Dykema Gossett PLLC

Capitol View

201 Townsend Street, Suite 900

Lansing, MI 48933

WWW.DYKEMA.COM

Tel: (517) 374-9100

Fax: (517) 374-9191

R. Lance Boldrey

Direct Dial: (517) 374-9162

Direct Fax: (855) 259-3563

Email: LBoldrey@dykema.com

February 17, 2020

Marijuana Regulatory Agency

Legal Section

P.O. Box 30205

Lansing, MI 48909

Re:

Comments to Proposed Combined Topic-Based Rule Sets

To Whom it May Concern:

As the chair of the Cannabis Law Practice at Dykema, I am writing to offer comments on

the Michigan Marijuana Regulatory Agency’s (the “MRA”) proposed combined topic-based rule

sets: Marijuana Licenses; Marijuana Licensees; Marijuana Operations; Marijuana Sampling and

Testing; Marijuana Infused Products and Edible Marijuana Products; Marijuana Sale or Transfer;

Marijuana Employees; Marijuana Hearings; Marijuana Disciplinary Proceedings; Industrial

Hemp for Marijuana Businesses; and Medical Marijuana Facilities (Rescinded) (collectively

referred to as the “Proposed Rules”) being promulgated pursuant to the Medical Marihuana

Facilities Licensing Act (“MMFLA”) and the Michigan Regulation and Taxation of Marihuana

Act (“MRTMA”).

As you know, our attorneys and government policy advisors represent clients in all facets

of the medical and adult use cannabis industry. Our comments are based on our collective

experience and the experience and views of many of our clients. Pursuant to the rulemaking

process and the request for public comments, please find below Dykema’s comments and

recommendations on the proposed rules.

1. General Global Comments

Although most of our comments are targeted to isolated provisions within the Proposed

Rules, and are set forth below on a rule by rule basis, two of our comments implicate issues that

are reflected by multiple proposed rules.

First, as a general matter, all provisions related to Labor Peace Agreements should be

eliminated. A mandate to enter into Labor Peace Agreements as a condition of licensure violates

the National Labor Relations Act (“NLRA”) and exceeds the statutory authority given to the

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Department. Additionally, Labor Peace Agreements effectively place the terms and conditions

of employment in the hands of an arbitrator. In an industry that is just beginning to find its way,

and where income and expenses already fluctuate wildly, requiring critical economic decisions

to be made by a third party does nothing to protect the interests of the industry, patients,

consumers, and the state. Therefore, all provisions related to Labor Peace Agreements should be

removed in entirety from all rule sets.

Second, we believe that there should be significant rewrites of the testing provisions. We

have already seen instances where MRA has imposed new standards and ordered hundreds of

thousands of dollars of product to be destroyed, only to then realize that the standards were

flawed or should be implemented differently, and reverse course. Producers who were ordered

to destroy product that MRA later determined was not harmful have suffered significant

economic harm with no recompense. We believe these concerns are best addressed by allowing

greater flexibility when it comes to remediation and by broadening the concept of administrative

holds beyond simply cases of rules violations, to also encompass product that has initially failed

testing. This would provide producers the ability to contest the appropriateness or sufficiency of

testing standards without having to destroy viable product.

Third, we believe that the MRA should exercise its authority to establish new license

types to establish a license for receiver businesses. As we have learned from other states, we

should expect significant business failures in this industry. Yet, cannabis businesses cannot avail

themselves of federal bankruptcy protection. Additionally, MRA’s rules provide for the

suspension and revocation of licenses. In an industry where licensees may have product

midstream in growth or production, or significant inventories, suspending operations can lead to

significant loss, and jeopardize the interests of creditors. This can also incentivize product

diversion. Having licensed receivers able to step in to operate or liquidate facilities serves

numerous public interests.

2. Marijuana Licenses 2019-67 LR

R 420.1(1)(c)—Definition of “Applicant”

The term “indirect ownership interest,” used in 420.1(1)(c)(i), comes directly from the

MMFLA but was not defined by the Legislature, leading to confusion and inconsistent practice

and advice from attorneys in the industry. The Proposed Rules should either define the term or

state that MRA will provide guidance as to the MRA’s interpretation. We often see what may be

considered indirect interests arise through the provision of equity in only one license of an entity

that possesses multiple licenses, or with respect to one product line. Today, it is not clear if an

indirect interest of 10% should be calculated based on total equity, total revenues, or some other

metric. MRA guidance would be useful.

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Also, we appreciate the express permission for both financing arrangements and licensing

agreements. Under 420.1(1)(c)(ii)(A) and (D), however, we recommend defining the terms

“reasonable interest rate” and “reasonable payment,” respectively. At a minimum, the rules should

state that MRA will provide guidance to the industry with respect to these terms.

R 420.1(1)(l)—Definition of “Employee”

Under 420.1(1)(l), the definition of “Employee” excludes “individuals providing trade

services who are not normally engaged in the operation of a marihuana business.” Dykema

suggests that the language read “Employee” does not include “individuals providing trade or

professional services who are not normally engaged in the operation of a marihuana business.

R 420.3—Application procedure; requirements

Under 420.3(2), Dykema suggests allowing prequalification status for grow facilities

currently under construction to extend beyond 1 year to avoid having to re-qualify grow facilities

whose municipal approval process and construction schedule often extends far beyond that

timeframe. This is especially problematic when a municipality requires prequalification status as

a condition to local approval, and prequalification status could be temporarily lost. Dykema

suggests providing that the MRA may request updated information from an applicant within 90

days prior to the expiration of prequalification status, and allow applicants with their facility under

construction to maintain uninterrupted prequalification status so long as circumstances have not

changed in a manner that affects suitability.

R 420.4—Application requirements; financial and criminal background

Under 420.4(2)(a)(i)(C), Dykema suggests amending the language “all loans” to read “all

loan types specified by the Department,” thus providing explicit authority for the MRA to exclude

auto loans, credit cards, student loans or other loans that the MRA may find to be unnecessary to

examine.

Under 420.4(13), while we understand the need to have adult-use licensees pass a facility

inspection on a timely basis, we also believe that this requirement provides municipalities the

ability to sidestep important MRTMA protections, at least insofar as MRA requires local

certificates of occupancy as a condition for passing inspection. As you know, MRTMA provides

municipalities the ability to opt out of allowing adult use businesses in their communities, but

MRTMA also explicitly states that ineligibility of an applicant to receive a license on this basis

must be tested as of the time the applicant files its application. MRTMA also expressly provides

that a municipal ordinance may not prevent an applicant from operating certain types of adult-use

establishments where the applicant already has an operating MMFLA facility. Despite the fact

that MMFLA and MRTMA operations and impacts are identical in nature (indeed, for many

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license types the only observable difference is the color of the Metrc tag), we have seen

municipalities refusing to issue certificates of occupancy for adult-use purposes to existing medical

facilities. A licensee should have the ability to demonstrate to MRA that a municipality is

improperly withholding documentation, without being forced to suffer a license denial and then

sue either the MRA or the municipality.

R 420.5—Application requirements; complete application

Under 420.5(4)-(5), Dykema suggests allowing more than 5 days for applicants to supply

missing information or proof of corrected deficiencies to the agency, at least in the case of

MMFLA applicants for whom there is no 90-day deadline for MRA decision making.

R 420.10—Proof of financial responsibility; insurance

Dykema suggests adding language to sections (1) and (4) that would require licensees to

maintain $100,000 in liability insurance per location as opposed to per license.

R 420.11—Capitalization requirements; medical marihuana facilities licensing act

Dykema suggests amending section (1) to read “On its initial application for licensure

under the medical marihuana facilities licensing act, an applicant shall disclose the sources and

total amount of capitalization to operate and maintain a proposed marihuana facility.” In other

words, the capitalization requirements should not be applicable to the expansion of existing

facilities.

R 420.12—Denial of a marihuana license; additional reasons

Dykema suggests that 420.12(2)(e) and (n) apply to adult-use applicants only, as they again

stem from the MRA’s need to more quickly process adult-use applications.

R 420.13—Renewal of state license

Under section (1)(a) and (2) the MRA is requiring spouses on renewal applications to be

fingerprinted, and apparently treating a disqualified spouse as a basis to disqualify an entity on

renewal. This applies new “applicant” language from 2018 statutory amendments to both initial

applicants and renewals. We believe this is entirely contrary to legislative intent and to the

language of the MMFLA.

The original set of amendments proposed by LARA/BMMR in 2018 made the

definitional change equally applicable to those in the application process and those who had yet

to file. This caused a particular concern by essentially retroactively changing the standard for

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those who had already filed applications. More specifically, this caused specific concerns for

applicants who worked with Rep. Kesto to ensure the changes would not be retroactively

applied; this was the genesis of the language limiting the effectiveness of the change to only

applications submitted “on or after January 1, 2019.” To now include and enforce these

standards on renewal to entities that applied before January 1, 2019, would completely subvert

and undermine the Legislature’s intent in adding the January 1, 2019, language.

Additionally, to add these requirements on renewal is inconsistent with the statutory language

itself. The MMFLA, as amended, makes an express distinction between “Applicant” and

“Licensee” under the MMFLA, as amended, along with a possible argument about MRA not

properly exercising its deference when carrying out the MMFLA depending on its ultimate

position. The MMFLA has specifically defined both “Applicant” and “Licensee” and references

the various definitions based on whether the license is being applied for or whether it is being

renewed. Thus, an “Applicant” is not a “Licensee” and a “Licensee” is not an “Applicant.”

Michigan courts have continuously held that “[w]hen interpreting a statute, our primary

obligation is to ascertain and effectuate the intent of the Legislature. To do so, we begin with the

language of the statute, ascertaining the intent that may be reasonably inferred from its

language.” Lash v Traverse City, 479 Mich 180, 187 (2007). “When the language of a statute is

unambiguous, the Legislature’s intent is clear and judicial construction is neither necessary nor

permitted.” Id. The Michigan Supreme Court has further held that “ambiguity is a finding of last

resort.” Stone v Williamson, 482 Mich 144, FN 21 (2008).

The MMFLA defines “applicant” as “a person who applies for a state operating license.” MCL

333. 27102(c). The statute further clarifies that applicant includes, “with respect to disclosures

in an application, for purposes of ineligibility for a license under section 402, or for purposes of

prior board 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.” Id. The MMFLA

defines “Licensee” as “a person holding a state operating license.” MCL 333.27102(j).

MCL 333.27402 provides that “[t]he 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.” MCL

333.27402(1). Section 27402 further provides that “[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 the 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; and (d) The licensee meets the

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requirements of this act and any other renewal requirements set forth in the rules.” MCL

333.27402(9).

From the statutory language it is apparent that the Legislature intended to distinguish applicants

(persons applying for a state license) and licensees (persons holding a state license). Section

27402 outlines the requirements for applicants to obtain a license, throughout the entire section

pre licensure requirements are referred to by “applicant.” However, provisions outlining the

requirements for licensure renewal specifically reference the “licensee.” Thus, the Legislature

intended that the definition of applicant apply to only those seeking licensure, while the

definition of licensee refer to holders of licenses.

Dykema suggests adding qualifying language to section (1)(a) and (2) carving out an

exception for spouses of applicants and licensees whose original application was filed prior to

January 1, 2019.

R 420.21—Designated consumption establishment license

Dykema suggests adding “program or manual” to section (2)(k) to read: “A documented

employee training program or manual that addresses all components of the responsible

operations plan.”

R 420.27—Marihuana delivery business

Dykema recommends removing rule 420.27 in its entirety. Licensees who make

significant investments in facility construction, inventory, and operating costs have a meaningful

financial incentive to fully comply with statutory and regulatory obligations. A licensee who

makes no such investment and has a role simply limited to delivering retail product does not

have such incentives. This new license type simply presents too much risk.

3. Marijuana Licensees 2019-68 LR

R 420.108—Grower license

Under section (6), Dykema suggests defining “investor.”

R 420.109—Processor license; exception for industrial hemp

Under section (1), Dykema suggests re-wording the section to read “A processor license

authorizes purchase of marihuana only from a grower or another processor.” Currently, the

section allows the sale of marihuana from another processor but not the purchase. If the sale is

authorized to another processor, it is inherent that the purchase would also be allowed. (We note

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also that the title of this rule includes “exception for industrial hemp,” yet the rule does not

mention hemp.)

4. Marijuana Operations 2019-69 LR

R 420.201—Definitions

Under 420.201(1)(c), Dykema suggests extending the definition of Administrative Hold to

include the failure to meet testing standards, and allow facilities having product that fails testing

standards to hold the product during an investigation into alleged violations or sufficiency of

testing standards.

Under 420.201(1)(e)(ii)(D), the MRA should define what is a “reasonable payment”

under a licensing agreement.

R 420.203—Marihuana licenses; licensees; operations; general

420.203(2)(a) provides that “a marihuana business shall be partitioned from any other

marihuana business or activity, any other business, or any other dwelling.” While section (2)(a)

provides an exception for operation of separate licenses at the same location and for operation of

equivalent licenses at the same location, we believe that the current language does not fully

contemplate the processing of industrial hemp. Section 7(1) of the Industrial Hemp Research

and Development Act (the “Hemp Act”) states that a processor licensed under the MMFLA may

process industrial hemp. Therefore, we believe that language should be added at the end of

section (2)(a) of proposed rule 420.203 to read “a marihuana business shall be partitioned from

any other marihuana business or activity, any other business, or any other dwelling, other than

activities in which marihuana businesses are entitled to participate, and provided further that

growers and processors operated at the same location under R 420.204 shall not be required to

partition.” (This latter provision would eliminate the need for costly “mantraps” in co-located

and integrated grower and processor facilities.)

Although the language of 420.203(2)(c) appears in the current rules, we believe that the

MRA should remove the requirement that marihuana businesses must be contiguous. To date,

MRA has allowed licensed activities to be in out-buildings on the same parcel as primary

buildings (e.g., for grinding of waste). At a minimum, the MRA should at least define

contiguous to mean structures located on one parcel.

Dykema suggests removing the prohibition against drive through operations in

420.203(2)(g).

R 420.204—Operation at same location

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Dykema suggests amending 420.204(2)(d)(iii) to read “Have separate entrances, exits,

inventory, record keeping, and point of sale operations other than for growers and processors at

the same location.”

As noted above, in 420.204(2)(d)(ii) MRA should remove the requirement that marihuana

businesses must be contiguous.

Dykema suggests adding a subsection (4)(d) under 420.204 that makes clear that a

laboratory co-located with an existing non-marijuana testing laboratory must comply with all

building security, design, and other MRA operational rules.

R 420.205—Equivalent licenses; operation at same location

Under 420.205(2)(c) to operate equivalent licenses at the same location, the operation

cannot “circumvent a municipal ordinance or zoning regulation that limits the marihuana business

under the acts.” MCL 333.27956, however, provides that “[a] municipality may not adopt an

ordinance that . . . prohibits a marihuana grower, a marihuana processor, and a marihuana retailer

from operating within a single facility or from operating at a location shared with a marihuana

facility operating pursuant to the medical marihuana facilities licensing act.” Dykema suggest that

this exact language be added to the end of (2)(c) after a “provided, however,” in order to comply

with the statutory requirements and prevent municipalities from sidestepping them.

R 420.206—Marihuana business; general requirements

Under 420.206(1)(b)(ii), cultivation may occur outdoors if “all drying, trimming, curing,

or packaging of marihuana occurs inside the building meeting all the requirements under these

rules.” Dykema suggests adding “Provided, however, that marihuana may be transported to a

grower or processor without drying, trimming, curing, or packaging of marihuana.”

Under 420.206(8)(b), Dykema suggests defining the term “supervisory analyst.”

Under 420.206(11), the term ‘inactive ingredients’ is a pharmaceutical product term.

While the term and this requirement is sensible with respect to distillate blended with other

products and intended for inhalation through vaping, to the extent that edibles or other supplements

have ingredients that may be on the FDA inactive ingredient list, they are not intended to “facilitate

the transport of marihuana in the body” and therefore the regulation makes no sense as applied to

edible or ingestible marihuana products. As non-pharma products or supplements, such products

should simply be required to list the ingredients pursuant to FDA labeling regulations (for food

products).

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420.206(14) requires marihuana businesses to comply with updated standards issued by

the agency within 60 days of their adoption. However, for growers, 60 days does not provide

enough time for a grow cycle to occur and product to be tested to comply with any changes.

Therefore, Dykema suggests adding “Except in cases of public health emergencies, a lab must

validate new tests within 60 days of adoption by the agency and growers and processors must meet

the standards adopted by the agency within 150 days of adoption.”

420.206(16)(a)-(b) quite simply amounts to a regulatory taking and must be removed. The

agency has no statutory authority to force a sale of product to a third party “to ensure that all

marihuana businesses are properly serviced.” Such a regulation amounts to a regulatory taking

and forces marihuana businesses to eliminate their competitive business advantage. By mandating

sales in certain circumstances, it also puts the MRA itself in direct violation of the federal

Controlled Substances Act, eliminating the defense to pre-emption challenges to the MMFLA

(and, by extension, to MRTMA) relied upon by the Michigan Supreme Court in Ter Beek v City

of Wyoming, 495 Mich 1 (2014). This step would thus threaten to undermine Michigan’s entire

statutory framework for the industry.

R 420.207—Marihuana delivery; limited circumstances

Under 420.207(3), Dykema suggests changing “shall establish procedures” to “may

establish procedures.” (Otherwise, this could be read as mandating delivery for businesses that

may choose not to engage in this practice.)

Under 420.207(4)(c), Dykema suggests amending the language to read: “All marihuana

delivery employees meet the requirements in R 420.602 and are employees, as defined in R

420.601(1)(d), of the marihuana sales location.

R 420.208—Building and fire safety

Under 420.208(5), we believe that the MRA and Bureau of Fire Services needs to re-assess

whether growers should be treated as an industrial use. This unique Michigan treatment has led to

numerous requirements that are not present in any other state, including such absurdities as

mandating sprinklers and specific paths and distances for marijuana planted outdoors under plastic

high tunnels.

R 420.209—Security measures; required plan; video surveillance system

Under 420.209(3) Dykema suggests adding “or other electronic or keypad access” after

“door locks.” (The current mandate for commercial grade locks has been interpreted by some in

MRA Enforcement to require low-tech deadbolt style locks, when electronic access controlled

doors are more secure.)

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5. Marijuana Sampling and Testing 2019-70 LR

R 420.301—Definitions

Under 420.301(1)(h) “Final Package” is defined as “the form a marihuana product is in

when it is available for sale by a marihuana sales location.” We believe the definition is

ambiguous because it references the “form” of the product itself. The definition should reference

the packaging, not the form of the product. Therefore, we suggest the definition be amended to

read: “Final Package means the outermost container or box the marihuana product is house in

when it is available for sale by a marihuana sales location.”

R 420.303—Batch; identification and testing.

Dykema suggests that MRA clarify in 420.303(1) that each immature plant counts as one

plant toward the grower plant count. As the MRA and others have determined, this is the count

methodology required by the wording of the MMFLA. However, this provision for batch

tagging in Metrc, while correct, continues to be misinterpreted, especially by new market

entrants.

420.303(5) currently allows marihuana product that fails testing and is remediated to be

sold or transferred once approved by the agency. We believe that agency approval should not be

required for marihuana product that passes (under R 420.306) two subsequent re-tests following

remediation.

Under 420.303(9), the MRA should change the language “anytime the marihuana product

changes form” to read “anytime the marihuana product changes state.”

R 420.304—Sampling; testing

Under 420.304(2)(b)-(c), the MRA should amend section (2)(b) to read “The agency may

publish sample sizes for other marihuana products being tested, and may provide for a

maximum harvest batch size.” Additionally, the MRA should move the language at the end of

section (2)(c) to the end of (2)(b) to now read “The laboratory must have access to the entire

batch for the purpose of sampling and shall ensure that the sample increments are taken from

throughout the batch.” (Sampling methodology should remain under the full control of the

laboratory, not growers, and growers should not be held responsible for a laboratory’s failure to

take appropriate samples.)

In 420.304(2)(h), laboratories should be the parties responsible for uploading accurate

data from the certificate of analysis into the statewide monitoring system. Certificates of

analysis are not standardized, vary from lab to lab, and are commonly misunderstood.

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Dykema suggests amending 420.304(2)(i) to read “This provision does not apply to a

laboratory who engages another laboratory to perform certain safety tests on a subcontracted

basis, or to a laboratory under common ownership.”

R 420.305—Testing; laboratory requirements

420.305(3) should be clarified so as to not interpret the section to mean a marihuana

product needs to be tested every time it changes form (or state). Testing should be required

before sale or transfer, but not when form changes due to processing.

420.305(10) currently sets a zero tolerance for chemical residue (pesticides). However,

extremely low levels of pesticide residue is possible. We believe that chemical residue should

have an action limit instead of a limit of quantification. Having an LOQ with a fail for even the

slightest amount of chemical residue creates excess costs or production because potentially large

batches must then be destroyed. At the very minimum we believe that R 420.306(3) should be

amended to allow product that tests positive for chemical residue to be remediated to fall below

the action limit allowable.

We believe that the accuracy thresholds for all licensed labs should be published by the

department. This would allow other licensees to monitor and be aware of labs that are the most

accurate.

The MRA should add a 420.305(2) stating that, “A marihuana business may have a failed

batch R&D tested by a different laboratory to determine whether or not the laboratory that

performed the initial test may have made an error. If an R&D test contradicts the failed result,

the department will investigate the failed result and may have the item selected for random

sampling by another licensed lab.”

Finally, Dykema suggests adding a provision to Rule 420.305 that allows laboratories

prelicensure possession of marihuana for the purpose of validating testing equipment. (With the

passage of MRTMA, owners and operators of prelicensed laboratories have the legal authority to

possess marijuana.)

R 420.306—Testing marihuana product after failed initial safety testing and remediation

Dykema suggests amending 420.306(2) to add a provision that prevents immediate

destruction of product if the marihuana business is challenging the validity of testing. In this

case, product would be required to be placed under an administrative hold as defined in R

420.501.

As discussed above, 420.306(3) is not ideal in practice. Currently, the rules propose a

zero tolerance for chemical residue. However, ultra-low levels of chemical residue can be

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attributable to accidental contamination rather than the use of a banned pesticide. Section (3)

should be amended to allow processors to remediate the material to remove chemical residue.

The implementation of the current section, as written, will result in exponential loses to licensees

and a shortage of product for customers and patients. Growers are vulnerable to large losses as a

result of accidental environmental contamination, while processors are vulnerable to large losses

due to an accumulation of contamination during processing, even where no banned pesticide was

utilized.

420.306(4) should be amended to specify that processors will be allowed to remediate

any material that can be remediated. Additionally, this rule should allow processors to transfer

material to another processor for remediation.

Finally, Dykema suggests amending section (4) to read “The agency shall publish a

remediation protocol.”

R 420.307—Research and Development

We believe that R&D testing should be allowed before or after final compliance testing.

6. Marijuana Infused Products and Edible Marijuana Product 2019-71 LR

R 420.403—Requirements and restrictions on marihuana-infused products; edible marihuana

product

420.403(6) should be amended in accordance with our comment to R 420.206(11): The

term ‘inactive ingredients’ is a pharmaceutical product term. To the extent non-medical

marihuana products have ingredients which may be on the FDA inactive ingredient list, they are

not intended to “facilitate the transport of marihuana in the body” and therefore the regulation

makes no sense as applied to edible or ingestible marihuana products. As food or supplements,

such products would be required to list the ingredients pursuant to FDA labeling regulations.

R 420.404—Maximum THC concentration for marihuana-infused products

420.404 should be amended to read “A marihuana sales location shall not sell or transfer

marihuana infused products that exceed, by more than 15%, the maximum THC concentrations

established by the agency.”

7. Marijuana Sale or Transfer 2019-72 LR

R 420.504—Marihuana product sale or transfer; labeling and packaging requirements

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Under 420.504(1)(i), listing the name of the laboratory that performed any test, any

associated batch number, and any test analysis date is very cumbersome and should be limited to

certain laboratories, batch numbers, and analysis dates.

Under 420.504(1)(k)(iii), Dykema suggests amending the language to read: “For products

being sold by a licensee under the medical marihuana facilities licensing act that exceed

maximum THC levels allowed for products sold under MRTMA, “For use by individuals 21

years of age or older only. Keep out of reach of children.”

Additionally, under section (1)(k)(iv), Dykema suggests amending the language to read:

“For all other products being sold by a licensee, “For use by individuals 21 years of age or older

or registered qualifying patients only. Keep out of reach of children.”

Together, the above changes would enable licensees to use the same labels for products

that are allowed for both medical and adult-use customers, thereby reducing the costs incurred by

growers and processors.

R 420.505—Sale or transfer; marihuana sales location

Dykema suggests amending section (1)(e) to read “A licensee selling marihuana product

pursuant to the medical marihuana facilities licensing act.”

R 420.507—Marketing and advertising restrictions

Under 420.507(6), Dykema suggests moving “under the medical marihuana facilities

licensing act” to after “marihuana product” so that section (6) would read: “A marihuana product

under the medical marihuana facilities licensing act must be marketed or advertised as

‘medical marihuana’ for use only by registered qualifying patients or registered primary

caregivers.”

Under 420.507(7), Dykema suggests moving “under the medical marihuana facilities

licensing act” to after “marihuana product” so that section (7) would read: “A marihuana product

under the medical marihuana facilities licensing act must not be marketed or advertised to

minors aged 17 years or younger.”

8. Marijuana Employees 2019-73 LR

R 420.602—Employees; requirements

Dykema suggests amending sections (6) and (7) to insert “or professional” after the word

“trade”.

071889.000098 4815-4954-6932.3

Marijuana Regulatory Agency

February 17, 2020

Page 14

9. Marijuana Hearings 2019-74 LR

R 420.706—Complaint by licensee

Dykema suggests adding a section that allows licensees to contest the standards set for

testing.

10. Marijuana Disciplinary Proceedings 2019-75 LR

R 420.808—Citation

Dykema suggests amending section (7) to allow a licensee to provide “a written

response” instead of limiting the response to one single page.

11. Industrial Hemp Rule for Marihuana Businesses 2019-88 LR

R 420.1003—Processing industrial hemp.

Sections (1), (2) and (5) of 420.1003 expressly require a medical or adult-use marijuana

processor to comply with the Hemp Act and associated rules promulgated by the Michigan

Department of Agriculture and Rural Development if the processor handles, processes, markets,

or brokers industrial hemp. This would pose a serious compliance issue for marijuana processors

that choose to process industrial hemp for several reasons. First and foremost, industrial hemp and

marijuana are both defined as the plant Cannabis sativa L., with the only distinction between the

two being the delta-9-tetrahydrocannabinol (THC) concentration of the plant. Under the Hemp

Act, any cannabis in the processor’s possession that exceeds .3% THC concentration would be

considered non-compliant industrial hemp and would need to be destroyed. Thus, a marijuana

processor that processes both industrial hemp and marijuana would not be in compliance with the

Hemp Act because it would be processing and in the possession of cannabis with a THC

concentration that exceeds the allowable limit under the Hemp Act. Similarly, a marijuana

processor would be unable to use any industrial hemp-derived CBD or other ingredients in its

finished marijuana products.

Therefore, the rule should be clarified to exempt marijuana processors from complying

with the Hemp Act if and when the marijuana processor handles, processes, markets, or brokers

cannabis with a delta-9-THC content greater than 0.3% on a dry weight basis.

071889.000098 4815-4954-6932.3

Marijuana Regulatory Agency

February 17, 2020

Page 15

Regards,

DYKEMA GOSSETT, PLLC

R. Lance Boldrey

071889.000098 4815-4954-6932.3

From:

To:

Ben Joffe

MRA-Legal

Cc:

Subject:

Date:

Brisbo, Andrew (LARA)

Comments to proposed rules

Tuesday, February 11, 2020 4:08:10 PM

MRA Legal and Director Brisbo,

In our review of the rules we noticed that there is no language covering who is an applicant

under a trust in the MRTMA. The MMFLA and MRTMA use equivalent definitions of the

term "Person"

MCL § 333.27953(s): “Person” means an individual, corporation, limited liability

company, partnership, limited partnership, limited liability partnership, limited liability

limited partnership, trust, or other legal entity.

MCL § 333.27102(r): “Person” means an individual, corporation, limited liability

company, partnership of any type, trust, or other legal entity.

However, in MCL § 333.27401(1)(b), the MMFLA provides that a trust applying for a state

operating license must disclose the names and addresses of the trust's beneficiaries.

There is no comparable language anywhere in the MRTMA or draft rules addressing who is an

applicant/must be disclosed for trusts applying for a state license.

Can MRA provide clarity on the application and disclosure requirements for trusts that are

applying as an entity for state licensure under the MRTMA in the proposed rules?

Regards,

Ben

______________________________________________________________

BENJAMIN D. JOFFE PLLC

Attorney & Counselor

106 NORTH FOURTH AVENUE, SUITE 302

ANN ARBOR, MI 48104

(734) 368-8595

bdj@benjamindjoffe.com

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From:

To:

Roma Thurin

MRA-Legal

Cc:

Gabriel Thurin

Subject:

Date:

Comments to the Proposed MMFLA/MRTMA Rules

Monday, February 17, 2020 2:10:56 PM

Good afternoon,

Please find below, comments to proposed rules:

Extension of Pre-Qualification longer than one year

CONSIDERATION: Applicants were initially encouraged to apply with

BMMR/MRA for pre-qualification prior to many

municipalities passing ordinances. It takes a significant

amount of time – much longer than one year, to obtain

property, build out a facility and obtain municipal special

use permits, certificate of occupancy, and permission to

operate. There are many unforeseen circumstances,

additional costs and construction delays with many

municipalities permitting facilities in areas with a lot of

blight and abandoned buildings.

RECOMMENDATION: Remove this unnecessary requirement that all pre-

qualified entities received an MRA state license within

one year. At a minimum require only an extension

application attesting to no changes in an entity’s

organizational structure and supplemental applicants’

status.

Support Labor Peace Agreements for cannabis licensees with more than

20 employees

CONSIDERATION: Assist with social equity into an industry where minorities

and women are marginalized. It does not necessarily

mean unionization. Assist with creating a solid labor

workforce.

RECOMMENDATION: Keep the requirement

Allow vertically integrated entities to have one access point for entrance

and exist (R 420.204)

CONSIDERATION: This would create more efficiency in cultivator security

measures on-premise such would be controlled through

a single access point.

RECOMMENDATION: Remove this unnecessary requirement.

One security camera system for multiple entities (R 420.204)

CONSIDERATION: Creating multiple security systems that are not

integrated creates administrative burden and can lead to

security risks as opposed to one centralized system that

can be easily monitored.

RECOMMENDATION: Allow one security system for multiple entities under the

same location

Escorting non-employees rule is too restrictive 420.209 (2)

CONSIDERATION: As the industry expands, cultivators should have access

to “trusted contractors” who have been background

checked to be allowed to go unescorted in areas where

there is no marijuana product.

RECOMMENDATION: Modify current language to read: “A licensee shall

ensure that any person at the marihuana

business, except for employees of the licensee

trusted contractors of the licensee, are escorted

at all times by the licensee or an employee of the

licensee when in the limited access areas and

restricted access areas at the marihuana

business.”

A licensee required to have cameras that record continuously 24 hours

per day 402.209 (9)

CONSIDERATION: The current rule requires cameras to record constantly,

which drains resources and makes it harder to find

sections of recordings that have actual activity in them.

RECOMMENDATION: Remove “record continuously” language and replace it

with motion detection language.

Waste management /onsite mulching (420.211, Rule 11)

CONSIDERATIONS:

Currently there are no environmentally friendly ways

of disposing of cannabis waste products. As an

outdoor grower that is trying to limit the carbon

footprint of the cultivation facility, we would like for

the rules to reflect more environmentally friendly

manners of repurposing the waste vs the option of

incineration or transportation, both of which have an

adverse effect on the environment.

The size of in-vessel digester it would take to do this

at a large-scale operation is impractical.

RECOMMENDATION: Allow outdoor grow operations to bury this waste within

the secure perimeter in a green-friendly manner.

The stringency of heavy metals tests (R 420.306)

CONSIDERATIONS:

There are ways to remediate cannabis flower and

trim without compromising safety or the other

important qualities of the plant.

Consideration should be given to the fact that there

is no standardized testing or exact science to

remediation and thus it may require more than a

couple of tests to get the plant to meet the required

testing standards.

RECOMMENDATION: Ability to retest a failed sample more than twice.

Grace periods / ample warning for new rules and standards

CONSIDERATIONS:

In the 2019 calendar year, Nickel was added to the

list of heavy metals without warning to cultivators

who already had their harvests in the ground.

Due to the sudden addition of the test, cultivators

were not able to react accordingly and remediate or

course-correct the issue in order to find a solution.

RECOMMENDATION: For future implementations of restrictive rules changes

allow a nine-month grace period unless it’s an emergency

situation that presents a clear and present danger.

Testing prior to moving product between entities

(R 420.303 Sub-rule 6, R 420.304 and R 430.305)

CONSIDERATIONS:

When moving product between cultivation and

processing, the proposed system of testing would be

inefficient.

If product is tested prior to moving between a

cultivator and a processor, and then again before it

reaches consumers, it would have an adverse effect

on the industry due to costs.

It also has adverse effects on testing facilities which

are already overburdened and have been the source

of bottlenecking flower getting to market.

RECOMMENDATION: Remove or do not move forward with this unnecessary

requirement, not only between co-located entities, but

between co-owned entities as well.

Requiring permission to remediate failed product (Rule 46 R 333.246)

CONSIDERATION: The product will need to pass testing in order to enter

the market. However, requiring permission to remediate

creates additional and unnecessary steps that slow down

the production process.

RECOMMENDATION: Remove this unnecessary requirement.

Sale and Transfer (420.501-511)

CONSIDERATIONS: With a supply shortage of cannabis biomass and the high retail

price of flower, there are no current processors that are

producing excess distillate for resale.

This will have an adverse effect on any processor that does not

have an associated cultivation facility that produces biomass

for extraction.

RECOMMENDATION: Allow for the intake of caregiver concentrate for infused

product production and caregiver RSO for medical.

Allow for the ability to transfer 100% of medical flower to

adult-use if it passes all testing requirements.

Background checks (to R 420.602)

CONSIDERATION: In order to create and expand upon the existing

employment opportunities for residents of Michigan in

the industry we would propose making the background

check process more efficient.

RECOMMENDATION: Begin tracking individual background checks and issue

permits based on their status vs. forcing background

checks for every job they apply for or are hired to do,

within the cannabis industry. This could possibly be done

through METRC in order to build efficiencies into the

system.

The requirement to weigh individual plants as they are removed from the field of outdoor

grows.

CONSIDERATION: Presently we need to weigh each individual plant as it’s removed from

the field, which is tedious and time-consuming.

RECOMMENDATION: Allow outdoor grow operators to weigh removed plants in bulk to

improve efficiency while maintaining the accuracy of data. Delete this

requirement.

Warmest regards,

Roma

Roma Thurin, Esq.

Managing Partner | Executive Consultant

office: (734) 744-7662

mobile: (484) • 632 •1973

romathurin@thurinlawgroup.com

thurinlawgroup.com

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February 17,2020

Director Andrew Brisbo

Marihuana Regulatory Agency

P.O. Box 30105

Lansing, MI. 48909

RE: Marihuana Delivery Business

Dear Director,

I have had the opportunity to review the proposed Marijuana Delivery Business License. I

can advise for a myriad of reasons, I strenuously oppose this type of license, especially at the early

stages of implementation of the MRTMA for multiple safety reasons. The “Marijuana Black

Market” from manufacturing to delivery is already at dangerous levels. Several months ago a local

resident (17 year old child) is caught in Shiawassee County with four pounds of Marijuana,

multiple THC vaping cartridges scales, baggies and yes a handgun. Within a week he is caught in

Alcona County with 7.2 ounces, plastic baggies, scales, and over 70 THC cartridges used for

vaping and THC wax.

These types of events are occurring all over the state creating large tax diversions and

multiple public safety issues. As I am sure you are aware, the MRTMA, inherently created a

“black market surplus” when it allowed individuals to grow and legally possess up to 12 pants.

With a conservative estimate of a 10 pound yield for those 12 plants, this equates to 9000 marijuana

cigarettes. This 10 pound yield is not going to be sitting in locked closets or container. It heads

directly into the stream of commerce and into the hands of our children.

I can advise the proposed Joint Permanent Rules for the licensed cannabis industry has

multiple unintended public safety consequences that include delivery of unsafe product, diversion

from retail busness, free lancing (black market drivers), tax diversion and no local control just to

name a few.

I find you in the unenviable position of trying to limit illegal marijuana entering the stream

of commerce and in that same breath trying to protect our communities. Please help keep our

communities safe by removing this proposed license until its serious adverse effects on our youth,

health, safety and welfare of Michigan’s communities and cannabis consumers are addressed.

Respectfully yours,

Alcona County Prosecuting Attorney

Marijuana Regulatory Agency

Legal Section

P.O. Box 30205

Lansing, MI 48909

RE: Proposed Marijuana Rule Set

On behalf of our members, the Great Lakes Cannabis Chamber of Commerce appreciates the

opportunity to share comments regarding the proposed marijuana rules. The GLCCOC

represents licensed operators in Michigan’s cannabis industry. We support any and all changes

to make the operation of business in the Medical and Adult Use industries consistent. Any

deviation between these two industries creates confusion and is a risk to public health to safety.

Although we recognize that the proposed rules would be step in the right direction for

consistency between the Medical and Adult Use industries, we share the concerns voiced by

many others in regard to the proposed rules:

-

Labor Peace Agreements. As our testimony in support of Senate Concurrent Resolution

(SCR) 18 indicates we find this requirement to be unlawful as burdensome to the

licensees.

-

Home Delivery Requirements. We support the requirement that a delivery service must

be affiliated with a licensed provisioning center in order to operate in Michigan. Failure

to require this creates a lack of control regarding integrity on the part of the licensee. It

also creates chain of custody errors and the potential for unqualified individuals to

involve themselves in the market. This requirement also helps local government and law

enforcement know who is impacted by a licensed business.

-

Testing Batch Sizes. In the interest of public safety, we support implementing sampling

requirements as written in the current Medical rules. The proposed rule set does not take

certain factors, such batch weight, into account. This creates variation between test

results and the potential for bad actors to attempt to manipulate the system to move

unsafe product to the market. Unless a scale based on batch weight and sample size

taken is implemented, the standards found in the current Medical rules must stay in

effect. Members have also voiced concerns regarding which substances are tested.

Container Transportation. Michigan statute currently requires that medical product be

transported in a secured and sealed container. However, the terms “secured” and “sealed”

have never been defined in statute or rule. The improper transportation of product can

lead to mold and other issues showing up on the plants, which is hazardous for

consumers. The proposed adult use rules have no requirements regarding sealing or

securing containers. With discussions ongoing with regards to failed testing and the

ultimate disposition of failed product, proper transportation and storage while awaiting

testing/processing is necessary.

-

Department Collaboration. We suggest the formation of a task force or council to help

facilitate collaboration and communication regarding the various areas of overlap that

LARA and other departments have in regard to this industry. For example, there are

certain food and drug issues that are found under DHHS that could be useful here.

Allowing their expertise to be utilized will help in protecting consumers.

We appreciate the time and effort devoted by the department to not only developing but hearing

feedback on these proposed rules. We believe that it is in the best interests of public health and

safety, the emerging industry, and the State of Michigan to make sure that rule sets are consistent

and the industry concerns highlighted here are addressed. The GLCCOC looks forward to

continuing a positive working relationship with the department and is happy to meet with

Marijuana Regulatory Agency representatives to discuss our concerns more thoroughly.

Thank you,

Sandra McCormick

Communications and Membership Director

Great Lakes Cannabis Chamber of Commerce

sandra@glccoc.com

(517) 420.5417

MICHIGAN CANNABIS MANUFACTURERS ASSOCIATION

DUAL RULE COMMENTS

(Feb. 2020)

SET #1 LICENSES

•

Definition of “Same Location” (R 420.1(1)(ai); R 420.203(2)(a)): The continued inclusion of a

“partition” as the minimum standard of division for more than one license operating at the same

location is appreciated. Further direction from the Enforcement Division on the minimum

requirements of a “partition” would be helpful. Doing so would standardize this issue and avoid

subjectivity on the part of operators and field inspectors.

•

Typo (R 420.4(1)): Seems like the word “either” is a mistake.

Disclosure of Persons “Controlled” by a Person who Controls the Applicant (R 420.4(2)(iv)(B)):

Among other things, the MMFLA conditions suitability for licensure upon the “integrity, moral

character, and reputation” of any person who “[i]s controlled . . . by a person who controls,

directly or indirectly, the applicant.” MCL 333.27402(3)(a)(ii). The MRTMA does not contain a

similarly detailed provision, but instead merely entrusts the MRA to “promulgat[e] rules . . . that

are necessary to implement, administer, and enforce [the MRTMA],” and to “grant[] or deny[]

each application for licensure . . . .” MCL 333.27957 (1)(a-b). Based upon these provisions,

proposed Rule 420.4(2)(iv)(B)) requires the disclosure “any other person who . . . [i]s controlled,

directly or indirectly, by . . . a person who controls, directly or indirectly, the applicant.” This has

been confusing and cumbersome since the inception of the MMFLA application process. The

requirement is difficult to understand and, taken to its furthest extreme, creates an endless string

of attenuated control relationships. Propose doing away with the requirement via legislative

amendment to the MMFLA and by extension, the Proposed Dual Rules, so as to avoid (i)

unnecessary expenditure of attention and resources on the part of the MRA, and (ii) unintentional

non-disclosures by applicants. [REQUIRES STATUTORY AMENDMENT]

•

60 Day Inspection Window & Need for Preliminary Plan Approval (R 420.4(13)): It is understood

that this 60 day window is necessary to comply with the 90 day application review period required

by the MRTMA. (MCL 333.27959(1)). However, only being able to access MRA field inspectors

after a Step II application is filed, which itself requires substantial completion of an establishment

build-out by virtue of this limited timeline, creates great risk for prospective operators. It is

suggested that MRA develop an interim, consistent process for prospective licensees to get

preliminary site plan approval before filing a Step II, and before assuming the expense of the

establishment build-out, to lessen the risk otherwise borne by those prospective operators.

Adjusting the NOD Correction Window to “Business Days” Excluding Holidays (R 420.5(4-5)):

While the reasons for this limitation are fully understood, often, correction of NODs will involve

the input of third-party professionals (architects, CPAs, lawyers, etc.), and depending upon the

timing of same, weekends and holidays can place unnecessary strain on an application who is

attempting to comply and address NODs in good faith. It is suggestion that the language of this

rule should be modified to operate upon “business days,” and to exclude national holidays, thus

ensuring that applicants do not fall victim to timing circumstances outside of their control.

•

Express Cure Right for Renewal NODs (R 420.13): Suggest adding an express NOD cure right for

renewal applications in line with the above comment re: NOD Correction Window for lead

applications. This is already being done in practice, but is not expressly set forth in the rules.

Reporting New Civil Lawsuits (R 420.14(5)): In the MMFLA Rules, a licensee needs to update the

MRA when it is the subject of a new civil judgment. The Dual Rules have expanded that reporting

requirement for “new . . . lawsuits” that are civil in nature. This is problematic, as it creates an

incentive for non-licensed contracting parties to leverage the litigation threat against a licensee

whether or not the actual claims are meritorious. That new requirement should be removed or

carved out for non-criminal, non-regulatory actions. Only when a judgment is obtained should

the matter need to be reported. If a case is settled, the MRA does not need to be informed at all

– as its just business at that point.

•

Delivery Business (R 420.20(1)(e); R 420.27): Suggest removing as the service is not needed in

light of home delivery allowed by licensed Provisioning Centers and Retailers. Also, maintaining

delivered sales within the seed-to-sale tracking system seems untenable as it is unclear who is

obligated to “record[] [confirmed sales] in the statewide monitoring system.” (R 420.27(11)(d)).

These license types are not allowed to “sell” the products (R 420.27(11)(f), as they are only

allowed to take “physical,” rather than “legal” custody of the marihuana or money (R 420.27(8)),

and yet deliveries must be recorded after being made in compliance with applicable regulations

(R 420.27(11(d)), including verifying age and other delivery requirements (R 420.27(11(e)), and in

instances when delivery business employees are unable to do so, or in certain other cases, these

license types must return the products to the marihuana retailer (R 420.27(11(g)). This requires

a great deal of interaction and follow up with the retailer. Since the delivery business employee

is not an employee of the retailer, limited access area restrictions and visitor log concerns come

into play, further complicating the situation for no apparent reason. Given the amount of

oversight and logistics required (R 420.27(12)), it is unlikely that this license type will be viable for

small business scales, so it will not further the MRA’s social equity initiatives in any meaningful

way. As such, it is an added complication without a reason. Alternatively, these licensees should

be required to obtain local approval to increase the controls placed upon this new license type.

Set #2 LICENSEES

•

Only Female Flowering Plants Count in AU (R 420.102(2)): It is suggested that greater

consideration be given to this standard before formalization. While it is not immediately

objectionable on its face, the long-term market implications of the loosened standard, coupled

with the possibility for abuse by bad actors, should be carefully considered by cultivation and

operations experts to ensure the immediate apparent benefits of the altered standard are not

outweighed by longer-term negative implications.

•

Sale of Seeds, Seedlings, Tissue culture Authorized and No Secured Transporter Needed. (R

420.102(3, 9)): A good development in the rules. This entire subject matter was very unclear in

previous renditions of the medical and AU rules.

Transfer of Inventory Between Commonly Owned MRTMA Processors (R 420.103(3)): Very

important and necessary development in the rules. Note, the MMFLA processor rule (R 420.109)

does not include a similar allowance. Why not? Can it?

•

Transfer of Inventory Between Commonly Owned MRTMA Retailers (R 420.104(4)): Also a good

development. Query: If the amount of product to be transferred is under the limits for home

delivery carriers, can this sort of a transfer be accomplished without use of a secured transporter,

similar to the rule to transport to temporary events noted above? As presently written, these

rules would indicate that the answer is “no.” Note, the MMFLA provisioning center rule (R

420.111) does not include a similar allowance. Why not? Can it?

Standards for Heavy Metals are Prohibitively High and Should Established through the Scientific

Process (R 420.107(3); R 420.206(12)): There have been reports that the maximum levels for

heavy metals established in October are causing hundreds of pounds of flower to only be usable

in oils, further contributing to the current shortage. There needs to be a 6 month+ runway for

licensed cultivators to meet these standards, so that a root cause analysis can be performed on

operating facilities/establishments to determine the source of these heavy metals (water, soil,

etc.). Also, established standards should be the product of an evaluation by a science-based panel

of impartial experts. The delayed implementation of the current testing requirements for copper

and nickel announced on Feb. 5, 2020, is appreciated, but it will only delay the negative

repercussions of the present standards, rather than alleviating them.

Set #3 OPERATIONS

•

RFID Cards and Logs for Facilities/Establishments (R 420.203(e); R 420.209(4-5)): This could be a

mandatory requirement under the referenced rules. Alternatively, if deemed to be cost-

prohibitive as a mandatory requirement, the MRA should make the installation and operation of

a facility/establishment-wide RFID Access Card and Log system a mandatory requirement of

GMP/GACP certification as set forth in later rule sets. Doing so will improve safety and

recordkeeping functions, among other indirect benefits.

Access to Licensee Records (R 420.203(2)(f)): Right now, the rule says licensee “records,”

presumably meaning, records of any sort, must be available to the Agency “upon request,” which

Enforcement has previously clarified means “immediately upon request” in the context of the

prior MMFLA Rules. Given that many vertically integrated operators will have a corporate

headquarters and various access limitations/security protocols on certain sorts of “records,” this

rule needs to clarify which records must be immediately accessible to the Agency, and/or provide

a 24 hour request window to ensure operators can always comply with such requests.

•

Compliance with Natural Resources and Environmental Protection Act (R 420.203(3)(a)): This is

an expansion of the prior MMFLA Rule’s obligation, which was limited to compliance in the

context of “waste disposal.” The implications of this expanded requirement could be substantial,

and the MRA should give operators a 1 year running start at this, similar to the Dual Rule’s

requirement that a safety compliance facility be “accredited” within a year of assuming

operations (R 420.107(2); R 420.305(1)(a)).

No Distinction of Separation for Equivalent Licenses (R 420.205(5)): This is a great rule, and

exactly what should be done.

•

Structure of Rule 6 in Set #3 (R 420.206): This rule spans nearly three pages, and contains various

operating requirements, some applicable to all classifications of licenses, and some specific to

certain licenses. There are no sub-titles in the rule and the placement of various sub-parts appears

somewhat random. Recommend breaking this into separate rules per facility classification for

ease of understanding and use.

Incorporation of Good Agricultural Collection Practices for Cultivators (R 420.206(2); R

420.212(5); R 420.301(i); R 420.305(4); R 420.602(2)(h)): Current rules incentivize growers to

obtain GMP certification. This is ideal, but GMP does not, by its nature, operate upon the

“cultivation” of plant products in a meaningful way. To truly achieve the intended result here –

standardized, repeatable cultivation practices with consistent, safe results – growers must meet

Good Agricultural Collection Practices (“GACP”). For instance, the definition of “Good

manufacturing processes” in Set #4 is limited to “manufacturing processes and facilities,” and

“manufactured” products. The equivalent “cultivation” standards need to be incorporated into

these rules. Properly incorporating GACP standards into cultivation operations requirements will

help the State of Michigan effectively compete in the interstate commerce post-Federal

decriminalization. Potential particulars include: (i) Inclusion of a GMP/GACP Plan requirement

that can (ii) serve as a basis for MRA benchmark inspections tied to the license renewal process

or, perhaps, more frequently. The specific incentives provided for achieving certification include

no testing and/or increased batch sizes. See above discussion re: “Plant Counts” and below

discussion re: “Harvest Batches.” In the future, depending on development of the matured

market, this could be changed to require a cultivator achieve GACP certification within two years

of initial licensure, and GMP/GACP Plans could become mandatory Step-II submissions.

•

General Incorporation of GMP for Manufacturing, Packaging and Food (R 420.206(10)): This is a

great rule, and was part of the prior MMFLA Rules. The question now is how this standard will be

enforced? It only matters if it is policed properly.

Forced Sharing Rule (R 420.206(16)): This rule does not appear to be expressly authorized by the

MRTMA, and does not efficiently serve its own stated purpose, which itself may turn out to be a

non-issue as the recreational market assumes its final form. Moreover, regardless of the rule’s

foundation, necessity or effectiveness, the Forced Sharing Rule as presently drafted is susceptible

to Constitutional challenge because it does not provide an objective standard of compliance or

enforcement.

•

Home Delivery as it Relates to Consumption Lounges (R 420.207): Certain provisions here,

specifically subsection 7(c-d, h, l), contemplate use of a motor vehicle for deliveries. However,

the most ideal situation is one where a Retailer is located directly next to a Consumption Lounge

so that real-time delivery on foot is possible. While there is nothing in this rule that expressly

disallows such that scenario, greater clarity on that point, and perhaps a relaxed list of

requirements for such a process, would be ideal.

Mandatory Installation of Backup Generator Power System (R 420.209): The MRA should

consider making the installation and operation of a backup generator/power system a mandatory

requirement under the rules. Alternatively, if deemed to be cost-prohibitive as a mandatory

requirement, the MRA should make the installation and operation of a backup generator a

mandatory requirement of GMP/GACP certification as discussed elsewhere in the rule sets. Doing

so will improve safety and security and avoid product losses that will impact the market and

pricing, among other indirect benefits.

•

Other Composting/Feedstock Disposal Methods (R 420.211(13)): This is a good rule and allows

operators to come up with more efficient ways to reuse/repurpose cannabis waste in the future.

Common Ownership MM to AU Transfers (R 420.214): It is suggested that the inverse of this

process be permanently allowed in the rules. As the market matures, recreational marijuana and

marijuana product generation will be the primary focus of cultivators and processors, and

allowing the transfer of AU products to the MM market, as needed, will ensure ample supply for

the MM market without requiring those operators to dedicate floor space and resources to MM

licenses that may be better utilized for AU operations.

Set #4 SAMPLING AND TESTING

•

No Limits on Harvest Batches (R 420.301(j); R 420.304(2)(b)): There no longer appears to be an

express limitation on the size of a “harvest batch.” Prior MMFLA Rules (R 333.248(2)(b)) and the

Emergency MRTMA Rules (R 42(2)(b)) were limited to 15 pounds. Now the issue seems to be

limited to the dictates of the definition of “batch,” meaning “same variety that has been

processed together and exposed to substantially similar conditions.” (R 420.301(1)(e)). While this

is an ideal situation for operators from a COGs standpoint, it should be offered as an incentive for

GMP/GACP certification rather than being the general standard. Doing so will incentivize such

certification, strike a balance between safety and efficiency, and quell work-flow concerns from

the Safety Compliance operators.

•

Skipping Testing for Plant Material Converted into Live Resin or Concentrate (R 420.303(6)): In

the Emergency MRTMA Rules (R 41(6)), the ability to skip testing until after the finished product

was produced was limited to 60 pound batches for live resin. Now, the same can be done for

“concentrates, with agency approval,” and there are no express weight limits. This seems to be a

good rule, but would be interested in knowing more about what will be required to receive

“agency approval.” Note, “concentrate” is not defined in this rule set. “Concentrate” is also not

defined in the MMFLA, but it is included under the MRTMA definition of “Marihuana” (MCL

333.27953(e)), and has its own definition there as well (MCL 333.27953(g)). Accordingly, a

defined term for “concentrate” in this rule set would be useful. The rule also says that the Agency

may publish “guidelines” in this regard.

•

Allowance for Transfer of Remediation Product (R 420.306(4)): Quarantined product must be

able to be transferred between processors for remediation purposes, as there will be certain

remediation methods that only some processors will have equipment to perform. As it currently

stands, this is not considered or enabled under the rules and guidance published to date.

Set #5 MARIHUANA-INFUSED PRODUCTS AND EDIBLE MARIHUANA PRODUCT

Reference to “Address” on Infused Product Labels (R 420.403(7)(a): Infused products must be

labeled with the “address” of the marihuana business that processes or packages the product.

This notation of an address is not a part of the general labeling requirements for marihuana itself.

(R 420.504). Given that fact, coupled with the amount of other information that must be included

on labels and the safety concerns brought about by noting the facility/establishment’s address on

packaging, it is suggested that this requirement be omitted. If patrons want to find a

facility/establishment’s address, they can look up the license number on the MRA website.

Set #6 MARIHUANA SALE OR TRANSFER

•

Different Warnings for MM and AU Products (R 420.504(k)): Currently, there are different

warnings required for MMFLA and MRTMA products. This requires the generation and application

of different labels for the different products, which will otherwise be identical. Enforcement has

previously instructed that, under the current rules, operators cannot combined the warnings (“For

use only by registered qualifying patients or individuals 21 years of age or older”) to streamline

the labeling process. This should be reconsidered in the Dual Rules.

Prohibits Health Claims in Marketing (R 420.507(3)): This is a new marketing limitation, which

runs head first into the concept of “medical marijuana” itself, as embodied by the MMMA and

MMFLA. In fact, as the MRA is well aware, there is a LARA/Medical Marihuana Review Panel made

up of experts who are responsible for approving debilitating conditions for which a patient might

be eligible under the MMMA. Yet, the FDA is not supporting any cannabis-based health claims

right now, so any such marketing statements will constitute regulatory violations. Further clarity

on what constitutes a health claim (“wellness,” “holistic,” “calming,” “pain management,” etc.)

should be provided by the Agency to avoid inconsistent compliance and enforcement efforts.

•

What Does it Mean to Advertise a “Marihuana Product?” (R 420.507(4, 6-9)): There have already

been several instances where the Agency, and an operator, disagreed as to whether or not the

latter was advertising its brand generally, or advertising a “marijuana product” within the context

of the limitations on public advertisements. The Agency should provide further guidance here, or

disputes will continue to arise. Also worthy of note, in both the Emergency MRTMA Rules and

here, the following prior limitation in the MMFLA Rules has been removed: “A licensee shall not

advertise a marihuana product where the advertisement is visible to members of the public from

any street, sidewalk, park, or other public place.” (R 333.276(3)). This change is appreciated as

that prior restriction was overly restrictive in many respects.

•

Trade Samples (R 420.508): This rule is identical to the one in the Emergency MRTMA Rules, but

for the following provision, which has been deleted: “Except for a licensed designated

consumption establishment, the samples may not be consumed or used on the premises of a

licensed marihuana establishment.” (R 53(3)). This is a good rule change.

Allowance of Internal Product Samples (R 420.501(1)(j); R 420.509): This was not allowed in the

MMFLA Rules, and seems like a welcomed accommodation for testing new products. Note, the

“results of internal product sampling” must be documented and kept on hand. Does this mean a

survey of employees’ impressions of the products? Also, the Trade Samples rule clarifies that

those samples need to be tested and entered into METRC. This rule does not have similar

language, so clarification on testing and recordation requirements for Product Samples under this

rule would be helpful. Also, what is the difference between a Trade Sample and an Internal

Product Sample for a Sales Location? Provisioning Centers and Retailers do not generate

products, so they would either be given trade samples by up-stream operators, or purchase

products and then circulate to their employees as Internal Product Samples before stocking on

the sales shelf? Seems odd. More clarity should be provided on these issues.

•

Product Development Allotment (R 420.510): Per sub-2, up to 50 plants do not count toward the

operators total plant count, which is great. R&D testing is allowed, as further explained in R

420.307. Generally, this is a good rule addition. These products to employees for market research,

and can sell those products to a Sales Location, assuming they passed testing. The rule also allows

operators to participate in research studies with prior Agency approval which is appreciated.

Set #7 EMPLOYEES

•

Operations Plan Requirement in Employee Training Manual (R 420.602(e)): This is a new

requirement not previously included in the MMFLA Rules. Must address policies to avoid over-

intoxication, underage access, illegal sales and other potential criminal activity. The MRA should

provide an initial 6 month runway to generate these Manuals to ensure they are based in

operational fact rather than hypothetical speculation.

21+ for Dual Employees (R 420.602(2)(j): Because equivalent licensed operators have to comply

with this limitation from the MRTMA, it basically makes it impossible to employ persons between

the ages of 18 and 21, unless the operator is running a strictly MM facility. This is unfortunate,

especially with regard to contractors and student interns. But, since the 21+ requirement is a part

of the MRTMA itself, a statutory changes is required. [REQUIRES STATUTORY AMENDMENT]

Criminal History for Dual Employees under MMFLA/MRTMA (R 420.602(2)(k)): Since nearly all

Sales Locations will have “equivalent licenses” for MM and AU, the more restrictive prohibitions

in the MMFLA (“past 10 years for a controlled substance-related felony,” R 333.27405) will always

apply, and the social equity initiatives of the MRTMA (disqualifying offenses limited to distribution

of a controlled substance to a minor, R 56(2)(b)) will be thwarted. Under this bulletin, the Agency

must provide prior approval if an operator under the MMFLA wishes to hire, or continue to

employ, a person with a disqualifying offense, so it is possible that the Agency could alleviate the

conflict between the hiring limitations in this way, but it would be preferable to align the two

standards via amendment of the most restrictive MMFLA standard. [REQUIRES STATUTORY

AMENDMENT]

Set #9 DISCIPLINARY PROCEEDINGS

•

Advanced Reporting re: Labor Peace Agreements (R 420.802(3)(h)): Changes to Labor Peace

Agreements must be reported in advance, which is odd if one assumes that, in most cases,

changes will come due to unexpected breakdowns in renewal negotiations. This should be

addressed in the context of the grander discussion on these Labor Peace Agreements generally.

Reporting New Civil Lawsuits (R 420.802(5)): As mentioned in the comments to Set # 1 regarding

“Reporting New Civil Lawsuits,” having to report the initiation of any civil case is inadvisable for a

number of reasons.

February 18, 2020

Department of Licensing and Regulatory Affairs

Legal Section

Bureau of Medical Marihuana Regulation

P.O. Box 30205

Lansing, MI 48909

Thank you for your diligent work on cannabis policy development and particularly for your thoughtful

consideration of public comment with the goal of improving clarity and adopting regulations that are fair

to the cannabis industry, while protecting public health and safety.

Founded in 2008, Weedmaps is the oldest and largest cannabis technology company in the world,

serving as the leading innovator in developing software and platforms that drive and support the

cannabis industry. Our core platform, weedmaps.com, connects consumers and patients with local

cannabis dispensaries, delivery services, doctors, deals, brands, laboratory data, and real-time menus.

Weedmaps’ full suite of business-to-business and business-to-consumer software directly integrates

with laboratories to collect public health data, dispensaries’ point-of-sale systems to provide product

availability, and medical practice management services in order to support certifying clinicians,

supporting and promoting a consumer-focused and transparent marketplace.

Beyond providing the technology solutions that underpin the cannabis industry over the last ten years,

Weedmaps has also advocated for measured growth and responsible policy in order to guide the

modernization of the industry. Weedmaps is working collaboratively with all levels of government across

the United States to provide policy assistance to encourage sensible reforms and regulatory frameworks

that will ensure reliable access to cannabis while maintaining critical public health and safety

protections.

We are excited to offer our opinions prior to the adoption and implementation of these rules.

1. Comprehensive Cannabis Delivery Program

In order to create a robust and mature cannabis market, it is imperative that the State of Michigan

implements a comprehensive cannabis delivery program. Licensing delivery of cannabis and cannabis

products links both medical and adult-use consumers with safe, convenient and reliable access to legal

cannabis retailers and benefits both densely-populated and rural areas. Permitting delivery operators to

gain licensure is also a less challenging method of providing consumers with sufficient retail access while

reducing illegal market activity.

Cannabis delivery businesses are adept at serving consumers and reducing illegal market activity in

urban, suburban and rural areas. For example, many medical and adult-use patients in rural

communities do not live close to a city or town where a storefront may exist. Without a convenient

legal alternative, including being able to order online, these consumers will rely on incumbent illegal

providers for access. Licensing delivery in rural areas offers these consumers a safe, legal alternative.

In urban and even suburban communities, consumers and legal retailers are separated by time more

than they are by distance. These jurisdictions have higher population densities, which contributes to

traffic congestion and increases the length of time required to access what often amounts to a very

limited number of cannabis retail storefronts. Similar to their rural counterparts, urban and suburban

cannabis consumers will also continue to engage incumbent illegal retailers where access to legal

providers is inconvenient. Expanding the number of retail access points available to consumers has

proven to be an effective strategy in dissuading them from returning to illegal market providers, and

delivery offers a creative approach to extending sufficient access.

Independent delivery services provide an attractive offset to traditional storefront retail when it

comes to establishing licensed retail in communities. For example, while local governments often

artificially limit the number of legal retail locations available to consumers, this approach frequently

fuels illegal market providers who can undercut licensed operators on price, product diversity and can

access consumers 24-hours/day. This is particularly true in jurisdictions that already had a large

volume of incumbent cannabis businesses prior to the organization of a licensing model. Augmenting

storefronts with delivery service providers enhances consumer access by expanding the pool of

retailers available to consumers, and offer tremendous flexibility in which consumers can secure legal

access.

No matter the state, county or city, a successful approach to legal cannabis retail should integrate

delivery to satisfy the needs and preferences of medical and adult-use consumers, and combat illegal

market forces.

2. Advertising

The cannabis industry is unique in that a robust illicit market has persisted for nearly a century;

therefore, lawmakers and licensed cannabis operators face the challenge of convincing consumers to

switch to the legal market. Research shows that the vast majority of consumers prefer legal cannabis,

however, restricting legal operators from advertising their business is a guaranteed way to ensure that

consumers will continue to patronize the illicit market. Digital platforms that provide product and pricing

information promote competition in an otherwise non competitive market facing restrictive licensing

caps and limited retail access. Such competition will control prevailing market prices within the

regulated market and thus shift a larger share of cannabis consumers from the illicit market to the

regulated industry.

Jurisdictions aiming to combat the illicit cannabis market by implementing overly-restrictive advertising

policies are misguided and likely doing more harm than good. The best way to diminish the illicit market

through advertising policy is to ensure that legal operators are able to effectively establish brand

recognition and advertise their products. Advertising policies should ensure that, at a minimum,

licensees are permitted to include information on pricing, available products, reasonable promotions,

hours of operation, and other information that is relevant to consumer purchasing decisions.

There is a way to properly structure the cannabis market so that it both promotes business growth and

protects public safety. Simple policies can be implemented to mitigate public safety risks and prevent

youth audiences from being exposed to cannabis-related advertisements. First, cannabis advertisements

2

should not feature individuals under the age of 21, nor should they intentionally appeal to children in

any manner. Requiring that all cannabis advertisements are targeted to adults 21 and older will help

ensure that children are not exposed to unnecessary risks or content that encourages youth usage.

Another policy that will protect public health is explicitly prohibiting cannabis companies from using

false or misleading claims regarding the health benefits of their products. Preserving public health is a

primary concern for many lawmakers, and prohibiting misinformation in advertisements is a way to

protect consumers from engaging in potentially harmful activities under the guise of health.

An informed cannabis consumer base is in the best interest of regulators and lawmakers who wish to

protect public health and safety. Cannabis products are diverse and oftentimes complex, so branding

and advertising play an important role in educating consumers. A Deloitte study on the Canadian

cannabis market found that 66% of consumers cited safety as their most important consideration when

buying edibles. If licensed retailers are allowed to advertise their products along with information on

laboratory testing, dosage recommendations, and potency, cannabis consumers will be able to identify

brands they trust. A major advantage of the legal market is the ability to foster consumer trust by

providing consistent, reliable products. Because illicit market products are often inconsistent and not

required to undergo any laboratory testing, consumers are more likely to opt for trustworthy legal

market products that they recognize. Enabling cannabis businesses to advertise their products will aid in

shifting consumption from the illicit market to the legal market, thus creating a safer cannabis

marketplace altogether.

3. Social Equity

While we applaud the department's efforts in mandating a plan that will help encourage industry

participation from communities disproportionately impacted by cannabis prohibition, we encourage the

department to study and review how other states and municipalities have dealt with equity in cannabis.

The department should review the overall barriers to entry when it comes to entering the legal market.

Not only should the department develop ways for smaller businesses to enter the legal market, it should

be mindful of how to make sure equity applicants can thrive in the industry after receiving a license.

While access to capital is an issue the entire cannabis industry has, this issue is even more pronounced

for equity applicants. Operating costs, regulatory overhead and a slow roll out could have unintended

consequences on these new businesses. Overall, prohibition has proven to have rippling effects in

disproportionately impacted communities and a thoughtful social equity initiative that pairs

programming and education with resources will help to mitigate the unintended effects seen in other

jurisdictions throughout the nation..

In closing, Weedmaps wants to emphasize our organization’s strong commitment to ensuring that

Michigan stands up a responsible and reliable program to best serve patients and consumers. We want

to continue to serve as a resource to you and hope to continue this important dialogue.

Thank you,

Reed Sullivan

Government Relations

Weedmaps

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COMMENTS TO PROPOSED JOINT PERMANENT RULES FOR MEDICAL AND

RECREATIONAL ADULT USE MARIJUANA FACILITIES

Delivery Business License

We oppose the addition of the Delivery Business License on numerous grounds:

Problems:

1. The Delivery Business License will be an unmanageable and unenforceable vehicle for

the black market marijuana trade. There is no amount of verification, compliance or

enforcement that can prevent, among other things, home delivery to minors, diversion,

operation out of residential areas, and counterfeit and unsafe products being sold to

unwitting consumers. It is not the answer to the social equity owner problem. The only

successful cannabis delivery business is an App created by a California billionaire, which

will create a lot of pizza-cannabis-fast food delivery drivers, not business owners.

Proposed Solution:

Do not adopt this rule.

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Warnings, Citations, and Formal Complaints

Section: Disciplinary Proceedings, Rule 420.807-809

Problems:

1. There is no distinction between when a warning is issued and when a citation is

issued. The rules use identical language for both.

There is no distinction between when a “warning” is issued and when a “citation” is

issued with the way the rules are drafted right now. This is significant because a warning does

not have a fine associated with it, is not made available to the public, and remains in the

licensee’s file for only 1 year, whereas a citation, as it is written now (which is quite different

from how citations have been issued over the past year) has a fine associated with it, is made

available to the public, and remains in the licensee’s file for 5 years.

2. Citations can no longer be negotiated or settled. If they are not accepted, they will

become a formal complaint.

It appears that the ability to negotiate citations has been removed from the rules. Under

the proposed rules, if a licensee is issued a citation and MRA does not accept the citation as is,

a formal complaint “must” be issued. The rules do not provide any avenue to request a

compliance conference or negotiate a settlement for citations, which is the common practice in

place right now when they are issued. For a “formal complaint,” the rules expressly allow for

negotiating a settlement with the agency or requesting a compliance conference. That language

is omitted from the citation rule (Rule 420.808).

The way it is drafted right now leaves the MRA with significant discretion as to what

violations should receive warnings as opposed to citations, and to which licensees should

receive warnings as opposed to citations. Warnings and citations can be issued and applied

inconsistently across the state and across licensees. Assuming the MRA does issue both

warnings and citations, there is nothing in the current rules to establish when each is

appropriate. One licensee may simply receive a warning for something that a different licensee,

who has an identical violation, receives a citation that is also accompanied by a substantial fine

and will put that licensee in a more serious position to potentially lose its license. This creates,

at the very least, the potential for the appearance of favoritism and retaliation, and could allow

the MRA to effectively remove whomever it pleases from the industry through using the excuse

of numerous citations to revoke a license, or to drown a licensee in fines. While the statutes do

cap the maximum fines that can be imposed for license violations, it is a per day cap, and the

case law in other regulated industries suggests that the courts will support an agency fining a

licensee the maximum fine per day, for each day the licensee is out of compliance.

Further, there is nothing preventing the MRA from skipping over the issuance of a

warning entirely and going directly to issuing citations, which are accompanied by a fine that is

now seemingly non-negotiable.

Proposed Changes:

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1. The first time something is found to be out of compliance, a warning is issued. The

second time the same issue is found to be out of compliance at a subsequent

inspection, it is a citation that is issued, etc.

2. Create a list of serious offense as opposed to minor errors or oversights (for

example: having large jars of distillate not logged in Metrc being a serious offense,

having a safety compliance employee not date the visitors log when she signs in a

minor offense). Minor offenses receive warnings where it is clear it was an oversight

or an error and as a first-time offense. (see below)

3. Place some kind of limitation on double jeopardy. Right now, licensees are receiving

numerous citations for one single violation because the rules are very repetitive.

(Example – having several large jars of distillate not logged in Metrc was citated as 4

separate violations because there are 4 separate places where the rules prohibit it) If

the rules are repetitive, a licensee can only be fined once per instance.

Proposed new definitions:

“Violation” means a single event or occurrence which violates one or more of the rules. In

situations where numbers rules relate to a single event or occurrence, only one single violation

shall be issued per occurrence.

“Violation Affecting Safety or Health” means a violation that generally has an immediate impact

on the health, safety and welfare of the public at large. This category of violations are the most

severe, and may include: selling to person under the age of 21; medical marihuana sales to a

non-patient; advertising to a minor; marihuana purchased from an unauthorized source;

marihuana sold to an unauthorized source; refusal to allow an inspection and/or obstructing a

law enforcement officer from performing their official duties; or failure to track marihuana in

METRC.

Rule 420.807 Warning.

Rule 7. (1) The agency may issue a warning to a licensee if the agency determines through an

investigation that the licensee violated the acts, these rules, or an order.

(2) The agency shall issue a warning to a licensee who has violated the act, rules, or an order,

provided it is the first offense of and is not classified as a violation affecting safety or health.

(3) A warning must be served on a licensee by certified mail, return receipt requested, or served

in person by a representative of the agency.

(4) A warning must remain in the licensee’s file for one year from the date of service.

(5) A warning may be considered in future licensing actions. Continued or repeated non-

compliance or repeated warnings for the same violation may result in further action, including

the imposition of fines or other sanctions against a licensee, or both.

Rule 420.808 Citation.

Rule 8. (1) The agency may issue a citation to a licensee if the agency determines through an

investigation that the licensee violated the acts, these rules, or an order, and the licensee has

already received a warning for the violation, when applicable.

(2) A citation must be served on a licensee by certified mail, return receipt requested, or

served in person by a representative of the agency.

(3) A citation must contain all of the following:

(a) The date of the citation.

(b) The name and title of the individual issuing the citation.

(c) The name and license number of the licensee.

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(d) A brief description of the conduct or conditions that are considered violations of the acts,

these rules, or orders.

(e) A reference to the section of the acts, these rules, or orders that the licensee has allegedly

violated.

(f) The penalties or actions required for compliance.

(g) A signature line for the licensee to agree and accept the terms and conditions.

(h) A timeframe to agree and accept the terms and conditions.

(4) A licensee shall have a specified time in which to notify the agency in writing that the

licensee accepts the conditions set forth in the citation.

(5) If the licensee accepts the conditions set forth in the citation, the licensee, within the listed

time frame after receiving the citation, shall sign the citation and return it to the agency along

with any fine or other material required to be submitted by the terms of the citation. The citation

and accompanying material must be placed in the licensee’s file for 5 calendar years.

(6) A citation issued under this section will be published to the public.

(7) A licensee may provide a 1-page response to the citation. This response must be placed in

the licensee’s file and published.

(8) If the licensee does not accept the citation a formal complaint must be issued.

Rule 420.809 Formal complaint.

Rule 9. (1) After an investigation has been conducted, the agency shall serve the formal

complaint on the licensee by certified mail, return receipt requested, or in person by a

representative of the agency.

(2) The licensee may do either of the following:

(a) Meet with the agency to negotiate a settlement of the matter, or demonstrate compliance

prior to holding a contested case hearing, as required by section 92 of the administrative

procedures act of 1969, 1969 PA 306, MCL 24.292.

(b) Proceed to a contested case hearing as set forth in these rules and section 71 of the

administrative procedures act of 1969, 1969 PA 306, MCL 24.271.

(3) The licensee must request a compliance conference or contested case hearing, or both,

within 21 days of receipt of the formal complaint. If the licensee does not respond, the agency

shall request a contested case hearing.

(4) If the licensee agrees and accepts the terms negotiated at the compliance conference, the

licensee and the agency shall execute a stipulation.

(5) An executed stipulation is subject to review and approval by the executive director of the

agency. If the stipulation is approved, the agency shall issue a consent order. If the stipulation

is not approved, a compliance conference or a contested case hearing shall be scheduled. The

consent order shall be published.

(6) If a licensee does not comply with the terms of a signed and fully executed stipulation and

consent order within the time frame listed in the consent order, the licensee’s license is

suspended until full compliance is demonstrated.

(7) If a compliance conference is not held or does not result in a settlement of a compliance

action, a contested case hearing shall be held, pursuant to these rules and the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to MCL 24.328.

Notes:

In creating the definition for "Violation Affecting Safety or Health" we used several other states

as a guide to determine what violates are the most severe. Almost all of them cited the same

violations, so there do appear to be pretty standard violations other states agree are the most

severe and relate to public health, safety, and welfare. Because of the way the MMFLA,

MRTMA, and the APA are written, the agency does need to have some authority over when the

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public health, safety, and welfare are at risk. However, other states also have similar

constraints. By creating a definition with specific examples of situations in which there a public

health, safety, and welfare concern, it does place some restrictions on inequitable enforcement,

and provides the industry businesses with some predictability.

We also attached Washington's statute and Colorado's statute as examples for reference.

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Language omitted “at the time of application” and additional supporting invalid rules.

Sections:

Problem:

Licenses, Rule 420.6(2)(g)

The MRA eliminated the phrase “at the time of application” in its rule to deny an application due

to a municipal ordinance. They also included the phrase “The agency determines…” which

appears to add discretion for the agency and effectively alters the meaning of the statute in its

application of the rule.

MCL 333.27959(3) “[T]he department shall approve a state license application and issue a

state license if . . . the municipality . . . does not notify the department that the proposed

marihuana establishment is not in compliance with an ordinance. . . in effect at the time of

application.”

Proposed Rule R420.6(2)(g)

“An applicant is ineligible to receive a state license if . . . the agency determines the

municipality in which the applicant’s proposed marihuana establishment will operate has

adopted an ordinance. . .”

The way the rule was drafted has effectively subverted the meaning of the statute, and

conflicts with the statutory language. In the statute, the burden is on the municipality to reach

out to the MRA if they have an ordinance that was in effect at the time of application. It is not

written to be a qualification for licensure, but rather something that can stop a license from being

issued.

The way the rules are written place the burden on the MRA to determine whether or not

the municipality has enacted an ordinance. In this context, it is written as a qualification for

licensure that requires affirmative action on the part of the MRA and the municipality. Because

MRTMA is an opt-out statute, the presumption for the MRA should be that every municipality is

opted in until they are told otherwise. Therefore, there is no statutory authority for the MRA to be

confirming the status or existence of an ordinance relating to marihuana in each municipality.

Proposed change:

R 420.6(2)

(g) The agency is notified by municipality in which the applicant’s proposed marihuana

establishment will operate that: i) the municipality has adopted an ordinance that prohibits

marihuana establishments that was in effect at the time of application; or ii) the proposed

establishment is noncompliant with an ordinance adopted by the municipality under section 6 of

the Michigan regulation and taxation of marihuana act, MCL 333.27956, and in effect at the time

of application.

Reinsert language in rules that was removed, and remove all rules inconsistent with Section 9.3

of the MRTMA Statute.

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Advertising and Marketing

R 420.507(4)

(4) Marihuana product must not be advertised or marketed to members of the public unless the

person advertising the product has reliable evidence that no more than 30 percent of the

audience or readership for the television program, radio program, internet website, or print

publication, is reasonably expected to be under the age listed in subrules (7) and (8) of this rule.

Any marihuana product advertised or marketed under this rule must include the warnings listed

in R 420.504(1)(k).

Problem:

Provisioning centers have been getting in trouble for advertisements with brand logos and being

told the brands are products. Many brands make multiple products, so punishing businesses for

advertising the brands makes the term marijuana product too broad. Moreover, marijuana

manufacturing and retail facilities often have no control over brand advertising, as they do now

own the brand, but are merely licensees.

Proposed language:

This section needs an additional (i) that says,

“marihuana sales locations may advertise certain brands for sale available at their location and

this will not be construed as advertising marihuana products.”

Or

(1) A marihuana product may only be advertised or marketed in a way that complies with all

municipal ordinances, state law, and these rules that regulate signs and advertising.

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From:

To:

mytcbd@yahoo.com

MRA-Legal

Subject:

Date:

Public hearing comments

Thursday, February 13, 2020 10:54:42 PM

Good evening,

Thank you for listening to the public before adopting new rules to the already instituted framework. I

made a public comment in person but wanted to follow up because I missed a few things that I wanted to

address and then listening to other peoples testimony, there are things I want to voice my thoughts on as

well. I used to own grocery stores in the family business until business got too tough for us, and then I left

and got into this industry. I went thru the process of getting my licenses with the state for tobacco, SDM,

and liquor. While I understand the intent to build a healthy foundation for businesses to operate in, and I

feel like Michigan does a much better job than California, there is still much work left to do to make this

right and feasible for everyone - not just big business and big pharma.

First and foremost, everyone (especially the retired 65-80 year olds who are getting cut off their opiates)

are chatting and wondering why things are so tough for cannabis to be obtained legally and why all these

hoops remain out there for businesses to establish themselves. In 2018, the voters voted to regulate

marijuana the same as alcohol and tobacco. Generally speaking, the additional changes proposed do not

honor the vote of the citizens and only adds more layer of governmental control. Cannabis should be

accessible at farmers markets, it's a plant and should be treated like other plants and food with the extra

oversight but not more than the same type of oversight as alcohol and tobacco.

1) Please do not write in specific zoning restrictions to the framework. Please allow the local

municipalities to determine what is best in their jurisdiction. I spent a lot of time and money to draft a

petition for a ballot initiative for the people to vote on and then I had to wait another 5 months because

there was no election in NOV.. Now with you proposing changing that mid stream is a huge hardship on

businesses while also taking the power away from the local municipalities or forcing them to rezone and

make changes just to accommodate state requirements.

2) GMP standards should only be required for large corporations doing mass production over a threshold

of at least 1M or more. GMP is not affordable for the small business and is not required for other food

products. Please stop pushing the small guy out by having excessive regulatory compliance. Serv-Safe

and food safety classes are available statewide and are affordable, OSHA compliance are all standard in

the food marketplace.

Commercial kitchen and cottage industry laws should apply. Nothing more than that makes sense if

the voters rights are truly honored. Businesses with less than 1M in food revenue should be required to

have lab tested, homogenized proven doses. Keep it simple for the small guys please!

3) Labor peace agreements should also have a threshold of 1M or more in gross profits or more than 10

employees. The reason is that if a business is big enough to profit that much, then they should be forced

to adhere to standards above that of which the rest of the state requires. As a small business owner, I

know if I pay people well, I will have better employees, and stronger community and so on. But if I were

forced to pay a bunch of money to be in a union to follow all this protocol, my chances as a small

business owner to operate let alone grow would be staunched. OSHA, FMLA, EEOC, and all the state

and federal rules apply to other businesses, why force businesses to join the union. It seems to me like

unions have outgrown their need. We have laws in place, and if companies behave in poor taste and

treatment of their employees, then due diligence should include having their license revoked and each

license holder/owner become ineligible for at least 5 years for any state license for cannabis. That will set

a standard far greater than that of a union where big $$$ and people entrusted with power creates

another chain of corruption, etc.

4) I absolutely agree with the MCIA that Processors should be allowed to keep product frozen and fresh,

not just the cultivators. There is a significant benefit to having the plant remaining in tact.

5) I suggest THC maximum potency levels - vapes not to exceed 85%. I am a huge full spectrum fan and

would like to see distillate completely removed from the marketplace. While I know that will never happen,

we all know distillation is a refining process that strips away the benefit of the plant so the only value is for

the increased psychoactive potential.

I would suggest any vape over 85% be treated like how we treat Everclear vs Popov vodka. Likewise,

potency less than 5% (not .3%) of delta 9 THC (not THCA combined) should not fall under the MG

content for industrial hemp oil, flower, THC tinctures, THC edibles etc. This could mitigate the loss as a

whole for hemp farmers while giving the marijuana CBD strains a little more legroom to operate in.

6) I'd like to see a protection clause for business owners not being able to be harassed by local

government and other cannabis businesses. People have opinions and are entitiled to them, but those

direct attacks should not hurt business owners who are working on getting licensed or are licensed. I

suggest this due to public comment of an African American lady getting sued because of her existing

location. I'd like to see a department within the MRA that handles investigation of bad business practices,

lawsuits, and specifically geared at enforcing the protection of the rights of the businesses who have

worked hard and spent a lot of time and money to get where they are today.

7) Caregivers should be able to sell any of the products they produce to all licensed access points -

retailers, processors and cultivators. Let the caregivers get in the game so they can build up to being a

stronger tax payer where they can get licensed. Please don't let the caregivers be put in harms way for

bad local politics like what happened to the dispensaries getting shut down prior to the MMFMLA

framework and licenses being issued. If any business licensee is found with other drugs, then they need

to get on the bad kids list and lose their license for 5 years. Hard drugs are the problem, and anyone

benefitting from the legal marketplace that turns around and fuels the illicit marketplace should have

tough sanctions put against them for continuing pumping bad drugs into our communities.

8) I agree with the cultivator plant count, it should be flowering plant count not at a certain height.

9) I'd like to see grant money made available to those businesses doing right by their communities. For

example, I have started a non profit, Free Relief that helps cancer patients and veterans with PTSD. I am

struggling to be funded and I don't have 500k to dish out to go thru the FDA process for complying with

those guidelines to qualify as a "research" in order to get grant monies. Either a kickstarter, incubator or

a way for someone like me, who is truly wanting to give away free "weed" (but it's THCA so it's non

psychoactive!) to people who can't afford it that need it, I'm asking you to please help me help others. If I

can prove to you my ethics of how I'm behaving out here, those funds that were partly set aside to help

fund efforts such as research for veterans with PTSD could help me help others and increase the

awareness that the plant can be used as medicine and you don't have to get high from marijuana to have

the benefits.

10) Consuming licenses - I love this concept but it's ridiculous to not allow consumption of food and

beverages at the same place as consuming cannabis. We know food is a requirement for safer alcohol

consumption, why would we treat THC products any different? If people take too much THC or misuse it

(which they will), then they will learn when they learn. Same as the alcoholic. We can't take the drink

away from the alcoholic, they have to make that decision for themselves. Please don't try and limit the

opportunities of other businesses to support and engage in the cannabis community. Those restrictions

continue to inhibit the benefits of the plant by allowing a new "stigma" to be formed.

11) I really really appreciated the efforts of the environmentally sustainable advocates and innovators.

That lady from Oakland college has some genius ideas on water and environmental sustainability. I'd

love to see monies set aside to support companies to innovate equipment and technology that would help

our manufacturing facilities find new opportunities to thrive and develop a stronger state in all areas. I

think tax credits for businesses who spend the extra $$$ to go the extra mile for our planet, our energy,

our water, our waste - those companies who commit and prove they are helping reduce our carbon

footprint should get kickbacks.

12) I agree with licensees getting extensions if they have been approved and yet have to wait on

contractors etc to get the next level of inspection done. Maybe another background check to ensure

nothing has changed is the remedy for ensuring nobody slips by for being a naughty business person

while waiting to get above board in their operations. If they screw up while they are waiting on their

contractors etc, then they shouldn't be able to move forward or at least they should get pushed back. But

good standing businesses who are working hard to get the job done and it takes longer than the states

timeframes should not have to pay the fees and go thru the whole process over again.

13) Take drug testing off the docket for businesses in Michigan - start with state employees, let them use

cannabis. Encourage businesses to become socially responsible for "recovery" from addiction. Whether

it's drugs, alcohol, sex, food, shopping, gambling, etc... The biggest thing we can ask from our

government is to help us use taxpayer dollars into fueling a healthier more sustainable community that

has support for all. Inclusion, diversity, social equiity, and addiction treatement services should all be at

the top of the list when it comes to the MRA supporting the endeavors of the aspiring cannaprenuer.

I'd love to the the MRA step up to the plate, help join in the war against the opiates, and help make

access truly available and affordable to the public at large. Thank you kindly for your consideration,

support and for all of your hard work!

Sincerely,

Kelly Young

CEO

My TCBD Inc.

http://www.mytcbd.com

"Believe in yourself and others will follow your inner light"

From:

To:

Richard LeBlanc

MRA-Legal

Subject:

Date:

Statement In Opposition to the Proposed “Marihuana Delivery Business” License

Tuesday, February 18, 2020 1:43:15 PM

Dear Mr. Brisbo and members of the Michigan Marihuana Regulatory Agency:

As you deliberate the proposed Joint Permanent Rules for the licensed Marijuana industry, I

ask that you consider my personal opposition to the proposed Marihuana Delivery Business

License. While the proposal may have been well-intentioned, a Delivery Business License

will likely bring with it significant unintended public safety consequences.

Municipalities cannot prohibit delivery businesses, and delivery businesses are not required to

seek municipal authorization for licensing. A freelance “Marihuana Delivery Business”

License will be very challenging to oversee from a municipal perspective, and arguably

impossible to regulate.

Until the State of Michigan has addressed fully the potential serious adverse effects these

licenses could have on our youth, on both Marijuana consumers and non-users, and on the

health, safety and welfare of Michigan’s communities, I request respectfully that as you

deliberate the proposal, you elect to decline advancement or approval of a “Marihuana

Delivery Business” License. Thank you.

Regards,

Richard LeBlanc

734-751-9366 personal mobile telephone

Westland resident currently serving as Westland City Clerk

Former State Representative 2007-2012 (term-limited) – 18th District