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Michigan’s licensing and regulatory framework is similar to programs in other Great Lakes and surrounding states.
Michigan has one of the country’s largest patient populations registered with its medical marihuana program, which
will presumptively create the consumer base for marihuana businesses. The other states have a tenth of the patient
population that Michigan has. On March 6, 2019, the taxation of medical marihuana ceased per Sec. 601 of the
Medical Marihuana Facilities Licensing Act which nullifies the tax with the enactment of a law authorizing the
recreational or nonmedical use of marihuana in this state. With the enactment of the Michigan Regulation and
Taxation of Marihuana Act (MRTMA), there is an excise tax on marihuana retailers and marihuana microbusinesses at
the rate of 10% of the sales price of the marihuana sold. The tax in Illinois is 7% at cultivators/dispensaries.
Pennsylvania has a 5% excise tax on gross receipts of dispensaries. Minnesota has a $3.50 tax on each gram. Ohio
does not have an excise tax on medical marihuana. The other programs also have similar licensing categories;
however, Michigan is unique with a transporter license available. The only other Great Lakes state that allows
recreational/adult-use marijuana is Illinois. Illinois’ Cannabis Regulation and Tax Act (ICRTA) took effect January 1,
2020. The Illinois Cannabis Regulation and Tax Act is comparable to the MRTMA in that it creates personal
possession limits and allows for individuals to cultivate a specific number of plants for themselves. The ICRTA also
creates comparable license types to MRTMA.
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits arising out of
the deviation.
The rules do not exceed the scope of licensing requirements of other states where licensure is required.
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the proposed
rules.
The rules do not conflict with, duplicate, or exceed any other regulations. The rule set is meant to provide clarity in
light of Michigan Administrative Code R 338.81, titled Declaratory Rulings, which is in the Office of Policy and
Legislative Affairs rules and the Michigan Administrative Code, and R 324.81, titled Declaratory Rulings, which is in
the Michigan Administrative Hearing System's "Contested Case and Declaratory Ruling Procedures" rules.
A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and local laws
applicable to the same activity or subject matter. This section should include a discussion of the efforts undertaken
by the agency to avoid or minimize duplication.
The rules will provide clarity in light of Michigan Administrative Code R 338.81, titled Declaratory Rulings, which is
in the Office of Policy and Legislative Affairs rules and the Michigan Administrative Code, and R 324.81, titled
Declaratory Rulings, which is in the Michigan Administrative Hearing System's "Contested Case and Declaratory
Ruling Procedures" rules.
4. If MCL 24.232(8) applies and the proposed rules are more stringent than the applicable federally mandated
standard, provide a statement of specific facts that establish the clear and convincing need to adopt the more
stringent rules.
MCL 24.232(8) does not apply; there is no applicable federally mandated standard.
5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard,
provide either the Michigan statute that specifically authorizes the more stringent rules OR a statement of the
specific facts that establish the clear and convincing need to adopt the more stringent rules.
MCL 24.232(9) does not apply; there is no applicable federal standard.
Purpose and Objectives of the Rule(s)
6. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.
The rules are designed to create consistency in the receipt and processing of declaratory ruling requests made under
the acts to the Agency. These requests come in on a routine basis.
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.
The rules should change or create more consistency in the processing of requests for declaratory rulings.
B. Describe the difference between current behavior/practice and desired behavior/practice.
The agency does not have administrative rules that relate to Declaratory Rulings – but processes them under Mich
Admin Code, R 338.811 in OPLA and Mich Admin Code R 324.81 in MAHS.
C. What is the desired outcome?
MCL 24.245(3)