegetative asexual propagation.

  (f) “Department” means the department of licensing and regulatory affairs.

  (g) “Grower” means a licensee that is a commercial entity located in this state that cultivates, dries, trims, or cures and packages marihuana for sale to a processor, provisioning center, or another grower.

  (h) “Industrial hemp” means that term as defined in section 7106 of the public health code, 1978 PA 368, MCL 333.7106.

  (i) “Industrial hemp research and development act” means the industrial hemp research and development act, 2014 PA 547, MCL 286.841 to 286.859.

  (j) “Licensee” means a person holding a state operating license.

  (k) “Marihuana” means that term as defined in section 7106 of the public health code, 1978 PA 368, MCL 333.7106.

  (l) “Marihuana facility” means a location at which a licensee is licensed to operate under this act.

  (m) “Marihuana plant” means any plant of the species Cannabis sativa L. Marihuana plant does not include industrial hemp.

  (n) “Marihuana-infused product” means a topical formulation, tincture, beverage, edible substance, or similar product containing any usable marihuana that is intended for human consumption in a manner other than smoke inhalation. Marihuana-infused product is not considered a food for purposes of the food law, 2000 PA 92, MCL 289.1101 to 289.8111.

  (o) “Marihuana tracking act” means the marihuana tracking act, 2016 PA 282, MCL 333.27901 to 333.27904.

  (p) “Marijuana regulatory agency” means the marijuana regulatory agency created under Executive Reorganization Order No. 2019-2, MCL 333.27001.

  (q) “Michigan medical marihuana act” means the Michigan Medical Marihuana Act, 2008 IL 1, MCL 333.26421 to 333.26430.

  (r) “Municipality” means a city, township, or village.

  (s) “Paraphernalia” means any equipment, product, or material of any kind that is designed for or used in growing, cultivating, producing, manufacturing, compounding, converting, storing, processing, preparing, transporting, injecting, smoking, ingesting, inhaling, or otherwise introducing into the human body, marihuana.

  (t) “Person” means an individual, corporation, limited liability company, partnership, limited partnership, limited liability partnership, limited liability limited partnership, trust, or other legal entity.

  (u) “Plant” means any living organism that produces its own food through photosynthesis and has observable root formation or is in growth material.

  (v) “Processor” means a licensee that is a commercial entity located in this state that purchases marihuana from a grower and that extracts resin from the marihuana or creates a marihuana-infused product for sale and transfer in packaged form to a provisioning center or another processor.

  (w) “Provisioning center” means a licensee that is a commercial entity located in this state that purchases marihuana from a grower or processor and sells, supplies, or provides marihuana to registered qualifying patients, directly or through the patients’ registered primary caregivers. Provisioning center includes any commercial property where marihuana is sold at retail to registered qualifying patients or registered primary caregivers. A noncommercial location used by a registered primary caregiver to assist a qualifying patient connected to the caregiver through the department’s marihuana registration process in accordance with the Michigan Medical Marihuana Act is not a provisioning center for purposes of this act.

  (x) “Registered primary caregiver” means a primary caregiver who has been issued a current registry identification card under the Michigan Medical Marihuana Act.

  (y) “Registered qualifying patient” means a qualifying patient who has been issued a current registry identification card under the Michigan Medical Marihuana Act or a visiting qualifying patient as that term is defined in section 3 of the Michigan Medical Marihuana Act, MCL 333.26423.

  (z) “Registry identification card” means that term as defined in section 3 of the Michigan Medical Marihuana Act, MCL 333.26423.

  (aa) “Rules” means rules promulgated under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, by the marijuana regulatory agency to implement this act.

  (bb) “Safety compliance facility” means a licensee that is a commercial entity that takes marihuana from a marihuana facility or receives marihuana from a registered primary caregiver, tests the marihuana for contaminants and for tetrahydrocannabinol and other cannabinoids, returns the test results, and may return the marihuana to the marihuana facility.

  (cc) “Secure transporter” means a licensee that is a commercial entity located in this state that stores marihuana and transports marihuana between marihuana facilities for a fee.

  (dd) “Seed” means the fertilized, ungerminated, matured ovule, containing an embryo or rudimentary plant, of a marihuana plant that is flowering.

  (ee) “Seedling” means a marihuana plant that has germinated and has not flowered and is not harvestable.

  (ff) “State operating license” or, unless the context requires a different meaning, “license” means a license that is issued under this act that allows the licensee to operate as 1 of the following, specified in the license:

  (i) A grower.

  (ii) A processor.

  (iii) A secure transporter.

  (iv) A provisioning center.

  (v) A safety compliance facility.

  (gg) “Statewide monitoring system” or, unless the context requires a different meaning, “system” means an internet-based, statewide database established, implemented, and maintained by the department under the marihuana tracking act, that is available to licensees, law enforcement agencies, and authorized state departments and agencies on a 24-hour basis for all of the following:

  (i) Verifying registry identification cards.

  (ii) Tracking marihuana transfer and transportation by licensees, including transferee, date, quantity, and price.

  (iii) Verifying in commercially reasonable time that a transfer will not exceed the limit that the patient or caregiver is authorized to receive under section 4 of the Michigan Medical Marihuana Act, MCL 333.26424.

  (hh) “Tissue culture” means a marihuana plant cell, cutting, tissue, or organ, that is kept under a sterile condition on a nutrient culture medium of known composition and that does not have visible root formation. A tissue culture is not a marihuana plant for purposes of a grower.

  (ii) “Usable marihuana” means the dried leaves, flowers, plant resin, or extract of the marihuana plant, but does not include the seeds, stalks, and roots of the plant.

***** 333.27102.amended THIS AMENDED SECTION IS EFFECTIVE OCTOBER 11, 2021 *****

333.27102.amended Definitions.

Sec. 102.

  As used in this act:

  (a) “Advisory panel” or “panel” means the marijuana regulatory agency.

  (b) “Affiliate” means any person that controls, is controlled by, or is under common control with; is in a partnership or joint venture relationship with; or is a co-shareholder of a corporation, a co-member of a limited liability company, or a co-partner in a limited liability partnership with a licensee or applicant.

  (c) “Applicant” means a person who applies for a state operating license. Applicant includes, with respect to disclosures in an application, for purposes of ineligibility for a license under section 402, or for purposes of prior marijuana regulatory agency approval of a transfer of interest under section 406, and only for applications submitted on or after January 1, 2019, a managerial employee of the applicant, a person holding a direct or indirect ownership interest of more than 10% in the applicant, and the following for each type of applicant:

  (i) For an individual or sole proprietorship: the proprietor and the proprietor’s spouse.

  (ii) For a partnership and limited liability partnership: all partners and their spouses. For a limited partnership and limited liability limited partnership: all general and limited partners, not including a limited partner holding a direct or indirect ownership interest of 10% or less and who does not exercise control over or participate in the management of the partnership, and their spouses. For a limited liability company: all members and managers, not including a member holding a direct or indirect ownership interest of 10% or less and who does not exercise control over or participate in the management of the company, and their spouses.

  (iii) For a privately held corporation: all corporate officers or persons with equivalent titles and their spouses, all directors and their spouses, and all stockholders, not including those holding a direct or indirect ownership interest of 10% or less, and their spouses.

  (iv) For a publicly held corporation: all corporate officers or persons with equivalent titles and their spouses, all directors and their spouses, and all stockholders, not including those holding a direct or indirect ownership interest of 10% or less, and their spouses.

  (v) For a multilevel ownership enterprise: any entity or person that receives or has the right to receive more than 10% of the gross or net profit from the enterprise during any full or partial calendar or fiscal year.

  (vi) For a nonprofit corporation: all individuals and entities with membership or shareholder rights in accordance with the articles of incorporation or the bylaws and the spouses of the individuals.

  (d) “Board” means the marijuana regulatory agency.

  (e) “Cutting” means a section of a lead stem or root stock that is used for vegetative asexual propagation.

  (f) “Department” means the department of licensing and regulatory affairs.

  (g) “Grower” means a licensee that is a commercial entity located in this state that cultivates, dries, trims, or cures and packages marihuana for sale to a processor, provisioning center, or another grower.

  (h) “Industrial hemp” means that term as defined in section 3 of the Michigan Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27953.

  (i) “Industrial hemp research and development act” means the industrial hemp research and development act, 2014 PA 547, MCL 286.841 to 286.859.

  (j) “Licensee” means a person holding a state operating license.

  (k) “Marihuana” means that term as defined in section 3 of the Michigan Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27953.

  (l) “Marihuana facility” means a location at which a licensee is licensed to operate under this act.

  (m) “Marihuana plant” means any plant of the species Cannabis sativa L. Marihuana plant does not include industrial hemp.

  (n) “Marihuana-infused product” means that term as defined in section 3 of the Michigan Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27953.

  (o) “Marihuana tracking act” means the marihuana tracking act, 2016 PA 282, MCL 333.27901 to 333.27904.

  (p) “Marijuana regulatory agency” means the marijuana regulatory agency created under Executive Reorganization Order No. 2019-2, MCL 333.27001.

  (q) “Michigan medical marihuana act” means the Michigan Medical Marihuana Act, 2008 IL 1, MCL 333.26421 to 333.26430.

  (r) “Municipality” means a city, township, or village.

  (s) “Paraphernalia” means any equipment, product, or material of any kind that is designed for or used in growing, cultivating, producing, manufacturing, compounding, converting, storing, processing, preparing, transporting, injecting, smoking, ingesting, inhaling, or otherwise introducing into the human body, marihuana.

  (t) “Person” means an individual, corporation, limited liability company, partnership, limited partnership, limited liability partnership, limited liability limited partnership, trust, or other legal entity.

  (u) “Plant” means any living organism that produces its own food through photosynthesis and has observable root formation or is in growth material.

  (v) “Processor” means a licensee that is a commercial entity located in this state that purchases marihuana from a grower and that extracts resin from the marihuana or creates a marihuana-infused product for sale and transfer in packaged form to a provisioning center or another processor.

  (w) “Provisioning center” means a licensee that is a commercial entity located in this state that purchases marihuana from a grower or processor and sells, supplies, or provides marihuana to registered qualifying patients, directly or through the patients’ registered primary caregivers. Provisioning center includes any commercial property where marihuana is sold at retail to registered qualifying patients or registered primary caregivers. A noncommercial location used by a registered primary caregiver to assist a qualifying patient connected to the caregiver through the department’s marihuana registration process in accordance with the Michigan Medical Marihuana Act is not a provisioning center for purposes of this act.

  (x) “Registered primary caregiver” means a primary caregiver who has been issued a current registry identification card under the Michigan Medical Marihuana Act.

  (y) “Registered qualifying patient” means a qualifying patient who has been issued a current registry identification card under the Michigan Medical Marihuana Act or a visiting qualifying patient as that term is defined in section 3 of the Michigan Medical Marihuana Act, MCL 333.26423.

  (z) “Registry identification card” means that term as defined in section 3 of the Michigan Medical Marihuana Act, MCL 333.26423.

  (aa) “Rules” means rules promulgated under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, by the marijuana regulatory agency to implement this act.

  (bb) “Safety compliance facility” means a licensee that is a commercial entity that takes marihuana from a marihuana facility or receives marihuana from a registered primary caregiver, tests the marihuana for contaminants and for tetrahydrocannabinol and other cannabinoids, returns the test results, and may return the marihuana to the marihuana facility.

  (cc) “Secure transporter” means a licensee that is a commercial entity located in this state that stores marihuana and transports marihuana between marihuana facilities for a fee.

  (dd) “Seed” means the fertilized, ungerminated, matured ovule, containing an embryo or rudimentary plant, of a marihuana plant that is flowering.

  (ee) “Seedling” means a marihuana plant that has germinated and has not flowered and is not harvestable.

  (ff) “State operating license” or, unless the context requires a different meaning, “license” means a license that is issued under this act that allows the licensee to operate as 1 of the following, specified in the license:

  (i) A grower.

  (ii) A processor.

  (iii) A secure transporter.

  (iv) A provisioning center.

  (v) A safety compliance facility.

  (gg) “Statewide monitoring system” or, unless the context requires a different meaning, “system” means an internet-based, statewide database established, implemented, and maintained by the department under the marihuana tracking act, that is available to licensees, law enforcement agencies, and authorized state departments and agencies on a 24-hour basis for all of the following:

  (i) Verifying registry identification cards.

  (ii) Tracking marihuana transfer and transportation by licensees, including transferee, date, quantity, and price.

  (iii) Verifying in commercially reasonable time that a transfer will not exceed the limit that the patient or caregiver is authorized to receive under section 4 of the Michigan Medical Marihuana Act, MCL 333.26424.

  (hh) “Tissue culture” means a marihuana plant cell, cutting, tissue, or organ, that is kept under a sterile condition on a nutrient culture medium of known composition and that does not have visible root formation. A tissue culture is not a marihuana plant for purposes of a grower.

  (ii) “Usable marihuana” means the dried leaves, flowers, plant resin, or extract of the marihuana plant, but does not include the seeds, stalks, and roots of the plant.

PART 2. APPLICATION OF OTHER LAWS

333.27201 Protected activities; person owning or leasing property upon which marihuana facility located subject to penalties or sanctions prohibited; conditions; activities of certified public accountant or financial institution not subject to certain penalties or sanctions; other provisions of law inconsistent with act; definitions.

Sec. 201.

  (1) Except as otherwise provided in this act, if a person has been granted a state operating license and is operating within the scope of the license, the licensee and its agents are not subject to any of the following for engaging in activities described in subsection (2):

  (a) Criminal penalties under state law or local ordinances regulating marihuana.

  (b) State or local criminal prosecution for a marihuana-related offense.

  (c) State or local civil prosecution for a marihuana-related offense.

  (d) Search or inspection, except for an inspection authorized under this act by law enforcement officers, the municipality, or the department.

  (e) Seizure of marihuana, real property, personal property, or anything of value based on a marihuana-related offense.

  (f) Any sanction, including disciplinary action or denial of a right or privilege, by a business or occupational or professional licensing board or bureau based on a marihuana-related offense.

  (2) The following activities are protected under subsection (1) if performed under a state operating license within the scope of that license and in accord with this act, rules, and any ordinance adopted under section 205:

  (a) Growing marihuana.

  (b) Purchasing, receiving, selling, transporting, or transferring marihuana from or to a licensee, a licensee’s agent, a registered qualifying patient, or a registered primary caregiver.

  (c) Possessing marihuana.

  (d) Possessing or manufacturing marihuana paraphernalia for medical use.

  (e) Processing marihuana.

  (f) Transporting marihuana.

  (g) Testing, transferring, infusing, extracting, altering, or studying marihuana.

  (h) Receiving or providing compensation for products or services.

  (3) Except as otherwise provided in this act, a person who owns or leases real property upon which a marihuana facility is located and who has no knowledge that the licensee violated this act is not subject to any of the following for owning, leasing, or permitting the operation of a marihuana facility on the real property:

  (a) Criminal penalties under state law or local ordinances regulating marihuana.

  (b) State or local civil prosecution based on a marihuana-related offense.

  (c) State or local criminal prosecution based on a marihuana-related offense.

  (d) Search or inspection, except for an inspection authorized under this act by law enforcement officers, the municipality, or the department.

  (e) Seizure of any real or personal property or anything of value based on a marihuana-related offense.

  (f) Any sanction, including disciplinary action or denial of a right or privilege, by a business or occupational or professional licensing board or bureau.

  (4) Except as otherwise provided in this act, a certified public accountant who is licensed under article 7 of the occupational code, 1980 PA 299, MCL 339.720 to 339.736, is not subject to any of the following for engaging in the practice of public accounting as that term is defined in section 720 of the occupational code, 1980 PA 299, MCL 339.720, for an applicant or licensee who is in compliance with this act, rules, and the Michigan medical marihuana act:

  (a) Criminal penalties under state law or local ordinances regulating marihuana.

  (b) State or local civil prosecution based on a marihuana-related offense.

  (c) State or local criminal prosecution based on a marihuana-related offense.

  (d) Seizure of any real or personal property or anything of value based on a marihuana-related offense.

  (e) Any sanction, including disciplinary action or denial of a right or privilege, by a business or occupational or professional licensing board or bureau based on a marihuana-related offense.

  (5) Except as otherwise provided in this act, a financial institution is not subject to any of the following for providing a financial service to a licensee under this act:

  (a) Criminal penalties under state law or local ordinances regulating marihuana.

  (b) State or local civil prosecution based on a marihuana-related offense.

  (c) State or local criminal prosecution based on a marihuana-related offense.

  (d) Seizure of any real or personal property or anything of value based on a marihuana-related offense.

  (e) Any sanction, including disciplinary action or denial of a right or privilege, by a business or occupational or professional licensing board or bureau based on a marihuana-related offense.

  (6) For the purposes of regulating the commercial entities established under this act, any provisions of the following acts that are inconsistent with this act do not apply to a grower, processor, secure transporter, provisioning center, or safety compliance facility operating in compliance with this act:

  (a) The business corporation act, 1972 PA 284, MCL 450.1101 to 450.2098.

  (b) The nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.

  (c) 1931 PA 327, MCL 450.98 to 450.192.

  (d) The Michigan revised uniform limited partnership act, 1982 PA 213, MCL 449.1101 to 449.2108.

  (e) The Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to 450.5200.

  (f) 1907 PA 101, MCL 445.1 to 445.5.

  (g) 1913 PA 164, MCL 449.101 to 449.106.

  (h) The uniform partnership act, 1917 PA 72, MCL 449.1 to 449.48.

  (7) As used in this section:

  (a) “Financial institution” means any of the following:

  (i) A state or national bank.

  (ii) A state or federally chartered savings and loan association.

  (iii) A state or federally chartered savings bank.

  (iv) A state or federally chartered credit union.

  (v) An insurance company.

  (vi) An entity that offers any of the following to a resident of this state:

  (A) A mutual fund account.

  (B) A securities brokerage account.

  (C) A money market account.

  (D) A retail investment account.

  (vii) An entity regulated by the Securities and Exchange Commission that collects funds from the public.

  (viii) An entity that is a member of the National Association of Securities Dealers and that collects funds from the public.

  (ix) Another entity that collects funds from the public.

  (b) “Financial service” means a deposit; withdrawal; transfer between accounts; exchange of currency; loan; extension of credit; purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument; or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected.

333.27203 Registered qualifying patient or registered primary caregiver; criminal prosecution or sanctions prohibited; conditions.

Sec. 203.

  A registered qualifying patient or registered primary caregiver is not subject to criminal prosecution or sanctions for purchasing marihuana from a provisioning center if the quantity purchased is within the limits established under the Michigan medical marihuana act. A registered primary caregiver is not subject to criminal prosecution or sanctions for any transfer of 2.5 ounces or less of marihuana to a safety compliance facility for testing.

333.27204 Medical purpose defense.

Sec. 204.

  This act does not limit the medical purpose defense provided in section 8 of the Michigan medical marihuana act, 2008 IL 1, MCL 333.26428, to any prosecution involving marihuana.

333.27205 Marihuana facility; ordinance; requirements.

Sec. 205.

  (1) The board shall not issue a state operating license to an applicant unless the municipality in which the applicant’s proposed marihuana facility will operate has adopted an ordinance that authorizes that type of facility. A municipality may adopt an ordinance to authorize 1 or more types of marihuana facilities within its boundaries and to limit the number of each type of marihuana facility. A municipality may adopt other ordinances relating to marihuana facilities within its jurisdiction, including zoning regulations, but shall not impose regulations regarding the purity or pricing of marihuana or interfering or conflicting with this act or rules for licensing marihuana facilities. A municipality that adopts an ordinance under this subsection that authorizes a marihuana facility shall provide the department with all of the following on a form prescribed and provided by the department:

  (a) An attestation that the municipality has adopted an ordinance under this subsection that authorizes the marihuana facility.

  (b) A description of any zoning regulations that apply to the proposed marihuana facility within the municipality.

  (c) The signature of the clerk of the municipality or his or her designee.

  (d) Any other information required by the department.

  (2) A municipal ordinance may establish an annual, nonrefundable fee of not more than $5,000.00 to help defray administrative and enforcement costs associated with the operation of a marihuana facility in the municipality.

  (3) The department may require a municipality to provide the following information to the department on a form prescribed and provided by the department regarding a licensee who submits an application for license renewal:

  (a) Information that the board declares necessary to determine whether the licensee’s license should be renewed.

  (b) A description of a violation of an ordinance or a zoning regulation adopted under subsection (1) committed by the licensee, but only if the violation relates to activities licensed under this act and rules or the Michigan medical marihuana act.

  (c) Whether there has been a change to an ordinance or a zoning regulation adopted under subsection (1) since the license was issued to the licensee and a description of the change.

  (4) Information a municipality obtains from an applicant under this section is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. Except as otherwise provided in this subsection, information a municipality provides to the department under this section is subject to disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

333.27206 Rules.

Sec. 206.

  The marijuana regulatory agency shall promulgate rules and emergency rules as necessary to implement, administer, and enforce this act. The rules must ensure the safety, security, and integrity of the operation of marihuana facilities, and must include rules to do the following:

  (a) Set appropriate standards for marihuana facilities and associated equipment.

  (b) Subject to section 408, establish minimum levels of insurance that licensees must maintain.

  (c) Establish operating regulations for each category of license to ensure the health, safety, and security of the public and the integrity of marihuana facility operations.

  (d) Establish qualifications and restrictions for persons participating in or involved with operating marihuana facilities.

  (e) Establish testing standards, procedures, and requirements for marihuana sold through provisioning centers.

  (f) Provide for the levy and collection of fines for a violation of this act or rules.

  (g) Prescribe use of the statewide monitoring system to track all marihuana transfers, as provided in the marihuana tracking act and this act, and provide for a funding mechanism to support the system.

  (h) Establish quality control standards, procedures, and requirements for marihuana facilities.

  (i) Establish chain of custody standards, procedures, and requirements for marihuana facilities.

  (j) Establish standards, procedures, and requirements for waste product disposal and storage by marihuana facilities.

  (k) Establish chemical storage standards, procedures, and requirements for marihuana facilities. 

  (l) Establish standards, procedures, and requirements for securely and safely transporting marihuana between marihuana facilities.

  (m) Establish standards, procedures, and requirements for the storage of marihuana-by-marihuana facilities.

  (n) Establish labeling and packaging standards, procedures, and requirements for marihuana sold or transferred through provisioning centers, including, but not limited to:

  (i) A prohibition on labeling or packaging that is intended to appeal to or has the effect of appealing to minors.

  (ii) A requirement that all marihuana sold through provisioning centers include on the exterior of the marihuana packaging the following warning printed in clearly legible type and surrounded by a continuous heavy line:

  WARNING: USE BY PREGNANT OR BREASTFEEDING WOMEN, OR BY

  WOMEN PLANNING TO BECOME PREGNANT, MAY RESULT IN FETAL

  INJURY, PRETERM BIRTH, LOW BIRTH WEIGHT, OR DEVELOPMENTAL

  PROBLEMS FOR THE CHILD.

  (o) Establish daily and monthly purchasing limits at provisioning centers for registered qualifying patients and registered primary caregivers to ensure compliance with the Michigan Medical Marihuana Act.

  (p) Establish marketing and advertising restrictions for marihuana products and marihuana facilities.

  (q) Establish maximum tetrahydrocannabinol levels for marihuana-infused products sold or transferred through provisioning centers.

  (r) Establish health standards to ensure the safe preparation of products containing marihuana that are intended for human consumption in a manner other than smoke inhalation.

  (s) Establish restrictions on edible marihuana-infused products to prohibit shapes that would appeal to minors.

  (t) Establish standards, procedures, and requirements for the sale of industrial hemp from a provisioning center to a registered qualified patient. The rules promulgated under this subdivision must be promulgated before March 1, 2019.

  (u) Establish informational pamphlet standards for provisioning centers including, but not limited to, a requirement to make available to every patron at the time of sale a pamphlet measuring 3.5 inches by 5 inches that includes safety information related to marihuana use by minors and the poison control hotline number.

  (v) Establish procedures and standards for approving an appointee to operate a marihuana facility under section 206a.

333.27206a Operation of a marihuana facility; appointment and approval; notice of violation.

Sec. 206a.

  (1) The marijuana regulatory agency may approve the operation of a marihuana facility by any of the following:

  (a) A court-appointed personal representative, guardian, or conservator of an individual who holds a state license or has an interest in a person that holds a state license.

  (b) A court-appointed receiver or trustee.

  (2) If an individual approved to operate a marihuana facility under subsection (1) receives notice from the marijuana regulatory agency that the marihuana facility the individual is operating is in violation of this act or rules, the individual shall notify the court that appointed the individual of the notice of violation within 2 days after receiving the notice of violation.

History: Add. 2020, Act 207, Imd. Eff. Oct. 15, 2020

Sec. 207.

  (1) Except as otherwise provided in subsection (2), a licensee shall adopt and use a third-party inventory control and tracking system that is capable of interfacing with the statewide monitoring system to allow the licensee to enter or access information in the statewide monitoring system as required under this act and rules. The third-party inventory control and tracking system must have all of the following capabilities necessary for the licensee to comply with the requirements applicable to the licensee’s license type:

  (a) Tracking all marihuana plants, products, packages, patient and primary caregiver purchase totals, waste, transfers, conversions, sales, and returns that are linked to unique identification numbers.

  (b) Tracking lot and batch information throughout the entire chain of custody.

  (c) Tracking all products, conversions, and derivatives throughout the entire chain of custody.

  (d) Tracking marihuana plant, batch, and product destruction.

  (e) Tracking transportation of product.

  (f) Performing complete batch recall tracking that clearly identifies all of the following details relating to the specific batch subject to the recall:

  (i) Sold product.

  (ii) Product inventory that is finished and available for sale.

  (iii) Product that is in the process of transfer.

  (iv) Product being processed into another form.

  (v) Postharvest raw product, such as product that is in the drying, trimming, or curing process.

  (g) Reporting and tracking loss, theft, or diversion of product containing marihuana.

  (h) Reporting and tracking all inventory discrepancies.

  (i) Reporting and tracking adverse patient responses or dose-related efficacy issues.

  (j) Reporting and tracking all sales and refunds.

  (k) Electronically receiving and transmitting information as required under this act, the Michigan medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430, and the marihuana tracking act.

  (l) Receiving testing results electronically from a safety compliance facility via a secured application program interface into the system and directly linking the testing results to each applicable source batch and sample.

  (m) Identifying test results that may have been altered.

  (n) Providing the licensee with access to information in the tracking system that is necessary to verify that the licensee is carrying out the marihuana transactions authorized under the licensee’s license in accordance with this act.

  (o) Providing information to cross-check that product sales are made to a registered qualifying patient or a registered primary caregiver on behalf of a registered qualifying patient and that the product received the required testing.

  (p) Providing the department and state agencies with access to information in the database that they are authorized to access.

  (q) Providing law enforcement agencies with access to only the information in the database that is necessary to verify that an individual possesses a valid and current registry identification card.

  (r) Providing licensees with access only to the information in the system that they are required to receive before a sale, transfer, transport, or other activity authorized under a license issued under this act.

  (s) Securing the confidentiality of information in the database by preventing access by a person who is not authorized to access the statewide monitoring system or is not authorized to access the particular information.

  (t) Providing analytics to the department regarding key performance indicators such as the following:

  (i) Total daily sales.

  (ii) Total marihuana plants in production.

  (iii) Total marihuana plants destroyed.

  (iv) Total inventory adjustments.

  (2) If the statewide monitoring system is capable of allowing a licensee to access or enter information into the statewide monitoring system without use of a third-party inventory control and tracking system, a licensee may access or enter information into the statewide monitoring system directly and the licensee is not required to adopt and use a third-party inventory control and tracking system.

333.27208 Marihuana facility and property; examination by local and state police.

Sec. 208.

  A marihuana facility and all articles of property in that facility are subject to examination at any time by a local police agency or the department of state police.

PART 3. MEDICAL MARIHUANA LICENSING BOARD

333.27301 Medical marihuana licensing board; creation; membership; appointment; terms; vacancy; reimbursement for expenses; other public office; eligibility; removal of member; appointment and employment limitations; financial disclosure statement; direct or indirect interest.

Sec. 301.

  (1) The medical marihuana licensing board is created within the department of licensing and regulatory affairs.

  (2) The board consists of 5 members who are residents of this state, not more than 3 of whom are members of the same political party. The governor shall appoint the members. One of the members shall be appointed from 3 nominees submitted by the senate majority leader and 1 from 3 nominees submitted by the speaker of the house. The governor shall designate 1 of the members as chairperson.

  (3) The members shall be appointed for terms of 4 years, except, of those who are first appointed, 1 member shall be appointed for a term of 2 years and 2 members shall be appointed for a term of 3 years. A member’s term expires on December 31 of the last year of the member’s term. If a vacancy occurs, the governor shall appoint a successor to fill the unexpired term in the manner of the original appointment.

  (4) Each member of the board shall be reimbursed for all actual and necessary expenses and disbursements incurred in carrying out official duties.

  (5) A board member shall not hold any other public office for which he or she receives compensation other than necessary travel or other incidental expenses.

  (6) A person who is not of good moral character or who has been indicted for, charged with, or convicted of, pled guilty or nolo contendere to, or forfeited bail concerning any felony or a misdemeanor involving a controlled substance violation, theft, dishonesty, or fraud under the laws of this state, any other state, or the United States or a local ordinance in any state involving a controlled substance violation, dishonesty, theft, or fraud that substantially corresponds to a misdemeanor in that state is not eligible to serve on the board.

  (7) The governor may remove any member of the board for neglect of duty, misfeasance, malfeasance, nonfeasance, or any other just cause.

  (8) The board shall not appoint or employ an individual if any of the following circumstances exist:

  (a) During the 3 years immediately preceding appointment or employment, the individual held any direct or indirect interest in, or was employed by, a person who is licensed to operate under this act or under a corresponding license in another jurisdiction or a person with an application for an operating license pending before the board or in any other jurisdiction. The board shall not employ an individual who has a direct or indirect interest in a licensee or a marihuana facility.

  (b) The individual or his or her spouse, parent, child, child’s spouse, sibling, or spouse of a sibling has an application for a license pending before the board or is a member of the board of directors of, or an individual financially interested in, any licensee or marihuana facility.

  (9) Each member of the board and each key employee as determined by the department shall file with the governor a financial disclosure statement listing all assets and liabilities, property and business interests, and sources of income of the member and key employee and his or her spouse, if any, affirming that the member and key employee are in compliance with subsection (8)(a) and (b). The financial disclosure statement shall be made under oath and filed at the time of employment and annually thereafter.

  (10) Each employee of the board shall file with the board a financial disclosure statement listing all assets and liabilities, property and business interests, and sources of income of the employee and his or her spouse. This subsection does not apply to a key employee.

  (11) A member of the board or key employee shall not hold any direct or indirect interest in, be employed by, or enter into a contract for services with an applicant, a board licensee, or a marihuana facility for a period of 4 years after the date his or her employment or membership on the board terminates. The department in consultation with the board shall define the term “direct or indirect interest” by rule.

  (12) For 2 years after the date his or her employment with the board is terminated, an employee of the board shall not acquire any direct or indirect interest in, be employed by, or enter into a contract for services with any applicant, licensee, or marihuana facility.

  (13) For 2 years after the termination of his or her office or employment with the board, a board member or an individual employed by the board shall not represent any person or party other than this state before or against the board.

  (14) A business entity in which a former board member or employee or agent has an interest, or any partner, officer, or employee of the business entity, shall not make any appearance or represent a party that the former member, employee, or agent is prohibited from appearing for or representing. As used in this subsection, “business entity” means a corporation, limited liability company, partnership, limited liability partnership, association, trust, or other form of legal entity.

333.27302 Board; duties.

Sec. 302.

  The board has general responsibility for implementing this act. The board has the powers and duties specified in this act and all other powers necessary and proper to fully and effectively implement and administer this act for the purpose of licensing, regulating, and enforcing the licensing and regulation system established under this act for marihuana growth, processing, testing, and transporting. The board is subject to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The board’s duties include all of the following:

  (a) Granting or denying each application for a state operating license within a reasonable time.

  (b) Deciding all license applications in reasonable order.

  (c) Conducting its public meetings in compliance with the open meetings act, 1976 PA 267, MCL 15.231 to 15.246.

  (d) Consulting with the department in promulgating rules and emergency rules as necessary to implement, administer, and enforce this act. The board shall not promulgate a rule establishing a limit on the number or type of marihuana facility licenses that may be granted.

  (e) Implementing and collecting the application fee described in section 401 and, in conjunction with the department of treasury, the tax described in section 601 and regulatory assessment described in section 603.

  (f) Providing for the levy and collection of fines for a violation of this act or rules.

  (g) Providing oversight of a marihuana facility through the board’s inspectors, agents, and auditors and through the state police or attorney general for the purpose of certifying the revenue, receiving complaints from the public, or conducting investigations into the operation of the marihuana facility as the board considers necessary and proper to ensure compliance with this act and rules and to protect and promote the overall safety, security, and integrity of the operation of a marihuana facility.

  (h) Providing oversight of marihuana facilities to ensure that marihuana-infused products meet health and safety standards that protect the public to a degree comparable to state and federal standards applicable to similar food and drugs.

  (i) Reviewing and ruling on any complaint by a licensee regarding any investigative procedures of this state that are believed to be unnecessarily disruptive of marihuana facility operations. The need to inspect and investigate is presumed at all times. The board may delegate authority to hear, review, or rule on licensee complaints to a subcommittee of the board. To prevail on the complaint, a licensee must establish by a preponderance of the evidence that the procedures unreasonably disrupted its marihuana facility operations.

  (j) Holding at least 2 public meetings each year. Upon 72 hours’ written notice to each member, the chairperson or any 2 board members may call a special meeting. Three members of the board constitute a quorum, including when making determinations on an application for a license. Three votes are required in support of final determinations of the board on applications for licenses and all other licensing determinations, except those 4 votes are required in support of a determination to suspend or revoke a license. The board shall keep a complete and accurate record of all of its meetings and hearings. Upon order of the board, 1 of the board members or a hearing officer designated by the board may conduct any hearing provided for under this act or by rules and may recommend findings and decisions to the board. The board member or hearing officer conducting the hearing has all powers and rights regarding the conduct of hearings granted to the board under this act. The record made at the time of the hearing shall be reviewed by the board or a majority of the board, and the findings and decision of the majority of the board are the order of the board in the case.

  (k) Maintaining records that are separate and distinct from the records of any other state board. The records shall be made available for public inspection subject to the limitations of this act and shall accurately reflect all board proceedings.

  (l) Reviewing the patterns of marihuana transfers by the licensees under this act as recorded in a statewide database established for use in administering and enforcing this act and making recommendations to the governor and the legislature in a written annual report to the governor and the legislature and additional reports that the governor requests. The annual report shall be submitted by April 15 of each year and shall include the report required under section 702, a statement of receipts and disbursements by the board, the actions taken by the board, and any additional information and recommendations that the board considers appropriate or that the governor requests.

  (m) Except as otherwise provided in this act, all information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the board are subject to the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, except for the following:

  (i) Unless presented during a public hearing or requested by the licensee or applicant who is the sole subject of the data, all of the information, records, interviews, reports, statements, memoranda, or other data supplied to, created by, or used by the board related to background investigation of applicants or licensees and to trade secrets, internal controls, and security measures of the licensees or applicants.

  (ii) All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the board that have been received from another jurisdiction or local, state, or federal agency under a promise of confidentiality or if the release of the information is otherwise barred by the statutes, rules, or regulations of that jurisdiction or agency or by an intergovernmental agreement.

  (iii) All information in the statewide monitoring system.

333.27303 Marijuana regulatory agency; powers.

Sec. 303.

  (1) The marijuana regulatory agency has jurisdiction over the operation of all marihuana facilities. The marijuana regulatory agency has all powers necessary and proper to fully and effectively oversee the operation of marihuana facilities, including the authority to do all of the following:

  (a) Investigate applicants for state operating licenses, determine the eligibility for licenses, and grant licenses to applicants in accordance with this act and the rules.

  (b) Investigate all individuals employed by marihuana facilities.

  (c) At any time, through its investigators, agents, auditors, or the state police, without a warrant and without notice to the licensee, enter the premises, offices, facilities, or other places of business of a licensee, if evidence of compliance or noncompliance with this act or rules is likely to be found and consistent with constitutional limitations, for the following purposes:

  (i) To inspect and examine all premises of marihuana facilities.

  (ii) To inspect, examine, and audit relevant records of the licensee and, if the licensee fails to cooperate with an investigation, impound, seize, assume physical control of, or summarily remove from the premises all books, ledgers, documents, writings, photocopies, correspondence, records, and videotapes, including electronically stored records, money receptacles, or equipment in which the records are stored.

  (iii) To inspect the person, and inspect or examine personal effects present in a marihuana facility, of any holder of a state operating license while that person is present in a marihuana facility.

  (iv) To investigate alleged violations of this act or rules.

  (d) Investigate alleged violations of this act or rules and take appropriate disciplinary action against a licensee.

  (e) Consult with the department in adopting rules to establish appropriate standards for marihuana facilities and associated equipment.

  (f) Require all relevant records of licensees, including financial or other statements, to be kept on the premises authorized for operation of the marihuana facility of the licensee or in the manner prescribed by the marijuana regulatory agency.

  (g) Require that each licensee of a marihuana facility submit to the marijuana regulatory agency a list of the stockholders or other persons having a 2.5% or greater beneficial interest in the facility in addition to any other information the marijuana regulatory agency considers necessary to effectively administer this act and rules, orders, and final decisions made under this act.

  (h) Eject, or exclude or authorize the ejection or exclusion of, an individual from a marihuana facility if the individual violates this act, rules, or final orders of the marijuana regulatory agency. However, the propriety of the ejection or exclusion is subject to a subsequent hearing by the marijuana regulatory agency.

  (i) Conduct periodic audits of marihuana facilities licensed under this act.

  (j) Consult with the department as to appropriate minimum levels of insurance for licensees in addition to the minimum established under section 408 for liability insurance.

  (k) Delegate the execution of any of its powers that are not specifically and exclusively reserved to the marijuana regulatory agency under this act for the purpose of administering and enforcing this act and rules.

  (l) Take disciplinary action as the marijuana regulatory agency considers appropriate to prevent practices that violate this act and rules.

  (m) Review a licensee if that licensee is under review or the subject of discipline by a regulatory body in any other jurisdiction for a violation of a controlled substance or marihuana law or regulation in that jurisdiction.

  (n) Take any other reasonable or appropriate action to enforce this act and rules.

  (2) The marijuana regulatory agency may seek and shall receive the cooperation and assistance of the department of state police in conducting background investigations of applicants and in fulfilling its responsibilities under this act. The department of state police may recover its costs of cooperation under this subsection.

333.27305 Board; disclosure form; providing certain notices to chairperson; ex parte communication; outside employment; personal transaction involving marihuana with licensee or applicant; violation.

Sec. 305.

  (1) By January 31 of each year, each member of the board shall prepare and file with the governor’s office and the board a disclosure form in which the member does all of the following:

  (a) Affirms that the member or the member’s spouse, parent, child, or child’s spouse is not a member of the board of directors of, financially interested in, or employed by a licensee or applicant.

  (b) Affirms that the member continues to meet any other criteria for board membership under this act or the rules promulgated by the board.

  (c) Discloses any legal or beneficial interests in any real property that is or that may be directly or indirectly involved with operations authorized by this act.

  (d) Discloses any other information as may be required to ensure that the integrity of the board and its work is maintained.

  (2) By January 31 of each year, each employee of the board shall prepare and file with the board an employee disclosure form in which the employee does all of the following:

  (a) Affirms the absence of financial interests prohibited by this act.

  (b) Discloses any legal or beneficial interests in any real property that is or that may be directly or indirectly involved with operations authorized by this act.

  (c) Discloses whether the employee or the employee’s spouse, parent, child, or child’s spouse is financially interested in or employed by a licensee or an applicant for a license under this act.

  (d) Discloses such other matters as may be required to ensure that the integrity of the board and its work is maintained.

  (3) A member, employee, or agent of the board who becomes aware that the member, employee, or agent of the board or his or her spouse, parent, or child is a member of the board of directors of, financially interested in, or employed by a licensee or an applicant shall immediately provide detailed written notice thereof to the chairperson.

  (4) A member, employee, or agent of the board who within the previous 10 years has been indicted for, charged with, or convicted of, pled guilty or nolo contendere to, or forfeited bail concerning a misdemeanor involving controlled substances, dishonesty, theft, or fraud or a local ordinance in any state involving controlled substances, dishonesty, theft, or fraud that substantially corresponds to a misdemeanor in that state, or a felony under Michigan law, the laws of any other state, or the laws of the United States or any other jurisdiction shall immediately provide detailed written notice of the conviction or charge to the chairperson.

  (5) Any member, employee, or agent of the board who is negotiating for, or acquires by any means, any interest in any person who is a licensee or an applicant, or any person affiliated with such a person, shall immediately provide written notice of the details of the interest to the chairperson. The member, employee, or agent of the board shall not act on behalf of the board with respect to that person.

  (6) A member, employee, or agent of the board shall not enter into any negotiations for employment with any person or affiliate of any person who is a licensee or an applicant and shall immediately provide written notice of the details of any such negotiations or discussions in progress to the chairperson. The member, employee, or agent of the board shall not take action on behalf of the board with respect to that person.

  (7) Any member, employee, or agent of the board who receives an invitation, written or oral, to initiate a discussion concerning employment or the possibility of employment with a person or affiliate of a person who is a licensee or an applicant shall immediately report that he or she received the invitation to the chairperson. The member, employee, or agent of the board shall not take action on behalf of the board with respect to the person.

  (8) A licensee or applicant shall not knowingly initiate a negotiation for or discussion of employment with a member, employee, or agent of the board. A licensee or applicant who initiates a negotiation or discussion about employment shall immediately provide written notice of the details of the negotiation or discussion to the chairperson as soon as he or she becomes aware that the negotiation or discussion has been initiated with a member, employee, or agent of the board.

  (9) A member, employee, or agent of the board, or former member, employee, or agent of the board, shall not disseminate or otherwise disclose any material or information in the possession of the board that the board considers confidential unless specifically authorized to do so by the chairperson or the board.

  (10) A member, employee, or agent of the board or a parent, spouse, sibling, spouse of a sibling, child, or spouse of a child of a member, employee, or agent of the board shall not accept any gift, gratuity, compensation, travel, lodging, or anything of value, directly or indirectly, from any licensee or any applicant or affiliate or representative of a licensee or applicant, unless the acceptance conforms to a written policy or directive that is issued by the chairperson or the board. Any member, employee, or agent of the board who is offered or receives any gift, gratuity, compensation, travel, lodging, or anything of value, directly or indirectly, from any licensee or any applicant or affiliate or representative of an applicant or licensee shall immediately provide written notification of the details to the chairperson.

  (11) A licensee or applicant, or an affiliate or representative of an applicant or licensee, shall not, directly or indirectly, give or offer to give any gift, gratuity, compensation, travel, lodging, or anything of value to any member, employee, or agent of the board that the member, employee, or agent of the board is prohibited from accepting under subsection (10).

  (12) A member, employee, or agent of the board shall not engage in any conduct that constitutes a conflict of interest and shall immediately advise the chairperson in writing of the details of any incident or circumstances that would present the existence of a conflict of interest with respect to performing board-related work or duties.

  (13) A member, employee, or agent of the board who is approached and offered a bribe as described in section 118 of the Michigan penal code, 1931 PA 328, MCL 750.118, or this act shall immediately provide written account of the details of the incident to the chairperson and to a law enforcement officer of a law enforcement agency having jurisdiction.

  (14) A member, employee, or agent of the board shall disclose his or her past involvement with any marihuana enterprise in the past 5 years and shall not engage in political activity or politically related activity during the duration of his or her appointment or employment.

  (15) A former member, employee, or agent of the board may appear before the board as a fact witness about matters or actions handled by the member, employee, or agent during his or her tenure as a member, employee, or agent of the board. The member, employee, or agent of the board shall not receive compensation for such an appearance other than a standard witness fee and reimbursement for travel expenses as established by statute or court rule.

  (16) A licensee or applicant or any affiliate or representative of an applicant or licensee shall not engage in ex parte communications with a member of the board. A member of the board shall not engage in any ex parte communications with a licensee or an applicant or with any affiliate or representative of an applicant or licensee.

  (17) Any board member, licensee, or applicant or affiliate or representative of a board member, licensee, or applicant who receives any ex parte communication in violation of subsection (16), or who is aware of an attempted communication in violation of subsection (16), shall immediately report details of the communication or attempted communication in writing to the chairperson.

  (18) Any member of the board who receives an ex parte communication in an attempt to influence that member’s official action shall disclose the source and content of the communication to the chairperson. The chairperson may investigate or initiate an investigation of the matter with the assistance of the attorney general and state police to determine if the communication violates subsection (16) or subsection (17) or other state law. The disclosure under this section and the investigation are confidential. Following an investigation, the chairperson shall advise the governor or the board, or both, of the results of the investigation and may recommend action as the chairperson considers appropriate. If the chairperson receives such an ex parte communication, he or she shall report the communication to the governor’s office for appropriate action.

  (19) A new or current employee or agent of the board shall obtain written permission from the director of the department or his or her designee before continuing outside employment held at the time the employee begins to work for the board. Permission shall be denied, or permission previously granted shall be revoked, if the director of the department or his or her designee considers the nature of the work to create a possible conflict of interest or if it would otherwise interfere with the duties of the employee or agent for the board.

  (20) An employee or agent of the board granted permission for outside employment shall not conduct any business or perform any activities, including solicitation, related to outside employment on premises used by the board or during the employee’s working hours for the board.

  (21) The chairperson shall report any action he or she has taken or proposes to take under this section with respect to an employee or agent or former employee or former agent to the board at the next meeting of the board.

  (22) Except as allowed under the Michigan medical marihuana act, a member, employee, or agent of the board shall not enter into any personal transaction involving marihuana with a licensee or applicant.

  (23) If a licensee or applicant, or an affiliate or representative of a licensee or applicant, violates this section, the board may deny a license application, revoke or suspend a license, or take other disciplinary action as provided in section 407.

  (24) Violation of this section by a member of the board may result in disqualification or constitute cause for removal under section 301(7) or other disciplinary action as recommended by the board to the governor.

  (25) A violation of this section by an employee or agent of the board need not result in termination of employment if the board determines that the conduct involved does not violate the purpose of this act. However, all of the following apply:

  (a) If, after being offered employment or beginning employment with the board, the employee or agent intentionally acquires a financial interest in a licensee or an applicant, or an affiliate or representative of a licensee or applicant, the offer or employment with the board shall be terminated.

  (b) If a financial interest in a licensee or an applicant, or an affiliate or representative of a licensee or applicant, is acquired by an employee or agent that has been offered employment with the board, an employee of the board, or the employee’s or agent’s spouse, parent, or child, through no intentional action of the employee or agent, the individual shall have up to 30 days to divest or terminate the financial interest. Employment may be terminated if the interest has not been divested after 30 days.

  (c) Employment shall be terminated if the employee or agent is a spouse, parent, child, or spouse of a child of a board member.

  (26) Violation of this section does not create a civil cause of action.

  (27) As used in this section:

  (a) “Outside employment”, in addition to employment by a third party, includes, but is not limited to, the following:

  (i) Operation of a proprietorship.

  (ii) Participation in a partnership or group business enterprise.

  (iii) Performance as a director or corporate officer of any for-profit or nonprofit corporation or banking or credit institution.

  (iv) Performance as a manager of a limited liability company.

  (b) “Political activity” or “politically related activity” includes all of the following:

  (i) Using his or her official authority or influence for the purpose of interfering with or affecting the result of an election.

  (ii) Knowingly soliciting, accepting, or receiving a political contribution from any person.

  (iii) Running for the nomination or as a candidate for election to a partisan political office.

  (iv) Knowingly soliciting or discouraging the participation in any political activity of any person who is either of the following:

  (A) Applying for any compensation, grant, contract, ruling, license, permit, or certificate pending before the board.

  (B) The subject of or a participant in an ongoing audit, investigation, or enforcement action being carried out by the board.

PART 4. LICENSING

333.27401 Licensure; application; background investigation; consent to inspections, examinations, searches, and seizures; disclosure of confidential records; interest in other state operating license; fee; additional costs; notification to municipality.

Sec. 401.

  (1) A person may apply to the marijuana regulatory agency for state operating licenses in the categories of class A, B, or C grower; processor; provisioning center; secure transporter; and safety compliance facility as provided in this act. The application shall be made under oath on a form provided by the marijuana regulatory agency and shall contain information as prescribed by the marijuana regulatory agency, including, but not limited to, all of the following:

  (a) The name, business address, business telephone number, Social Security number, and, if applicable, federal tax identification number of the applicant.

  (b) The identity of every person having a 2.5% or greater ownership interest in the applicant with respect to which the license is sought. If the disclosed entity is a trust, the application shall disclose the names and addresses of the beneficiaries; if a privately held corporation, the names and addresses of all shareholders, officers, and directors; if a publicly held corporation, the names and addresses of all shareholders holding a direct or indirect interest of greater than 5%, officers, and directors; if a partnership or limited liability partnership, the names and addresses of all partners; if a limited partnership or limited liability limited partnership, the names of all partners, both general and limited; or if a limited liability company, the names and addresses of all members and managers.

  (c) An identification of any business that is directly or indirectly involved in the growing, processing, testing, transporting, or sale of marihuana, including, if applicable, the state of incorporation or registration, in which an applicant or, if the applicant is an individual, the applicant’s spouse, parent, or child has any equity interest. If an applicant is a corporation, partnership, or other business entity, the applicant shall identify any other corporation, partnership, or other business entity that is directly or indirectly involved in the growing, processing, testing, transporting, or sale of marihuana in which it has any equity interest, including, if applicable, the state of incorporation or registration. An applicant may comply with this subdivision by filing a copy of the applicant’s registration with the Securities and Exchange Commission if the registration contains the information required by this subdivision.

  (d) Whether an applicant has been indicted for, charged with, arrested for, or convicted of, pled guilty or nolo contendere to, forfeited bail concerning any criminal offense under the laws of any jurisdiction, either felony or controlled-substance-related misdemeanor, not including traffic violations, regardless of whether the offense has been reversed on appeal or otherwise, including the date, the name and location of the court, arresting agency, and prosecuting agency, the case caption, the docket number, the offense, the disposition, and the location and length of incarceration.

  (e) Whether an applicant has ever applied for or has been granted any commercial license or certificate issued by a licensing authority in Michigan or any other jurisdiction that has been denied, restricted, suspended, revoked, or not renewed and a statement describing the facts and circumstances concerning the application, denial, restriction, suspension, revocation, or nonrenewal, including the licensing authority, the date each action was taken, and the reason for each action.

  (f) Whether an applicant has filed, or been served with, a complaint or other notice filed with any public body, regarding the delinquency in the payment of, or a dispute over the filings concerning the payment of, any tax required under federal, state, or local law, including the amount, type of tax, taxing agency, and time periods involved.

  (g) A statement listing the names and titles of all public officials or officers of any unit of government, and the spouses, parents, and children of those public officials or officers, who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have any interest in any contractual or service relationship with an applicant. As used in this subdivision, public official or officer does not include a person who would have to be listed solely because of his or her state or federal military service.

  (h) A description of the type of marihuana facility; anticipated or actual number of employees; and projected or actual gross receipts.

  (i) Financial information in the manner and form prescribed by the marijuana regulatory agency.

  (j) A paper copy or electronic posting website reference for the ordinance or zoning restriction that the municipality adopted to authorize or restrict operation of 1 or more marihuana facilities in the municipality.

  (k) A copy of the notice informing the municipality by registered mail that the applicant has applied for a license under this act. The applicant shall also certify that it has delivered the notice to the municipality or will do so by 10 days after the date the applicant submits the application for a license to the marijuana regulatory agency.

  (l) Any other information the department requires by rule.

  (2) The marijuana regulatory agency shall use information provided on the application as a basis to conduct a thorough background investigation on the applicant. A false application is cause for the marijuana regulatory agency to deny a license. The marijuana regulatory agency shall not consider an incomplete application but shall, within a reasonable time, return the application to the applicant with notification of the deficiency and instructions for submitting a corrected application. Information the marijuana regulatory agency obtains from the background investigation is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

  (3) An applicant must provide written consent to the inspections, examinations, searches, and seizures provided for in section 303(1)(c)(i) to (iv) and to disclosure to the marijuana regulatory agency and its agents of otherwise confidential records, including tax records held by any federal, state, or local agency, or credit bureau or financial institution, while applying for or holding a license. Information the marijuana regulatory agency receives under this subsection is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

  (4) An applicant must certify that the applicant does not have an interest in any other state operating license that is prohibited under this act.

  (5) A nonrefundable application fee must be paid at the time of filing to defray the costs associated with the background investigation conducted by the marijuana regulatory agency. The marijuana regulatory agency shall set the amount of the application fee for each category and class of license by rule. If the costs of the investigation and processing the application exceed the application fee, the applicant shall pay the additional amount to the marijuana regulatory agency. All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the marijuana regulatory agency in the course of its review or investigation of an application for a license under this act shall be disclosed only in accordance with this act. The information, records, interviews, reports, statements, memoranda, or other data are not admissible as evidence or discoverable in any action of any kind in any court or before any tribunal, board, agency, or person, except for any action considered necessary by the marijuana regulatory agency.

  (6) By 10 days after the date the applicant submits an application to the marijuana regulatory agency, the applicant shall notify the municipality by registered mail that it has applied for a license under this act.

333.27402 License; issuance; ineligibility; circumstances; other considerations granting license; fingerprint processing fee; criminal history check; requirements applicable to fingerprints; definitions; review of application; informing applicant of decision; issuance; duration; renewal; notice; expiration; consent to inspections; examinations, searches, and seizures; information required to be provided by applicant.

Sec. 402.

  (1) The board shall issue a license to an applicant who submits a complete application and pays both the nonrefundable application fee required under section 401(5) and the regulatory assessment established by the board for the first year of operation, if the board determines that the applicant is qualified to receive a license under this act.

  (2) An applicant is ineligible to receive a license if any of the following circumstances exist:

  (a) The applicant has been convicted of or released from incarceration for a felony under the laws of this state, any other state, or the United States within the past 10 years or has been convicted of a controlled substance-related felony within the past 10 years.

  (b) Within the past 5 years the applicant has been convicted of a misdemeanor involving a controlled substance, theft, dishonesty, or fraud in any state or been found responsible for violating a local ordinance in any state involving a controlled substance, dishonesty, theft, or fraud that substantially corresponds to a misdemeanor in that state.

  (c) The applicant has knowingly submitted an application for a license under this act that contains false information.

  (d) The applicant is a member of the board.

  (e) The applicant fails to demonstrate the applicant’s ability to maintain adequate premises liability and casualty insurance for its proposed marihuana facility.

  (f) The applicant holds an elective office of a governmental unit of this state, another state, or the federal government; is a member of or employed by a regulatory body of a governmental unit in this state, another state, or the federal government; or is employed by a governmental unit of this state. This subdivision does not apply to an elected officer of or employee of a federally recognized Indian tribe or to an elected precinct delegate.

  (g) The board determines that the applicant is not in compliance with section 205(1).

  (h) The applicant fails to meet other criteria established by rule.

  (3) In determining whether to grant a license to an applicant, the board may also consider all of the following:

  (a) The integrity, moral character, and reputation; personal and business probity; financial ability and experience; and responsibility or means to operate or maintain a marihuana facility of the applicant and of any other person that meets either of the following:

  (i) Controls, directly or indirectly, the applicant.

  (ii) Is controlled, directly or indirectly, by the applicant or by a person who controls, directly or indirectly, the applicant.

  (b) The financial ability of the applicant to purchase and maintain adequate liability and casualty insurance.

  (c) The sources and total amount of the applicant’s capitalization to operate and maintain the proposed marihuana facility.

  (d) Whether the applicant has been indicted for, charged with, arrested for, or convicted of, pled guilty or nolo contendere to, forfeited bail concerning, or had expunged any relevant criminal offense under the laws of any jurisdiction, either felony or misdemeanor, not including traffic violations, regardless of whether the offense has been expunged, pardoned, or reversed on appeal or otherwise.

  (e) Whether the applicant has filed, or had filed against it, a proceeding for bankruptcy within the past 7 years.

  (f) Whether the applicant has been served with a complaint or other notice filed with any public body regarding payment of any tax required under federal, state, or local law that has been delinquent for 1 or more years.

  (g) Whether the applicant has a history of noncompliance with any regulatory requirements in this state or any other jurisdiction.

  (h) Whether at the time of application the applicant is a defendant in litigation involving its business practices.

  (i) Whether the applicant meets other standards in rules applicable to the license category.

  (4) Each applicant shall ensure that 1 set of fingerprints is submitted to the department of state police. The applicant shall submit with its application the applicant’s written consent to the criminal history check described in this section and the submission of the applicant’s fingerprints to, and the inclusion of the applicant’s fingerprints in, the state and federal database systems described in subsection (7).

  (5) The fingerprints required under subsection (4) may be taken by a law enforcement agency or any other person determined by the department of state police to be qualified to take fingerprints. The applicant shall submit a fingerprint processing fee to the department in an amount required under section 3 of 1935 PA 120, MCL 28.273, and any costs imposed by the Federal Bureau of Investigation.

  (6) The department of state police shall do all of the following:

  (a) Conduct a criminal history check on each applicant and request the Federal Bureau of Investigation to make a determination of the existence of any national criminal history pertaining to each applicant.

  (b) Provide the board with a written report containing the criminal history record information of each applicant.

  (7) All of the following apply concerning fingerprints submitted to the department of state police under this section:

  (a) The department of state police shall store and retain all fingerprints submitted under this section in an automated fingerprint identification system database that searches against latent fingerprints, and provides for an automatic notification if and when a subsequent fingerprint is submitted into the system that matches a set of fingerprints previously submitted under this section or if and when the criminal history of an individual whose fingerprints are retained in the system is updated. Upon receiving a notification, the department of state police shall immediately notify the board. Information in the database maintained under this subsection is confidential, is not subject to disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, and shall not be disclosed to any person except for purposes of this act or for law enforcement purposes.

  (b) The department of state police shall forward all fingerprints submitted to it under this section to the Federal Bureau of Investigation for submission of those fingerprints into the FBI automatic notification system. This subdivision does not apply until the department of state police is a participant in the FBI automatic notification system. As used in this subdivision:

  (i) “Automatic notification system” means a system that stores and retains fingerprints, and that provides for an automatic notification to a participant if and when a fingerprint is submitted into the system that matches an individual whose fingerprints are retained in the system or if and when the criminal history of an individual whose fingerprints are retained in the system is updated.

  (ii) “FBI automatic notification system” means the automatic notification system that is maintained by the Federal Bureau of Investigation.

  (8) The board shall review all applications for licenses and shall inform each applicant of the board’s decision.

  (9) A license shall be issued for a 1-year period and is renewable annually. Except as otherwise provided in this act, the board shall renew a license if all of the following requirements are met:

  (a) The licensee applies to the board on a renewal form provided by the board that requires information prescribed in rules.

  (b) The application is received by the board on or before the expiration date of the current license.

  (c) The licensee pays the regulatory assessment under section 603.

  (d) The licensee meets the requirements of this act and any other renewal requirements set forth in rules.

  (10) The department shall notify the licensee by mail or electronic mail at the last known address on file with the board advising of the time, procedure, and regulatory assessment under section 603. The failure of the licensee to receive notice under this subsection does not relieve the licensee of the responsibility for renewing the license.

  (11) If a license renewal application is not submitted by the license expiration date, the license may be renewed within 60 days after its expiration date upon application, payment of the regulatory assessment under section 603, and satisfaction of any renewal requirement and late fee set forth in rules. The licensee may continue to operate during the 60 days after the license expiration date if the license is renewed by the end of the 60-day period.

  (12) License expiration does not terminate the board’s authority to impose sanctions on a licensee whose license has expired.

  (13) In its decision on an application for renewal, the board shall consider any specific written input it receives from an individual or entity within the local unit of government in which the applicant for renewal is located.

  (14) A licensee must consent in writing to inspections, examinations, searches, and seizures that are permitted under this act and must provide a handwriting exemplar, fingerprints, photographs, and information as authorized in this act or by rules.

  (15) An applicant or licensee has a continuing duty to provide information requested by the board and to cooperate in any investigation, inquiry, or hearing conducted by the board.

333.27403 Application deficiency; correction.

Sec. 403.

  If the board identifies a deficiency in an application, the board shall provide the applicant with a reasonable period of time to correct the deficiency.

333.27404 Repealed. 2018, Act 582, Eff. Jan. 1, 2019.

Compiler’s Notes: The repealed section pertained to a true party of interest.

333.27405 Background check.

Sec. 405.

  Subject to the laws of this state, before hiring a prospective employee, the holder of a license shall conduct a background check of the prospective employee. If the background check indicates a pending charge or conviction within the past 10 years for a controlled substance-related felony, a licensee shall not hire the prospective employee without written permission of the board.

333.27406 Transfer, sale, or purchase of license.

Sec. 406.

  Each license is exclusive to the licensee, and a licensee or any other person must apply for and receive the board’s approval before a license is transferred, sold, or purchased. The attempted transfer, sale, or other conveyance of an interest in a license without prior board approval is grounds for suspension or revocation of the license or for other sanction considered appropriate by the board, but only if the transfer, sale, or other conveyance would result in the transferee meeting the definition of applicant.

333.27407 Denial, suspension, revocation, or restriction of license.

Sec. 407.

  (1) If an applicant or licensee fails to comply with this act or rules, if a licensee fails to comply with the marihuana tracking act, if a licensee no longer meets the eligibility requirements for a license under this act, or if an applicant or licensee fails to provide information the board requests to assist in any investigation, inquiry, or board hearing, the board may deny, suspend, revoke, or restrict a license. The board may suspend, revoke, or restrict a license and require the removal of a licensee or an employee of a licensee for a violation of this act, rules, the marihuana tracking act, or any ordinance adopted under section 205. The board may impose civil fines of up to $5,000.00 against an individual and up to $10,000.00 or an amount equal to the daily gross receipts, whichever is greater, against a licensee for each violation of this act, rules, or an order of the board. Assessment of a civil fine under this subsection is not a bar to the investigation, arrest, charging, or prosecution of an individual for any other violation of this act and is not grounds to suppress evidence in any criminal prosecution that arises under this act or any other law of this state.

  (2) The board shall comply with the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, when denying, revoking, suspending, or restricting a license or imposing a fine. The board may suspend a license without notice or hearing upon a determination that the safety or health of patrons or employees is jeopardized by continuing a marihuana facility’s operation. If the board suspends a license under this subsection without notice or hearing, a prompt post suspension hearing must be held to determine if the suspension should remain in effect. The suspension may remain in effect until the board determines that the cause for suspension has been abated. The board may revoke the license or approve a transfer or sale of the license upon a determination that the licensee has not made satisfactory progress toward abating the hazard.

  (3) After denying an application for a license, the board shall, upon request, provide a public investigative hearing at which the applicant is given the opportunity to present testimony and evidence to establish its suitability for a license. Other testimony and evidence may be presented at the hearing, but the board’s decision must be based on the whole record before the board and is not limited to testimony and evidence submitted at the public investigative hearing.

  (4) Except for license applicants who may be granted a hearing at the discretion of the board under subsection (3), any party aggrieved by an action of the board suspending, revoking, restricting, or refusing to renew a license, or imposing a fine, shall be given a hearing before the board upon request. A request for a hearing must be made to the board in writing within 21 days after service of notice of the action of the board. Notice of the action of the board must be served either by personal delivery or by certified mail, postage prepaid, to the aggrieved party. Notice served by certified mail is considered complete on the business day following the date of the mailing.

  (5) The board may conduct investigative and contested case hearings; issue subpoenas for the attendance of witnesses; issue subpoenas duces tecum for the production of books, ledgers, records, memoranda, electronically retrievable data, and other pertinent documents; and administer oaths and affirmations to witnesses as appropriate to exercise and discharge the powers and duties of the board under this act. The director of the department or his or her designee may issue subpoenas and administer oaths and affirmations to witnesses.

333.27407a Operation of marihuana facility; license required; violation; penalties.

Sec. 407a.

  Beginning June 1, 2019, a person shall not hold itself out as operating a marihuana facility if the person does not hold a license to operate that marihuana facility or if the person’s license to operate that marihuana facility is suspended, revoked, lapsed, or void, or was fraudulently obtained or transferred to the person other than pursuant to section 406. A person that violates this section is guilty as follows:

  (a) In the case of a first violation, a misdemeanor punishable by a fine of not less than $10,000.00 or more than $25,000.00 or imprisonment of not more than 93 days, or both.

  (b) In the case of a second or subsequent violation, a misdemeanor punishable by a fine of not less than $10,000.00 or more than $25,000.00 or imprisonment of not more than 1 year, or both.

  (c) If the violation causes death or serious injury, a felony punishable by a fine of not less than $10,000.00 or more than $25,000.00 or imprisonment for not more than 4 years, or both.

333.27408 Proof of financial responsibility.

Sec. 408.

  (1) Before the board grants or renews any license under this act, the licensee or applicant shall file with the department proof of financial responsibility for liability for bodily injury to lawful users resulting from the manufacture, distribution, transportation, or sale of adulterated marihuana or adulterated marihuana-infused product in an amount not less than $100,000.00. The proof of financial responsibility may be in the form of cash, unencumbered securities, a liability insurance policy, or a constant value bond executed by a surety company authorized to do business in this state. As used in this section:

  (a) “Adulterated marihuana” means a product sold as marihuana that contains any unintended substance or chemical or biological matter other than marihuana that causes adverse reaction after ingestion or consumption.

  (b) “Bodily injury” does not include expected or intended effect or long-term adverse effect of smoking, ingestion, or consumption of marihuana or marihuana-infused product.

  (2) An insured licensee shall not cancel liability insurance required under this section unless the licensee complies with both of the following:

  (a) Gives 30 days’ prior written notice to the department.

  (b) Procures new proof of financial responsibility required under this section and delivers that proof to the department within 30 days after giving the department the notice under subdivision (a).

333.27409 State operating license as revocable privilege.

Sec. 409.

  A state operating license is a revocable privilege granted by this state and is not a property right. Granting a license does not create or vest any right, title, franchise, or other property interest. A licensee or any other person shall not lease, pledge, or borrow or loan money against a license.

PART 5. LICENSEES
333.27501 Grower license.

Sec. 501.

  (1) A grower license authorizes the grower to grow not more than the following number of marihuana plants under the indicated license class for each license the grower holds in that class:

  (a) Class A – 500 marihuana plants.

  (b) Class B – 1,000 marihuana plants.

  (c) Class C – 1,500 marihuana plants.

  (2) Except as otherwise provided in this subsection, a grower license authorizes sale of marihuana plants to a grower only by means of a secure transporter. A grower license authorizes the sale or transfer of seeds, seedlings, or tissue cultures to a grower from a registered primary caregiver or another grower without using a secure transporter.

  (3) A grower license authorizes a grower to transfer marihuana without using a secure transporter to a processor or provisioning center if both of the following are met:

  (a) The processor or provisioning center occupies the same location as the grower and the marihuana is transferred using only private real property without accessing public roadways.

  (b) The grower enters each transfer into the statewide monitoring system.

  (4) A grower license authorizes sale of marihuana, other than seeds, seedlings, tissue cultures, and cuttings, to a processor or provisioning center.

  (5) Except as otherwise provided in subsections (2) and (3) and section 505, a grower license authorizes the grower to transfer marihuana only by means of a secure transporter.

  (6) To be eligible for a grower license, the applicant and each investor in the grower must not have an interest in a secure transporter or safety compliance facility.

  (7) Until December 31, 2018, for a period of 30 days after the issuance of a grower license and in accord with rules, a grower may transfer any of the following that are lawfully possessed by an individual formerly registered as a primary caregiver who is an active employee of the grower:

  (a) Marihuana plants.

  (b) Seeds.

  (c) Seedlings.

  (8) A grower shall comply with all of the following:

  (a) Until December 31, 2021, have, or have as an active employee an individual who has, a minimum of 2 years’ experience as a registered primary caregiver.

  (b) While holding a license as a grower, not be a registered primary caregiver and not employ an individual who is simultaneously a registered primary caregiver.

  (c) Enter all transactions, current inventory, and other information into the statewide monitoring system as required in this act, rules, and the marihuana tracking act.

  (9) A grower license does not authorize the grower to operate in an area unless the area is zoned for industrial or agricultural uses or is unzoned and otherwise meets the requirements established in section 205(1).

333.27502 Processor license; exception for industrial hemp.

Sec. 502.

  (1) A processor license authorizes purchase of marihuana only from a grower and sale of marihuana-infused products or marihuana only to a provisioning center or another processor.

  (2) Except as otherwise provided in section 505 and this subsection, a processor license authorizes the processor to transfer marihuana only by means of a secure transporter. A processor license authorizes a processor to transfer marihuana without using a secure transporter to a grower or provisioning center if both of the following are met:

  (a) The grower or provisioning center occupies the same location as the processor and the marihuana is transferred using only private real property without accessing public roadways.

  (b) The processor enters each transfer into the statewide monitoring system.

  (3) To be eligible for a processor license, the applicant and each investor in the processor must not have an interest in a secure transporter or safety compliance facility.

  (4) Until December 31, 2018, for a period of 30 days after the issuance of a processor license and in accord with rules, a processor may transfer any of the following that are lawfully possessed by an individual formerly registered as a primary caregiver who is an active employee of the processor:

  (a) Marihuana plants.

  (b) Usable marihuana.

  (5) A processor shall comply with all of the following:

  (a) Until December 31, 2021, have, or have as an active employee an individual who has, a minimum of 2 years’ experience as a registered primary caregiver.

  (b) While holding a license as a processor, not be a registered primary caregiver and not employ an individual who is simultaneously a registered primary caregiver.

  (c) Enter all transactions, current inventory, and other information into the statewide monitoring system as required in this act, rules, and the marihuana tracking act.

  (6) This act does not prohibit a processor from handling, processing, marketing, or brokering, as those terms are defined in section 2 of the industrial hemp research and development act, MCL 286.842, industrial hemp.

333.27503 Secure transporter license.

Sec. 503.

  (1) A secure transporter license authorizes the licensee to store and transport marihuana and money associated with the purchase or sale of marihuana between marihuana facilities for a fee upon request of a person with legal custody of that marihuana or money. It does not authorize transport to a registered qualifying patient or registered primary caregiver. If a secure transporter has its primary place of business in a municipality that has adopted an ordinance under section 205 authorizing that marihuana facility, the secure transporter may travel through any municipality.

  (2) To be eligible for a secure transporter license, the applicant and each investor with an interest in the secure transporter must not have an interest in a grower, processor, provisioning center, or safety compliance facility and must not be a registered qualifying patient or a registered primary caregiver.

  (3) A secure transporter shall enter all transactions, current inventory, and other information into the statewide monitoring system as required in this act, rules, and the marihuana tracking act.

  (4) A secure transporter shall comply with all of the following:

  (a) Each driver transporting marihuana must have a chauffeur’s license issued by this state.

  (b) Each employee who has custody of marihuana or money that is related to a marihuana transaction shall not have been convicted of or released from incarceration for a felony under the laws of this state, any other state, or the United States within the past 5 years or have been convicted of a misdemeanor involving a controlled substance within the past 5 years.

  (c) Each vehicle must be operated with a 2-person crew with at least 1 individual remaining with the vehicle at all times during the transportation of marihuana.

  (d) A route plan and manifest must be entered into the statewide monitoring system, and a copy must be carried in the transporting vehicle and presented to a law enforcement officer upon request.

  (e) The marihuana must be transported in 1 or more sealed containers and not be accessible while in transit.

  (f) A secure transporting vehicle must not bear markings or other indication that it is carrying marihuana or a marihuana-infused product.

  (5) A secure transporter is subject to administrative inspection by a law enforcement officer at any point during the transportation of marihuana to determine compliance with this act.

333.27504 Provisioning center license.

Sec. 504.

  (1) A provisioning center license authorizes the purchase or transfer of marihuana only from a grower or processor and sale or transfer to only a registered qualifying patient or registered primary caregiver. Except as otherwise provided in section 505 and this subsection, all transfers of marihuana to a provisioning center from a separate marihuana facility must be by means of a secure transporter. A transfer of marihuana to a provisioning center from a marihuana facility that occupies the same location as the provisioning center does not require a secure transporter if the marihuana is transferred to the provisioning center using only private real property without accessing public roadways.

  (2) A provisioning center license authorizes the provisioning center to transfer marihuana to or from a safety compliance facility for testing by means of a secure transporter or as provided in section 505.

  (3) To be eligible for a provisioning center license, the applicant and each investor in the provisioning center must not have an interest in a secure transporter or safety compliance facility.

  (4) A provisioning center shall comply with all of the following:

  (a) Sell or transfer marihuana to a registered qualifying patient or registered primary caregiver only after it has been tested and bears the label required for retail sale.

  (b) Enter all transactions, current inventory, and other information into the statewide monitoring system as required in this act, rules, and the marihuana tracking act.

  (c) Before selling or transferring marihuana to a registered qualifying patient or to a registered primary caregiver on behalf of a registered qualifying patient, inquire of the statewide monitoring system to determine whether the patient and, if applicable, the caregiver hold a valid, current, unexpired, and unrevoked registry identification card and that the sale or transfer will not exceed the daily and monthly purchasing limit established by the medical marihuana licensing board under this act.

  (d) Not allow the sale, consumption, or use of alcohol or tobacco products on the premises.

  (e) Not allow a physician to conduct a medical examination or issue a medical certification document on the premises for the purpose of obtaining a registry identification card.

333.27505 Safety compliance facility license; exception for industrial hemp

Sec. 505.

  (1) In addition to transfer and testing authorized in section 203, a safety compliance facility license authorizes the safety compliance facility to do all of the following without using a secure transporter:

  (a) Take marihuana from, test marihuana for, and return marihuana to only a marihuana facility.

  (b) Collect a random sample of marihuana at the marihuana facility of a grower, processor, or provisioning center for testing.

  (2) A safety compliance facility must be accredited by an entity approved by the board by 1 year after the date the license is issued or have previously provided drug testing services to this state or this state’s court system and be a vendor in good standing in regard to those services. The board may grant a variance from this requirement upon a finding that the variance is necessary to protect and preserve the public health, safety, or welfare.

  (3) To be eligible for a safety compliance facility license, the applicant and each investor with any interest in the safety compliance facility must not have an interest in a grower, secure transporter, processor, or provisioning center.

  (4) A safety compliance facility shall comply with all of the following:

  (a) Perform tests to certify that marihuana is reasonably free of chemical residues such as fungicides and insecticides.

  (b) Use validated test methods to determine tetrahydrocannabinol, tetrahydrocannabinol acid, cannabidiol, and cannabidiol acid levels.

  (c) Perform tests that determine whether marihuana complies with the standards the board establishes for microbial and mycotoxin contents.

  (d) Perform other tests necessary to determine compliance with any other good manufacturing practices as prescribed in rules.

  (e) Enter all transactions, current inventory, and other information into the statewide monitoring system as required in this act, rules, and the marihuana tracking act.

  (f) Have a secured laboratory space that cannot be accessed by the general public.

  (g) Retain and employ at least 1 staff member with a relevant advanced degree in a medical or laboratory science.

  (5) This act does not prohibit a safety compliance facility from taking or receiving industrial hemp for testing purposes and testing the industrial hemp pursuant to the industrial hemp research and development act.

PART 6. TAXES AND FEES
333.27601 Provisioning center; imposition of tax; rate; administration.

Sec. 601.

  (1) A tax is imposed on each provisioning center at the rate of 3% of the provisioning center’s gross retail receipts. By 30 days after the end of the calendar quarter, a provisioning center shall remit the tax for the preceding calendar quarter to the department of treasury accompanied by a form prescribed by the department of treasury that shows the gross quarterly retail income of the provisioning center and the amount of tax due, and shall submit a copy of the form to the department. If a law authorizing the recreational or nonmedical use of marihuana in this state is enacted, this section does not apply beginning 90 days after the effective date of that law.

  (2) The taxes imposed under this section shall be administered by the department of treasury in accordance with 1941 PA 122, MCL 205.1 to 205.31, and this act. In case of conflict between the provisions of 1941 PA 122, MCL 205.1 to 205.31, and this act, the provisions of this act prevail.

333.27602 Medical marihuana excise fund.

Sec. 602.

  (1) The medical marihuana excise fund is created in the state treasury.

  (2) Except for the application fee under section 401, the regulatory assessment under section 603, and any local fees, all money collected under section 601 and all other fees, fines, and charges, imposed under this act must be deposited in the medical marihuana excise fund. The state treasurer shall direct the investment of the fund. The state treasurer shall credit to the fund interest and earnings from fund investments.

  (3) Money in the medical marihuana excise fund at the close of the fiscal year remains in the fund and does not lapse to the general fund.

  (4) The state treasurer is the administrator of the medical marihuana excise fund for auditing purposes.

  (5) The money in the medical marihuana excise fund must be allocated, upon appropriation, as follows:

  (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 in replacement of any other funding received by the county sheriffs.

  (d) 30% to this state for the following:

  (i) Until September 30, 2017, for deposit in the general fund of the state treasury.

  (ii) Beginning October 1, 2017, 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.

333.27603 Regulatory assessment.

Sec. 603.

  (1) A regulatory assessment is imposed on certain licensees as provided in this section. All of the following shall be included in establishing the total amount of the regulatory assessment established under this section:

  (a) The department’s costs to implement, administer, and enforce this act, except for the costs to process and investigate applications for licenses supported with the application fee described in section 401.

  (b) Expenses of medical-marihuana-related legal services provided to the department by the department of attorney general.

  (c) Expenses of medical-marihuana-related services provided to the department by the department of state police.

  (d) Expenses of medical-marihuana-related services provided by the department of treasury.

  (e) $500,000.00 to be allocated to the department for expenditures of the department for licensing substance use disorder programs.

  (f) An amount equal to 5% of the sum of the amounts provided for under subdivisions (a) to (d) to be allocated to the department of health and human services for substance-abuse-related expenditures including, but not limited to, substance use disorder prevention, education, and treatment programs.

  (g) Expenses related to the standardized field sobriety tests administered in enforcing the Michigan vehicle code, 1949 PA 300, MCL 257.1 to 257.923.

  (h) An amount sufficient to provide for the administrative costs of the Michigan commission on law enforcement standards.

  (2) The regulatory assessment is in addition to the application fee described in section 401, the tax described in section 601, and any local licensing fees.

  (3) The regulatory assessment shall be collected annually from licensed growers, processors, provisioning centers, and secure transporters. The regulatory assessment for a class A grower license shall not exceed $10,000.00.

  (4) Beginning in the first-year marihuana facilities are authorized to operate in this state, and annually thereafter, the department, in consultation with the board, shall establish the total regulatory assessment at an amount that is estimated to be sufficient to cover the actual costs and support the expenditures listed in subsection (1).

  (5) On or before the date the licensee begins operating and annually thereafter, each grower, processor, provisioning center, and secure transporter shall pay to the state treasurer an amount determined by the department to reasonably reflect the licensee’s share of the total regulatory assessment established under subsection (4).


333.27604 Marihuana regulatory fund.

Sec. 604.

  (1) The marihuana regulatory fund is created within the state treasury.

  (2) The application fee collected under section 401 and the regulatory assessment collected under section 603 must be deposited into the marihuana regulatory fund. The state treasurer shall direct the investment of the fund. The state treasurer shall credit to the fund interest and earnings from fund investments.

  (3) Except as otherwise provided in this section, money in the marihuana regulatory fund at the close of the fiscal year must remain in the fund and must not lapse to the general fund.

  (4) The marijuana regulatory agency is the administrator of the marihuana regulatory fund for auditing purposes.

  (5) Except as provided in section 603(1)(d) and (e), the department shall expend money from the marihuana regulatory fund, upon appropriation, only for implementing, administering, and enforcing this act.

  (6) For the fiscal year ending September 30, 2020 only, $17,000,000.00 of the money in the marihuana regulatory fund is transferred to and must be deposited into the general fund.

  (7) As used in this section, “marijuana regulatory agency” means the marijuana regulatory agency created under Executive Reorganization Order No. 2019-2, MCL 333.27001.

333.27605 Use of money from Michigan marihuana registry fund.

Sec. 605.

  The department may use any money appropriated to it from the marihuana registry fund created in section 6 of the Michigan medical marihuana act, 2008 IL 1, MCL 333.26426, for the purpose of funding the operations of the department and the board in the initial implementation and subsequent administration and enforcement of this act.

PART 7. REPORTS
333.27701 Financial statements.

Sec. 701.

  By 30 days after the end of each state fiscal year, each licensee shall transmit to the board and to the municipality financial statements of the licensee’s total operations. The financial statements shall be reviewed by a certified public accountant in a manner and form prescribed by the board. The certified public accountant must be licensed in this state under article 7 of the occupational code, 1980 PA 299, MCL 339.720 to 339.736. The compensation for the certified public accountant shall be paid directly by the licensee to the certified public accountant.

333.27702 Report.

Sec. 702.

  The board shall submit with the annual report to the governor under section 302(l) and to the chairs of the legislative committees that govern issues related to marihuana facilities a report covering the previous year. The report shall include an account of the board actions, its financial position, results of operation under this act, and any recommendations for legislation that the board considers advisable.

PART 8. MARIHUANA ADVISORY PANEL
333.27801 Marihuana advisory panel.

Sec. 801.

  (1) The marihuana advisory panel is created within the department.

  (2) The marihuana advisory panel consists of 17 members, including the director of state police or his or her designee, the director of this state’s department of health and human services or his or her designee, the director of the department or his or her designee, the attorney general or his or her designee, the director of the department of agriculture and rural development or his or her designee, and the following members appointed by the governor:

  (a) One registered medical marihuana patient or medical marihuana primary caregiver.

  (b) One representative of the industry from the growers category.

  (c) One representative of the industry from the processors category.

  (d) One representative of the industry from the provisioning centers category.

  (e) One representative of the industry from the safety compliance facilities category.

  (f) One representative of townships.

  (g) One representative of cities and villages.

  (h) One representative of counties.

  (i) One representative of sheriffs.

  (j) One representative of local police.

  (k) One physician licensed under article 15 of the public health code, 1978 PA 368, MCL 333.16101 to 333.18838.

  (l) One representative of the industry from the secure transporter category.

  (3) The governor shall appoint the first members of the panel by March 1, 2018. The members appointed to the panel shall serve at the pleasure of the governor and shall serve for terms of 3 years or until a successor is appointed, whichever is later.

  (4) If a vacancy occurs on the advisory panel, the governor shall make an appointment for the unexpired term in the same manner as the original appointment.

  (5) The director of the department or his or her designee shall call the first meeting of the panel within 1 month after the advisory panel is appointed. At the first meeting, the panel shall elect from among its members a chairperson and any other officers it considers necessary or appropriate. After the first meeting, the panel shall meet at least 2 times each year, or more frequently at the call of the chairperson.

  (6) A majority of the members of the panel constitute a quorum for the transaction of business. A majority of the members present and serving are required for official action of the panel.

  (7) The business that the panel performs must be conducted at a public meeting held in compliance with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

  (8) A writing prepared, owned, used, in the possession of, or retained by the panel in the performance of an official function is subject to the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

  (9) Members of the panel shall serve without compensation. However, members of the panel may be reimbursed for their actual and necessary expenses incurred in the performance of their official duties as members of the panel.

  (10) The panel may make recommendations to the board concerning promulgation of rules and, as requested by the board or the department, the administration, implementation, and enforcement of this act and the marihuana tracking act.

  (11) State departments and agencies shall cooperate with the panel and, upon request, provide it with meeting space and other necessary resources to assist it in the performance of its duties.

History: 2016, Act 281, Eff. Dec. 20, 2016 ;– Am. 2018, Act 10, Imd. Eff. Jan. 26, 2018
Compiler’s Notes: Enacting section 2 of Act 281 of 2016 provides: “Enacting section 2. The legislature finds that the necessity for access to safe sources of marihuana for medical use and the immediate need for growers, processors, secure transporters, provisioning centers, and safety compliance facilities to operate under clear requirements establish the need to promulgate emergency rules to preserve the public health, safety, or welfare. “For transfer of powers and duties of the medical marihuana licensing board, marihuana advisory panel, and department of licensing and regulatory affairs, including its bureau of marijuana regulation, to the marijuana regulatory agency, and abolishment of the medical marihuana licensing board, marihuana advisory panel, and bureau of marijuana regulation, see ERO No. 2019-2, compiled at MCL 333.27001.

Rendered 10/25/2021 12:25:04
Courtesy of www.legislature.mi.gov

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