September 27, 2021  
VIA E-MAIL  
Marijuana Regulatory Agency  
ATTN: Legal Section  
E: MRA-Legal@michigan.gov  
RE: Cannabis Law Section of the State Bar of Michigan’s Special Committee on  
Administrative Rules  
Public Comments on Proposed Administrative Rules  
Disclaimer: The Cannabis Law Section of the State Bar of Michigan (“Cannabis Law Section”)  
is not the State Bar of Michigan but rather a section whose membership is voluntary. The position  
expressed in this correspondence is that of the Cannabis Law Section’s Special Committee on  
Administrative Rules only, and the State Bar of Michigan has no position on this matter. The  
Cannabis Law Section has approximately 911 members as of the date of this correspondence. The  
Special Committee on Administrative Rules of the Cannabis Law Section consists of six members  
of the Cannabis Law Section. All members of the Special Committee voted in favor of the positions  
contained in this correspondence.  
To Whom It May Concern,  
On behalf of the Cannabis Law Section, the undersigned members of its Special Committee on  
Administrative Rules had the opportunity to meet and discuss the proposed rule sets at significant  
length. Each member of the Special Committee is an attorney whose practice consists primarily  
on the focus of legal issues in the cannabis law space. Accordingly, the Special Committee is well  
suited to offer practical suggestions to assist the Marijuana Regulatory Agency (“MRA”) as it  
navigates through many of the changes proposed in the draft rule sets.  
The Special Committee engaged in thorough discussion and debate before reaching consensus on  
the comments presented herein. We thank the MRA in advance for its time and consideration of  
our comments.  
2020-121 LR – Marihuana Licenses Rule Set  
R 420.4(2)(a)(i): The rule retains reference to required disclosure of deposit accounts,  
deeds, and other documents that the MRA no longer requires in its application process. The  
rule should be modified to be consistent with the MRA’s current application practices and  
disclosure requirements.  
R 420.4(3): The revised disclosure requirements are ambiguous. It is unclear whether all  
members, shareholders, beneficiaries, etc. of various entities must be disclosed or whether  
the 2.5% threshold in the introductory language of this section operates to limit the  
disclosure requirements.  
R 420.6(2)(d): This provision disqualifies government employees/elected officials from  
holding an MRTMA license. There is no statutory authority within the MRTMA for this  
provision. While the MMFLA has such language, it does not exist in the MRTMA. The  
MRA should consider whether the preservation of the regulated market requires such a  
broad prohibition. For example, is the public health and welfare of the State of Michigan  
negatively impacted by denying licensure to an applicant solely because his or her spouse  
is a public elementary schoolteacher?  
R 420.6(6): The subject of this particular rule is a matter that is presently being litigated in  
a number of jurisdictions throughout the State of Michigan. Given the fact that the language  
presented in this rule appears in the MMFLA but does not appear in the MRTMA, the  
MRA should allow the judicial process to play out, as there is not clear and expressed  
statutory authority for this rule in the MRTMA. To the extent the MRA is concerned about  
pledges, loans, or liens against a state operating license, the MRA already has a regulatory  
framework that governs transfers of interests in licenses that these proposed transfers  
would be subject to.  
R 420.8(2)(b)(viii): Because drive-through transactions were previously prohibited, the  
MRA should expressly provide for the allowance of drive-through transactions. In the  
absence of express and explicit approval for drive-through transactions, it is possible that  
some municipal officials may interpret silence on this issues as the MRA’s decision to  
continue the previous status quo of prohibiting drive-through transactions.  
R 420.21(3): The definition of “designated consumption establishment” may be overbroad,  
as the current rule, as written, would require licensure for private businesses where  
cannabis is privately consumed that is not part of any commercial activity of the business.  
For example, if a business owner privately offered a beer to his or her employees to  
celebrate a milestone achievement, no license would be required under the Michigan  
Liquor Control Code. However, under the present definition, it appears that a designated  
consumption establishment license would be required under that same example if  
“cannabis” was substituted for “beer.” The MRA should give some consideration to the  
breadth of this definition.  
R 420.25(6): This rule should be clarified to make clear that temporary marihuana events  
could be held that allow (1) sales, (2) consumption, or (3) both. The present language of  
the rule suggests that only temporary events with both sales and consumption are allowed,  
which is inconsistent with the definition for “temporary marihuana event license” in the  
rules.  
R 420.27a(7): The MRA should re-consider the absolute prohibition on transfers contained  
in this rule, as an educational research licensee may develop and wish to license some  
unique genetics that have medicinal or other benefits for the general population and the  
market. Understanding that federal law and DEA restrictions may be implicated, we would  
suggest that the prohibition on transfers be modified to prohibit transfers “without the  
express written consent of the MRA.”  
R 420.27a(9): Similarly, with respect to the prohibition on consumption and sampling, the  
MRA should consider adding language to prohibit consumption and sampling “without the  
express written consent of the MRA.” In the event that federal law or the DEA’s position  
changes, this would give the MRA flexibility to respond to any such changes without  
having to re-engage the formal rulemaking process.  
2020-120 LR – Marihuana Licensees Rule Set  
R 420.101(1)(ii)(m): This provision should only address participation in management, as  
the percentage of profits issue is covered in R420.112a. The provision in that latter section  
should be clarified that it applies to NET profit, and the rule needs clarification whether  
the threshold is particular only to a single license or whether it is to be calculated across  
the entire business entity.  
R 420.102(10): Any grower (not just small growers) should be allowed to accept transfer  
of plants upon licensure from any applicant for that license. There is no reason to prohibit  
licensed growers from obtaining plants, clones or tissue culture from any source, as  
genetics may be difficult to obtain and are critical supplies, but MRTMA prohibits sale  
unless licensed.  
R 420.103(3) is proposed for removal. This provision allows commonly owned processors  
to transfer product inventory between the establishments. There is no apparent justification  
for this change.  
R 420.105(a): This provision would allow a Class A Microbusiness to obtain a mature plant  
from persons including a registered primary caregiver, while the caregiver is prohibited  
from transferring anything to anyone except that caregiver’s registered patients. This  
provision conflicts with the MMMA and case law (see McQueen case). All growers should  
have the same accessibility to genetics they can secure.  
R 420.105a(1)(c): This allows Class A Microbusinesses (but not regular microbusinesses)  
to purchase concentrates and infused products from any processor. This effectively will  
convert a microbusiness into a general retail store, but with limited flower availability. It  
could be expected that some of these entities will not even grow cannabis, but will use the  
license only as a retail store to sell everything else. Class A Microbusiness also would be  
prohibited from doing any processing, but allows purchase of processed products from a  
licensed processor. There is no reason for this prohibition.  
R 420.107(1)(a)(b)(c): Safety compliance facilities should be authorized to take, test, and  
return marijuana to any person or entity. Individuals are allowed to have their own product  
tested, but nothing obtained from a licensed business. There is no apparent good reason  
for this provision, and it would prevent a patient from having product tested which was  
obtained from their caregiver (or anywhere else). Testing prohibitions should be  
eliminated unless they can be justified.  
2020-122 LR – Marihuana Operations Rule Set  
R 420.207a: The concept of “contactless and limited contact transactions” is introduced in  
this rule but, as written, the manner in which such sales may be effectuated is not expressly  
stated. The open-ended nature of the allowance is appreciated as it will enable the  
development of new, creative transaction methods among sales locations. However, it is  
presumed that this new rule was particularly drafted to allow for “drive-though” service,  
and yet the absence of any express statement to that effect (i.e. “including but not limited  
to drive-though service”) is problematic because subsection (1) of the rule conditions the  
use of these new transaction methods upon their allowability under an applicable municipal  
ordinance. Without question, the lack of additional specificity in the rule will make it  
challenging to show municipalities that the MRA now allows “drive-through” service, as  
city attorneys will naturally interpret this rule cautiously. MRA should set out some  
examples of allowable “contactless and limited contact transactions” – including  
specifically drive-through service – to avoid unnecessary rule-parsing between industry  
participants and municipalities.  
R 420.206(11): In relevant part, this provision exempts “botanically derived terpenes that  
are chemically identical to the terpenes derived from the plant Cannabis Sativa L.” from  
the mandate that inactive ingredients be approved for the intended use by the FDA. The  
botanical terpene exception is practical and necessary because to date, the FDA has not  
approved any substances utilized for a vapor-based inhalable. However, to ensure the  
exception works as truly intended, it should be amended to include “flavonoids” and  
“terpenoids” – not just terpenes – because all three are naturally occurring in cannabis and  
all three contribute to the smell and flavor of cannabis and other botanicals. Restricting  
the exemption to only terpenes drastically limits the botanically-based terpen formulations  
that are allowable for operators, as most contain at least minute amounts of the other two  
categories of organic compounds. It is presumed that many operators are not aware of that  
fact or their technical and unintentional violations of this provision relative to, most  
particularly, distillate-based inhalable products.  
R 420.206(14): This new subrule directs that “each form of marihuana or marihuana  
product [combined to make a new, single marihuana product] must have passing safety  
compliance test results in the statewide monitoring system prior to the creation of the new  
combined product.” However, the MRA’s August 18, 2021 Bulletin concerning the  
creation of “Inhalable Compound Concentrate Products” states that “compound  
concentrate products” must be “tested in final form” after they have “been created.”  
(Bulletin at Pg. 2). There is tension between those two forms of guidance as the former  
new rule does not expressly say that the newly combined products must once again be  
tested in final form, and the absence of any such direction implies that, because the separate  
forms of marihuana products themselves each passes testing prior to being combined, a  
final-form test is not required. The Bulletin itself takes the opposite approach and  
commands final form testing in all settings other than “Raw Pre-Rolls without Kief Added”  
– which is a useful and supported exception. The MRA should consider building out this  
new subrule to incorporate the additional teachings of the Bulletin thereby ensuring that  
consistent, harmonized guidance is provided to operators on this important subject.  
2020-124 LR – Marihuana Sampling and Testing Rule Set  
R. 420.305 Testing; laboratory requirements.  
(3) A laboratory shall conduct the required safety tests specified in subdivisions (a) to (i)  
of this subrule on marihuana product that is part of the harvest batch as specified in R  
420.303, except as provided in subrule (4) of this rule. The agency may publish minimum  
testing portions to be used in compliance testing. After the testing on the harvest batch  
is completed, the agency may publish a guide indicating which of the following safety tests  
are required based on product type when the marihuana product has changed form:  
10) The agency shall publish a list of action limits for the required safety tests in subrule  
(3) of this rule, except for potency. A marihuana sample with a value that exceeds the  
published action limit is considered to be a failed sample. A marihuana sample that is at  
or below the action limit is considered to be a passing sample.  
(11) For the purposes of chemical residue testing and target analyte testing, the agency  
shall publish a list of quantification levels. Any result that exceeds the action limit is a  
failed sample.  
The MRA is required to promulgate administrative rules that govern the testing and minimum  
action limit standards for safety compliance facilities as opposed to publishing ad hoc guidance.  
The current practice of the MRA in this regard violates the Administrative Procedures Act. The  
MRA should comply with the formalities of the Administrative Procedures Act, and should not  
publish the minimum standards for laboratory testing—giving those publications the force of law.  
If and when MRA promulgates new testing rules, orderly operations of the markets dictate that  
MRA must allow for a phase-in or sell-through period before the new standards come into force,  
so as not to disrupt markets by requiring mass retesting of products, or leave processors or sales  
establishments holding significant volumes of products that can’t be sold without additional  
testing. MRA should clarify whether the new rules apply to tested and approved product that is  
already packaged and labeled for sales establishments, and MRA should articulate a six-month  
phase-in period so that all market participants have sufficient time to adjust their operations.  
R420.107(1)(c): Although it is understood that MRA will not condone unlawful or  
underage possession or consumption of cannabis products, it is contrary to the interests of  
public health for MRA to raise barriers that discourage members of the public from having  
products tested. By creating an age bar for testing services, or by requiring testing licensees  
to verify age and retain documentation related to the identity of the person who desires to  
have product tested, MRA could be discouraging vulnerable Michiganders from accessing  
reliable safety and compliance information about marihuana products in their possession.  
MRA should make it clear that people in Michigan will not be penalized if they attempt to  
get their product tested—regardless of the owner’s age.  
2020-119 LR – Marihuana Infused Products and Edible Marihuana Products Rule Set  
R 420.403(7)(b): The rule uses the term “component ingredients,” in subsection b, when  
describing the ingredients that must be listed on the label of marijuana-infused products.  
The term “component ingredients” is not defined, which could lead to confusion. The term  
“inactive ingredients” is defined and used elsewhere in these rules and would be a more  
suitable term. Another alternative would be to delete the term “component ingredients,”  
entirely, and require all ingredients to be listed on the label.  
2020-123 LR – Marihuana Sale or Transfer Rule Set  
R 420.504 (a) and (b) – This rule has resulted in sales establishment licensees attempting  
to push all label compliance obligations (and associated liability) upstream to processor  
licensees. This creates an operational problem for processors that are expected to satisfy  
requirements from multiple sales establishments with different understandings of what  
constitutes a compliant label. To promote consistency in the marketplace, MRA should  
clarify responsibility as between processor and sales establishment with respect to required  
label elements.  
R 420.504 (v) – This requirement specifies that the warning must be in “clearly legible  
type” – MRA should consider whether to require legibility for all mandatory label  
information.  
2021-10 LR – Marihuana Employees Rule Set  
R 420.602 (2)(k) – This rule adopts the MRTMA position (10-year bar on hiring persons  
with convictions for sales to minors), but it excludes fewer people than the corresponding  
MMFLA prohibition on hiring employees with convictions. MRA should amend this rule  
to make it explicit that MRA will allow hiring of employees that would be barred by the  
MMFLA but not the MRTMA, without written permission or other additional hurdles, so  
long as the conviction is not for sale of a controlled substance to a minor.  
R 420.602 (6) – There is tension between the definition of “employee” in this rule and the  
definition of “employee” as provided elsewhere in other rules (for one example, R  
420.401(1)(c)). Market participants have come to rely on the definition as it is stated here-  
that is, “employee includes, but is not limited to, hourly employees, contract employees,  
trainees, or any other person given any type of employee credentials or authorized access  
to the marihuana business.” MRA should consider whether to make definitions in other  
Rule sections consistent with the definition as it is stated here.  
2020-117 LR – Marihuana Disciplinary Proceedings Rule Set  
R 420.808a: The rule as drafted contains substantial ambiguity as to the criteria that  
constitutes conduct that could result in being excluded. Notions of due process require that  
there be fair notice of the types of conduct that would result in exclusion from the  
industry—particularly for conduct that has not resulted in a conviction.  
On behalf of the Cannabis Law Section, this Special Committee on Administrative Rules  
respectfully submits the comments above to the Marijuana Regulatory Agency. We appreciate the  
opportunity to participate in the rulemaking process and are available to discuss should the MRA  
have any questions about the comments contained herein.  
Sincerely,  
Special Committee on Administrative Rules of the  
Cannabis Law Section of the State Bar of Michigan  
Matthew Abel, John Fraser, Steven Glista, Jordan Rassam, Marc Seyburn, and Benjamin Sobczak  
Rule Citation  
Rule Title  
Page  
Comments  
Number  
MARIHUANA LICENSES  
R 420.1(1)(o)  
Definitions  
3
Rule adds definition of “Limited access area” meaning a “building, room, or other contiguous area of a  
marihuana business where marihuana is grown, cultivated, stored, weighed, packaged, sold or processed for sale  
and that is under the control of the licensee.”  
This definition will add greater clarity of limited access areas for licensees. However, what if the licensee has  
multiple licenses operating at the same location and has a limited access area under the licensee’s control, but is  
not contiguous to the marijuana business?  
R 420.1(1)(dd)  
R 420.3(3)  
Definitions  
4
5
Rule adds definition of a “Restricted access area” meaning a designated and secure area at a marihuana business  
where marihuana products are sold, possessed for sale, and displayed for sale.  
The definitions do not define “secure area.” I assume this definition adheres to the security requirements in R  
420.209, but I would like to see more specific language here, e.g., “secured by four walls and a locking door.”  
Rule states that partial applications to obtain prequalification status may be administratively withdrawn if  
application was filed and has been pending for more than 1 year. After a partial application has been withdrawn,  
the applicant may be required to submit a new application and pay a new nonrefundable application fee.  
Application  
procedure;  
requirements  
If an application has been partially completed and the application fee paid prior to withdrawal, it seems excessive  
to make the applicant pay another application fee when they resubmit.  
R 420.3(4)  
Application  
requirements;  
financial and  
criminal  
5
Rule states that “an applicant who has been granted prequalification status may have that status revoked by the  
agency and a marihuana license denied should the agency determine that the applicant is no longer suitable or no  
longer qualifies for licensure under the acts and these rules. An applicant who has had its prequalification status  
revoked may request a hearing pursuant to R 420.703.”  
background  
This rule concerns me. It gives the MRA complete discretion to revoke prequalification status if “the applicant  
is no longer suitable.” That is a very vague definition.  
R 420.5(1)(d)(vii)  
Application  
requirements;  
complete  
8-9  
Rule states that the applicant must submit confirmation of municipal compliance, specifically an attestation “that  
the applicant will report any changes that occur with municipal ordinances or zoning regulations that relate to the  
proposed marihuana facility . . . .”  
application  
This is very broad—any changes that occur with related municipal ordinances? What if an amendment is made  
but it is not publicly posted? Also, many municipal ordinances covering many topics may apply to the  
marihuana facility. It seems excessive to expect a licensee to monitor their municipality to report any ordinances  
that may apply. The rule should be written more narrowly to only reference “marihuana licensing or zoning  
specific” ordinances only.  
R 420.11a(5)  
Prelicensure  
investigation;  
proposed  
15-16  
Rule requires applicant to submit certificate of occupancy to agency for prelicensure inspection. If this  
certificate is not available, “the agency may accept alterative documentation from the building authority.”  
marihuana  
Some of our clients live in small townships without a building authority. I would like this definition to factor  
establishment  
inspection  
that scenario. For example, “from the building authority or other designated municipal official.”  
1
Rule Citation  
Rule Title  
Page  
Comments  
Number  
MARIJUANA LICENSEES  
R 420.105a(8)  
Class A  
7
Rule says “A Class A marihuana microbusiness may purchase or accept a mature plant from an individual,  
registered qualifying patient, or registered caregiver.  
marihuana  
microbusiness  
license  
What is the statutory authority for authorizing an individual, a registered qualifying patient, or a registered  
primary caregiver to sell mature marijuana plants to a Class A marijuana microbusiness?  
For clarity, this rule 112a should indicate that the phrase “licensing, management, or other agreement” is as  
defined in R420.101(1)(m).  
R 420.112a  
Licensing,  
management, or  
other agreements  
13-14  
It would appear that the purpose of this rule 112a is to identify agreements between a license holder and another  
person which are intended to convey the benefits of ownership on the non-license holder, when that non-license  
holder has not been vetted by MRA. If this is the actual purpose, the rule might be clearer if that were simply  
stated rather than covered by many words which seem to beat around the bush.  
MARIHUANA OPERATIONS  
R 420.206a  
Standing  
11  
Rule adds requirement for licensees to have up-to-date written standard operating procedures on site at all times.  
Operating  
Procedures  
Contactless and  
limited contact  
transactions  
Why is this required in addition to a facility or establishment plan?  
Rule allows licensees to designate area for contactless delivery. Section (4) requires separate standard operating  
procedure in addition to R 420.206a.  
R 420.207a(4)  
15-16  
Why can’t the standard operating procedures referenced in R 420.206a cover the contactless delivery? Why  
does it need to be a separate document?  
R 420.214b  
Adverse reactions 24  
Rule requires licensees to notify the MRA within 1 business day “of when licensee should have been aware of  
any adverse reactions to a marihuana product sold or transferred by any licensee.”  
First, the rule does not specify how the licensee should notify the MRA. Will the MRA provide notification  
forms? Is an email to enforcement sufficient?  
Second, the “should have been aware” language concerns me. If a licensee sells a product to a customer and the  
customer has a bad reaction after consuming the product 3 weeks later, how would the licensee even be aware of  
that reaction?  
MARIJUANA SALE OR TRANSFER  
R 420.303(6)  
Batch;  
identification and  
testing  
4
Rule allows a cultivator to sell/transfer marihuana products without being tested by a lab to produce live resin,  
with agency approval but limits the sales/transfer to a producer under this rule if the package contains more than  
1 harvest batch. The next line reads “This does not prohibit a cultivator from transferring multiple harvest  
batches for extraction.”  
This reads as internally conflicting and does not make sense, that a cultivator cannot use the testing exemption  
under the rule if they sell/transfer a package with more than one batch, but still can sell/transfer multiple batches.  
2
Rule Citation  
Rule Title  
Page  
Comments  
Number  
R. 420.305(16)(c)  
Testing;  
laboratory  
requirements  
10  
Rule prohibits a lab from “Cherry pick, which means testing specific material from a batch. All sample  
increments must have the same chances of being selected.”  
Practically, how can this even be enforced and it’s unclear what procedures, if any, a lab can put in place to  
ensure samples have the same chance of being selected.  
MARIJUANA SALE OR TRANSFER  
R 420.504(4)  
Marijuana product 4-5  
sale or transfer;  
labeling and  
New rule requires that both medical and retail sales location to provide customers with pamphlets that includes  
safety information related to marihuana use by minors and the poison control hotline number and that the  
pamphlet must substantially conform to the design published on the agency’s website.  
packaging  
requirements  
This new requirement seems duplicative given that the products already have labels with a safety warning. It also  
raises numerous practical issues, such as when these pamphlets have to be issued; what information has to be  
included in the pamphlets; the added cost which will be passed down to the customer/patient; for sales made  
online or via telephone, will this require some sort of digital pamphlet and if the Agency makes changes to the  
required information, will that require a whole new set of pamphlets and discarding the old ones?  
Rules limit the amount of internal product samples that can be given to an employee within a 30-day period to a  
total of 1 ounce of marihuana, a total of 2 grams of marihuana concentrate, and marihuana infused products with  
a total THC content of 2000 mgs. Further, R 420.509(7) requires that internal product samples be tested prior to  
transfer to its employees.  
R 420.508(8) and  
R 420.509(6)-(7)  
Trade samples  
Internal product  
samples  
8-9  
This new limitation and testing requirement seem overbroad and limits the ability of licensee’s to receive  
feedback from employees regarding the quality of the product/flower. Also, the testing requirement prior to  
transfer would mean that if a licensee is interested in knowing the quality of a product/flower before even  
deciding to put it to market, would have to pay the expensive testing requirements and would discourage  
product/flower improvement.  
MARIHUANA EMPLOYEES  
Generally, the changes are stylistic and help make some of the rules with listed requirements easier to read. The substance of most of the rules in this section has not  
changed.  
R 420.602(1)  
Employees;  
requirements  
2-4  
Rule has been modified to require employee training manuals to include detailed explanations for how  
employees can monitor and prevent over-intoxication, illegal distribution, etc. Previously, the rule only required  
such information to be in the employee manual if applicable.  
Generally, this isn’t a major burden for most licensees, but it seems like the previous language should be  
considered here, as this seems unnecessary for certain types of cannabis businesses.  
The major change is adding this rule, which prohibits employees of one type of licensee from being employees  
of another type. For example, employees of cultivators (growers) may not also be employed by transporters or  
labs.  
R 210.602a  
Prohibitions  
5
Do we know the reason for this addition? What is MRA trying to do here? The prohibition seems a little silly –  
are there similar prohibitions in the alcohol or tobacco industries?  
3
Rule Citation  
Rule Title  
Page  
Comments  
Number  
MARIHUANA HEARINGS  
As with Rule 601 et seq. above, most of the changes to these sections are stylistic and for readability purposes  
R 420.702(1)(d)  
Hearing  
The rule adds “the denial of the renewal of a marihuana license” to the situations where the “hearing” rules  
apply.  
procedures; scope  
and construction  
of rules  
This is an important addition.  
R 420.703(3)  
Public  
investigative  
hearing  
2-3  
4
Rule removes the specific requirements of what public investigators must provide in the contents of their notice  
to an applicant of an investigative hearing.  
It is unclear how often these public investigative hearings happen when a license is denied, and the degree to  
which this removal of specificity will impact applicants.  
Rule has been added, which provides a procedure for a marijuana business to contest MRA’s exclusion of a  
particular individual from the marijuana business.  
R 420.704a  
Hearing on  
exclusion of  
individuals or  
employees  
The procedures seem reasonable; however, subsection (1) allows the business only 21 days to contest MRA’s  
decision to exclude an individual. From our client’s perspective, this is not much time, and I would comment that  
maybe 45-60 days would be more helpful for our clients.  
MARIJUANA DISCIPLINARY PROCEEDINGS  
R 420.802(7)  
Notification and  
reporting  
3
For clarity, R420.802(7) should indicate that the phrase “licensing, management, or other agreement” is as  
defined in R420.801(1)(j).  
22355973  
4
BENJAMIN D. JOFFE PLLC  
Attorneys & Counselors  
334 E WASHINGTON STREET  
ANN ARBOR, MI 48104  
(734) 368-8595  
BDJ@BENJAMINDJOFFE.COM  
September 21, 2021  
Marijuana Regulatory Agency  
Legal Section  
P.O. Box 30205  
Lansing, MI 48909  
Re: Comments on Proposed Administrative Rule Amendments  
To Whom It May Concern,  
We are writing to offer comments on the Marijuana Regulatory Agency's ("MRA" or the  
"Agency") proposed amendments to the current Administrative Rules, Mich Admin Code R 420.1  
et seq. (the "Proposed Amendments") being promulgated under the Medical Marihuana Facilities  
Licensing Act ("MMFLA"), and the Michigan Regulation and Taxation of Marihuana Act  
("MRTMA").  
Our firm has served clients in the cannabis industry since before the MMFLA became law.  
We have collaborated extensively with the Agency to navigate the inevitable challenges of  
implementing each subsequent set of state regulations, including the current unified  
Administrative Rules (the "Rules") for medical and adult use marihuana businesses. Our comments  
are based on our collective experience. Pursuant to the rulemaking process and the request for  
public comments, please find below our comments and recommendations on the proposed rules.  
1. General Global Comments  
We appreciate the Proposed Amendments improved clarity and consistency—but believe  
additional clarity should be added to eliminate the enduring ambiguities we have encountered in  
the existing Rules to the greatest extent practicable. Moreover, we fear that many new provisions  
introduced in the Proposed Amendments may compound existing ambiguities. Finally, we believe  
many of the Proposed Amendments provide MRA with unfettered discretion to regulate by ad hoc  
Bulletin; a current practice of the MRA that at times has generated much consternation for  
attorneys, operators, and regulators alike.1  
1 The simple fact that MRA's Proposed Amendments clearly seek to codify the substance of numerous regulatory  
issues that were previously only contemplated in Bulletins as guidance or interpretative rules confirms that the  
substance of those Bulletins was not merely interpretative guidance but rule making. Two notable examples include  
the proposed addition of R 420.112a (regarding licensing, management, and other agreements), and the proposed  
changes to R 420.403 (regarding requirements and restrictions on marihuana-infused and edible marihuana  
products), each of which are substantively identical to the Bulletins MRA previously published on these topics—  
purportedly as mere interpretative guidance. If these prior Bulletins truly only provided interpretative rules or  
BDJ PLLC  
Comments on Proposed Rule Amendments  
The Proposed Amendments suggest that MRA will enjoy vast discretion to continue  
regulating Michigan's cannabis industry by Bulletin and bypassing the proper rulemaking  
procedures contemplated in the Michigan Administrative Procedures Act (MAPA). For instance,  
the Proposed Amendments seek to confer broad discretionary authority to MRA over (1) standard  
operating procedures for marihuana businesses,2 (3) quality assurance and validation measures for  
safety compliance labs,3 (4) material that must be distributed at a retail point of sale,4 and numerous  
other matters, that will surely come out in piecemeal communications, analyst decree, and the  
aforementioned bulletins; all of which will avoid public review and comment. Rather than  
continuing the Agency's current practice of rulemaking by Bulletin we urge MRA to add additional  
substance and clarification to the Proposed Rules with the requisite public notice and comment  
period. Denying licensees the opportunity to take notice of—and provide feedback on—future  
substantive rules could lead to future legal action against the Agency.  
We respectfully request that the Agency consider further revising the Proposed  
Amendments language to properly limit the scope and extent of discretionary authority MRA can  
deploy so the MRA, licensees, and applicants can operate under a concrete and well-defined set of  
new Final Rules. The Proposed Amendments could better achieve this objective.  
2. Marijuana Licenses – R 420.1 et seq.  
R420.1(1)(c)(i)—Definition of "Applicant"  
"Indirect ownership interest" should be defined. Despite public comments on the originally  
proposed language for this Rule that specifically requested further clarification of the phrase  
"indirect ownership interest," the final adopted Rules did not further define or clarify this term.  
Countless hours of unnecessary confusion and frustration for both industry participants and  
Agency staff alike have resulted from the ambiguity of this undefined term. We accordingly re-  
iterate the importance of providing sufficient definitional clarity for critical operative phrases and  
terms throughout the Proposed Amendments.5  
guidance, there would be no need to codify and promulgate them through the rulemaking process, as MRA now  
seeks to do.  
2 See Proposed R 420.206a.  
3 See Proposed R 420.305a.  
4 See Proposed R 420.504(4).  
5 The concept of an "indirect interest" or "indirect ownership" should also be used consistently both when  
determining which individuals or entities within the main applicant's organizational structure also count as  
supplemental applicants—and when determining what "other business interests" or "associated business" an  
applicant must disclose. However, this raises major administrability concerns—because any applicant who owns a  
single share of any exchange traded fund (ETF) that tracks a major stock index (e.g. the S&P 500, or Russell 2000)  
technically has an "indirect interest" in all 500 companies in the S&P, or all 2000 companies in the Russell.  
Attempting to disclose entire stock indices as "other business interests" or "associated businesses" would be entirely  
impracticable for both Agency analysts and applicants—but that is what consistent application of the phrase  
"indirect interest" in both the applicant identification and application disclosure contexts would require.  
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Other related examples of operational terms or phrases in R 420.1(1)(c) that require further  
clarification include, without limitation:  
"exercise control"  
o The Michigan Court of Appeals has held that "different percentages of control may  
be necessary to direct the management of different corporate entities."6 To  
illustrate, the Court opines that "if an entity requires a supermajority to undertake  
an action, a mere majority of common shareholders would not be sufficient" to  
establish control thereof.7 Thus, the Court concluded that "control" of a business  
entity depends "on the actual control of business" as structured in the entity’s  
governing documents.8  
o We urge MRA to adopt a formal definition of "control" that is consistent with the  
case law cited above.  
"participate in the management of"  
o Like the "exercise [of] control"—MRA has never clearly established what  
constitutes participation "in the management of" an applicant entity. We urge MRA  
to adopt a definition of "management" that is consistent with the case law cited  
above.  
R420.1(1)(c)(i)(I)—Definition of "Applicant" for a trust  
The proposed amendment for a trust application is impractical and potentially  
impracticable. The definition of "Applicant" for a trust seeks to add "trustees" and "any individual  
or body able to control and direct the affairs of the trust" without offering any further explanation  
of how this proposed expansion to the definition of a trust Applicant would apply to institutional  
trustees (e.g. large trust companies, financial institutions, law firms, etc.). Institutional trustees  
often assist in administrative matters necessary for the operation and maintenance of a trust with  
substantial assets—but typically do not make 'managerial' or 'business' decisions for the trust. If  
the Proposed Amendment to this Rule is not further revised to provide a safe harbor or other  
exemptions for institutional trustees, organizations including national banks—nearly all of which  
offer a variety of trust administration and management services9—would have to be treated as  
Applicants, even if the bank or other comparable institutional trustee does not participate in the  
operations or management of the prospective licensee in any conceivable manner.  
6 TRJ & E Props v City of Lansing, 323 Mich App 664, 673 (2018).  
7 Id.  
8 Id.  
9 See e.g. https://privatebank.jpmorgan.com/gl/en/services/trusts-and-estates/us-trust-services;  
https://www.privatebank.bankofamerica.com/solutions/individuals-families/trusts-estates.html;  
https://www.wellsfargo.com/the-private-bank/solutions/trust-services/;  
https://www.city.bank/personal/wealth/trust  
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R 420.4—Application requirements; financial and criminal background  
To the extent that MRA no longer requires applicants for licensure under the MMFLA to  
provide the financial statements contemplated in RR 420.4(2)(a)(i) and (ii)—these Rules  
should be updated or eliminated.  
The phrase "Controls, directly or indirectly" is susceptible to the same ambiguities noted  
above for R 420.1(1)(c)(i).  
The current language in R 420.4(2)(b)(ii) is impermissibly broad—insofar as it does not  
provide any standard for evaluating whether information is "required by the agency."  
The phrase "ownership interest" in the Proposed Amendment for R 420.4(3) is susceptible  
to the same ambiguities noted above for R 420.1(1)(c)(i).  
The Proposed Amendment for R 420.4(3)(b) directly contradicts the general 2.5%  
threshold for disclosing ownership interests in an applicant established in R 420.4(3) by  
mandating disclosure of "all shareholders"—which presumably includes those who own  
less than 2.5% of a private corporation applicant.  
The use of the phrase "shareholders holding a direct or indirect interest" in the Proposed  
Amendment for R 420.4(3)(c) requires further clarification. By definition, a "shareholder"  
is any entity or individual who owns shares of a corporation. Just as one cannot "indirectly"  
hold title to real or personal property—one cannot "indirectly" own shares of a corporation.  
Using the phrase "any individual or entity" in place of "shareholders" could eliminate this  
ambiguity.  
The Proposed Amendment for R 420.4(3)(f) directly contradicts the general 2.5% threshold  
for disclosing ownership interests in an applicant established in R 420.4(3) by mandating  
disclosure of "all members"—which presumably includes those whose membership  
interests consists of less than 2.5% of an LLC applicant.  
R 420.5—Application requirements; complete application  
The Proposed Amendment to R 420.5(1)(c)(ii) directly contradicts the general 2.5%  
threshold for disclosing ownership interests in an applicant established in R 420.4(3) by  
mandating disclosure of all "persons who have a direct or indirect ownership interest in the  
marihuana establishment."  
The phrase "direct or indirect ownership interest" as used in the Proposed Amendment to  
R 420.5(1)(c)(ii) is susceptible to the same ambiguities noted above for R 420.1(1)(c)(i).  
R 420.14—Notification and reporting  
It is unclear how an applicant could report the "appointment of a court-appointed personal  
representative, guardian, conservator, receiver, or trustee of the applicant" before such an  
appointment is made. At best, it seems that an applicant could report the possibility of a  
court ordering such appointments before they occur—but MRA cannot reasonably expect  
applicants to report a court order before the order has been issued.  
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3. Marijuana Licensees – R 420.101 et seq.  
R 420.101—Definitions  
All references to "industrial hemp" throughout the Rules and Proposed Amendments  
(including the Proposed Amendment to RR 420.101(1)(i) and (j)) should be updated to  
include reference to the Industrial Hemp Growers Act.10  
The phrases "exercise control over" and "participate in the management of" are susceptible  
to the same ambiguities noted above for R 420.1(1)(c)(i).  
The definition of "Managerial employee" provided in Proposed Amendment for R  
420.101(1)(m) includes ambiguous terms and phrases like "ability to control and direct the  
affairs of" and "ability to make policy concerning" a marihuana business that are  
susceptible to the same ambiguities noted above for R 420.1(1)(c)(i).  
R 420.112a—Licensing, management, or other agreements  
Though we support MRA's decision to formally promulgate substantive rules pertaining to  
these agreements, we respectfully re-iterate the concerns noted in our General Global  
Comments above regarding MRA's historical practice introducing these regulatory  
obligations through Bulletins or other "guidance" documents that it routinely seeks to  
enforce as binding legal authority.  
The difference between "gross" and "net" profits is substantial, however, MRA treats them  
as equivalent synonyms throughout the Rules and Proposed Amendments (including R  
420.112a(4)(ii)).  
o "Gross Profit" is traditionally defined as total revenue (sales) minus the cost of  
goods sold (COGS).  
o "Net Profit" is traditionally defined as Gross Profit minus operating expenses and  
all other expenses (e.g. taxes, interest paid on debt, etc.)11  
Proposed R 420.112a(5) would create an unreasonable burden on licensees that seek to use  
an assumed name or dba as authorized by another party to a licensing agreement—insofar  
as the mechanics of registering the assumed name when it is already registered to another  
entity is unduly cumbersome and time consuming. Under the statutory authority referenced  
in the Proposed Rule, if an unlicensed Michigan LLC (Entity A) registers the assumed  
name "ABC Cannabis" and enters into an agreement with a licensed Michigan entity  
(Entity B) that provides non-exclusive rights to use the assumed name "ABC Cannabis"—  
Entity A would have to withdraw its original assumed name registration and refile a new  
assumed name registration listing itself and Entity B on the registration. If Entity A  
subsequently entered into another agreement with licensed Entity C that provides the same  
non-exclusive use rights for the assumed name "ABC Cannabis"—it would have to  
withdraw the updated assumed name registration (listing Entity A and B) and refile a new  
assumed name registration listing Entities A, B, and C. While MRA could reasonably  
request copies of the licensing agreement as executed by the parties to verify that a given  
licensee has received proper authority from the party holding legal rights to an assumed  
10 Public Act 220 of 2020.  
11 The formula for calculating Net Income is traditionally stated as NI = R – COGS – OE – O – I – T; where NI =  
Net Income, R = Revenue, OE = Operating Expenses, O = Other Expenses, I = Interest, and T = Taxes.  
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Comments on Proposed Rule Amendments  
name or dba—there is no rational basis for requiring non-licensees to amend their assumed  
name filings every time they execute a new licensing agreement assigning use rights of  
their assumed name(s).  
4. Marijuana Licensees – R 420.201 et seq.  
R 420.201—Definitions  
The definition of "Applicant" provided in R 420.201(d) is inconsistent with the definition  
of "Applicant" provided in R420.1(1)(c)(i).  
The definition of "Applicant" for a trust provided in R 420.201(1)(d)(i)(I) is inconsistent  
with the definition of "Applicant" for a trust provided in the Proposed Amendment to  
R420.1(1)(c)(i)(I).  
The phrase "direct or indirect ownership interest" is susceptible to the same ambiguities  
noted above for R 420.1(1)(c)(i).  
The language in RR 420.201(1)(d)(i)(E) and (F) has not been amended to eliminate the  
incoherent reference to "indirect stockholders" discussed above in the Proposed  
Amendment for R 420.4(3)(c).  
R 420.204—Operation at same location  
The phrase "combined space" as used in the Proposed Amendment to R 420.204(4) should  
be further clarified or defined.  
R 420.206 Marihuana business; general requirements  
We implore MRA to expedite its work with MDARD to develop a pathway for licensed  
hemp growers and processors to enter cannabinoid biproducts into METRC.  
R 420.206a Standard operating procedures  
This newly proposed Rule seems duplicative of the existing requirements for applicants to  
submit a business plan—which licensees must maintain and update with MRA—including  
the applicant's plans for maintaining inventory and other business records, staffing and  
training employees, securing and otherwise operating the proposed marihuana business,  
etc.  
The language proposed in R 420.206a(4) seeks to delegate substantive rulemaking  
authority over "standard operating procedure requirements" to MRA, which would likely  
be issued in the form of Bulletins or other guidance. Under the MAPA, any new compliance  
obligations pertaining to the "standard operating procedures" contemplated throughout this  
proposed Rule would likely constitute substantive rulemaking that must be promulgated  
with an opportunity for public notice and comment. Since Agency guidance "does not have  
the full effect of law,"12 a licensee could possibly challenge the use of Bulletins or other  
12 See MCL § 24.203(7) (defining "guideline" as "an agency statement or declaration of policy that the agency  
intends to follow, that does not have the force or effect of law, and that binds the agency but does not bind any other  
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Comments on Proposed Rule Amendments  
guidance issued under this proposed Rule in any future enforcement action or  
proceedings.13  
R 420.207 Marihuana delivery; limited circumstances.  
R 420.207(2)'s restriction of delivering medical marihuana product only to a patient "at the  
patient's residential address" raises numerous questions and concerns about the measures  
medical licensees and their delivery employees must take to prevent mis-delivery to an  
address that reasonably appears to be the patient's bona fide residential address but is later  
determined not to be the bona fide residential address. We respectfully request further  
clarification of this topic.  
5. Marijuana Sampling and Testing – R 420.301 et seq.  
R 420.304 Sampling; testing  
R 420.304(2)(d) should specifically set forth standards for the "statistically valid sampling  
method" that safety compliance licensees must have "approved by the agency." When  
MRA's scientific department has been given discretion to issue interpretative guidance—  
they have produced new substantive rules that impose unduly draconian standards that are  
treated by MRA as binding legal authority.  
R 420.305 Testing; laboratory requirements  
Please list the mycotoxins that licensees must test for. MRA's scientific department has had  
ample opportunity to develop a list of the mycotoxins that licensees should be required to  
test for. Since Agency guidance "does not have the full effect of law," a licensee could  
possibly challenge the use of Bulletins or other guidance issued under this proposed Rule  
in any future enforcement action or proceedings.14  
The definition of "Cherry pick" provided in proposed R 420.305(16)(c) should be moved  
to the definitions section of this rule set.  
R 420.305a—Validations  
Without including clear standards for receiving agency approval of the "validations" and  
"validated methodologies" contemplated in this newly proposed Rule, MRA is self-  
delegating substantive rulemaking authority. We would request that the approval methods  
be included in the rules for public review and comment. Since Agency guidance "does not  
have the full effect of law," a licensee could possibly challenge the use of Bulletins or other  
person."). Cf. MCL § 24.207(1) (defining "rule" as "an agency regulation, statement, standard, policy, ruling, or  
instruction of general applicability that implements or applies law enforced or administered by the agency or that  
prescribes the law enforced or administered by the agency.").  
13  
See AFSCME v Mich Dep't of Mental Health, 452 Mich 1 (1996); Detroit Base Coalition for Human Rights of  
Handicapped v Dir, Dep't of Social Servs, 431 Mich 172 (1988).  
14 See notes 12 and 13, supra.  
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guidance issued under this proposed Rule in any future enforcement action or  
proceedings.15  
6. Marihuana-Infused Products and Edible Marihuana Product–R 420.401 et seq.  
R 420.403—Requirements and restrictions on marihuana-infused products  
The phrase "appropriately descriptive" as used in the Proposed Amendment to R  
420.403(7)(a) should be further clarified to give licensees adequate notice of their  
obligations under the rule.  
The phrase "component ingredients" as used in the Proposed Amendment to R  
420.403(7)(b) should be further clarified so licensees can prepare to make the necessary  
changes to their current packaging labels.  
The phrase "in charge" as added in the Proposed Amendment to R 420.403(8)(d) should  
be further clarified—particularly since this language seems to implicate a form of policy  
making authority or "control" of the licensee that could make this employee a "managerial  
employee" and thus, an "applicant."  
Insofar as the Proposed Amendments to R 420.403(9) principally introduce new negative  
restrictions—the structure of the Rule could be clearer if R 420.403(9) was amended and  
reorganized to read "A producer of edible marihuana products may not"  
The Proposed Amendment to R 420.403(9)(a) should be further clarified to provide a  
standard for determining whether the "shape" or "label" of a marihuana product "would  
appeal to minors aged 17 or younger." To date, MRA has issued guidance that does not  
provide any evidence or explanation for its determination that certain product label or  
package designs "appeal to minors"—and used this guidance as binding legal authority to  
impose transfer restrictions on products with purportedly non-compliant packaging. These  
restrictions could also possibly be challenged as an unconstitutional infringement of  
protected commercial speech rights.  
The Proposed Amendment to R 420.403(9)(a) should be further clarified to provide a  
standard for determining whether a proposed edible marihuana product "can be easily  
confused with a commercially available food product." As written – this language would  
appear to prohibit the production of all edible marihuana products, since all edible  
marihuana products could arguably be confused with a "commercially available food  
product" with some degree of relative ease. Licensees need clarity on what is "easily  
confused" and not "easily confused with a commercially available food product."  
The Proposed Amendment to R 420.403(9)(e) could be challenged as an unconstitutional  
restriction of licensee's commercial speech rights. In the parallel context of advertising  
restrictions for alcoholic beverages, the Federal Trade Commission has properly noted  
"[t]he First Amendment provides substantial protections to speech, and thus substantially  
limits the government’s ability to regulate truthful, non-deceptive alcohol advertising  
based on concerns about underage appeal. For this reason, the Federal Trade Commission  
has long encouraged the alcohol industry to adopt and comply with self-regulatory  
15 See notes 12 and 13, supra.  
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standards to reduce the extent to which alcohol advertising targets teens, whether by  
placement or content."16  
7. Marihuana Sale or Transfer–R 420.501 et seq.  
R 420.502—Tracking identification; labeling requirements; general  
The Proposed Amendment to R 420.502(2) seems intended to give MRA the authority to  
require licensees distribute informational materials at the point of sale, as contemplated in  
proposed Rule 420.504(4). However, by moving the modifier "material" from its original  
position after the word "information" to its position before the word "information"17—the  
Proposed Amendment implicates the legal term of art "material information." This term of  
art does not refer to physical informational materials—but rather, to information that is  
'material' (i.e. important or relevant to) making a particular decision. Further clarification  
is requested.  
R 420.504—Marihuana product sale or transfer; labeling and packaging requirements  
The proposed addition of R 420.504(4) could possibly be challenged for lacking a rational  
relation to MRA's statutorily defined policy objective. Insofar as licensees must already  
provide the national poison control hotline number, and express age or patient-status use-  
restrictions on the product label under existing rules, it is largely redundant to provide the  
same information in the form of 3.5 x 5-inch pamphlet. We respectfully remind MRA that  
licensees would principally bear the cost for producing and updating these pamphlets in  
accordance with any subsequent changes MRA may later propose as mandatory content  
for said pamphlets—which may add unnecessary strain to already tight operating budgets.  
Since Agency guidance "does not have the full effect of law," a licensee could possibly  
challenge the use of Bulletins or other guidance issued under this proposed Rule in any  
future enforcement action or proceedings.18  
R 420.507—Marketing and advertising restrictions  
The Proposed Amendment to R 420.507(2) is narrowly tailored to advance a substantial  
government interest in preventing the dissemination of false, deceptive, or misleading  
advertising—and is thus a constitutionally permissible restriction on commercial speech.19  
Any restrictions on the packaging or labeling designs of a marihuana product beyond the  
prohibition of false, deceptive, or misleading advertising contemplated in this Rule could  
possibly be challenged as an unconstitutional restriction of licensees' protected commercial  
speech.20  
16 https://www.consumer.ftc.gov/articles/0391-alcohol-advertising  
17 "require a marihuana business to provide material information or notifications…"  
18 See notes 12 and 13, supra.  
19 See Cent. Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557 (1980). Cf. R 420.403.  
20 See e.g. R 420.403.  
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8. Marihuana Hearings–R 420.701 et seq.  
R 420.704a—Hearing on exclusion of individuals or employees  
Insofar as the exclusion of an individual or employee from participation in Michigan's  
marihuana industry amounts to a restriction of individual liberty—we believe MRA's  
burden of proof should be higher than the "preponderance of the evidence" standard  
contemplated in proposed R 420.704a(5) as individuals liberty and pursuit of happiness  
may include working for a Marijuana establishment or facility and that type of restriction  
should not be taken lightly  
9. Marihuana Disciplinary Proceedings–R 420.801 et seq.  
R 420.802—Notification and Reporting  
The Proposed Amendment to R 420.802(3)(g) implicates the same concerns noted above  
in our comments regarding the Proposed Amendment to R 420.14. It is unclear how an  
applicant could report the "appointment of a court-appointed personal representative,  
guardian, conservator, receiver, or trustee of the applicant" before such an appointment is  
made. At best, it seems that an applicant could report the possibility of a court ordering  
such appointments before they occur—but MRA cannot reasonably expect applicants to  
report a court order before the order has been issued.  
The Proposed tattletale Amendment to R 420.802(4)(c) creates an unrealistic burden for  
licensees.  
R 420.808a—Exclusion  
The phrase "valid and current exclusion list from another jurisdiction in the United States"  
as used in proposed R 420.808a(1)(e) should be further clarified, as it is presently unclear  
what "exclusion lists" would potentially implicate this proposed Rule.  
Regards,  
BENJAMIN D JOFFE, PLLC  
Benjamin D Joffe  
Ari D Goldstein  
Page 10 of 10  
MEMORANDUM  
TO:  
Marijuana Regulatory Agency  
FROM:  
DATED:  
RE:  
Pollicella, PLLC d/b/a Cannabis Attorneys of Michigan  
September 27, 2021  
Comments to Draft Joint Administrative Rules  
In no particular order:  
420.3(4) We disagree with the ability of the MRA to revoke a prequalification approval because  
there are not sufficient due process protections built into this process to protect the prequalified  
applicants.  
420.13(5) Failure to file an AFS should be one factor in license renewal but should not, by itself,  
be a barrier to renewal. Additionally, there needs to be a defined time for what is considered a  
failure to renew. 30 days late? 90? 120?  
420.4(3):  
The language needs to be clarified. The initial sentence of the rule says an applicant only has to  
disclose person's having 2.5% or more ownership interest. But the subdivisions a-f (except for c)  
say applicants shall disclose the names of ALL members and managers, etc., for an LLC.  
420.6(6):  
Language that states a license is not a property right should be removed. A license is a property  
right. This is long-established law in Michigan and this provision is de facto invalid. (It was  
inserted on the Senate floor in 2015 by a staffer in exchange for a vote and never properly sent  
through LSB.)  
420.801 set:  
Not renewing a license due to a violation would be unconstitutional. It is akin to a revocation but  
would subvert (or try to subvert) the due process protections owed a licensee when the  
government agency wants to revoke a license.  
420.806 - Penalties:  
Under the current and proposed rules, one single "violation" of the act can be fined multiple  
times under (if applicable) multiple sections of the joint rules. It would be preferable to everyone  
to have some type of limit/cap of the number of fines per violation. This would give  
Private and Confidential Correspondence  
predictability to both the MRA and to persons/applicants/licensees subject to possible fines, and  
it would provide fairness and consistency in the MRA's deliverance of penalties.  
420.808a(1)(c):  
One of the reasons for being put on the exclusion list for employees is if the person has been  
found ineligible for licensure under the acts or rules. This is problematic and needs to be  
removed. An individual can be ineligible for licensure for a large variety of reasons unrelated to  
criminal history and those reasons are wholly unrelated to their ability to be employed by a  
licensed company. This prohibition goes beyond what is contemplated by both acts.  
420.8(2)(b)(viii):  
This requires that architectural plans include areas designated for contactless and limited contact  
transactions. This should just be for retail sales locations.  
What is missing:  
There needs to be a limit on the amount of time that:  
A product can be placed on administrative hold, particularly if the product has already passed  
testing. Placing products on hold indefinitely is an unconstitutional regulatory taking, and  
can result in the MRA effectively putting a company out of business. We recommend 90  
days total.  
A compliance complaint can be brought after a known violation. Licensees have received  
compliance complaints many months both after the alleged violation happened and after it  
was discovered. Bringing a compliant more than 9 or 12 months after an alleged violation  
leaves the Licensee without the ability to adequately respond to the complaint due to the time  
lapse. We recommend 6 months after the violation became known or 12 months after it  
happened, whichever is earlier.  
The MRA needs an independent (civilian or non-civilian) emergency review board to deal with  
summary suspensions and revocations. Because there is no licensing board as in other regulatory  
agencies, licensee-respondents are left to the slow and bureaucratic MOAHR process, which is  
also not equipped to deal with complex marijuana licensing or compliance matters, and does not  
provide hearings in a timely manner that meets the due process requirements of a summary  
suspension or revocation review. An emergency review board’s sole responsibility would be  
determining whether a summary suspension or revocation by the MRA is supported by enough  
evidence to permit it to continue during the complaint process. This is the right of every licensee  
who suffers hundreds of thousands of dollars in product, productivity, staffing and PR losses  
when a summary suspension or revocation action is taken by the MRA.  
The definition of Managerial Employeeneeds to include a manager of a Management  
Agreement. It needs to be very clear that a Management Agreement is a contract subject to  
MRA review and prequalification approval and that the manager in a Management Agreement  
meets the definition of Applicant.  
Private and Confidential Correspondence  
To:  
Michigan Marijuana Regulatory Agency - Legal Section  
VIA Email: Legal@michigan.gov  
From:  
Date:  
Re:  
Jennifer L. Domingue, Director of Compliance for Gage Cannabis Company  
September 27, 2021  
Comments to Proposed Rules  
______________________________________________________________________________  
To whom it may concern,  
Thank you for the opportunity to provide comment on the proposed rules. Below are some of the  
proposed rules we have identified as most important to our operations as a vertically-integrated  
cannabis company, and to the industry at large.  
1.  
MARIHUANA DISCIPLINARY PROCEEDINGS  
Rule 420.802(3) Notification and reporting  
(3) Licensees shall report to the agency any proposed material changes to the marihuana business  
before making a material change that may require prior authorization by the agency. A proposed  
material change is any action that would result in alterations or changes being made to the  
marihuana business to effectuate the desired outcome of a material change. Material changes,  
include, but are not limited to, the following:  
Comment on Proposed Rule:  
The proposed language is overly broad and puts an undue burden on licensees to make the  
Agency aware of any changes that it is considering even before it has made a decision to  
proceed with a material change.  
The proposed language is vague.  
Rule 420.802(4)(c) Notification and reporting.  
(4) A licensee shall notify the agency within 1 business day of becoming aware or within 1 business  
day of when the licensee should have been aware of any of the following:  
(c) Action by another party in actual or alleged violation of the acts or these rules.  
Comment on Proposed Rule:  
This proposed rule is not limited to the health and safety of the public.  
It is very difficult to determine when a licensee should have become aware of a violation.  
As written, the Agency could levy fines for an extensive length of time based upon its  
determination of when a licensee should have been aware of the violation.  
When read together with the definition if proposed rule 420.801(e) and (r), every potential  
breach of commercial contract could be a reportable event, disrupting routine commercial  
activity and potentially involving the MRA in purely commercial matters that are within  
the province of the courts or elsewhere.  
The Agency should more clearly define who will determine when the violation should have  
been known by the licensee, and the process for making that determination.  
Licensees already have a duty to report matters that are within their control (e.g., employee  
theft, diversion, etc.).  
Licensees should be given time to investigate alleged violations before bringing them to  
the Agency.  
The Agency should consider requiring notification to the Agency when the licensee is  
aware of an issue of public health and safety (i.e. – presence of glass shards in finished  
product, etc.)  
Rule 420.802(7) Notification and reporting.  
(7) The licensee shall notify the agency within 10 business days of terminating a licensing,  
management, or other agreement.  
Comment on Proposed Rule:  
A licensee should not have to notify the Agency every time it cancels a month-to-month  
contract with a service provider in the ordinary course of business.  
This proposed rule goes far beyond matters that affect health and safety or ownership and  
control, and should be amended to only apply to management agreements that cause a  
material change to the marihuana business.  
Rule 420.808a(1)(d) Exclusion.  
(8)a (1) A person may be excluded from employment at, or participation in, a marihuana business  
upon a finding of any of the following:  
… (d) The person has engaged in conduct that could negatively impact public health,  
safety, and welfare.  
Comment on Proposed Rule:  
808a(1)(d) is too vague because it relies on arbitrary judgment of MRA hearing officer as  
to relevance of time and nature of potentially offending conduct.  
The rule lacks sufficient definiteness to allow an ordinary person to understand what  
conduct it prohibits.  
2.  
MARIHUANA-INFUSED PRODUCTS AND EDIBLE MARIHUANA PRODUCT  
Rule 420.403(7)(a); 420.402(8)(d) Requirements and restrictions on marihuana-infused  
products; edible marihuana product.  
(7) A producer shall label all marihuana-infused product with all of the following:  
(a) The name of the marihuana-infuse product. The name of the product must be an  
appropriately descriptive phrase that accurately describes the basic nature of the product.  
Comment on Proposed Rule:  
The Agency should provide clarification on what it means by the “basic nature of the  
product.” (e.g., Does that mean that the product should include the words edible, gummy,  
mint, etc.?)  
The fourth point of this proposed rule is vague in that the phrase “in charge” is not defined.  
A “managing employee” is already defined and prequalified as a licensee; however, this  
appears to expand who must be considered a manager.  
Rule 420.403(9) A producer of edible marihuana product shall comply with the following:  
(…) (b) Not produce an edible marihuana product that is associated with or has cartoons,  
caricatures, toys, designs, shapes, labels, or packaging that would appeal to minors.  
(c) Not produce edible marihuana products that can be easily confused with a commercially  
available food product. The use of the word candy or candies on the packaging or labeling is  
prohibited.  
(d) Not produce edible marihuana products in the distinct shape of a human, animal, or fruit, or  
a shape that bears the likeness or contains characteristics of a realistic or fictional human, animal,  
or fruit, including artistic, caricature, or cartoon renderings. Edible marihuana products that are  
geometric shapes and fruit flavored are permissible.  
(e) Not package an edible marihuana product in a package that bears the image, likeness, or  
contains the characteristics of commercially available food products.  
Comment on Proposed Rule:  
This rule will have significant impact on some current market participants. Clients should  
assess costs that may be imposed related to package or product redesign that may be  
required to comply with this new rule.  
The final prohibited element “Not [produce a] package that […] contains the characteristics  
of commercially available food products” is ambiguous and subject to misunderstanding  
by licensees and other stakeholders. MRA should specify which characteristics are  
objectionable. Peanut butter is commonly sold in glass or plastic jars with screw-on plastic  
or metal lids; does the MRA intend to prohibit sales of marihuana products packaged in  
glass jars with screw-on lids because such packaging is a “characteristic” shared with a  
commercially available food product?  
In order to minimize economic impact to stakeholders, MRA should allow a “grandfather”  
or “sell-through” period or delay implementation of this proposed rule by a reasonable time  
period following adoption (e.g. six months) during which time licensees would be  
permitted to sell through existing product inventory before new packaging rules take effect.  
3.  
MARIHUANA LICENSEES  
R 420.101 (c, d, k, l, m, x); 420.112a(1-6) Definitions.  
(c) “Another party” or “other party” means an individual or company with which a licensee  
contracts to use the individual’s or company’s intellectual property or to utilize management or  
other services provided by the individual or company.  
(c d) “Applicant” means a person who applies for a marihuana license, subject to paragraphs (i)  
and (ii) of this subrule:  
(k) “Intellectual property” means all original data, findings, or other products of the mind or  
intellect commonly associated with claims, interests, and rights that are protected under trade  
secret, patent, trademark, copyright, or unfair competition law and includes brands or recipes.  
(l) “Licensing agreement” means any understanding or contract concerning the licensing of  
intellectual property between a licensee and another party.  
(m) “Management or other agreement” means any understanding or contract between a licensee  
and another party for the provision of management or other services that would allow the other  
party to exercise control over or participate in the management of the licensee or to receive more  
than 10% of the gross or net profit from the licensee during any full or partial calendar or fiscal  
year.  
(x) “Parties” means a licensee and another party pursuant to a licensing or management or other  
agreement.  
R 420.112a Licensing, management, or other agreements.  
(1) A licensee may contract with another party to use the other party’s intellectual property or for  
the other party to provide management or other services necessary for the operation of the licensee  
pursuant to a licensing, management, or other agreement approved by the agency.  
(2) A licensee shall submit a complete, unredacted, signed copy of the licensing, management, or  
other agreement to the agency for review and approval prior to performance under the agreement.  
Approval by the agency indicates an agency determination that it does not appear based upon the  
information provided that the other party meets the definition of applicant.  
(3) The agreement must include, but is not limited to, all of the following:  
(i) All payment terms between the parties. Licensing  
agreements must also include a requirement that all  
payments made to the other party pursuant to the  
licensing agreement must be made by the license and not  
by any other licensee purchasing the marihuana product.  
(ii) Terms specifically naming and clearly defining any  
service to be performed pursuant to the agreement.  
(iii) Terms specifically requiring all business operations  
related to the production, sales, invoicing, and payment  
for marihuana products sold pursuant to a licensing  
agreement must be performed by the licensee.  
(iv) A statement indicating that the agreement contains  
the entire agreement of the parties  
(4) Terms that may indicate the other party meets the definition of applicant and is thereby subject  
to application requirements, including, but not limited to, the following:  
(i) Any term or condition that would allow the other  
party to exercise control over or participate in the  
management of the licensee. This does not include  
control or terms specific to a licensing agreement such as  
production method or packaging requirements.  
(ii) Any term or condition that would allow the other  
party to receive more than 10% of the gross or net profit  
from the licensee during any full or partial calendar or  
fiscal year.  
(iii) Any term or condition that would result in the other  
party obtaining an ownership interest in the marihuana  
business or taking possession or ownership of marihuana  
product owned by the marihuana business.  
(iv) Any term or condition that would require the  
licensee to name the other party as a named insured on  
any insurance policy required to be maintained as a  
condition of a marihuana license.  
(5) Any term or condition that would allow the licensee to use an assumed name or doing business  
as in the operation of the licensee is not operative unless the licensee has complied with the  
requirements of 1907 PA 101, MCL 445.1 to 445.5.  
(6) The licensee shall provide any other information requested by the agency that is not  
inconsistent with the acts and these rules.  
Comment on Proposed Rule:  
This proposed rule does not affect the health or safety of the public.  
The proposed language is vague in that it does not define what constitutes management  
authority. We request that the MRA clearly define what services and activities qualify as  
management services for the purposes of this rule.  
This proposed rule has an adverse impact on business, when applied to proposed rule  
420.112a, in that it requires prior approval for non-cannabis commercial activity, increases  
the costs of each transaction, and would permit the MRA to determine its own, arbitrary  
commercial standard.  
This proposed rule, when applied to proposed rule 420 112a, sets an arbitrary limit of 10%  
of profit to determine that a service provider must apply for a license; MRA lacks the  
statutory authority to set this arbitrary percentage cap.  
This proposed rule should be limited to only considerations of ownership and control of  
licensees, and the health and safety of patients and workers.  
The enabling statutes – the Medical Marijuana Facilities Licensing Act (“MMFLA”), the  
Michigan Medical Marihuana Act (“MMMA”) and the Michigan Regulation and Taxation  
of Marihuana Act (“MRTMA”) – do not authorize that level of overreach to the MRA;  
This rule, when applied to proposed rule 420.112a, may violate the US Constitution’s  
Contract Clause (art. I, sec. X, Cl. 1) in that it would purport to allow the MRA to  
effectively terminate or re-write existing and enforceable agreements with licensees.  
4.  
MARIHUANA OPERATIONS  
R 420.203(2)(f)(i)(A-I) Marihuana licenses; licensees; operations; general.  
(i)  
A licensee shall maintain accurate and comprehensive financial records for each  
license that clearly documents the licensee’s income and expenses. Applicable  
supporting source documentation must be maintained, including, but not limited to, all  
of the following:  
(A) Cash logs.  
(B) Sales records.  
(C) Purchase of inventory.  
(D)Invoices.  
(E) Receipts.  
(F) Deposit slips.  
(G)Cancelled checks.  
(H)Employee compensation records.  
(I) Tax records.  
Comment on Proposed Rule:  
There should be timeline set by the Agency dictating how long these records must be kept  
by a licensee. Five (5) years is a standard retention time.  
R 420.206a(5) Standard operating procedures.  
(5) If the agency determines that any standard operating procedure contains inaccurate  
information or does not comply with these rules and safe food management guidelines, as  
applicable, the licensee may be required to correct and update the standard operating procedures  
immediately.  
Comment on Proposed Rule:  
It is unreasonable to ask a licensee to amend an SOP on the spot during an inspection. We  
propose that the Agency issue a deficiency notice to the licensee and allow adequate time  
for the licensee to make the necessary changes.  
R 420.214(b) Adverse reactions.  
1. A licensee shall notify the agency within 1 business day of becoming aware of within 1  
business day of when the licensee should have been aware of any adverse reactions to a  
marihuana product sold or transferred by any licensee.  
Comment on Proposed Rule:  
The Agency does not define an “adverse reaction”, which leads to an overbroad  
interpretation, leading to undue burden on licensees.  
At this point, an adverse reaction could be interpreted as any complaint or symptoms  
reported by consumers regarding any marihuana product, including but not limited to  
coughing, a “tickle in their throat”, headaches, sneezing, or tiredness. We propose the  
Agency clarify what type of adverse reactions should be reported.  
R 420.401(d) Definitions.  
(d) “Final package form” means the form a marihuana product is in when its is available for sale  
by a marihuana sales location. For marihuana products intended for inhalation, final form means  
the marihuana concentrate in the e-cigarette or vaping device.  
Comment on Proposed Rule:  
This proposed rule does not protect the health and safety of the public.  
5.  
MARIHUANA LICENSES  
R 420.6(6) State license under the Michigan regulation and taxation of marihuana act;  
issuance; qualifications; ineligibility.  
(6) A marihuana license is a revocable privilege granted by the agency and is not a property right.  
Granting a marihuana license does not create or vest any right, title, franchise, or other property  
interest. A licensee or any other person shall not lease, pledge, borrow, or loan money against a  
marihuana license.  
Comment on Proposed Rule:  
With respect to adult-use licenses, this proposed rule seems at odds with the holding in  
Brown v. Yousif 445 Mich. 222 (1994) where the court found Michigan liquor licenses to  
be a “general intangible” and “personal property” despite an MLCC rule to the contrary—  
similar to what MRA is proposing here -- because the MLCC did not have statutory  
authority to overrule article 9 of the Michigan UCC. Does MRA have authority where  
MLCC did not? See generally https://law.justia.com/cases/michigan/supreme-  
court/1994/96311-6.html  
This proposed rule has the effect of limiting investment and reducing access to capital for  
Michigan cannabis licensees. Rather than prohibiting a pledge of the license, MRA should  
require disclosure from lenders who take a license as security (similar to the MLCC’s  
process for parties that lend to liquor license operators). If a lender who is not an applicant  
seeks to foreclose or assume the license, MRA should support an escrow process for such  
foreclosed licenses, or facilitate a transfer to a new licensee operator.  
R 420.401 Definitions.  
(d) “Final package form” means the form a marihuana product is in when it is available for sale  
by a marihuana sales location. For marihuana products intended for inhalation, final form  
means the marihuana concentrate in the e-cigarette or vaping device.  
Comment on Proposed Rule:  
This proposed rule does not protect the health and safety of the public.  
R 420.403 Requirements and restrictions on marihuana-infused products; edible marihuana  
product.  
Summary of Changes:  
1) The Agency seeks to amend the current rule that prohibits producers from producing packaging  
or labels that would appeal to minors to include the shape of the edible product.  
2) The MRA proposes to expand the prohibition on producing edibles that can be easily confused  
with commercially sold candy to include all commercially available food products.  
Comment on Proposed Rule:  
DW does not have any objection to these proposed rules, but if you, as an operator, believe that  
any of these rules are unreasonable and should be challenged, please identify those rules.  
September 27, 2021  
Marijuana Regulatory Agency  
Legal Section  
P.O. Box 30205  
Lansing, MI 48909  
Via Email: MRA-Legal@michigan.gov  
Dear Marijuana Regulatory Agency (“MRA”):  
Thank you for the opportunity to comment on the proposed rule sets intended to promote clarity  
and consistency in Michigan’s medical and adult-use markets. Cresco Labs Michigan, LLC  
(“Cresco”) holds grower and processor licenses, operating a facility in Marshall. Cresco  
respectfully submits the following comments to the amended rule sets (proposed additions  
underlined in blue, proposed deletions in strikethrough red), which balance the clarity and  
flexibility necessary for operators with the interests of the program’s customers and patients and  
the other objectives essential to the implementation of a safe, secure and effective program:  
MARIHUANA DISCIPLINARY PROCEEDINGS  
R 420.802 Notification and reporting.  
[. . .]  
Rule 2.  
[. . .]  
(4) A licensee shall notify the agency within 1 3 business days of becoming aware or  
within 13 business days of when the licensee should have been aware of any of the  
following:;  
(a) Adverse reactions to a marihuana product sold or transferred by any licensee.  
(ba) Criminal convictions, charges, or civil judgments against a licensee in this state or any  
other state, federal, or foreign jurisdiction.  
(cb) Regulatory disciplinary action taken or determined against a licensee by this state or any  
other state, federal, or foreign jurisdiction, including any pending action.  
(c) Action by another party in actual or alleged violation of the acts or these rules.  
[. . .]  
Comment:  
Cresco respectfully urges the MRA to consider the above changes, which would afford operators  
a more reasonable period in which to report certain events. Allowing three businesses days rather  
than a single day would not be burdensome on the MRA and presents no risk to the public.  
Allowing license holders a small amount of additional time to understand whether an event must  
be reported, including with respect to new subsection (c), simply provides licensees with a fair  
amount of time in which to report events to the MRA.  
R 420.808a Exclusion.  
Rule 8a.  
Rule 8a. (1) A person may be excluded from employment at, or participation in, a  
marihuana business upon a finding of any of the following:  
[. . .]  
(e) The person is included on any valid and current exclusion list from  
another jurisdiction in the United States if the basis for the person’s inclusion  
on the exclusion list would also be grounds for exclusion as set forth in this  
Rule.  
[. . .]  
Comment:  
Cresco proposes to clarify the language set forth in the above rule, which would permit a person  
from being excluded from employment at, or participation in, a marihuana business based on that  
person’s exclusion from the cannabis industry in another state. Cresco submits that a person  
should only be excluded from participating in the cannabis industry in this state if the conduct or  
grounds for the person being excluded in another state would result in exclusion in this state.  
Absent clarification such as the above, an otherwise qualified individual may be prevented from  
participating in the Michigan cannabis industry for conduct that may acceptable under Michigan  
law.  
MARIHUANA-INFUSED PRODUCTS AND EDIBLE MARIHUANA PRODUCT  
R 420.403 Requirements and restrictions on marihuana-infused products; edible  
marihuanaproduct.  
Rule 3.  
[. . .]  
(7) A producer shall label all marihuana-infused product with all of the following:  
(a) The name of the marihuana-infused product. The name of the product must be an  
appropriately descriptive phrase that accurately describes the basic nature of the product.  
[. . .]  
(2) A producer of edible marihuana product shall comply with all the following:  
(a) Edible marihuana product packages shall nNot be in produce an edible marihuana  
product in a shape or with a labeled in a manner that would appeal to minors aged 17 years  
oryounger. Edible marihuana products shall not be associated with or have cartoons,  
caricatures,toys, designs, shapes, labels, or packaging that would appeal to minors.  
(b) Not produce an edible marihuana product that is associated with or has  
cartoons,caricatures, toys, designs, shapes, labels, or packaging that would appeal to  
minors.  
(bc) Not produce Eedible marihuana products shall not be that can be easily confused with a  
commercially sold candy available food product. The use of the word candy or candies on the  
packaging or labeling is prohibited. Edible marihuana products shall not be in the distinct shape  
of a human, animal, or fruit, or a shape that bears the likeness or contains characteristics of a  
realistic or fictional human, animal, or fruit, including artistic, caricature, or cartoon renderings.  
Edible marihuana products that are geometric shapes and simply fruit flavored are permissible.  
[. . .]  
(9) A producer of edible marihuana product shall comply with all the following:  
(a) Edible marihuana product packages shall nNot be in produce an edible marihuana  
product in a shape or with a labeled in a manner that would primarily appeal to minors  
aged 17 years oryounger. Edible marihuana products shall not be associated with or have  
cartoons, caricatures,toys, designs, shapes, labels, or packaging that would appeal to minors.  
(b) Not produce an edible marihuana product that is associated with or has cartoons,  
caricatures, toys, designs, shapes, labels, or packaging that would primarily appeal to  
minors.  
[. . .]  
(10) A producer shall not produce an edible marihuana product that requires time and  
temperature control for safety. The agency may publish validation guidance for shelf  
stable edible marihuana product. The agency may request to review the validation study  
for a shelfstable edible marihuana product. The end product must be a shelf stable edible  
marihuana product and state the following information:  
(a) A product expiration date, upon which the marihuana product is no longer fit  
for consumption and after which it must be destroyed. Once a label with an  
expiration date has been affixed to a marihuana product, a licensee shall not alter that  
expiration date or affix a newlabel with a later expiration date. The expiration date  
must consider all the following:  
(i) The quality and characteristics of the edible marihuana product.  
(ii) The packaging of the edible marihuana product.  
(iii) The customary conditions encountered by the edible marihuana product from  
product to sale.  
[. . .]  
Comment:  
With regard to the proposed amendment to subsection (7)(a) above, which would require operators  
to label products in a descriptive manner that accurately describes the basic nature of the product,  
Cresco respectfully asks the MRA to provide further clarify to operators. While Cresco  
understands the proposed rule to echoes recent packaging guidance issued by the MRA, the  
proposed rule is not precise and leaves operators to interpret the MRA’s intent with this additional  
language. Packaging and labeling changes take substantial time to design, implement, and  
purchase and changes cannot be made easily. Accordingly, to the extent the MRA can provide  
more specificity, codified in the rule, such would be to the benefit of both operators and the agency  
and would avoid costly changes to packaging that take considerable time to effectuate.  
Regarding subsections (9)(a) and 9(b), Cresco suggests the above change that more accurately  
reflects the intent of the rule and balances an operator’s ability to build brands and design  
packaging creatively while ensuring that such packaging is not aimed to the appeal of minors.  
Employment the qualifier “primarily” or “likely” is in line with other adult use jurisdictions and  
serves to accomplish the aim of the rule change.  
Additionally, related to subsection (10)(a)(i), Cresco seeks clarity from the MRA as to what is  
meant by the phrase “quality and characteristics of the edible marihuana product.” As drafted, this  
new language is subject to interpretation and is not defined within the amended rules. As a result,  
Cresco asks the MRA to consider providing further clarifying language to provide operators the  
necessary transparency to comply with the new rule.  
MARIHUANA LICENSEES  
R 420.106 Marihuana secure transporter license.  
Rule 6. (1) A marihuana secure transporter license authorizes the licensee to store and transport  
marihuana and money associated with the purchase or sale of marihuana between marihuana  
establishments for a fee upon request of a person with legal custody of that marihuana or  
money.It does not authorize transport to a registered qualifying patient or registered primary  
caregiver. If a marihuana secure transporter has its primary place of business in a municipality  
that has notadopted an ordinance under section 6 of the MRTMA, MCL 333.27956, prohibiting  
marihuana establishments, the marihuana secure transporter may travel through any  
municipality  
[. . .]  
Comment:  
Cresco respectfully asks that the MRA consider permitting operators to self-distribute to entities  
under common ownership if an operator meets the requirements set forth in the secure transporters  
Rule 420.106, set forth in part above.  
R 420.101 Definitions.  
[. . .]  
(cd) "Applicant" means a person who applies for a marihuana license, subject to paragraphs (i)  
and (ii) of this subrule:  
(i) For purposes of this definition, an applicant includes a managerial employee of the  
applicant, a person holding a direct or indirect ownership interest of more than 10% in theapplicant,  
and the following for each type of applicant:  
[. . .]  
(F) For a publicly held corporation: all corporate officers or persons with equivalent titles and  
their spouses, all directors and their spouses, all stockholders, not including those holding a direct  
or indirect ownership interest of 10% or less, and their spouses.  
[. . .]  
Comment:  
Cresco urges the MRA to consider the above changes to remove “spouses” from the definition of  
applicant with respect to publicly held corporations. Simply stated, the spouses of corporate  
officers, persons with equivalent titles, directors, and certain stockholders should not be construed  
as applicants under the law. Indeed, Michigan stands as an outlier in making such a determination,  
which only serves to burden applicants with additional disclosures not required in other similarly  
situated jurisdictions and does not advance any goal the state may have with regard to transparency.  
PART 3. AGREEMENTS  
R 420.112a Licensing, management, or other agreements.  
Rule 12a. (1) A licensee may contract with another party to use the other  
party’s intellectual property or for the other party to provide management  
or other services necessary for the operation of the licensee pursuant to a  
licensing, management, or otheragreement approved by the agency.  
(2) A licensee shall submit a complete, unredacted, signed copy of the licensing,  
management, or other agreement to the agency for review and approval prior to  
performance under the agreement. Approval by the agency indicates an agency  
determination that it does not appear based upon the information provided that the  
otherparty meets the definition of applicant.  
(3) The agreement must include, but is not limited to, all of the following:  
[. . .]  
Comment:  
While Cresco understands the intent behind the MRA’s propose rule, set forth above, and takes no  
issue with providing a licensing, management, or other agreement to the MRA for review to  
confirm that any third party does not meet the definition of an applicant, Cresco respectfully urges  
the MRA to take another approach with respect to the requirements set forth in the proposed rule.  
As currently drafted, the MRA’s requirements come close to dictating the terms of a business  
agreement, which Cresco respectfully suggests goes beyond the role of a regulator and is not the  
ultimately intent here. As an alternative approach, Cresco proposes the above rule be amended to  
plainly set forth what is prohibited from inclusion in such agreements rather than a list of required  
terms. Such an approach would still provide the MRA discretion over agreements but would not  
otherwise restrict the terms of such agreements (other than that certain terms cannot be included  
in such agreements).  
MARIHUANA LICENSES  
R 420.1 Definitions.  
Rule 1. (1) As used in these rules:  
[. . .]  
(a) "Applicant" means a person who applies for a marihuana license, subject to paragraphs  
(i)and (ii) of this subdivision:  
(i) For purposes of this definition, an applicant includes a managerial employee of  
the applicant, a person holding a direct or indirect ownership interest of more than 10%  
in theapplicant, and the following for each type of applicant:  
[. . .]  
(F) For a publicly held corporation: all corporate officers or persons with equivalent titles  
and their spouses, all directors and their spouses, all stockholders, not including those holding  
a direct or indirect ownership interest of 10% or less, and their spouses.  
Comment:  
Once again, as set forth above, Cresco urges the MRA to consider removing “spouses” from the  
definition of applicant with respect to publicly held corporations. The spouses of corporate  
officers, persons with equivalent titles, directors, and certain stockholders should not be construed  
as applicants under the law. Indeed, Michigan stands as an outlier in making such a determination,  
which only serves to burden applicants with additional disclosures not required in other similarly  
situated jurisdictions and does not advance any goal the state may have with regard to transparency.  
R 420.4 Application requirements; financial and criminal background.  
Rule 4. (1) Each applicant shall disclose the identity of any other person who controls, either  
directly or indirectly, the applicant, including, but not limited to, date of birth, government issued  
identification, and any other documents required by the agency.  
(2) Each applicant shall disclose the financial information required in the acts and these rules  
ona form created by the agency, including the following:  
(a) For an applicant seeking licensure under the medical marihuana facilities  
licensingactMMFLA, required information includes, but is not limited to, all of the  
following:  
(i) Financial statements regarding all of the following:  
(A) A pecuniary interest.  
(B) Any deposit of value of the applicant or made directly or indirectly to the applicant,  
orboth.  
(C) Financial accounts including, but not limited to, all of the following: funds, savings,  
checking, or other accounts including all applicable account information, such as the name of  
thefinancial institution, names of the account holders, account type, account balances, and a  
list of all loans types specified by the agency, amounts, securities, or lender information.  
(ii) Property ownership information, including, but not limited to, deeds, leases,  
rentalagreements, real estate trusts, or purchase agreements.  
(iii) Tax information, including, but not limited to, W-2 and 1099 forms, and any  
otherinformation required by the agency.  
(iv) Disclosure by the applicant of the identity of any other person who meets either  
of thefollowing:  
[. . .]  
(b) For an applicant seeking licensure under the Michigan regulation and taxation  
of marihuanaact MRTMA required information includes, but is not limited to, all of  
the following is required:  
(i) Tax information, including, but not limited to:  
(A) W-2 forms for the most recent tax year.  
(B) 1099 forms for the most recent tax year.  
(ii) Any other information required by the agency.  
[. . .]  
(3) Each applicant shall disclose all shareholders holding a direct or indirect interest of greater  
than 5%, officers, and directors in the proposed marihuana establishment. Each applicant shall  
disclose the identity of every person having a 2.5% or greater ownership interest in the  
applicant with respect to which the license is sought.  
[. . .]  
(c) If the disclosed entity is a publicly held corporation, the names and addresses of all  
shareholders holding a direct or indirect interest of greater than 5%, officers, and directors.  
Comment:  
As an initial matter, Cresco seeks clarification regarding subsections (2)(a) and (2)(b) of Rule 4,  
which appear to set forth different requirements for applicants in the medical and adult use  
programs in terms of financial information required to be disclosed. Cresco respectfully proposes  
that the MRA seek to align these requirements for consistency and to create parity between the  
programs. Further, to the extent disclosures are not accompanied by any temporal limitations,  
Cresco proposes that the MRA take steps to limit the information required to be produced. For  
example, an applicant under the MMFLA must produce tax information (see subsection (2)(a)(iiii))  
whereas an applicant under the MRTMA must produce tax information for the most recent tax  
year (see subsection (2)(b)(i)).  
Further, Cresco seeks clarity from the MRA as to the required disclosures applicable to a publicly  
held corporation. The definition of applicant in Rule 420.1 defines an applicant as a person holding  
an interest of more than 10% in the applicant while subsection (3) of this rule mandates disclosure  
of the identity of every person having a 2.5% or greater ownership interest and subsection (3)(c)  
requires a publicly held corporation to disclose certain persons holding a 5% of greater interest in  
the business.  
R 420.13 Renewal of marihuana license.  
Rule 13.  
[. . .]  
(c) For an applicant seeking renewal of a license under the MMFLA, confirmation of  
municipal compliance on an attestation form provided by the agency that includes all of the  
following Aattestation by the municipality on a form created by the agency regarding a licensee  
who submits an application for marihuana license renewal which shall include, but not be limited  
to, both of the following:  
(i) A description of any violation, if applicable, of an ordinance or a zoning regulation  
adoptedpursuant to section 205 of the medical marihuana facilities licensing actMMFLA,  
MCL 333.27205, or section 6 of the Michigan regulation and taxation of marihuana act, MCL  
333.27956, committed by the licensee, but only if the violation relates to activities licensed  
underthe acts or these rules.  
(ii) Whether there has been a change to an ordinance or a zoning regulation adopted pursuant  
to section 205 of the medical marihuana facilities licensing actMMFLA, MCL 333.27205, or  
section 6 of the Michigan regulation and taxation of marihuana act, MCL 333.27956, since the  
marihuana license was issued to the licensee and a description of the change.  
(iii) The date and signature of the clerk of the municipality or his or her designee.  
(iv)The date and signature of the applicant.  
(v)The name and address of the marihuana facility.  
(vi) The license type of the marihuana facility.  
(d) For an applicant seeking renewal of a license under the MRTMA, confirmation of  
municipal compliance on an attestation form provided by the agency that includes all of  
the following:  
(i) A description of any violation, if applicable, of an ordinance or a zoning  
regulation consistent with section 6 of the MRTMA, MCL 333.27956, committed by  
the licensee, butonly if the violation relates to activities licensed under the act or these  
rules.  
(ii) Whether there has been a change to an ordinance or a zoning regulation  
consistent with section 6 of the MRTMA, MCL 333.27956, since the marihuana license  
was issued tothe licensee and a description of the change.  
(iii) The following information for the municipality where the marihuana  
establishmentis located, including, at a minimum, all of the following:  
(A) The name and address of the marihuana establishment.  
(B) The license type of the marihuana establishment.  
(C) The municipality where the marihuana establishment is located.  
(D) The contact information for the municipality, including, at a minimum, all of  
thefollowing:  
(I) The name of the clerk of the municipality or his or her designee.  
(II) The telephone number of the clerk of the municipality or his or her designee.  
(III) The email address of the clerk of the municipality or his or her designee.  
(IV) The mailing address of the clerk of the municipality or his or her designee.  
(iv) Confirmation that the municipality has not adopted an ordinance prohibiting  
theproposed marihuana establishment.  
(v) Confirmation that the applicant is in compliance with any ordinance the  
municipalityhas adopted relating to marihuana establishments within its jurisdiction,  
including zoning regulations.  
(vi) Attestation that the applicant will report any changes that occur with municipal  
ordinances or zoning regulations that relate to the marihuana establishment, any  
municipal establishment approvals, or any violations of a municipal or zoning  
regulation.  
The date and signature of the applicant.  
[. . .]  
Comment:  
With respect to the requirements of the above Rule, Cresco asks that the MRA consider the scope  
of information required of municipalities and how to address situations where a licensee may be  
unable to procure the necessary information in a timely fashion from a municipality so that the  
licensee may continue to serve patients and customers without disruption.  
R 420.14 Notification and reporting.  
[. . .]  
(4) An applicant shall notify the agency within 13 business days of becoming aware of or  
within 13 business days of when the applicant should have been aware of any of the following:  
[. . .]  
Comment:  
Cresco respectfully urges the MRA to consider the above change, which would afford operators a  
more reasonable period in which to report certain events. Allowing three businesses days rather  
than a single day would not be burdensome on the MRA and presents no risk to the public.  
Affording license holders a small amount of additional time to understand whether an event must  
be reported simply provides licensees with a fair amount of time in which to report events to the  
MRA.  
MARIHUANA OPERATIONS  
R 420.1 Definitions.  
Rule 1. (1) As used in these rules:  
[. . .]  
(d) "Applicant" means a person who applies for a marihuana license, subject to paragraphs (i)  
and (ii) of this subdivision:  
(i) For purposes of this definition, an applicant includes a managerial employee of the  
applicant, a person holding a direct or indirect ownership interest of more than 10% in the  
applicant, and the following for each type of applicant:  
[. . .]  
(F) For a publicly held corporation: all corporate officers or persons with equivalent titles and  
their spouses, all directors and their spouses, all stockholders, not including those holding a direct  
or indirect ownership interest of 10% or less, and their spouses.  
Comment:  
As stated above, Cresco respectfully asks the MRA to consider removing “spouses” from the  
definition of applicant with respect to publicly held corporations. The spouses of corporate  
officers, persons with equivalent titles, directors, and certain stockholders should not be construed  
as applicants under the law. As noted above, Michigan stands as an outlier in making such a  
determination, which only serves to burden applicants with additional disclosures not required in  
other similarly situated jurisdictions and does not advance any goal the state may have with regard  
to transparency.  
R 420.206 Marihuana business; general requirements.  
Rule 6.  
[. . .]  
(13) All ingredients containing cannabinoids, whether naturally occurring or  
synthetically derived, that are added to marihuana or marihuana products must be from a  
source licensed to grow, handle, and produce cannabinoids under a license issued by  
a governmental authority and entered into the statewide monitoring system.  
(14) When combining more than 1 form of marihuana or marihuana product into a  
single marihuana product, each form of marihuana or marihuana product must have  
passing safety compliance test results in the statewide monitoring system prior to the creati  
on of the new combined product.  
[. . .]  
Comment:  
Cresco respectfully seeks clarification from the MRA regarding the meaning of the above  
language. Specifically, does the MRA intend subsection (13) of Rule 6 to mean an operator can  
procure hemp-derived cannabinoids from outside of Michigan as long as the source of the  
cannabinoids is licensed in the state in which it operates and the product passes testing, as set forth  
in subsection (14).  
R 420.207 Marihuana delivery; limited circumstances.  
Rule 7.  
[. . .]  
(9) To ensure the integrity of the marihuana sales location operation, a A marihuana  
delivery employee shall comply with all the following:  
[. . .]  
(d) A marihuana delivery employee shall not carry marihuana product in the delivery  
vehicle with a value in excess of $5,000.00 (pre-tax retail value) at any time. The value of  
marihuana products carried in the delivery vehicle for which a delivery order was not received  
and processed by the licensed retailer prior to the delivery employee departing from the  
marihuana sales location may not exceed $3,000.00 (pre-tax retail value). For the purposes of  
this subrule, the value of marihuana products must be determined using the current retail price  
of all marihuana products carried by, or within the delivery vehicle of, the marihuana delivery  
employee.  
[. . .]  
Comment:  
Cresco respectfully asks the MRA to consider the above change to clarify that value of products  
is measured before tax. Such is a reasonable clarification and would be easier for operators to  
navigate compared to determining product value post-tax.  
R 420.214b Adverse reactions.  
Rule 14b. (1) A licensee shall notify the agency within 13 business days of becoming  
aware or within 1 business day of when the licensee should have been aware of any  
adverse reactions to a marihuana product sold or transferred by any licensee.  
(2) A licensee shall enter into the statewide monitoring system within 13 business days  
of becoming aware of or within 1 business day of when the licensee should have been  
aware of any adverse reactions to a  
marihuana product sold or transferred by any licensee.  
Comment:  
As an initial point, Cresco requests the MRA to consider the above change, which would afford  
operators a more reasonable period in which to report certain events. Allowing three businesses  
days rather than a single day would not be burdensome on the MRA and presents no risk to the  
public. Further, permitting license holders a small amount of additional time to understand whether  
an adverse reaction has actually occurred must be reported provides licensees with a fair amount  
of time in which to report adverse reactions.  
Additionally, Cresco asks the MRA to consider eliminating language that would mandate a  
licensee to report (and enter information into the statewide monitoring system) within one business  
day of when the licensee “should have been aware” of an adverse reaction occurred. Licensees can  
only fairly report information they are aware of and it is unclear, as a general matter, how a licensee  
can report and enter information concerning an event which they were not aware of but “should  
have been.” As a result, Cresco proposes the above changes to Rule 420.214b.  
R 420.214c Product returns.  
Rule 14c. (1) A marihuana sales location may accept the return of marihuana product  
that is reported to have caused an adverse reaction or is determined to be defective.  
(2) A marihuana sales location must have a written policy for the return of marihuana  
product that contains, at a minimum, the following:  
[. . .]  
(g) A marihuana retailer may return a marihuana product that is past its expiration date  
to the marihuana processor who produced the marihuana product for destruction or  
retesting and/or remediation instead of destroying the marihuana product.  
Comment:  
Cresco respectfully asks the MRA to consider permitting operates to retest and remediate, as  
necessary, any product that has been returned as being past an expiration date. With appropriate  
testing and/or the application of remediation, a product can be assured as appropriately dispensed  
to the public. Such would avoid the unnecessary destruction of products to the expense of operators  
and ultimately to patients and customers who would not have that product available.  
MARIHUANA SAMPLING AND TESTING  
R 420.303 Batch; identification and testing.  
Rule 3.  
[. . .]  
(6) A cultivator may transfer or sell fresh frozen or dry marihuana to a producer without first  
being tested by a laboratory in order to produce fresh frozen live resin or rosin, or if the marihuana  
product willbe refined to a concentrate extracted, with agency approval. A cultivator may not  
transfer or sell marihuana to a producer under this rule if the package contains more than  
1 harvest batch. This does not prohibit a cultivator from transferring multiple harvest  
batches for extraction. After the producer has processed extracted the material, the producer  
shall have the sample tested for all required safety tests pursuant to R 420.304 and R 420.305. A  
producer that received a package under this rule that has not been processed may transfer  
that package to another producer without having the package first tested by a laboratory to  
produce live resin or rosin or concentrate with agency approval. The agency may publish  
guidance for fresh frozen and concentrate production, transfer, and sale.  
Comment:  
Cresco asks the MRA to consider the above changes which would provide operators with  
flexibility while continuing to ensure products meet testing standards before being dispensed to  
patients or customers. As drafted, the above rule would permit the transfer of fresh frozen  
marijuana to a producer to make live resin or marihuana extract without first being tested, with  
MRA approval. Cresco proposes that rosin be included in the above amended regulation, as a  
reasonable expansion of this amended rule. Cresco further suggests that the ability to transfer  
biomass intended for extraction should not be limited to fresh frozen marihuana and should also  
include dry marihuana. And finally, Cresco proposes removing the requirement that an operator  
must request and receive approval before transferring materials that will be subject to extraction.  
The above modifications serve to reasonably expand the intent of the rule and would not result in  
untested product being offered for sale. Indeed, the above modifications further the purpose of the  
rule change, by permitting the transfer of biomass that will be subject to extraction without  
requiring that the marihuana be subject to a pre-transfer test and then tested again following  
extraction.  
MARIHUANA EMPLOYEES  
R 420.601 Definitions.  
Rule 1. (1) As used in these rules:  
[. . .]  
(de) “Employee” means, except as otherwise provided in these rules, a person performing work  
or service for direct compensation from the marihuana establishment. “Employee” does not  
include individuals providing trade or professional services who are not normally engaged in the  
operation of a marihuana establishment.  
[. . .]  
Comment:  
Cresco proposes the above changes to the definition of employee in this rule setand in other rule  
sets that employs the same definition of employeeas the current definition is overly broad. By  
enacting the above changes, the definition more clearly defines the term “employee.”  
Thank you for the opportunity to comment on these proposed rule sets. Cresco welcomes the  
opportunity to provide the MRA with any additional feedback or information.  
Sincerely,  
Cresco Labs Michigan, LLC  
M E M O R A N D U M  
Michigan Marijuana Regulatory Agency  
Jim Boland and Lloyd Pierre Louis  
To:  
From:  
Date:  
Re:  
September 27, 2021  
Comments on Proposed Rules  
Our law firm represents a number of clients licensed by and participating within  
Michigan’s Medical and Recreational Marijuana Program. The purpose of this letter is to provide  
comments to the MRA in opposition to the proposed rules below.  
Rule at issue: 420.802(3) Notification and reporting  
(3) Licensees shall report to the agency any proposed material changes to the marihuana  
business before making a material change that may require prior authorization by the  
agency. A proposed material change is any action that would result in alterations or  
changes being made to the marihuana business to effectuate the desired outcome of a  
material change. Material changes, include, but are not limited to, the following:  
Comment on Proposed Rule:  
The proposed language is overly broad and puts an undue burden on licensees to  
make the Agency aware of any changes that it is considering even before deciding  
to proceed with a material change.  
The proposed language is vague.  
Rule at issue: 420.802(4)(c) Notification and reporting.  
(4) A licensee shall notify the agency within 1 business day of becoming aware or within  
1 business day of when the licensee should have been aware of any of the following:  
(c) Action by another party in actual or alleged violation of the acts or these rules.  
Comment on Proposed Rule:  
This proposed rule is not limited to the health and safety of the public.  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
2
It is difficult to determine when a licensee should have become aware of a violation.  
As written, the Agency could levy fines for an extensive length of time based upon  
its determination of when a licensee should have been aware of the violation.  
When read together with the definition if proposed rule 420.801(e) and (r), every  
potential breach of commercial contract could be a reportable event, disrupting  
routine commercial activity and potentially involving the MRA in purely  
commercial matters that are within the province of the courts or elsewhere.  
The Agency should more clearly define who will determine when the licensee  
should have known the violation and the process for making that determination.  
Licensees already have a duty to report matters that are within their control (e.g.,  
employee theft, diversion, etc.).  
Licensees should be given time to investigate alleged violations before bringing  
them to the Agency.  
Rule at issue: 420.802(7) Notification and reporting.  
(7) The licensee shall notify the agency within 10 business days of terminating a licensing,  
management, or other agreement.  
Comment on Proposed Rule:  
A licensee should not have to notify the Agency every time it cancels a month-to-  
month contract with a service provider in the ordinary course of business.  
This proposed rule goes far beyond matters that affect health and safety or  
ownership and control and should be amended to only apply to management  
agreements that cause a material change to the marihuana business.  
Rule at Issue: 420.808a(1)(d) Exclusion.  
(8)a (1) A person may be excluded from employment at, or participation in, a marihuana  
business upon a finding of any of the following:  
… (d) The person has engaged in conduct that could negatively impact public  
health, safety, and welfare.  
Comment on Proposed Rule:  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
3
808a(1)(d) is too vague because it relies on the arbitrary judgment of the MRA  
hearing officer regarding the relevance of time and nature of potentially offending  
conduct.  
The rule lacks sufficient definiteness to allow an ordinary person to understand  
what conduct it prohibits.  
Rules at issue: 420.403(7)(a); 420.402(8)(d) Requirements and restrictions on marihuana-  
infused products; edible marihuana product.  
(7) A producer shall label all marihuana-infused product with all of the following:  
(a) The name of the marihuana-infused product. The name of the product must  
be an appropriately descriptive phrase that accurately describes the basic  
nature of the product.  
Comment on Proposed Rule:  
The Agency should provide clarification on what it means by the “basic nature of  
the product.” (e.g., does that mean that the product should include the words edible,  
gummy, mint, etc.?)  
The fourth point of this proposed rule is vague in that the phrase “in charge” is not  
defined. A “managing employee” is alreadydefined and prequalified as a licensee;  
however, this appears to expand who must be considered a manager.  
Rule 420.403(9) A producer of edible marihuana product shall comply with the following:  
(…) (b) Not produce an edible marihuana product that is associated with or has cartoons,  
caricatures, toys, designs, shapes, labels, or packaging that would appeal to minors.  
(c) Not produce edible marihuana products that can be easily confused with a  
commercially available food product. The use of the word candy or candies on the  
packaging or labeling is prohibited.  
(d) Not produce edible marihuana products in the distinct shape of a human, animal, or  
fruit, or a shape that bears the likeness or contains characteristics of a realistic or fictional  
human, animal, or fruit, including artistic, caricature, or cartoon renderings. Edible  
marihuana products that are geometric shapes and fruit flavored are permissible.  
(e) Not package an edible marihuana product in a package that bears the image, likeness,  
or contains the characteristics of commercially available food products.  
Comment on Proposed Rule:  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
4
The final prohibited element, “Not [produce a] package that […] contains the  
characteristics of commercially available food products” is ambiguous and subject  
to misunderstanding by licensees and other stakeholders. MRA should specify  
which characteristics are objectionable. For example, peanut butter is commonly  
sold in glass or plastic jars with screw-on plastic or metal lids; does the MRA  
intend to prohibit sales of marihuana products packaged in glass jars with screw-  
on lids because such packaging is a “characteristic” shared with a commercially  
available food product?  
In order to minimize economic impact to stakeholders, MRA should allow a  
“grandfather” or “sell-through” period or delay implementation of this proposed  
rule by a reasonable time period following adoption (e.g., six months), during  
which time licensees would be permitted to sell through existing product  
inventory before new packaging rules take effect.  
Rules at issue: 420.101 (c, d, k, l, m, x); 420.112a (1-6)  
420.101 Definitions  
(c) “Another party” or “other party” means an individual or company with which a  
licensee contracts to use the individual’s or company’s intellectual property or to utilize  
management or other services provided by the individual or company.  
(c d) "Applicant" means a person who applies for a marihuana license, subject to  
paragraphs (i) and (ii) of this subrule:  
(k) “Intellectual property” means all original data, findings, or other products of the mind  
or intellect commonly associated with claims, interests, and rights that are protected under  
trade secret, patent, trademark, copyright, or unfair competition law and includes brands  
or recipes.  
(l) “Licensing agreement” means any understanding or contract concerning the licensing  
of intellectual property between a licensee and another party.  
(m) “Management or other agreement” means any understanding or contract between a  
licensee and another party for the provision of management or other services that would  
allow the other party to exercise control over or participate in the management of the  
licensee or to receive more than 10% of the gross or net profit from the licensee during  
any full or partial calendar or fiscal year.  
(x) “Parties” means a licensee and another party pursuant to a licensing or management  
or other agreement.  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
5
R 420.112a Licensing, management, or other agreements.  
(1) A licensee may contract with another party to use the other party’s intellectual property  
or for the other party to provide management or other services necessary for the operation  
of the licensee pursuant to a licensing, management, or other agreement approved by the  
agency.  
(2) A licensee shall submit a complete, unredacted, signed copy of the licensing,  
management, or other agreement to the agency for review and approval prior to  
performance under the agreement. Approval by the agency indicates an agency  
determination that it does not appear based upon the information provided that the other  
party meets the definition of applicant.  
(3) The agreement must include, but is not limited to, all of the following:  
(i) All payment terms between the parties. Licensing  
agreements must also include a requirement that all  
payments made to the other party pursuant to the  
licensing agreement must be made by the license and not  
by any other licensee purchasing the marihuana product.  
(ii) Terms specifically naming and clearly defining any  
service to be performed pursuant to the agreement.  
(iii) Terms specifically requiring all business operations  
related to the production, sales, invoicing, and payment  
for marihuana products sold pursuant to a licensing  
agreement must be performed by the licensee.  
(iv) A statement indicating that the agreement contains  
the entire agreement of the parties  
(4) Terms that may indicate the other party meets the definition of applicant and is thereby  
subject to application requirements, including, but not limited to, the following:  
(i) Any term or condition that would allow the other  
party to exercise control over or participate in the  
management of the licensee. This does not include  
control or terms specific to a licensing agreement such as  
production method or packaging requirements.  
(ii) Any term or condition that would allow the other  
party to receive more than 10% of the gross or net profit  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
6
from the licensee during any full or partial calendar or  
fiscal year.  
(iii) Any term or condition that would result in the other  
party obtaining an ownership interest in the marihuana  
business or taking possession or ownership of marihuana  
product owned by the marihuana business.  
(iv) Any term or condition that would require the  
licensee to name the other party as a named insured on  
any insurance policy required to be maintained as a  
condition of a marihuana license.  
(5) Any term or condition that would allow the licensee to use an assumed name or doing  
business as in the operation of the licensee is not operative unless the licensee has complied  
with the requirements of 1907 PA 101, MCL 445.1 to 445.5.  
(6) The licensee shall provide any other information requested by the agency that is not  
inconsistent with the acts and these rules.  
Comment on Proposed Rules:  
This proposed rule does not affect the health or safety of the public.  
The proposed language is vague in that it does not define what constitutes  
management authority. Therefore, we request that the MRA clearly define what  
services and activities qualify as management services for the purposes of this  
rule.  
This proposed rule has an adverse impact on business when applied to proposed  
rule 420.112a, in that it requires prior approval for non-cannabis commercial  
activity, increases the costs of each transaction, and would permit the MRA to  
determine its own arbitrary commercial standard.  
This proposed rule, when applied to proposed rule 420 112a, sets an arbitrary  
limit of 10% of profit to determine that a service provider must apply for a  
license; MRA lacks the statutory authority to set this arbitrary percentage cap.  
This proposed rule should be limited to only considerations of ownership and  
control of licensees and the health and safety of patients and workers.  
The enabling statutes – the Medical Marijuana Facilities Licensing Act  
(“MMFLA”), the Michigan Medical Marihuana Act (“MMMA”) and the  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
7
Michigan Regulation and Taxation of Marihuana Act (“MRTMA”) – do not  
authorize that level of overreach to the MRA;  
When applied to proposed rule 420.112a, this rule may violate the US  
Constitution’s Contract Clause (art. I, sec. X, Cl. 1) in that it would purport to  
allow the MRA to effectively terminate or terminate re-write existing and  
enforceable agreements with licensees.  
Rule at issue: 420.203(2)(f)(i)(A-I) Marihuana licenses; licensees; operations; general.  
(i) A licensee shall maintain accurate and comprehensive financial records for each  
license that clearly documents the licensee’s income and expenses. Applicable  
supporting source documentation must be maintained, including, but not limited to,  
all of the following:  
(A) Cash logs.  
(B) Sales records.  
(C) Purchase of inventory.  
(D) Invoices.  
(E) Receipts.  
(F) Deposit slips.  
(G) Cancelled checks.  
(H) Employee compensation records.  
(I) Tax records.  
Comment on Proposed Rule:  
There should be a timeline set by the Agency dictating how long a licensee must  
keep these records. For example, five (5) years is a standard retention time.  
Rule at issue: 420.206a(5) Standard operating procedures.  
(5) If the agency determines that any standard operating procedure contains  
inaccurate information or does not comply with these rules and safe food management  
guidelines, as applicable, the licensee may be required to correct and update the standard  
operating procedures immediately.  
Comment on Proposed Rule:  
It is unreasonable to ask a licensee to amend an SOP on the spot during an  
inspection. Therefore, we propose that the Agency issue a deficiency notice to the  
licensee and provide adequate time for the licensee to make the necessary changes.  
Rule at issue: R 420.401(d) Definitions.  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
8
(d) “Final package form” means the form a marihuana product is in when it is available  
for sale by a marihuana sales location. For marihuana products intended for inhalation,  
final form means the marihuana concentrate in the e-cigarette or vaping device.  
Comment on Proposed Rule:  
This proposed rule does not protect the health and safety of the public.  
Rule at issue: 420.207a Contactless and limited contact transactions.  
(1) A marihuana sales location may designate an area for contactless or limited contact  
transactions unless prohibited by an ordinance adopted by the municipality where the  
marihuana sales location is located.  
(2) A marihuana sales location may accept online orders for marihuana product and  
payment for the order that will be picked up at the marihuana sales location.  
(3) The designated area for contactless or limited contact transactions must be  
identified in the marihuana business location plan.  
(4) A marihuana sales location operating a contactless or limited contact transaction  
must have a written standard operating procedure in place and be made available to  
the agency upon request.  
(5) Contactless or limited contact transactions must be completed during normal  
business hours.  
(6) A marihuana sales location using a designated area for contactless or limited  
contact transactions must have in place an anti-theft policy, procedure, or automatic  
capability.  
(7) The designated area for contactless or limited contact transactions must comply  
with R 420.209.  
(8) The contactless and limited contact transaction must comply with R 420.505 and R  
420.506.  
(9) Marihuana being transferred during a contactless or limited contact transaction  
must be in an opaque bag and the contents must not be visible to the general public upon  
pick up.  
Comment on Proposed Rule:  
If this rule is intended to provide explicit authority for licensees to operate drive-  
through service at the licensed premises or delivery services based from the  
licensed premises using registered employees of the licensee, it would be beneficial  
to licensees and other stakeholders if MRA would spell those intentions out  
explicitly in the rule. As proposed, the rule could be construed to permit other types  
of contactless transactions (e.g., vending machines), which may not be in the  
MRA’s intended scope of authorization.  
Letter:  
DATE:  
PAGE:  
Marijuana Regulatory Agency  
September 15, 2021  
9
Rule at Issue: 420.6(6)  
(6) A marihuana license is a revocable privilege granted by the agency and is not a  
property right. Granting a marihuana license does not create or vest any right, title,  
franchise, or other property interest. A licensee or any other person shall not lease,  
pledge, borrow, or loan money against a marihuana license.  
Comment on Proposed Rule:  
With respect to adult-use licenses, this proposed rule seems at odds with the  
holding in Brown v. Yousif 445 Mich. 222 (1994), where the court found  
Michigan liquor licenses to be a “general intangible” and “personal property”  
despite an MLCC rule to the contrary—similar to what MRA is proposing here --  
because the MLCC did not have statutory authority to overrule article 9 of the  
Michigan UCC. Does MRA have authority where MLCC did not? See generally  
This proposed rule has the effect of limiting investment and reducing access to  
capital for Michigan cannabis licensees. Rather than prohibiting a pledge of the  
license, MRA should require disclosure from lenders who take a license as  
security (similar to the MLCC’s process for parties that lend to liquor license  
operators). If a lender who is not an applicant seeks to foreclose or assume the  
license, the MRA should support an escrow process for such foreclosed licenses,  
or facilitate a transfer to a new licensee operator.  
Dykema Gossett PLLC  
Capitol View  
201 Townsend Street, Suite 900  
Lansing, MI 48933  
WWW.DYKEMA.COM  
Tel: (517) 374-9100  
R. Lance Boldrey  
Direct Dial: (517) 374-9162  
Direct Fax: (855) 259-3563  
Email: LBoldrey@dykema.com  
September 27, 2021  
Marijuana Regulatory Agency  
Legal Section  
P.O. Box 30205  
Lansing, MI 48909  
Via E-mail: MRA-Legal@michigan.gov  
Re:  
Proposed Marijuana Regulatory Agency Rules  
Dear Marijuana Regulatory Agency Staff:  
On behalf of the Michigan Cannabis Manufacturer’s Association (“MCMA”), I write to offer  
public comments on the proposed changes to the Marijuana Regulatory Agency’s (“MRA”)  
administrative rule sets (the “Draft Rules”). The MCMA is an association of the largest business  
stakeholders in Michigan’s cannabis industry. MCMA’s members represent hundreds of millions  
of dollars of private investment and employ thousands of Michigan citizens, but the Number One  
priority of the MCMA is protecting the health and safety of Michigan citizens. The MCMA  
appreciates the opportunity to provide stakeholder feedback on the issues that directly impact the  
public and our members, and MRA’s willingness to engage its stakeholders.  
By way of introduction, MCMA finds much to praise in MRA’s Draft Rules. In particular, MCMA  
believes that the Draft Rules will continue to advance product safety to the benefit of patients and  
customers. Revisions to facilitate internal testing, address the potential for the manipulation of  
testing results before we see such problems in Michigan (issues that have arisen in other states),  
and authorizing testing of homegrown adult-use cannabis are all extremely positive steps. So too  
are changes to allow drive-though and curbside service, and to simplify the fee structure to allow  
for greater predictability. The addition of a formal process for declaratory rulings is also welcome.  
MCMA does nonetheless find some areas of the Draft Rules that could use some additional review  
and improvement. As explained in more detail below, the Draft Rules leave important terms and  
requirements undefined, and would improperly rely upon guidance and administrative bulletins,  
rendering important rule topics vulnerable to legal challenge. MCMA also strongly objects to the  
creation of a Class A Microbusiness License, a license that would violate the Michigan Regulation  
and Taxation of Marihuana Act (“MRTMA”) and authorize activity that presently constitutes a  
felony under the Michigan Medical Marihuana Act (“MMMA”). MCMA also opposes efforts to  
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limit “non-marijuana” cannabinoid sourcing. And MCMA believes that there are a number of  
additional areas where the rules should be changed based on lessons learned, most especially with  
respect to the operation of co-located grower and processor facilities and the excess grow license.  
MCMA’s comments follow.  
Utilization of Guidance  
As we all well know, the cannabis industry has been evolving at light speed since the first state  
licenses were issued just over three years ago. MRA has been evolving too, and we understand  
the need for MRA to be flexible and respond to new developments. That said, one significant  
over-arching concern for MCMA is MRA’s practice of relying on the issuance of ad hoc advisory  
or technical bulletins in lieu of the formal rulemaking process of the Administrative Procedures  
Act, 1969 PA 306, MCL 24.201 to 24.328 (“APA”). While understandable in the very early days  
of the industry, we are concerned that in many places the Draft Rules appear intended to extend  
and expand that practice. By way of example, proposed R 420.304(2)(l) provides that licensees  
must comply with to-be-published guidance with respect to chain of custody documentation.  
Proposed R 420.206a(4) mandates that licensees have Standard Operating Procedures that “must  
comply with any guidance issued by the agency.” There are numerous other instances.  
While the objectives of the underlying rules may be laudable, MRA’s reliance on such guidance—  
and imposition of that guidance on licensees—violates the APA. The APA defines a “rule” as “an  
agency regulation, statement, standard, policy, ruling, or instruction of general applicability that  
implements or applies law enforced or administered by the agency, or that prescribes the  
organization, procedure, or practice of the agency, including the amendment, suspension, or  
rescission of the law enforced or administered by the agency.” MCL 24.207. Relying on a long  
line of precedent, the Michigan Court of Claims reiterated this principle earlier this year, ruling  
that, “A ‘rule’ not promulgated in accordance with the APA’s procedures is invalid.” Genetski v  
Benson, Ct. Claims Docket #20-000261-MM (March 9, 2021) at pp. 7-8, citing MCL 24.243;  
MCL 24.245; Pharris v Secretary of State, 117 Mich App 202, 205; 323 NW2d 652 (1982).  
As the Genetski decision explains,  
An agency must utilize formal APA rulemaking procedures when establishing policies that  
“do not merely interpret or explain the statute or rules from which the agency derives its  
authority,” but rather “establish the substantive standards implementing the program.”  
Faircloth v Family Indep Agency, 232 Mich App 391, 403-404; 591 NW2d 314 (1998).  
“[I]n order to reflect the APA’s preference for policy determinations pursuant to rules, the  
definition of ‘rule’ is to be broadly construed, while the exceptions are to be narrowly  
construed.” AFSCME v Dep’t of Mental Health, 452 Mich 1, 10; 550 NW2d 190 (1996).  
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Genetski at 8. Unlike a guideline, which “binds the agency but does not bind any other person”,  
MCL 24.203(6), a rule, whether labeled as such or not, must involve notice, a public hearing, and  
review by the Legislature’s Joint Committee on Administrative Rules. AFSCME v Dep’t of Mental  
Health, 452 Mich at 9.  
MCMA certainly appreciates and understands MRA’s desire to be flexible to respond to new  
situations as data becomes available or new lessons are learned. MCMA is also thankful that  
MRA has regularly sought industry and public input, be it through public meetings or MRA  
workgroups and advisory boards. But however receptive to input today’s MRA has been,  
enshrining the use of guidance in the rules creates the very real risk that future MRA leadership  
will attempt to regulate by fiat. And even more importantly, if MRA guidance is challenged in the  
courts, the result could easily be an environment where the regulated industry and market are left  
without legal standards on important topics, such as requirements for safety testing.  
Accordingly, we recommend that MRA resolve these concerns by removing references to  
guidance in the rulesets and instead codifying any technical guidance and bulletins in the  
administrative rules themselves. If a new situation arose that required immediate action, the APA  
gives MRA the power to promulgate emergency rules to address matters that concern the  
preservation of public health, safety, or welfare. MRA has used emergency rules to great success  
and effect historically to combat and address matters of urgent public health, such as the Vitamin  
E Acetate vaping crisis. MRA should conform to the APA’s requirements.  
With respect the various proposed rulesets, the MCMA offers the following comments:  
2020-121 LR – Marihuana Licenses Rule Set  
R 420.1(1)(c) – The definition of “Applicant” contains language covering both a direct “or  
indirect” ownership interest, yet does not define the terms. In interpreting “indirect  
ownership interest,” MRA has looked primarily to the right of a party to receive any share  
of revenues or profits. Recently, though, uncertainty has been created by MRA relying on  
language in its Statement of Money Lender form to conclude that a lender has an interest  
for purposes of the rule prohibiting holding interests in both a safety compliance facility  
and other license types. “Indirect ownership interest” should be specifically defined to  
provide clarity to the industry as to what types of relationships constitute an “indirect  
ownership interest” for purposes of meeting the definition of “applicant.”  
R 420.1(1)(f) – The definition of “common ownership” should be clarified to specify that  
“common ownership” includes 2 or more state licenses or 2 or more equivalent licenses  
held directly or indirectly by the same legal person, which among other effects would  
provide clear authority for transfers between the subsidiaries of a parent company.  
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R 420.1(1)(o) and (dd) – MRA should consider clarifying the definitions of “limited access  
area” and “restricted access area” as there is overlap in these definitions—particularly with  
respect to marijuana sales locations.  
R 420.1(1)(s) – The definition of “Marihuana establishment” in the Draft Rule (and in the  
current rules) is inconsistent with the definition in MRTMA, MCL 333.27953(h).  
MRTMA defines an “establishment” as a “business,” not a “location.” While MCMA  
understands the desire to harmonize definitions in MRTMA with those in the Medical  
Marihuana Facilities Licensing Act (“MMFLA”), the definition of “marihuana  
establishment” in the rules should be consistent with the statutory definition.  
R 420.3 – The MCMA supports the changes proposed to provide clear guidance as to when  
applications may be administratively withdrawn or for prequalification approvals to be  
revoked for subsequent ineligibility.  
R 420.4(2) and (9) – The Draft Rules continue requiring information not requested on  
MRA’s current applications, such as financial account statements. MRA progressed in  
easing the regulatory burden of the application process and focusing on information that is  
truly important for determining applicant suitability. The rule should be amended to  
conform to the MRA’s current application disclosure practice, by “required information  
includes” with “may include” and making similar revisions elsewhere in R 420.4.  
R 420.4(3) – The proposed language as to who meets the disclosure requirement is  
internally inconsistent. It starts with a statement that every person having an interest of  
2.5% or greater must be disclosed. It then specifies by entity type who must be disclosed,  
varying from the 2.5% threshold. This could be readily clarified by changing the  
introductory language as follows: “Each applicant shall disclose the identity of all persons  
having an ownership interest in the applicant with respect to which the license is sought as  
follows:”. Also, it should be noted that the definition of applicant is proposed to be changed  
with respect to trusts, but the disclosure requirement does not reflect that.  
R 420.5(1) – This rule should be modified to conform to the current application  
requirements of the MRA. For example, the reference to a business plan in Subsection  
(1)(ii) should be modified to reflect a marketing plan, technology, plan, and staffing plan.  
R 420.5(1)(e) – The MCMA applauds and supports the proposed rule change with respect  
to MRTMA municipal attestations, as the proposed change conforms to MCL  
333.27959(3)(b).  
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R 420.6(2)(d) – This subrule should be either removed or revised. While this prohibition  
on holding any governmental office or position of employment appears in the MMFLA,  
this statutory prohibition does not appear in the MRTMA. This prohibition should be either  
stricken or narrowed to focus on addressing true issues of concern as opposed to importing  
the broad exclusion from the MMFLA. The public health, safety, and welfare of the State  
of Michigan is unlikely to be implicated if the spouse of a marijuana licensee happens to  
be a public elementary schoolteacher or an appointee on the Ski Area Safety Board. If this  
rule is maintained, then “regulatory body” should be defined and exclude Boards and  
Commissions that do not issue licenses or promulgate regulations governing the activities  
of third parties. (Relatedly, MCMA recommends that “regulatory body” also be defined  
for MMFLA applications, and that the rules expressly incorporate the bases for license  
denial contained in the MMFLA.)  
R 420.6(2)(h) – This rule prohibiting an ownership interest in more than 5 adult-use Class  
C Grower licenses is inconsistent with the definition of “marihuana grower” in the  
MRTMA. A “marihuana grower” is defined as a “person licensed to cultivate marihuana  
and sell or otherwise transfer marihuana to marihuana establishments.” MCL 333.27953(i).  
In the context of MCL 333.27959(3)’s prohibition on holding an interest in more than 5  
“marihuana growers,” there is not a prohibition on the number of licenses. Instead, the  
statute prohibits a “person” from holding an ownership interest in more than 5 different  
businesses that hold Grower licenses, as opposed to 5 or more licenses. Accordingly, the  
rule should be modified to conform to the statute by prohibiting an applicant from holding  
an interest in more than 5 different entities that hold Grower licenses as opposed to  
restricting the number of licenses that any individual entity may hold. This change would  
not only reflect the actual statutory language, but would also eliminate what has become  
an impediment to capital investment.  
R 420.6(6) – This added subsection, which imports for MRTMA licenses the language  
from the MMFLA, MCL 333.27409, stating that a license is a revocable privilege and not  
a property right should be stricken, as the same statutory language does not appear in  
MRTMA. Whether a MRTMA license is a revocable privilege or a property right is the  
subject of ongoing litigation. Absent express statutory authority, MRA should not  
promulgate a rule to opine on an open question of law. Indeed, the determination of  
whether a license is a property right and the definition of the scope of that right is a  
legislative determination, not one delegated to the MRA.  
R 420.7 – The MCMA applauds the MRA’s decision to reduce prequalification application  
fees and licensing fees across the board. The MCMA also applauds the MRA’s decision to  
provide uniform fees for renewals, which gives clarity and certainty to the regulated  
industry for purposes of budgeting the costs of licensure.  
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R 420.8 – The MCMA applauds MRA’s decision to allow limited contact and contactless  
options for marijuana sales locations. The COVID-19 pandemic has shown that the  
industry can safely and securely provide limited contact and contactless options to  
customers. While we recognize that the Draft Rule strikes the prohibition on drive-thru  
transactions, MCMA recommends that the MRA be explicit in authorizing drive-through,  
so that no municipalities are confused and claim that drive-through’s are not allowed  
because they are not specifically authorized.  
R 420.12(2)(s) – The denial of a license for failure to pass a pre-licensure inspection should  
be clarified to indicate that this means the failure of a MRTMA applicant to pass a pre-  
licensure inspection within 60 days of the submission of its establishment license  
application. The current proposed language simply states that a failure to initially pass a  
pre-licensure inspection could be grounds for denial of the application, which is contrary  
to MRA’s practice. It is typical in a pre-licensure inspection for an applicant to add  
additional security cameras or make other minor changes to the facility in response to  
concerns or direction from the MRA field agent. These types of corrections to ensure  
compliance and to respond to the direction of the field agent—even if initially a failing pre-  
inspection report is issued—should not be grounds for denial of a license if the applicant  
cures any noted deficiencies.  
R 420.12(2)(t) – The proposed rule seeks to give MRA authority to deny an applicant’s  
application if they submit an amendment to add an individual or entity that MRA then  
determines is not eligible for licensure. It is unclear what issue this rule is seeking to fix,  
as the amendment application would be denied if it was determined that an individual or  
entity proposed to be added was ineligible or unsuitable. In practical terms, applicants  
could be expected to cause any and all individuals or entities they wished to add to  
ownership first be separately prequalified. Only then would applicants be able to add new  
parties without fear of possibly jeopardizing the original applicant’s status by attempting  
to add an unsuitable partner. This would create inefficiencies in the process and inhibit the  
ability of applicants to raise capital after they have been prequalified. MCMA proposes  
striking this proposed addition to the rules.  
R 420.14 – The reporting requirements for licensees should be consistently changed from  
“calendar days” to “business days” to conform with the proposed changes in R 420.802,  
which exclusively uses “business days.” The timelines for reporting to the MRA should be  
consistent to avoid inconsistency or misunderstandings.  
R 420.18(2) – The MRA should clarify and make explicit the fees that will be required for  
a change of location. The current rule uses permissive language by using the word “may”  
as to whether additional fees will be required, yet our experience has been that MRA  
charges a full new licensure fee or regulatory assessment even when a licensee is moving  
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from a facility that has been licensed for a short period of time. MCA recommends that  
MRA charge a specific transfer fee limited to MRA’s actual expense in reviewing a new  
facility application and inspecting a new location.  
R 420.20 – MCMA wholeheartedly supports MRA reviewing financial records of licensees  
for critical compliance matters. Nevertheless, in its application of the MMFLA’s Annual  
Financial Statement to MRTMA licensees, MCMA believes that the AFS has metastasized  
to become something it was never intended to be. There is nothing to suggest that the  
Legislature intended the AFS to be anything other than what is commonly understood to  
be financial statements, i.e., a balance sheet, income statement, and a statement of cash  
flows. Instead, what MRA has turned into a searching audit takes enormous amounts of  
time and expense. For smaller businesses (e.g., stand-alone provisioning centers or  
retailers, microbusinesses), the cost is extreme enough that a credible argument can be  
made that the AFS constitutes an “unreasonably impracticable” mandate in violation of  
MCL 333.27958(3)(d). The MRA should provide definitive clarity as to the breadth and  
scope of the AFS mandate, and should strongly reconsider its current practice to focus on  
requiring applicants to provide only those financial documents that are necessary for the  
MRA to confirm regulatory compliance. Relatedly, MCMA recommends that a rule be  
added to define the AFS requirement under the MMFLA.  
R 420.23 – Again, MCMA believes that MRA should conform its definition of “marihuana  
grower” in R 420.6(2)(h) to the language of the statute. This would obviate the need for  
excess grower licenses. If MRA keeps the excess grow license, MRA should re-evaluate  
the ratio of Medical Class C Grower Licenses that are required to secure each excess  
grower license. Medical product is now only 25% of the marijuana market and likely to  
become an even smaller share. A ratio of 1 medical Class C license to 4 excess grow  
licenses would much better reflect the market.  
2020-120 LR – Marihuana Licensees Rule Set  
R 420.101(c) – The definition of “another party” becomes unclear in certain contexts, such  
as the obligation to report misconduct of “another party” being limited to parties to a  
contract rather than other licensees. “Outside party” or “unlicensed third party” may be  
preferable.  
R 420.101(1)(m) – The definition of “management or other agreement” should be clarified  
to provide clear definitions for the terms “gross profit” and “net profit.” “Gross profit”  
should be defined as “Revenue less Cost of Goods Sold.” “Net Profit” should be defined  
as “Gross profit less expenses.” These terms would eliminate ambiguity that exists in the  
context of licensing agreements today. Additionally, the definition for management or  
other agreement states that such an agreement is one by which an outside party either can  
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exercise control or receive more than 10% of gross or net profit. Consequently, the other  
party would be an applicant under both the statutory definitions and the provisions of  
proposed new rule 420.112a(4). That being the case, the management or other agreement  
definition should also include the fact that the outside party will be a supplemental  
applicant and must be reviewed by MRA as such.  
R 420.102(1) – MCMA recommends that the broader term “cultivate” should be used in  
this rule as opposed to the term “grow.” This would mirror the language used in Section  
10 of MRTMA, MCL 333.27960(1)(a) and also the language used in R 420.105(1)(a) for  
microbusinesses with respect to the authorization to cultivate marijuana plants.  
R 420.102(3) and (5) –The rule allows growers to acquire mature plants, seeds, seedlings,  
tissue cultures, and immature plants from other adult-use growers, but does not authorize  
acquiring harvested marijuana from another adult-use grower. MRTMA, however,  
expressly allows a grower to sell marijuana, broadly defined, to other licensed  
establishments. MCL 333.27960(1)(a). The rule should be modified to track the statute  
and also allow growers to acquire “marihuana” from other growers.  
R 420.102(9) – By providing that a grower may obtain from another grower “seeds, tissue  
cultures and clones that do not meet the definition of marihuana plant,” this subrule  
conflicts with subrule (3), which explicitly allows an adult-use grower to transfer mature  
plants to another adult-use grower. It also conflicts with MRTMA. To reflect the language  
of MRTMA, the subrule should either broadly grant authority to acquire “marihuana” from  
another grower, or simply be deleted in favor of reliance upon subrule (3). If the intent of  
this subpart is to address the acquisition of seeds, tissue cultures and clones by an adult-  
use grower from a medical grower, then the subrule should be limited to such acquisitions.  
Finally, the entirety of R 420.109 fails to recognize that MRTMA authorizes adult-use  
growers “acquiring marihuana seeds or seedlings from a person who is 21 years of age or  
older.” MCL 333.27960(1)(a). In the interests of clarity, this statutory authorization  
should be placed into the rule.  
R 420.103 – Subrule (1) allows processors to purchase from or sell to adult-use  
establishments, which would obviously include other processors. The proposed rule would  
delete subrule (3), which permits a licensee who holds processor licenses at multiple  
locations to transfer inventory between locations. This would appear to still be allowed  
under subrule (1), but it would be helpful for MRA to confirm that. Furthermore, when  
the present rules were adopted, they were for a brief time misinterpreted as allowing  
microbusinesses to acquire processed product, which contravenes MRTMA’s requirement  
that microbusinesses sell only “marihuana cultivated or processed on the premises.” MCL  
333.27960(1)(f). To avoid such a misinterpretation arising again in the future, MCMA  
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recommends that subrule (1) expressly exclude microbusinesses from the establishments  
to which a processor may sell or transfer marijuana.  
R 420.104 – MCMA’s comments regarding R 420.103 apply to R 420.104 as well.  
R 420.105 – As noted above, R 420.105(7) provides that microbusinesses are subject to all  
“applicable” rules that govern the activities of growers, processors and retailers. The rule  
also notes the obvious that microbusinesses are subject to the provisions of MRTMA  
pertaining to this license type. This includes that activities related to cultivation, processing  
and sale of marijuana must take place solely on the premises of the microbusiness. MCL  
333.27960(1)(f). Because subrule (7) was for a brief time misinterpreted as allowing  
microbusinesses to participate in the full range of activities permitted for growers,  
processors, and retailers, MCMA recommends that the rule more clearly incorporate the  
limits of MRTMA. This could be accomplished by:  
o Inserting “All marijuana must be cultivated solely on the premises” at the end of  
subrule (1)(a);  
o Inserting the phrase “cultivated on the premises” after the word “marihuana” in  
subrule 1(b); and  
o Inserting the phrase “cultivated or processed on the premises” after the word  
“marihuana” in subrule (1)(c).”  
To align the rule with the statutory language, MCMA recommends that proposed subrule  
(8) read “A marihuana microbusiness may not purchase or accept a mature plant from  
another establishment, an individual, a registered qualifying patient, or a registered primary  
caregiver.” (Should pending House Bills 5300 and 5301 be enacted, “specialty medical  
grower” should be added to the above, as well as in other applicable rules.)  
R 420.105a – This new proposed license should be stricken entirely from the rule set.  
The proposed “Class A microbusinesses” would be the farthest thing from any conception  
of a “microbusiness,” and completely disrupt the market and settled expectations of  
incumbent businesses at every level. Instead, these so-called microbusinesses would be  
full-fledged retailers able to acquire unlimited just-harvested plants from multiple sources  
including caregivers and individuals, acquire and sell unlimited amounts of concentrate  
and infused product, and to still operate as a grower and retailer, all for a lower license fee.  
The suggested authorization to allow mature plants to be acquired from patients,  
caregivers, and anyone over the age of 21 would without question lead to microbusinesses  
that would be based on mature plants collectively grown by unlicensed individuals, greatly  
exacerbating current problems with caregivers and unlicensed individuals functioning as  
de facto commercial growers in neighborhoods throughout the state. MRA would  
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effectively be blessing and encouraging the movement of cultivation activities outside of  
MRA licensed and regulated facilities. Even worse, the conduct that would be authorized  
by rule is flat-out illegal and would blatantly violate both MRTMA and the MMMA.  
MRTMA is explicit that adults cannot sell marijuana, but can only gift marijuana to  
individuals (not businesses). MCL 333.27955(1)(d). Our Supreme Court has ruled that  
the only transfers of medical marijuana authorized by the MMMA and that are lawful are  
transfers from caregivers to their maximum of five patients connected to them through the  
medical marihuana registry. People of the State of Michigan v McQueen, 493 Mich 135  
(2013). Indeed, a caregiver or patient selling their marijuana cultivated under the MMMA  
is committing a felony. MCL 333.26424(l). Patients and caregivers are authorized only to  
transfer or sell marihuana seeds or seedlings to MMFLA growers. MCL 333.26424a(2)(b).  
Quite simply, this proposed new license type would facilitate and reward the illicit market  
and unregulated actors.  
It is also worth noting that this concept originated with MRA’s Racial Equity Workgroup,  
yet the proposed rule is not in any way tied to social equity. MCMA has in the past  
supported legislative changes to authorize a higher plant count for social equity applicants  
(as well as improvements to MRA’s determination of what makes up definition of  
“disproportionately impacted communities.”)  
R 420.106 – MCMA recommends that this rule be revised to simply require ongoing  
reporting to MRA Compliance of any off-site addresses where vehicles may be stored, not  
require these locations to be identified by address in a secure transporter’s staffing plan.  
This would alleviate any need for a secure transporter to constantly update a plan that  
would need to be sent through MRA Applications.  
R 420.107 – MCMA strongly supports the proposal to allow MRTMA safety compliance  
facilities to test marijuana from individuals who are home growing under MRTMA.  
R 420.108 – Unlike MRTMA, the MMFLA does not allow growers to accept returns of  
product from processors or provisioning centers. As you know, MRA has taken  
disciplinary action against MMFLA licensees for product returns to growers. To parallel  
other rules and make the prohibition more clear, MCMA recommends placing that  
prohibition in the rule.  
R 420.110 – While the MMFLA limits to whom some license types may transfer product,  
this is not the case for secure transporters, who may “transport marihuana and money …  
between marihuana facilities.” MCL 333.27503(1). Although a secure transporter’s place  
of business is a “facility,” there has been some confusion over whether secure transporter  
to secure transporter transfers are permissible. MCMA recommends that the rule expressly  
state that such transfers are lawful. As with R 420.106, MCMA also recommends that this  
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rule be revised to require ongoing reporting to MRA Compliance of any off-site addresses  
where vehicles may be stored, not require these locations to be identified by address in a  
staffing plan.  
R 420.112 – This rule today states that safety compliance facilities are authorized to “Take  
marihuana from, test marihuana for, and return marihuana to only a marihuana facility.” R  
420.112(1)(a) (emphasis added). Although the rule tracks the statutory language of the  
MMFLA, it must also account for the fact that the MMMA allows patients and caregivers  
to transfer “marihuana for testing to and from a safety compliance facility licensed under  
the medical marihuana facilities licensing act.” MCL 333.26424a(2)(c). This provision of  
the MMMA was enacted at the same time as the MMFLA, via a tie-barred bill, and was  
contingent upon the MMFLA being enacted. The two statutes, therefore, should be  
construed in pari materia, and the rule should therefore reflect that safety compliance  
facilities may also test patient and caregiver medical marihuana.  
R 420.112a – MCMA appreciates MRA placing the standards for licensing agreements in  
the rules and recognizing the need to address management agreements and other similar  
agreements. MRA is also pleased that the rule removes the current Advisory Bulletin  
requirement that licensing royalties be based on the number of units sold or a monthly rate.  
As the Advisory Bulletin provisions are being enshrined in the rules, though, MCMA  
believes that there are aspects that should be made more clear.  
First, the definition of “other agreement” and the test for whether another party meets the  
definition of “applicant” both depend on whether the other party could receive “more than  
10% of the gross or net profit from the licensee.” As with proposed R 420.101(1)(m), this  
rule should provide clear definitions for the terms “gross profit” and “net profit.”  
(“Revenue less Cost of Goods Sold” and “Gross profit less expenses” respectively.)  
Second, “profit from the licensee” should be defined as being based on the licensee’s total  
revenues, not just the revenues attributable to the products that are the subject of the  
licensing agreement. This would then track the statutory definition of applicant. Third, it  
should be made clear that the 10% payment cap does not include payments for services,  
equipment, packaging, etc. so long as they are provided at fair market value and the contract  
shows how that is calculated. (This is MRA’s current practice.)  
In addition to these points of clarification, MCMA recommends striking the provision on  
how and by whom payments may be made (the second sentence of subrule 3(i)), as payment  
flow should not be an issue unless the other party is being given the ability to control or  
participate in the management of the licensee. For the same reason, MCMA recommends  
striking subrule (3)(iii). Finally, MCMA asks that the rule be applied only prospectively  
or to agreements that have not previously been approved by MRA. This would avoid what  
would be the unconstitutional impairment of contracts.  
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2020-122 LR – Marihuana Operations Rule Set  
R 420.203 – MRTMA prohibits MRA from adopting any rule requiring a “marihuana  
retailer to acquire or record personal information about customers other than information  
typically required in a retail transaction.” MCL 333.27958(3)(b). In requiring that licensees  
maintain sales records and receipts, MRA should make clear, at least for adult-use, that  
personal information about customers at the retail level need not be provided to MRA.  
R 420.204 – MCMA supports the accommodation that would permit internal analytical  
testing space to be utilized by co-located licensees. Based on the experience MCMA  
members have in numerous other jurisdictions, however, MCMA discerns no regulatory  
purpose that is being achieved with the artificial separation of grower and processor spaces  
within co-located facilities. In other states, no such separation is required, and licensees  
are free to design facilities that are far more efficient. MCMA strongly recommends  
eliminating the separation requirements altogether, at least as pertains to grower and  
processor activities. METRC tags are sufficient to determine if marijuana or marijuana  
products that are in progress or finished are associated with the grower license or processor  
license, just as with adult-use and medical marijuana and products being in the same grower  
or processor space. For co-located growers and processors, MRA should permit inventory,  
record keeping, and point of sale operations to be shared, and there is no reason to mandate  
that licenses be posted in separate spaces. If MRA does, for some reason, believe that the  
separation of these operations is necessary, MRA should at a minimum allow both licenses  
to use some areas simultaneously (e.g., shipping and receiving).  
R 420.206(4) – This rule presently provides that MRA is to publish lists of approved and  
banned chemicals, but the rule is silent about the use of chemicals that are on neither list.  
MRA’s present stance is that if a cultivator wishes to use an unlisted chemical, they must  
ask MRA, which will first work with MDARD to determine if use should be allowed. This  
should be spelled out in the rule.  
R 420.206(8)(b) – This rule currently provides that when a lab manager leaves and an  
interim is designated, that interim must meet the qualifications of a “supervisory analyst.”  
These qualifications should be set out in the rule.  
R 420.206(13) – MCMA believes that the ability of licensees to utilize hemp-derived inputs  
would be unnecessarily hampered by mandating that all ingredients containing  
cannabinoids, whether naturally occurring or synthesized, be sourced from an entity that is  
licensed by a governmental authority and entered into METRC. First, there is not presently  
any mechanism for MRA licensees to add ingredients to METRC, and there is no METRC  
access for hemp producers. Second, the function of protecting patient and customer safety  
would be better served by requiring Certificates of Analysis to be provided by all suppliers  
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of cannabinoids that do not meet the definition of “marihuana” than by requiring that all  
come from licensed sources. Testing of the resulting product then will further confirm  
safety.  
If MRA is to retain the proposed requirement, at a minimum it should be modified to clearly  
provide that the licensing authority is not restricted to MDARD or other Michigan  
agencies, as interstate commerce in hemp-derived products is now federally legal. Any  
hemp-based ingredients originating from a producer operating under a USDA approved  
hemp plan should be acceptable. Additionally, there should be some phase-in of this rule  
so that it does not take effect until (1) the necessary functionality is added to METRC, and  
(2) MDARD has provided a clear pathway for Michigan hemp growers and processors to  
transfer hemp and derivatives to MRA licensees. In the interim, MRA could require that  
all COAs and licenses of suppliers be kept on file for inspection, and that they be uploaded  
to MRA once MRA creates a way to do this.  
R 420.206a – While requiring written standard operating procedures is appropriate and  
welcome, the proposed rule provides no clarity or definition to permit a licensee to identify  
the specific processes for which SOP’s are required. The rule lacks any description about  
the level of detail that SOP’s must contain. The rule leaves all this and more to “any  
guidance issued” by MRA. Again, the use of binding guidance documents rather than  
notice and comment rulemaking violates the APA. MRA should also recognize the value  
of industry operational experience being considered when developing required parameters  
for SOP’s. For both legal and practical reasons, SOP requirements should not be produced  
without industry input.  
R 420.207 – MCMA recommends eliminating the current restriction that a delivery  
employee may only be employed for one sales location. At a minimum, MRA should allow  
drivers to be employed by multiple sales locations if those locations are under common  
ownership. It serves no regulatory purpose to require companies that have multiple stores  
to have employees be restricted to working at only one location.  
R 420.207a – MCMA is highly supportive of permitting sales locations to designate an  
area for contactless or limited contact transactions, unless prohibited at the municipal level.  
To avoid uncertainty, MCMA recommends that the rule state explicitly that drive-through  
and curbside sales are acceptable. MCMA also recommends that subrule (7), which would  
direct that the area for contactless or limited contact transactions meet the security  
requirements of R 420.209, be modified to exclude R 420.209(3)’s mandate for locks.  
R 420.208 – Michigan is an outlier, perhaps the only state in the nation, in classifying  
marijuana grow facilities as “industrial uses.” The sprinkler systems, minimum aisleway  
widths, and other requirements for manufacturing facilities simply make no sense for  
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buildings used for the cultivation of marijuana. MCMA recommends that MRA and the  
Bureau of Fire Services work with industry to adopt or develop standards that are more  
appropriate to the actual use of facilities. Also, as MRA and BFS are no doubt aware, the  
National Fire Protection Association is currently developing new standards for cannabis  
facilities. MCMA recommends that the rule provide for re-evaluation of fire protection  
standards once the NFPA process is complete.  
R 420.212 – MCMA recommends that co-located facilities be permitted to store marijuana  
product in a common area.  
R 420.214 – MCMA suggests that “common ownership” be broadly defined such that  
transfers among subsidiaries of the same company are more clearly authorized. MCMA  
also recommends that the requirements and parameters for transfers be set forth in the rule,  
and not by “guidance,” which violates the APA. MCMA also recommends providing clear  
authority for transfers of all from expiring licenses that are not being renewed.  
R 420.214a – MCMA is strongly supportive of the express authorization of internal  
analytical testing, and suggests only that licensees be allowed to have product from more  
than one license in the space the same time.  
R 420.214b – MCMA recommends that the term “adverse reaction” be defined. MCMA  
also recommends that the reporting requirement be placed into R 420.14, which contains  
all of the other event reporting mandates.  
R 420.214c – MCMA recommends that the term “defective product” be defined.  
2020-124 LR – Marihuana Sampling and Testing Rule Set  
R 420.305 – MCMA strongly supports this proposed rule, which would give consumers  
and patients (as well as industry) greater confidence in the reliability of safety testing.  
R 420.307 – MCMA recommends striking the mandate that all marijuana businesses must  
follow guidance that may be published and instead set forth standards in the rules. By law,  
guidance cannot bind those outside of the agency; this rule should be modified to conform  
to the requirements of the APA.  
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2020-119 LR – Marihuana Infused Products and Edible Marihuana Products Rule Set  
R 420.403(6) – “Inactive ingredients” is defined in the rules in a manner that excludes from  
the definition ingredients “not derived from the plant Cannabis sativa L.” R 420.102(1)(e).  
By requiring “All non-marihuana inactive ingredients” (emphasis added) to be listed and  
approved, ambiguity is introduced. “Inactive ingredients” are by definition “non-  
marihuana,” so it is unclear what is accomplished by the addition of “non-marihuana” to  
the term. Because of the general interpretive rule that words in a rule should be interpreted  
so that they are not surplusage, licensees will be left to attempt to interpret the meaning.  
One implication could be that hemp-derived products and compounds (CBD, etc.) fall  
within the rule’s ambit. If this is the case, then virtually all such ingredients would be  
prohibited, because the FDA has not included them in the FDA Inactive Ingredient  
database. MCMA recommends that the words “non-marihuana” be deleted.  
R 420.406(7)(a) – MCMA recommends that MRA not adopt its proposed mandate that  
product names “must be an appropriately descriptive phrase that accurately describes the  
basic nature of the product.” This significant change seems to imply that products must be  
named “gummies” or “chocolate bars” and would undermine the value of branding.  
R 420.406(8)(d) – MCMA recommends that MRA not adopt the addition of “in charge” as  
that could be interpreted as requiring the certification of all managerial employees. MCMA  
recommends a more targeted requirement that “an employee who is certified as a Food  
Protection Manager must supervise the production of edible marihuana product.”  
R 420.406(9)(e) – MCMA recommends that this new proposed provision be deleted, or at  
the minimum, made more clear. It is not clear from the text of the rule what prohibiting  
edible marijuana packaging from containing “the characteristics of commercially available  
food products” means. Would this prohibit packaging like that used for a candy bar?  
Clarity should be provided.  
2020-123 LR – Marihuana Sale or Transfer Rule Set  
R 420.501 – MCMA recommends that “administrative hold” be expanded to also expressly  
encompass “potential health hazards. Prior to the MRA’s emergency rules during the  
EVALI crisis, it was not a violation of either the acts or the rules to produce vape cartridges  
containing Vitamin E Acetate (although fortunately, there is no record of such products  
being manufactured by MRA licensees). MRA therefore arguably lacked legal authority  
at that time to impose an administrative hold. The rule should explicitly give MRA the  
authority to do so when public health is in jeopardy.  
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R 420.504(1)(f) – MCMA strongly believes that the requirement that product containers or  
bags include net weight in “United States customary” units should not be removed from  
the rules. Quantity limitations for products sold to patients and customers are virtually all  
expressed in ounces. See MCL 333.2424(c). Ounces and pounds have been customarily  
used in reference to cannabis since before the invention of the metric system and are widely  
understood by customers and patients.  
R 420.504(4) – By requiring that safety information pamphlets “substantially conform to  
the design published on the agency’s website,” MRA is again sidestepping the  
requirements of the APA. In addition, this approach violates the Acts. In the MMFLA,  
the Legislature mandated that the MRA “promulgate rules” that “must include rules to …  
[e]stablish informational pamphlet standards…” MCL 333.27206(u) (emphasis added).  
MRTMA also mandates the inclusion of informational pamphlet standards in promulgated  
rules. MCL 333.27958(1)(l). MCMA recommends that MRA conform to the requirements  
of the APA, MMFLA, and MRTMA and incorporate the pamphlet standards into the rules  
themselves. MCMA also recommends that MRA provide lead time for new pamphlet  
requirements (which would occur naturally under the framework of the APA).  
2021-10 LR – Marihuana Employees Rule Set  
R 420.602(2)(e) – MCMA believes that the requirement for “responsible operations plans”  
should be limited to designated consumption establishments, marijuana events,  
microbusinesses, and retailers. These are the only license types that deal directly with  
customers and patients. While MCMA recognizes that responsible operations plans are  
also to detail how employees will prevent underage access to the establishment, illegal sale  
of marihuana in the establishment, and potential criminal activity, each of these must be  
addressed in the establishment’s security plan. Having duplicative plans invites confusion.  
R 420.602(2)(j)-(k) – MCMA recommends that MRA include the statutory disqualifier for  
MMFLA employees, and the ability to obtain a waiver from MRA.  
R 420.602a – MCMA believes that extending to the employment context the prohibition  
on holding an interest in a secure transporter or safety compliance facility while holding  
an interest in any other license type is unnecessary and over-reaches. MCMA does not  
believe that there is an adequate rationale to provide that an employee of a secure  
transporter or laboratory may not also be an employee of any other licensee. MCMA is  
also concerned that a licensee could face regulatory discipline for unknowingly employing  
or continuing to employ someone who also has a job with a prohibited license type.  
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2020-118 LR – Marihuana Hearings Rule Set  
R 420.703 – MCMA is pleased to see the specific inclusion of authority for ALJ’s to  
subpoena witnesses.  
2020-117 LR – Marihuana Disciplinary Proceedings Rule Set  
R 420.801(1)(g) – MCMA recommends that the subrule read that contested case hearings  
be conducted “pursuant to the APA, the acts and these rules.”  
R 420.802 – MCMA asks that subrule (4)(c) be clarified to provide that reporting of  
violations of “another party” means the defined term “another party.” Otherwise, this rule  
could easily be misinterpreted as requiring notification to MRA when a licensee “should  
have been aware” of a regulatory violation by any other licensee. (Although MCMA  
certainly hopes that licensees who become aware of regulatory concerns will bring those  
to MRA’s attention.) MCMA also notes again that this rule would have reporting  
requirements measured in business days, while R 420.14 has the same reporting  
requirements measured in calendar days. These should be consistent.  
R 420.808a – While beneficial that MRA is adding a rule to implement the statutory  
requirement of an exclusion list, portions of the proposed rule should be modified. First,  
including individuals on the list for theft, fraud or dishonesty even when a conviction has  
not been obtained takes a step too far. Someone who has been acquitted of criminal activity  
should not be treated as a criminal. Second, exclusion for “conduct that could negatively  
impact public health, safety, and welfare” is far too subjective and broad. Third, the cross-  
reference in subrule (3) to R 420.705 should be corrected to cross-reference R 420.704a.  
Finally, MCMA is concerned that a hearing under R 420.704a must be requested within 21  
days, or else an individual stays on the exclusion list. Those excluded should have other  
opportunities to contest their exclusion. Subrule 5(c)’s proviso that exclusions are  
permanent if they are for reasons other than conduct (such as having been found ineligible  
for licensure at one time) eliminates the opportunity for someone who was denied licensure  
to reapply in the future, when they may have matured or circumstances otherwise have  
changed. The prospect of rehabilitation should not be foreclosed.  
2021-29 LR – Marihuana Declaratory Rulings Rule Set  
R 420.822(1) – MCMA believes that providing for declaratory rulings is a very positive  
step forward, and recommends that all declaratory rulings be posted on the MRA website.  
MCMA, however, believes that language should be added to this rule to clarify that MRA  
will still respond to questions from licensees concerning the application of rules and  
provide informal review of product packaging, but MRA’s answers to such questions will  
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be non-binding. A simple sentence should be added to the conclusion of R 420.822(1) that  
states: “Nothing in this rule is intended to limit or restrict the agency’s ability to respond  
to questions or inquiries from licensees or the general public, but any agency response to  
such questions or inquiries shall not be binding on the agency.”  
R 420.822(2)(c), (d) – The proposed language limits the scope of a declaratory ruling to  
“statutes, rules, or orders” that may apply to the requested declaratory ruling. The MRA  
should consider broadening the scope of these rules to also include “constitutional  
provisions,” “judicial opinions,” and “ordinances.” The implications of the Michigan  
constitution may factor into a declaratory ruling. Similarly, a judicial opinion, particularly  
one that constitutes binding legal precedent from the Michigan Court of Appeals or  
Michigan Supreme Court, may be implicated in a declaratory ruling. Lastly, both the  
MMFLA, MCL 333.27205(1), and MRTMA, MCL 333.27965(2), prohibit local  
municipalities from adopting ordinances that conflict with the MMFLA, MRTMA, or rules  
promulgated by the MRA. There may be instances in which it may be appropriate for the  
MRA to offer a declaratory ruling with respect to whether a local municipal ordinance  
conflicts with the MMFLA, MRTMA, or the rules.  
R 420.822(12) – The rule should be slightly modified to make clear that any declaratory  
ruling issued by the agency also contain the effective date of the ruling.  
In conclusion, MCMA again thanks MRA for the effort already put into the Draft Rules and looks  
forward to the number of positive steps proposed. MCMA also appreciates MRA’s consideration  
of the comments provided in this letter, and values the collaborative approach of the agency. If  
there are any questions with respect to these comments, please contact me.  
Regards,  
DYKEMA GOSSETT PLLC  
R. Lance Boldrey  
cc: MCMA Board  
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118728.000002 4846-8058-6748.2  
Robin Schneider  
MiCIA  
Executive Director  
(517) 974-2265  
101 S. Washington Square #820  
Lansing, MI 48933  
robin@micannabisindustryassociation.org  
micannabisindustryassociation.org  
MICIA COMMENTS ON DRAFT MARIHUANA RULES  
(Rule Sets # 2021-29 LR, 2020-117 LR, 2020-118 LR, 2020-119 LR, 2020-120 LR, 2020-121  
LR, 2020-122 LR, 2020-123 LR, and 2020-124 LR)  
INTRODUCTION  
The Michigan Cannabis Industry Association (MICIA) is the leading voice for Michigan’s  
legal cannabis businesses. The association advocates for a responsible and successful medical and  
adult-use cannabis industry by promoting sensible laws and regulations and industry best practices  
among members. MICIA seeks to create a thriving industry for cannabis businesses in Michigan  
by developing opportunities for industry collaboration and partnerships and sharing industry  
knowledge and best practices among its membership.  
MICIA supports many elements of the proposed rules. But MICIA offers the following  
constructive comments with the hopes of developing policies that promote both the growth of the  
industry and the establishment of good business practices. Moreover, MICIA seeks to ensure that  
the Marijuana Regulatory Agency (MRA) receives adequate stakeholder input prior to the  
adoption of its generally applicable policies, standards, and enforcement procedures consistent  
with the rule of law and the Michigan Administrative Procedures Act, MCL 24.201 et seq. Lastly,  
MICIA notes that, though it has not exhaustively commented on all of the rules, its silence on some  
rules should not be understood as either approval or disapproval of those particular provisions.  
COMMENTS  
I.  
RULE SET 2021-29 LR (DECLARATORY RULINGS, R. 420.821 ET SEQ.)  
Proposed Rules 420.821 through 420.823 create a procedure through which the MRA may  
issue declaratory rulings as to the applicability to an actual state of facts of a statute, rule, final  
order, or decision administered, promulgated, or issued by the agency. The MICIA supports the  
MRA’s efforts to promulgate rules outlining the declaratory rulings process and offers the  
following industry feedback on how those proposed rules may be improved.  
The MRA’s Legal Authority for Declaratory Rulings Derives from the APA  
The MRA asserts that its legal authority for this Proposed Rule Set is conferred by “section  
5 of the Michigan Medical Marihuana Act, 2008 IL 1, MCL 333.26425, section 206 of the medical  
marihuana facilities licensing act, 2016 PA 281, MCL 333.27206, sections 7 and 8 of the Michigan  
ClarkHill\98902\346090\264189386.v2-9/26/21  
Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27957 and 333.27958, and  
Executive Reorganization Order No. 2019-2, MCL 333.27001).”  
None of those statutes expressly confer on the MRA the authority to issue declaratory  
rulings or issue rules setting the procedure for same. Rather, Section 63 of the Administrative  
Procedures Act provides the MRA the authority to prescribe the form and procedure for declaratory  
ruling requests, submissions, consideration, and disposition by administrative rule. MCL 24.263.  
Specifically, Section 63 states:  
On request of an interested person, an agency may issue a declaratory ruling as to  
the applicability to an actual state of facts of a statute administered by the agency  
or of a rule or order of the agency. An agency shall prescribe by rule the form for  
such a request and procedure for its submission, consideration and disposition. A  
declaratory ruling is binding on the agency and the person requesting it unless it is  
altered or set aside by any court. An agency may not retroactively change a  
declaratory ruling, but nothing in this subsection prevents an agency from  
prospectively changing a declaratory ruling. A declaratory ruling is subject to  
judicial review in the same manner as an agency final decision or order in a  
contested case.  
As such, the boilerplate “authority” language at the outset of the Proposed Rule should be amended  
to reference Section 63 of the APA.  
The MRA’s Process Timing is Too Long  
Proposed Rule 420.822 affords the MRA 60 days to issue notification to a party seeking a  
declaratory ruling as to whether the MRA will issue a declaratory ruling and, if so, another 90 days  
to issue the ruling “unless the agency notifies the interested person in writing of the need for  
additional time, and the reasons for the additional time.” Consequently, the Proposed Rule would  
provide the MRA 150 days to issue a declaratory ruling unless the MRA decides to take longer for  
whatever written reason.  
The 150-day window with the potential to be extended further is outside of the standard  
time frame for a declaratory ruling and inconsistent with best practices. See, e.g., Mich Admin  
Code, R 324.81(2)(b) (requiring EGLE declaratory ruling to be issue “[w]ithin 60 days of receipt  
of the request” unless additional information is required); MCL 169.215(2) (requiring SOS to issue  
a ruling “within 60 business days after a request . . . is received”); Mich Admin Code, R 400.951  
(requiring MDHHS ruling “within 60 working days”); Mich Admin Code, R 436.1973(2)(f)  
(requiring Liquor Control Commission ruling “within 90 days after the receipt of the initial  
request.”). Therefore, the MICIA requests that the MRA consider shortening these timeframes to  
45 days and 60 days, respectively, and, rather than grant itself the discretion of unlimited extension,  
provide that: “A person requesting a declaratory ruling may waive, in writing, the time limitations  
provided by this section.” Timing is often a critical component of regulatory certainty and a more  
expedited process similar to those employed by other state agencies would better accomplish that  
objective.  
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There is a Lack of Public Transparency and Industry Participation  
The declaratory ruling process outlined by the Proposed Rules lacks transparency and  
precludes industry participation. For example, Proposed Rule 420.822(5) provides, in part, that:  
Before the issuance of the declaratory ruling, the agency, in its discretion, may  
choose to do 1 or more of the following: (a) Seek consultation, comments, or advice  
from legal counsel, experts within or outside the agency, local, state, or federal  
governmental agencies, or any other source. (b) Request information or  
clarification from other interested parties. (c) Advise the person requesting the  
ruling that further clarification of the facts must be provided, or that the agency  
requires additional time to conduct a review.  
But the Proposed Rule neither provides for public notification of a declaratory ruling request nor  
for participation of interested parties in a declaratory ruling request.  
Here, as well, the best practice includes the opportunity for interested persons other than  
the requestor to participate. See, e.g., MCL 169.215(2) (allowing interested members of the public  
to comment); Mich Admin Code, R 432.1715(2)(b) (considering “information from other  
interested persons”). Accordingly, the MICIA asks that the MRA consider amending the Proposed  
Rule to require the MRA to timely make declaratory ruling requests and decisions open to public  
view and to further allow for interested persons to submit comments regarding declaratory ruling  
requests. To accomplish that objective, the MRA could amend the Proposed Rule 420.822(5) to  
provide that:  
A request for a declaratory ruling that is submitted to the agency will be made  
available on its website for public inspection within 48 hours after its receipt. An  
interested person may submit written comments regarding the request to the agency  
within 10 business days after the date the request is made available to the public.  
The agency’s notification to a party seeking a declaratory ruling as to whether the  
MRA will issue a declaratory ruling will be made available on its website for public  
inspection at the time it is issued. If the agency’s notification provides that the  
agency will issue a declaratory ruling, an interested person may submit written  
comments regarding the subject matter of the declaratory ruling request to the  
agency within 10 business days after the notification is made available to the public.  
The MICIA further asks that the agency amend the Proposed Rule to provide that “The agency  
will make available to the public an annual summary of the declaratory rulings issued under this  
rule.” This added transparency and participation will aid the MRA in its mission and lead to more  
well-informed decision-making. An assessible compendium of declaratory rulings will also  
facilitate the compliance of licensees with applicable laws.  
The Substantive Scope of Review is Too Limited  
Proposed Rule 420.822(9) provides that “[r]equests regarding enforcement issues are not  
a proper subject for a declaratory ruling.” The MICIA asks that the MRA consider deleting or  
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altering this Proposed Rule for reason that it unnecessarily narrows the scope of subjects on which  
the agency may provide clarity. By its very nature, as a regulatory agency charged with enforcing  
the law, a wide swath of the issues that come before the MRA could properly be characterized as  
“enforcement issues.” The intent of an agency declaratory ruling, like a declaratory judgment  
action within the judiciary, is to provide clarity to affected persons “in order to guide or direct  
future conduct . . . .” Cf. UAW v Central Michigan University Trustees, 295 Mich App 486, 495;  
815 NW2d 132 (2012). Nowhere is such guidance more crucial than with respect to controversial  
matters, where enforcement may become an issue. Further, by limiting the scope of matters that  
may be addressed by declaratory ruling in this manner, the Proposed rule is far narrower than the  
controlling statute. MCL 24.263. As an alternative, MRA may consider rewriting Proposed Rule  
420.822(9) to clarify only that a matter that has already been referred for enforcement cannot be  
submitted by that licensee for a declaratory ruling.  
There is Judicial Review of Declaratory Rulings  
Proposed Rule 420.822(8) provides that “[a] denial or adverse decision of a declaratory  
ruling does not entitle a person to a contested case hearing.” This statement may have the  
inadvertent effect of chilling a licensee’s exercise of the right to appeal MRA’s decision on a  
declaratory ruling. For purposes of clarity, the MRA should consider adding additional language  
acknowledging that, under Section 63 of the Administrative Procedures Act, “[a] declaratory  
ruling is subject to judicial review in the same manner as an agency final decision or order in a  
contested case.” The MRA should further provide that its decision not to issue a declaratory ruling  
is subject to judicial review. See Human Rights Party v. Michigan Corrections Commission, 76  
Mich App 204; 256 NW2d 439 (1977) (“[W]e find that a refusal to issue a declaratory ruling under  
M.C.L.A. s 24.263 is subject to judicial review as an agency final decision or order in a contested  
case”).  
II.  
RULE SET 2020-117 LR (DISCIPLINARY PROCEEDINGS, R. 420.801 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.801 through Rule 420.808 to  
clarify and/or strengthen the MRA’s disciplinary processes and notification/reporting  
requirements. The Proposed Rule Set also seeks to add a new Rule 420.808a which sets forth the  
grounds on which, and processes by which, the MRA may exclude a person from employment or  
participation in a marihuana business. The MICIA supports the MRA’s efforts to clarify and/or  
strengthen its disciplinary processes and further agrees with the MRA that clear and transparent  
disciplinary rules facilitate regulatory compliance and the protection of the public health and  
safety. The MICIA does, however, highlight that these proposed changes will increase licensee  
costs and liability but a detailed cost-benefit analysis has not been provided as required by MCL  
24.245(3)(h), (3)(k), (3)(l), (3)(n), (3)(p), (3)(q)–(3)(t), & (3)(bb). The MICIA further offers  
industry feedback on how those Proposed Rules may be improved.  
Grounds for Exclusion of Employment or Participation in a Marihuana Business  
Proposed Rule 420.808a(1)(a)–(1)(f) sets for the grounds on which the MRA may, in its  
discretion and pursuant to a contested case hearing if requested, exclude a person from  
employment at, or participation in, a marihuana business. The MICIA generally supports the stated  
grounds for exclusion with the exception that a previous finding of ineligibility for licensure, as  
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stated in Rule 420.808a(1)(c), alone is not a proper basis for exclusion of employment where the  
standard for holding a license is and should be higher than the standard for general employment.  
Contents of Notice of Exclusion  
Proposed Rule 420.808a(2) sets forth the contents of a notice of exclusion filed by the  
agency including “(a) The identity of the subject. (b) The nature and scope of the circumstances  
or reasons that the person should be placed on the exclusion list. (c) A recommendation as to  
whether the exclusion or ejection is permanent.” The MICIA supports these general contents for a  
notice of exclusion but submits that the MRA should also provide to the charged person “a detailed  
factual statement of the alleged grounds for exclusion accompanied by any supporting  
documentation or witness statements.”  
Proposed Rule 420.808a(3) states that “[t]he notice shall also inform the person of the  
availability of a hearing in compliance with R 420.705.” In light of Proposed Rule Set 2020-118  
LR, the MICIA queries whether the proper citation here is R. 420.704a which will address the  
hearing process for notices of exclusion.  
Service of Notice of Exclusion  
Proposed Rule 420.808a(2) provides that the MRA “shall file a notice of exclusion.” It is  
unclear what the term “file” in this context means, and the MICIA submits that the notice of  
exclusion should be personally served on both the person being excluded and, if applicable, the  
licensee employing that person.  
Proposed Rule 420.808a(6) provides that “[t]he exclusion list must be a public record made  
available to licensees by the agency and must include information deemed necessary by the agency  
to facilitate identification of the person placed on the exclusion list.” The MICIA submits that the  
phrase “made available to licensees” lacks detail and that, in light of the resulting disciplinary  
proceedings that result from employing a person on the exclusion list, the exclusion list should be  
periodically mailed to licensees, included into the statewide monitoring system, and/or posted on  
the agency’s website. Making this requested change would additionally add clarity to the phrase  
“knows or reasonably should know is on the exclusion list” in Proposed Rules 420.808a(8),(9).  
Due-Process Concerns Regarding Exclusion List  
Proposed Rule 420.808a(4) states that “[i]f a hearing is not requested, then the subject’s  
name or excluded person’s name must remain on the exclusion list.” Proposed Rule 420.808a(7)  
further clarifies the MRA’s intention and provides that “[a] person who is placed on the exclusion  
list or served with a notice of exclusion is prohibited from being employed by or participating in a  
marihuana business until a determination by the agency or a court to the contrary.”  
The MICIA acknowledges that there may, at times, exist unique circumstances where a  
person’s continued involvement in a marihuana business presents an immediate threat to the public  
health and safety and, in those circumstances, immediate placement on the exclusion list may be  
warranted. However, aside from an immediate threat to public health and safety, the MRA should  
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provide basic a higher level of due process to the charged person and that person’s placement on  
the exclusion list should occur until after that person has been afforded a hearing pursuant to R.  
420.704a.  
Notification and Reporting – Material Changes  
Proposed Rule 420.802(3) requires reporting of proposed material changes to a marihuana  
business and delineates several examples of what constitute a proposed material change. In an  
apparent effort to further clarify what constitutes a “proposed material change,” the agency now  
provides that “[a] proposed material change is any action that would result in alterations or changes  
being made to the marihuana business to effectuate the desired outcome of a material change.”  
The MICIA submits that this clarifying language is unnecessary and overbroad and requests that  
it be removed or narrowed.  
Notification and Reporting – Third-Party Violations  
Proposed Rule 420.802(4)(c) requires reporting, within 1 business day, of any “[a]ction by  
another party in actual or alleged violation of the acts or these rules.” Proposed Rule 420.801(e)  
defines “[a]nother party” or “other party” as “an individual or company with which a licensee  
contracts to use the individual or company’s intellectual property or to utilize management or other  
services provided by the individual or company.” The Proposed Rule, which is accompanied by  
disciplinary action for failure to report, places licensees in an quasi-enforcement role that is  
unreasonably impracticable and could potentially subject licensees to substantial costs and liability  
including, but not limited to, third-party litigation for defamation and other claims. The MICIA  
requests that this aspect of the Proposed Rule be removed or narrowed.  
Notification and Reporting – Licensing and Management Agreements  
Proposed Rule 420.802(7) provides that “[t]he licensee shall notify the agency within 10  
business days of terminating a licensing, management, or other agreement.” Proposed Rule  
420.801(i) defines “[l]icensing agreement” as “any understanding or contract concerning the  
licensing of intellectual property between a licensee and another party.” And, Proposed Rule  
420.801(j) defines “[m]anagement or other agreement” as “any understanding or contract between  
a licensee and another party for the provision of management or other services that would allow  
the other party to exercise control over or participate in the management of the licensee or to  
receive more than 10% of the gross or net profit from the licensee during any full or partial calendar  
or fiscal year.”  
The MICIA opposes these notification requirements and submits that the agency appears  
to lack statutory and/or rulemaking authority for this expansion of the notification and reporting  
requirements, which strictly construed are unreasonably impracticable. The MRA has not  
articulated a rational basis on which it may justify its exercise of regulatory authority over  
“licensing agreements” of intellectual property. Moreover, the term “Management or other  
agreement” is overbroad and cuts against the agency’s proposed definition of “employee” which  
excludes trade or professional services. At a minimum, if the MRA persists with its notification  
requirements with respect to management agreements, MICIA asks that the agency consider  
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revising the definition of “management agreement” to mean “any contract between a licensee and  
another party for the provision of management services that allows the other party to exercise  
control over or participate in the management of the licensee.” Such a definition would more fairly  
mirror the statutory term “managerial employee” under MCL 333.27102(c).  
Definition of Employee  
Proposed Rule 420.801(h) defines “Employee” as “a person performing work or service  
for compensation” but “does not include a person providing trade or professional services who is  
not normally engaged in the operation of a marihuana business.” The MICIA supports this  
common-sense clarification.  
III.  
RULE SET 2020-118 LR (HEARINGS, R. 420.701 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.701 through Rule 420.706 to  
clarify and/or strengthen the MRA’s hearing processes and to add a new Rule 420.704a which sets  
forth a hearing process by which a person may challenge the agency’s decision to exclude the  
person from employment or participation in a marihuana business. The MICIA supports, without  
exception, the MRA’s Proposed Rules for hearings.  
IV.  
RULE SET 2021-10 LR (EMPLOYEES, R. 420.601 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.601 through Rule 420.602 to  
strengthen the MRA’s requirements for, inter alia, employee training manuals and operational  
plans. The Proposed Rule Set also seeks to add a new Rule 420.602a that, inter alia, restricts  
employees of a cultivator, producer, marihuana sales location, or microbusiness from also being  
employed by a laboratory or transporter. The MICIA generally supports this Proposed Rules Set  
and agrees that the changes will facilitate consistency in the hiring and employment practices of  
marihuana businesses. The MICIA, however, disagrees with the agency’s assertion that these  
changes will not increase compliance costs and submits that the agency’s cost-benefit analysis is  
deficient. See MCL 24.245(3)(h), (3)(k), (3)(l), (3)(n), (3)(p), (3)(q)–(3)(t), & (3)(bb). In  
particular, MCL 24.245(3)(bb) requires that the MRA identify “the sources the agency relied on  
in compiling the regulatory impact statement, including the methodology used in determining the  
existence and extent of the impact of a proposed rule and a cost-benefit analysis of the proposed  
rule.” This has not been done.  
V.  
RULE SET 2020-119 LR (MARIHUANA-INFUSED PRODUCTS AND EDIBLE  
MARIHUANA PRODUCTS, R. 420.401 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.401 through Rule 420.403 to  
continue to refine and make consistent requirements for infused and edible marihuana product to  
ensure safe handling, production, and labeling. The Rule Set also seeks to update standards  
referenced for the handling and production of these products. The MICIA’s supporting and  
opposing comments are below.  
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Product Labeling Requirements  
Proposed Rule 420.403(2) provides that “[m]arihuana-infused products processed under  
these rules must be homogenous” and that “[t]he allowable variation for weight and THC and CBD  
concentrations between the actual results and the intended serving is to be + or – 15%.” The MICIA  
submits that the labeling, homogeneity, and testing variance percentages should be consistent.  
Proposed Rule 420.403(7)(a) requires that producers label all marihuana-infused products  
with not only the name of the product but also that “[t]he name of the product must be an  
appropriately descriptive phrase that accurately describes the basic nature of the product.” The  
MICIA supports the agency’s labeling requirements but takes issue with the language  
“appropriately descriptive” for reason that it is vague. The MICIA recommends that the sentence  
read: “[t]he name of the product must accurately describe the basic nature of the product.”  
Proposed Rule 420.403(7)(b) requires that producers label all marihuana-infused products  
with not only the ingredients of the product but also the “component ingredients.” MICIA  
highlights that the term “component ingredients” is undefined and finds the term to be somewhat  
vague in application. The MICIA suggests that the agency consider striking the term and replacing  
it with the term “excipients.”  
Proposed Rule 420.403(7)(e) requires that producers label all marihuana-infused products  
with “[t]he date of the marihuana product was produced.” The MICIA supports this common-sense  
requirement.  
Proposed Rule 420.403(9)(b)-(e) clarifies product and labelling requirements to ensure that  
edible marihuana products are not confused with commercially available food products or  
attractive to children. The MICIA supports these clarifications but requests that the agency develop  
additional guidance and/or establish a process for issuing timely labelling approvals.  
Proposed Rule 420.403(10)(a) clarifies how producers are to set expiration dates for edible  
marihuana products and further provides that on the label that the product must be destroyed after  
the expiration date. The MICIA supports these changes but submits that the term “marihuana  
product” in this section should read “edible marihuana product.”  
Inflexible Product Storage Temperature Mandate  
Proposed Rule 420.403(8)(a) requires that producers of edible marihuana products comply  
with “Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative  
Controls for Human Food, 21 CFR part 117” but that “[a]ny potentially hazardous ingredients used  
to process shelf-stable edible marihuana products must be stored at 40 degrees Fahrenheit, 4.4  
degrees Celsius, or below.”  
The MICIA supports application of the federal reference but asserts that the agency’s  
specific storage temperature requirement for hazardous ingredients should be stricken because it  
is not appropriate in all contexts and not necessarily consistent with the federal reference. See 21  
CFR § 117.80(5). Specifically, the specific storage temperature requirement in R. 420.403(8)(a)  
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requires what is defined in 21 CFR § 117.135 as a “Preventive Control,” without offering a licensee  
the opportunity to conduct a proper Hazard Analysis according to 21 CFR § 117.130 to see if a  
Preventive Control is warranted. Further, the specific storage temperature requirement in R.  
420.403(8)(a) applies this Preventive Control to an undefined sub-category of ingredients  
(“potentially hazardous ingredients used to process shelf-stable edible marijuana products”)  
without identifying the critical product attribute that is affected by storage temperature.  
Recordkeeping  
Proposed Rule 420.403(8)(b) requires that producers of edible marihuana products keep  
formulation records which, inter alia, include “test results for all ingredients used.” The MICIA  
suggests that because testing is not required for non-active/excipient ingredients, the Proposed  
Rule is overbroad and should be appropriately narrowed.  
VI.  
RULE SET 2020-120 LR (LICENSING, R. 420.101 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.101 through Rule 420.11 to  
prohibit and authorize the purchase of caregiver product depending on licensee type; prohibit  
certain intra-license product transfers; authorize the provision of marihuana testing for non-  
licensee adults; and maintain laboratory accreditation exceptions. The Proposed Rule Set also adds  
a new Rule 420.105a which regulates Class A marihuana microbusiness licenses and a new Rule  
420.112a which regulates licensing and management agreements. The MICIA’s comments are  
below.  
Caregiver Product Transfers  
Proposed Rule 420.102(12) provides that “[a] marihuana grower [licensed under MRTMA]  
may not purchase or accept the transfer of a mature plant from an individual, registered qualifying  
patient, or registered primary caregiver.” Proposed Rule 420.105(8) contains the same prohibition  
with respect to microbusinesses licensed under MRTMA. Proposed Rule 420.108(10) contains the  
same prohibition with respect to growers licensed under the MMFLA.  
The MICIA does not take a position on whether grower licensees should be permitted to  
purchase or accept mature plants from registered qualifying patients or caregivers but submits that  
the various grower license types should be treated uniformly.  
Intra-license Transfers  
Proposed Rules 420.103(3) and 420.104(4), delete language authorizing marihuana  
processors and retailers, respectively, with two or more licenses at different establishments from  
transferring inventory between licensed establishments owned by the licensee.  
The MICIA opposes this change for reason that such transfers between licensed locations  
promote flexibility and help prevent product waste. Moreover, these proposed changes will  
increase licensee costs and a detailed cost benefit analysis has not been provided.  
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Class A Microbusinesses  
Proposed Rule 420.105a generally sets forth the rights and obligations of a Class A  
marihuana microbusiness license including, inter alia, the cultivation of not more than 300 mature  
plants, packaging of marihuana, purchasing of marihuana concentrate and infused products, sale  
of marihuana and marihuana products, and the purchase of seeds, tissue cultures, clones or  
marijuana plants from licensed growers.  
The MICIA supports these aspects of the Proposed Rules. However, Proposed Rule  
420.105a(8) specifically authorizes such license holders to “purchase or accept a mature plant from  
an individual, registered qualifying patient, or registered primary caregiver.” The MICIA does not  
take a position on whether grower licensees should be permitted to purchase or accept mature  
plants from registered qualifying patients or caregivers but submits that the various grower license  
types should be treated uniformly.  
Adult Marihuana Testing Services  
Proposed Rule 420.107(1)(c) provides that a marihuana safety compliance facility license  
authorizes the marihuana safety compliance facility to “Receive marihuana from and test  
marihuana for an individual 21 years of age or older, if the marihuana was produced by the  
individual and not purchased or obtained from a licensed marihuana business. The marihuana  
safety compliance facility shall keep documentation for proof of age.”  
The MICIA asks that the phrase “if the marihuana was produced by the individual and not  
purchased or obtained from a licensed marihuana business” be stricken. The MICIA’s position is  
that an adult in legal possession of marijuana should not be limited with respect to testing services  
based upon the legal source of the marijuana. Any adult should have access to product safety  
testing if they are concerned about the product for any reason, without limitation. When a sample  
is presented to a lab for testing that was obtained from a licensed business, the chain of custody  
will be broken on the sample and results cannot be used to represent batch quality. This makes the  
proposed limiting language unnecessary. Moreover, if a sample is presented to a lab for testing by  
an adult, the lab has no way of definitively verifying its source, and neither does the MRA. This  
renders the rule practically unenforceable.  
Laboratory Accreditation Exceptions are no Longer Needed  
Proposed Rule 420.107(2)(c) and 420.112(2) provide that “[a] safety compliance facility  
must be accredited by an entity approved by the agency by 1 year after the date the license is issued  
or have previously provided drug testing services to this state or this state’s court system and be a  
vendor in good standing in regard to those services” that “the agency may grant a variance from  
this requirement upon a finding that the variance is necessary to protect and preserve the public  
health, safety, or welfare.”  
The MICIA submits that these provisions should be amended to read only that “[a]  
marijuana safety compliance facility must be accredited by an entity approved by the agency prior  
to issuance of a state operating license.” Accreditation protects public health and safety and there  
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is no longer any need for post-licensure accreditation nor the issuance of variances for  
accreditation. When the MRA was established in 2018, only four labs were operating in the state,  
and thus good cause existed for these exceptions to accreditation. Now, almost three years later,  
with fifteen licensed and operating testing laboratories, there is no need for the lower bar.  
Accreditation ensures that a laboratory has a functional quality system, complete with validated  
test methods, to ensure the accuracy of published test results.  
Plant Count for MMFLA Grower  
Proposed Rule 420.108(2) provides that “[f]or the purposes of this rule, a marihuana plant  
that meets the definition of a plant in the MMFLA is included in the plant count in subrule (1) of  
this rule.” The MMFLA, however, defines the term “marihuana plant” and “plant” and it is unclear  
to which term the agency refers in this language. The MICIA submits that the term “marihuana  
plant” is the correct term.  
Regulation of Licensing and Management Agreements  
Proposed Rule 420.112a creates a new regulatory regime whereby the MRA seeks to  
require all “licensing agreements”1 and “management agreements”2 of a marihuana licensee to be  
submitted to the MRA for review and approval prior to performance thereunder and further  
requires those agreements to specify a litany of detailed contractual terms relating to payment,  
services, performance, and merger. The Proposed Rule 420.112a(4) further delineates a non-  
exclusive set of contract terms that would render the non-licensed party subject to the agency’s  
application requirements including: “[a]ny term or condition that would allow the other party to  
receive more than 10% of the gross or net profit from the licensee during any full or partial calendar  
or fiscal year” and “[a]ny term or condition that would require the licensee to name the other party  
as a named insured on any insurance policy required to be maintained as a condition of a marihuana  
license.”  
The MICIA opposes these new filing and approval requirements and submits that the  
agency appears to lack statutory and/or rulemaking authority for this expansion of government  
regulation, which strictly construed is unreasonably impracticable, and which may retroactively  
impair contracts. These proposed changes will also increase licensee costs and a detailed cost  
benefit analysis has not been provided. The MRA has not articulated a rational basis on which it  
1
Proposed Rule 420.101(l) defines “licensing agreement” as “any understanding or contract  
concerning the licensing of intellectual property between a licensee and another party.” Proposed  
Rule 420.101(k) defines “intellectual property” as “all original data, findings, or other products of  
the mind or intellect commonly associated with claims, interests, and rights that are protected  
under trade secret, patent, trademark, copyright, or unfair competition law and includes brands or  
recipes.”  
2 Proposed Rule 420.101(m) defines “management or other agreement” as “any understanding or  
contract between a licensee and another party for the provision of management or other services  
that would allow the other party to exercise control over or participate in the management of the  
licensee or to receive more than 10% of the gross or net profit from the licensee during any full or  
partial calendar or fiscal year.”  
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may justify its exercise of regulatory authority over “licensing agreements” of intellectual  
property. Moreover, the term “Management or other agreement” is overbroad and cuts against the  
agency’s proposed definition of “employee” which excludes trade or professional services. At a  
minimum, if the MRA persists with its filing and approval requirements with respect to  
management agreements, MICIA asks that the agency consider revising the definition of  
“management agreement” to mean “any contract between a licensee and another party for the  
provision of management services that allows the other party to exercise control over or participate  
in the management of the licensee.” Such a definition, albeit broader than the statute, would more  
fairly mirror the statutory term “managerial employee” under MCL 333.27102(c).  
VII. RULE SET 2020-121 LR (LICENSING, R. 420.1 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.1 through Rule 420.27 to,  
inter alia, provide for administrative withdrawals of license applications; expand applicant  
disclosure requirements; disclaim vested rights in licenses; lower and streamline renewal  
application fees; and continue to utilize moral character in licensure determination. The Proposed  
Rule Set also adds a new Rule 420.27a also creates a new class of regulated marihuana educational  
research licenses. The MICIA’s comments are below.  
Administrative Application Withdrawal  
Proposed Rules 420.3(3) and (6) authorize the MRA to withdraw applications for  
prequalification and licensure and force applicants to reapply in instances where an application  
has been pending for over one year. Proposed Rule 420.3(7) further provides that “[t]he agency  
may administratively withdraw an amendment to any application or marihuana license if the  
applicant or licensee fails to respond or submit documentation to cure all deficiencies within 30  
days after notice of the deficiency.”  
The MICIA opposes these changes for reason that they are patently unfair. Applicants  
should not be forced to reapply and/or pay additional licensure fees where, through no fault of  
their own, the MRA has failed to adjudicate a license application in under one year. Moreover, 60  
days would be a more reasonable timeframe in which applicants may cure deficiencies.  
Expanded Application Disclosure Requirements  
Proposed Rule 420.4(3) deletes language providing that “[e]ach applicant shall disclose all  
shareholders holding a direct or indirect interest of greater than 5%, officers, and directors in the  
proposed marihuana establishment” and adds language providing that “[e]ach applicant shall  
disclose the identity of every person having a 2.5% or greater ownership interest in the applicant  
with respect to which the license is sought. (a) If the disclosed entity is a trust, the applicant shall  
disclose the names and addresses of the beneficiaries. (b) If the disclosed entity is a privately held  
corporation, the names and addresses of all shareholders, officers, and directors. (c) If the disclosed  
entity is a publicly held corporation, the names and addresses of all shareholders holding a direct  
or indirect interest of greater than 5%, officers, and directors. (d) If the disclosed entity is a  
partnership or limited liability partnership, the names and addresses of all partners. (e) If the  
disclosed entity is a limited partnership or limited liability limited partnership, the names of all  
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partners, both general and limited. (f) If the disclosed entity is a limited liability company, the  
names and addresses of all members and managers.”  
The MICIA opposes this more stringent disclosure requirement for a de minimis ownership  
interest. It is unnecessary, will jeopardize licensee funding, is unreasonably impracticable, and  
may retroactively impair contracts. The MICIA further submits that the agency appears to lack  
statutory and/or rulemaking authority for this expansion of the disclosure requirement beyond the  
bounds of MCL 333.27102. These proposed changes will also increase licensee costs and a  
detailed cost benefit analysis has not been provided. The MRA has also failed to articulate a  
rational basis on which it may justify its increased disclosure requirements.  
Vested Rights in Marihuana License  
Proposed Rule 420.6(6) asserts that “[a] marihuana license is a revocable privilege granted  
by the agency and is not a property right” and that “[g]ranting a marihuana license does not create  
or vest any right, title, franchise, or other property interest.”  
The MICIA acknowledges that this language tracks and then expands on the language  
provided that MCL 333.27409. Nonetheless, the MICIA opposes this language for the reason that  
it may be legally incorrect where a license has been issued, substantial investments made, and state  
law only authorizes license revocation for cause. Regardless of whether the MRA’s assertions are  
legally accurate, it is patently unfair to deny the existence of a property right where substantial  
investments are made based on licensure and such licenses may only be revoked for good causes  
and pursuant to due process.  
Application Fees  
Proposed Rule 420.7 lowers initial licensure and renewal fees and abandons the process of  
calculating renewal fees based on gross weight transferred for growers, gross retail sales for  
retailers and microbusinesses, net weight transported for transporters, and number of tests  
completed for laboratories. The MICIA supports these common-sense changes.  
Moral Character  
Proposed Rule 420.13(1)(a) retains language for requiring license renewals under the  
MMFLA to include “information regarding the identification, integrity, moral character,  
reputation, relevant business experience, ability, probity, financial experience, and responsibility  
of the licensee and each person required to be qualified for renewal of the license under the  
MMFLA.” The MICIA opposes the inclusion of such subjective attributes of the licensee such as  
moral character and further notes Senate Bill 619, if enacted, would remove language allowing the  
MRA to deny a license to any applicant on account of their “moral character” or if they have any  
previous marijuana-related offenses. License denials based on hyper-subjective criteria create the  
appearance of arbitrary application.  
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Marihuana Educational Research License  
Proposed Rule 420.21(1)(e) adds marihuana educational research licenses to the list of  
special licenses which may be issued by the agency. And, Proposed Rule 420.27a sets forth the  
rights and obligations of a person holding a marihuana educational research license. The MICIA  
supports these changes.  
Excess Grower License Fees  
Proposed Rule 420.23(11) provides that “[a]n applicant for an excess grower license is not  
required to pay the application fee under these rules.”  
The MICIA highlights that this provision benefits the largest growers and that many of the  
growers who are not capable of achieving this license type view this fee waiver as inequitable. The  
MICIA submits that the various grower license types should be treated uniformly.  
VIII. RULE SET 2020-123 LR (MARIHUANA SALE OR TRANSFER, R. 420.501 ET  
SEQ)  
This Proposed Rule Set seeks to amend portions of Rule 420.501 through Rule 420.510 to,  
inter alia, address the transfer and/or destruction of expired products; product warning labels and  
advisory pamphlet distribution; and employee limits for internal and trade samples. The Proposed  
Rule Set also adds a new Rule 420.503a authorizing the transfer of immature plant batches without  
utilization of a transporter. The MICIA’s comments are below.  
Definition of Final Form  
Proposed Rule 420.501(g) defines “final form” as “the form a marihuana product is in  
when it is available for sale by a marihuana sales location. For marihuana products intended for  
inhalation, final form means the marihuana concentrate in an e-cigarette or a vaping device.”  
The MICIA requests that the agency clarify that prerolls, deli-style bulk flower packaged  
by a retailer, and batches of edibles divided into multiple packages, are not required to undergo an  
additional level of testing. See also Proposed Rule 420.504(1)(i).  
Destruction of Expired Products  
Proposed Rule 420.502(4) provides that “[a] marihuana business shall not sell or a [SIC]  
transfer marihuana product after the printed expiration date on the package. An expired marihuana  
product must be destroyed.” Proposed Rule 420.502(6) provides that “[a] marihuana business shall  
destroy all product required to be destroyed for any reason within 90 calendar days of when the  
marihuana business became aware of the fact that the product must be destroyed.”  
The MICIA supports these proposed changes for public safety purposes and requests that  
the agency clarify that expired product may be transferred from a retailer to a processor for  
destruction. The MICIA also identifies that this requirement will increase costs and submits that  
the agency’s cost-benefit analysis is deficient.  
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Transfer of Immature Plant Batches  
Proposed Rule 420.503a authorizes approved cultivators to sell or transfer immature plant  
batches to a marihuana sales location without using a marihuana transporter and without  
conducting testing. The MICIA supports these common-sense regulations.  
Labeling Warnings  
Proposed Rule 420.504(1)(v) creates the following labelling requirement: “In clearly  
legible type and surrounded by a continuous heavy line: “WARNING: USE BY PREGNANT OR  
BREASTFEEDING WOMEN, OR BY WOMEN PLANNING TO BECOME PREGNANT,  
MAY RESULT IN FETAL INJURY, PRETERM BIRTH, LOW BIRTH WEIGHT, OR  
DEVELOPMENTAL PROBLEMS FOR THE CHILD.”  
The MICIA supports this labelling requirement which is expressly required by MCL  
333.27206. The MICIA nevertheless asserts that this requirement will substantially increase  
labeling costs and submits that the agency’s cost-benefit analysis is incorrect in asserting  
otherwise.  
Advisory Pamphlet  
Proposed Rule 420.504(4) creates the following requirement: “Before a marihuana product  
is sold or transferred by a marihuana sales location, the sales location shall make available to each  
customer a pamphlet measuring at least 3.5 inches by 5 inches, that includes safety information  
related to marihuana use by minors and the poison control hotline number. The pamphlet must  
substantially conform to the design published on the agency’s website.”  
The MICIA supports this advisory requirement which is expressly required by MCL  
333.27206. The MICIA nevertheless asserts that this requirement will substantially increase  
labeling costs and submits that the agency’s cost-benefit analysis is incorrect in asserting  
otherwise.  
Employee Transfer Limits for Internal and Trade Samples  
Proposed Rule 420.508(8) provides that “[a] producer or marihuana sales location is  
limited to transferring a total of 1 ounce of marihuana, a total of 2 grams of marihuana concentrate,  
and marihuana infused products with a total THC content of 2000 mgs of internal product samples  
to each of its employees in a 30-day period.” Similarly, Proposed Rules 420.509(6) provides that  
“[a] marihuana sales location, marihuana microbusiness, and class A marihuana microbusiness are  
limited to transferring a total of 1 ounce of marihuana, a total of 2 grams of marihuana concentrate,  
and marihuana infused products with a total THC content of 2000 mgs of internal product samples  
to each of its employees in a 30-day period.”  
The MICIA supports these additional clarifications regarding internal and trade sample  
transfers.  
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IX.  
RULE SET 2020-122 LR (OPERATIONS, R. 420.201 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.201 through Rule 420.214 to,  
inter alia, require maintenance of certain financial records and provide for the regulation of natural  
and synthetic cannabinoid sourcing. The Proposed Rule Set also adds new Rules 420.206a  
(standard operating plan), 420.207a (contactless tracing), 420.214a (internal analytical testing),  
420.214b (adverse reactions), and 420.214c (product returns). The MICIA’s comments are below.  
Financial Records  
Proposed Rule 420.204(2) adds new language stating the following: “(i) A licensee shall  
maintain accurate and comprehensive financial records for each license that clearly documents the  
licensee’s income and expenses. Applicable supporting source documentation must be maintained,  
including, but not limited to, all of the following: (A) Cash logs. (B) Sales records. (C) Purchase  
of inventory. (D) Invoices. (E) Receipts. (F) Deposit slips. (G) Cancelled checks. (H) Employee  
compensation records. (I) Tax records. (ii) Bulk financial deposits or transactions must be traceable  
to the individual transactions that comprise the bulk deposit or transaction.”  
These new more granular financial recordkeeping requirements will increase costs and the  
MRA has failed to engage in any cost-benefit analysis related to the impact of these requirement  
on the industry. MCL 24.245(3).  
Cannabinoid Sourcing and Synthetically-Derived Cannabinoids  
Proposed Rule 420.206(13) adds new language providing that “[a]ll ingredients containing  
cannabinoids, whether naturally occurring or synthetically derived, that are added to marihuana or  
marihuana products must be from a source licensed to grow, handle, and produce cannabinoids  
under a license issued by a governmental authority and entered into the statewide monitoring  
system.”  
The MICIA submits that the use of the term “cannabinoids” in the Proposed Rule may be  
overbroad and may encompass any and all industrial hemp products. MCL 333.7106(2); MCL  
286.842(i). The MICIA requests that the MRA add language providing that “a source authorized  
to grow, handle, and produce cannabinoids pursuant to an Industrial Hemp Pilot Program created  
by state statute or regulation” is also acceptable. The MICIA further cautions against the blanket  
authorization of synthetic cannabinoids and synthetic processing where certain synthetic  
cannabinoids such as “K2” and “Spice” are extremely dangerous to public health and safety and  
synthetic production involves a substantial risk of product adulteration by toxic reagents and/or  
byproducts. The MICIA believes that this rule should be revised to explicitly ban all fully or semi-  
synthetic cannabinoids from the Michigan marijuana industry, except those produced incidentally  
by otherwise non-synthetic processing steps that have been approved by the agency.  
Testing for Product Combination  
Proposed Rule 420.206(14) adds new language providing that “[w]hen combining more  
than 1 form of marihuana or marihuana product into a single marihuana product, each form of  
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marihuana or marihuana product must have passing safety compliance test results in the statewide  
monitoring system prior to the creation of the new combined product.”  
The MICIA flatly opposes this new and non-sensical requirement as both ultra vires and  
unreasonably impractical. There is no added health or safety benefit gained by testing the same  
product three different times; only three separate testing fees and three separate samples being  
destroyed from each batch. These new testing requirements will substantially increase costs and  
the MRA has failed to engage in any cost-benefit analysis related to the impact of these  
requirement on the industry. MCL 24.245(3).  
Standard Operating Plan  
Proposed Rule 420.206a adds new language providing that “[a] marihuana business must  
have up-to-date written standard operating procedures on site at all times . . . [which] must detail  
the marihuana business operations and activities necessary for the marihuana business to comply  
with the acts and these rules [and] . . . comply with any guidance issued by the agency.”  
While not opposed to standard operating plans, which are beneficial to licensees, the  
MICIA opposes government mandates (and associated regulatory enforcement) of such a broad  
requirement for licensees to have “up-to-date” and “written” procedures that “detail” compliance  
with every single present or future statutory, regulatory, or even informal guidance requirement of  
the MRA. That a mandatory SOP detail compliance with informal guidance is plainly at odds with  
the APA and this Proposed Rule, as written, is unreasonably impractical. Moreover, this new  
requirement will substantially and continually increase costs and the MRA has failed to engage in  
any cost-benefit analysis related to the impact of these requirement on the industry. MCL  
24.245(3); MCL 243.203(7) (defining a “guideline” as “an agency statement or declaration of  
policy that the agency intends to follow, that does not have the force or effect of law,  
and that binds the agency but does not bind any other person”).  
Contactless and Limited Contact Transactions  
Proposed Rule 420.207a adds new language authorizing and regulating the process for  
contactless and limited contact transactions (including online orders) “unless prohibited by an  
ordinance adopted by the municipality where the marihuana sales location is located.” Such  
transactions are authorized during normal business hours provided that “the designated area for  
contactless or limited contact transactions [is] identified in the marihuana business location plan,”  
the “marihuana sales location [has] a written standard operating procedure in place,” the  
“marihuana sales location using a designated area for contactless or limited contact transactions  
[has] in place an anti-theft policy, procedure, or automatic capability,” the “designated area for  
contactless or limited contact transactions [complies] with R 420.209,” the “contactless and limited  
contact transaction [complies] with R 420.505 and R 420.506,” and the “[m]arihuana being  
transferred during a contactless or limited contact transaction [is] in an opaque bag and the contents  
[are] not be visible to the general public upon pick up.”  
The MICIA supports this very necessary Proposed Rule with the exception that any  
municipal prohibition on contactless transactions should be both direct and specific. As such, the  
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phrase should read “unless DIRECTLY AND SPECIFICALLY prohibited by an ordinance  
adopted by the municipality where the marihuana sales location is located.”  
Storage of Marihuana Product  
Proposed Rule 420.212(3) requires all chemicals or solved to be “stored separately from  
marihuana products and kept with a closed lid in locked storage areas.”  
The MICIA suggests that the phrase “with a closed lid” be replaced with the phrase “in a  
closed container” for reason that not all chemicals and solvents are packaged in a container with a  
lid.  
Internal Analytical Testing  
Proposed Rule 420.214a adds new language authorizing and regulating the process for  
internal analytical testing. The MICIA generally supports this Proposed Rule with the following  
exceptions:  
The MICIA asks for clarification and examples of the meaning of the phrase “fully  
partitioned” as used in Proposed Rule 420.214a(1)(a) (i.e., whether a partition includes walls,  
dividers, curtains, etc).  
The MICIA requests that the MRA strike the requirement in Proposed Rule 420.214a(1)(c)  
that the product of only one license may be in co-located internal analytical testing spaces at a  
time. The MICIA fails to see the necessity of this requirement where such products are required to  
be disposed of, the products cannot return to the licensee, and the results from the testing cannot  
be used to release the products to the public.  
The MICIA seeks clarification regarding the prohibition in Proposed Rule 420.214a(4) that  
“[n]o marihuana or marihuana product may be stored in the internal analytical testing space.” The  
MICIA submits that the samples of products being internally tested should be permitted to be  
stored in the space.  
The MICIA opposes the requirement in Proposed Rule 420.214a(8) that “[a]ny batch of  
marihuana or a marihuana product that has undergone internal analytical testing must undergo full  
safety compliance testing, with failing test results entered into the statewide monitoring system,  
prior to making a request for remediation.” This requirement seems to impose a requirement of  
outside finished testing prior to remediation and thus limits the ability of licensees to proactively  
remediate products. Such a requirement would mark a significant departure from current practice.  
Adverse Reactions  
Proposed Rule 420.214b adds new language requiring that “[a] licensee shall notify the  
agency within 1 business day of becoming aware or within 1 business day of when the licensee  
should have been aware of any adverse reactions to a marihuana product sold or transferred by any  
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licensee” and that “[a] licensee shall enter into the statewide monitoring system within 1 business  
day of becoming aware of or within 1 business day of when the licensee should have been aware  
of any adverse reactions to a marihuana product sold or transferred by any licensee.”  
The MICIA asks that the MRA define what constitutes an “adverse reaction” and clarify  
whether the phrases “becoming aware” or “should have been aware” encompass only actual  
adverse reactions or also customer alleged or perceived adverse reactions. The MICIA further  
requests that the agency issue a form or more detailed guidance as to how to submit such  
information and identifies that, at present, there is not a method for licensees to upload this  
information into METRC.  
Product Returns  
Proposed Rule 420.214c(1) adds new language applicable to marihuana sales locations that  
authorizes “the return of marihuana product that is reported to have caused an adverse reaction or  
is determined to be defective.” Proposed Rule 420.214c(2) further requires that “[a] marihuana  
sales location must have a written policy for the return of marihuana product that contains, at a  
minimum, the following: (a) Product returned to a marihuana sales location must be tracked  
consistently in the statewide monitoring system as waste in compliance with R 420.211. (b)  
Product returned to a marihuana sales location must be destroyed in compliance with R 420.211  
within 90 calendar days of when the marihuana business became aware of the fact that the product  
must be destroyed. (c) Product returned to a marihuana sales location cannot be re-sold, re-  
packaged, or otherwise transferred to a customer or another marihuana business. (d) Product  
returned to a marihuana sales location shall be returned by the customer who purchased the  
product. (e) Product returned to a marihuana sales location is prohibited from being returned to the  
marihuana sales location by way of a delivery driver. (f) A marihuana sales location that does not  
comply with these rules may be subject to disciplinary proceedings. (g) A marihuana retailer may  
return a marihuana product that is past its expiration date to the marihuana processor who produced  
the marihuana product for destruction instead of destroying the marihuana product.”  
The MICIA requests that the agency issue a form or more detailed guidance as to how to  
submit such information and identifies that, at present, there is not a method for licensees to upload  
this information into METRC. The MICIA further submits that the phrase “reported to have caused  
an adverse reaction or is determined to be defective,” is vague and potentially overbroad. The  
agency has neither defined the terms “adverse reaction” nor “defective” and the phrase “reported  
to have caused,” read literally, could mean “alleged by anyone no matter how far removed.”  
Furthermore, the MICIA asks that the agency reconsider the prohibition in Proposed Rule  
420.214c(2)(d) that “[p]roduct returned to a marihuana sales location shall be returned by the  
customer who purchased the product.” This requirement may be extraordinarily difficult to enforce  
and, as set out in the proposed rule, appears to potentially suggest that a marihuana sales location  
may be subject to disciplinary proceedings as a result of third-party conduct completely outside  
the location’s control.  
X.  
RULE SET 2020-124 LR (SAMPLING AND TESTING R. 420.301 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.301 through Rule 420.307 to,  
inter alia, set maximum batch sizes, revise laboratory accreditation requirements and testing  
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methodologies, require safety tests on harvest batches, redefine potency analyses, and mandate  
laboratory policies for potentially hazardous contaminants. The Proposed Rule Set also adds a new  
Rule 420.303a, establishing producer and sales location packaging and testing requirements, and  
Rule 420.305a, establishing certain validation requirements. The MICIA’s comments are below.  
Batch Identification and Testing  
Proposed Rule 420.303(4) provides that “[a] cultivator shall immediately destroy the  
individual plant tag once a tagged plant is harvested and is part of a harvest batch so that a sample  
of the harvest batch can be tested by a licensed laboratory as provided in R 420.304 and R  
420.305.”  
The MICIA requests that the agency clarify that the individual plant tags (which are used  
to identify the plants during the drying stage) do not need to be destroyed until after the drying  
stage is complete.  
Proposed Rule 420.303(6) provides that “[a] cultivator may transfer or sell fresh frozen  
marihuana to a producer without first being tested by a laboratory in order to produce live resin,  
or if the marihuana product will be extracted, with agency approval.”  
The MICIA requests that the agency revise the Proposed Rule so that “fresh frozen”  
includes “any dried biomass” and to replace the term “live resin” with the term “concentrate.”  
Producer and Sales Location Packaging and Testing Requirements  
Proposed Rule 420.303a(1) and (2) clarifies that “[a] producer shall give a marihuana  
product a new package tag anytime the marihuana product changes form or is incorporated into a  
different product,” “[a] producer of a marihuana product in its final form shall have the sample  
tested pursuant to R 420.304 and R 420.305,” “[t]he producer shall quarantine products from all  
other products when the product has test results pending,” “[t]he producer shall not transfer or sell  
a marihuana product to a marihuana sales location until after test results entered into the statewide  
monitoring system indicate a passed result for all required safety tests,” and that “[n]othing in this  
subsection prohibits a producer from transferring or selling a package in accordance with the  
remediation protocol provided by the agency and these rules.” Proposed Rule 420.303a(3) further  
clarifies that “[a] marihuana sales location may sell or transfer a marihuana product only to a  
marihuana customer under both of the following conditions: (a) The marihuana product has  
received passing results for all required safety tests in the statewide monitoring system. (b) The  
marihuana product bears the label required under the acts and these rules for retail sale.”  
The MICIA supports these proposed clarifications.  
Sample Collection  
Proposed Rule 420.304(2)(a) provides that “[t]he laboratory shall physically collect the  
sample the marijuana product from another business to be tested at the laboratory.”  
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MICIA’s only comment is that it appears a typographic error exists; the sentence should  
read: “The laboratory shall physically collect the marijuana product sample from another business  
to be tested at the laboratory.”  
Maximum Batch Size  
Proposed Rule 420.304(2)(d) further provides that “[t]he laboratory shall develop a  
statistically valid sampling method and have it approved by the agency to collect a representative  
sample from each batch of marihuana product. The laboratory shall have access to the entire batch  
for the purposes of sampling.”  
The MICIA submits that “statistically valid sampling method” is too vague and that  
additional guidance should be provided in the proposed rule.  
Laboratory Accreditation Requirements  
Proposed Rule 420.305(1) provides that “A laboratory shall become fully accredited for all  
required safety tests in at least 1 required matrix to the International Organization for  
Standardization (ISO), ISO/IEC 17025:2017, by an International Laboratory Accreditation  
Corporation (ILAC) recognized accreditation body or by an entity approved by the agency within  
1 year after the date the laboratory license is issued and agree to have the inspections, reports, and  
all scope documents sent directly to the agency from the accreditation body.”  
The MICIA submits that these provisions should be amended to read only that:  
A laboratory shall become fully accredited for all required safety tests in all  
required matrices to the International Organization for Standardization (ISO),  
ISO/IEC 17025:2017, by an International Laboratory Accreditation Corporation  
(ILAC) recognized accreditation body or by an entity approved by the agency prior  
to and as a condition of license issuance and agree to have the inspections, reports,  
and all scope documents sent directly to the agency from the accreditation body.  
Accreditation protects public health and safety and there is no longer any need for post-licensure  
accreditation nor the issuance of variances for accreditation. When the MRA was established in  
2018, only four labs were operating in the state, and thus good cause existed for these exceptions  
to accreditation. Now, almost three years later, with fifteen licensed and operating testing  
laboratories, there is no need for the lower bar. Accreditation ensures that a laboratory has a  
functional quality system, complete with validated test methods, to ensure the accuracy of  
published test results.  
Laboratory Testing Methodologies  
Proposed Rule 420.305(2) provides, in part, that “[a] laboratory shall use analytical testing  
methodologies for the required safety tests in subrule (3) of this rule that are validated by an  
independent third party and may be monitored on an ongoing basis by the agency. In the absence  
of published, peer reviewed, validated cannabis methods, Appendix J or K of Official Methods of  
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Analysis authored by the Association of Official Analytical Collaboration (AOAC) International  
must be published in full with guidance from published cannabis standard method performance  
requirements where available.”  
The MICIA submits that the proposed language does not clearly reflect the intent of the  
Rule nor the way in which the Rule has been enforced to date. In its place, the MICIA asks the  
MRA to consider the following language:  
A laboratory shall use analytical testing methodologies for the required safety tests  
in subrule (3) of this rule that are based upon published peer-reviewed methods,  
have been validated for cannabis testing by an independent third party, may be  
monitored on an ongoing basis by the agency, and have been internally verified by  
the licensed laboratory according to Appendix K of Official Methods of Analysis  
authored by the Association of Official Analytical Collaboration (AOAC)  
International, with guidance from published cannabis standard method  
performance requirements where available. In the absence of published, peer-  
reviewed, validated cannabis methods, method validation requirements of  
Appendix K of Official Methods of Analysis must be met in full with guidance  
from published cannabis standard method performance requirements where  
available.  
Safety Tests on Harvest Batches  
Proposed Rule 420.305(3) provides, in part, that “[a] laboratory shall conduct the required  
safety tests specified in subdivisions (a) through (i) of this subrule on marijuana product that is  
part of a harvest batch as specified in R420.303, except as provided in subrule (4) of this rule. The  
agency may publish minimum testing portions to be used in compliance testing.”  
The MICIA reads this language as limiting safety testing to marijuana product that is part  
of a harvest batch (which is only plant material by definition) and thus as excluding testing  
requirements for marijuana products that are not part of a harvest batch such as concentrates and  
infused products. The agency should clarify its intention in that regard. The MICIA supports the  
agency publishing minimum testing portions to be used in compliance testing.  
Potency Analysis  
Proposed Rule 420.305(3)(a)(i) states that “[i]n the preparation of samples intended for  
potency analysis, the laboratory may not adulterate or attempt to manipulate the total potency of  
the sample by adding trichomes that were removed during the grinding and homogenization  
process.”  
The MICIA opposes this prohibition for reason that it leads to results that are not  
representative. Simply because a testing lab “damages” or knocks portions off of a licensee’s  
product, does not mean that those portions should not be included in the potency test.  
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Proposed Rule 420.305(3)(a)(ii) states, in part, that “Kief must not be reintroduced to the  
flower sample during the homogenization process.”  
The MICIA opposes this prohibition for reason that it leads to results that are not  
representative. Kief created during the grinding process is customarily kept and reintroduced by  
the average consumer.  
Proposed Rule 420.305(3)(a)(iii) defines the list of legally required cannabinoids for  
potency testing as: “(A) Total Tetrahydrocannabinol (THC); (B) Tetrahydrocannabinol Acid  
(THC-A); (C) Total Cannabidiol (CBD); (D) Cannabidiol Acid (CBDA); [and] (E) Additional  
cannabinoids may be tested with approval from the agency.”  
The MICIA reads the rule as only requiring potency test results for the four cannabinoids  
in items (A) through (D) of the subrule. Consequently, the subrule does not authorize potency  
testing of d9-THC or Cannabidiol. By default, these two important compounds fall into optional  
analyte category (E). Omitting mandatory reporting of d9-THC and Cannabidiol test results is not  
recommended. The MICIA also submits that the correct term for “Tetrahydrocannabinol Acid” is  
“Tetrahydrocannabinoic Acid” and the correct term for “Cannabidiol Acid” is “Cannabidiolic  
Acid.”  
Proposed Rule 420.305(9) further defines the list of legally required cannabinoids for  
potency testing and provides that “[p]otency shall include the following cannabinoid  
concentrations listed in subdivisions (a) to (f) of this subrule, subject to subdivisions (g) and (h) of  
this subrule:  
(a) Total THC concentration;  
(b) THC-A concentration;  
(c) Total THC, which includes Delta 7, Delta 8, Delta 9, Delta 10, and Delta 11  
THC and THC-A. The following calculation must be used for calculating Total  
THC, where M is the mass or mass fraction of delta-9 THC or delta-9 THC-A: Σ  
Delta 7-11 THC + Σ ((Delta 7-11 THCA) x 0.877)=Total THC;  
(d) Total CBD concentration;  
(e) CBD-A concentration;  
(f) Total CBD. The following calculation must be used for calculating Total CBD,  
where M is the mass or mass fraction of CBD and CBD-A: M total CBD = M CBD  
+ 0.877 x M CBD-A;  
(g) For marihuana and marihuana concentrates, total THC and total CBD must be  
reported in percentages; [and]  
(h) For marihuana infused products, potency must be reported as milligrams of  
Delta-9-THC and CBD.”  
The MICIA reads the proposed rule as only requiring reporting of test results for items (a)  
through (f) of the subrule. As such, this list no longer mandates individually reporting of d9-THC  
or Cannabidiol test results. By default, these important compounds fall into optional analyte  
category (E). Omitting mandatory reporting of d9-THC and Cannabidiol test results is not  
recommended. The MICIA also submits that Rules 420.305(9)(a) and (c) are redundant. The  
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agency should change “Total THC concentration” in Rule 420.305(9)(a) to “delta-9 THC  
Concentration.”  
Furthermore, the definition in Rule 420.305(9)(c) of compounds that comprise “Total  
THC” is problematic such that reporting of Total THC results, as defined, cannot be met at this  
time where (i) certified analytical reference standards for Delta7-THC (a fully synthetic and non-  
psychoactive cannabinoid) may not be fully and commercially available at this time; (ii) certified  
reference standards for Delta 10-THC (a fully synthetic cannabinoid) are available for two separate  
enantiomers: Delta 10 (6aR, 9S), which is not psychoactive, and Delta 10 (6aR, 9R), which is  
psychoactive;3 (iii) although there are various forms of nomenclature, the term “Delta 11 THC” is  
not a consistently recognized term in current scientific literature;4 and (iv) the calculation provided  
for determining Total THC includes summing the concentrations of “Delta 7-11 THCA.”5  
Consequently, MICIA recommends that the potency testing requirements be revised to allow the  
MRA to publish a list of cannabinoids for mandatory testing and reporting and to update the list  
as needed via bulletins separately from the Rules. It is important to address the emergence of  
additional THC isomers (like delta-8 THC) without prematurely and unnecessarily complicating  
the Proposed Rule.  
Residual Solvent Testing as Part of Harvest Batch  
Proposed Rule 420.305(3)(f) includes “Residual Solvents” as a required safety test for a  
marijuana product that is part of a harvest batch. Because residual solvent testing has not been  
required for plant material to date, the MICIA suggests that this subrule be deleted, especially  
where subrule 420.305(7) properly addresses residual solvent testing.  
Reporting Units for CBD  
Proposed Rule 420.305(9)(h) states that “[f]or marijuana infused products, potency must  
be reported in milligrams of Delta-9 THC and CBD.”  
The MICIA suggests that this language does not adequately define reporting units for CBD.  
While the definition provides a magnitude (milligrams), it does not specify the quantity. That is,  
the language does not specify whether the quantity be a milliliter of analytical solution, gram of  
product, serving, etc. By requiring reporting of individual test results for Delta 9-THC and CBD  
for infused products, the subrule also seems to conflict with Proposed Rules 420.305(3)(a)(iii) and  
420.305(9) which provide that these analytes are defined as optional.  
3
The Proposed Rule should clarify whether both enantiomers or, if only one, which enantiomer  
must be quantified.  
4
Provided that the term “Delta 11 THC” intends to describe THC with a double bond between  
carbon atoms 9 and 11, the MICIA would prefer the nomenclature “exo-THC,” as certified  
reference standards are available for “exo-THC.”  
5
This requires a laboratory to individually quantify delta 7, delta 8, delta 10, and delta 11 THC  
acids. Certified reference standards for these cannabinoic acids do not currently exist in the  
literature, and the delta-9 THC acid isomers themselves may not be known compounds at all at  
this time.  
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Terpene Analysis  
Proposed Rule 420.305(18) states that “[a] laboratory may perform terpene analysis on a  
marijuana product by a method approved by the agency, and the method must be accredited on the  
same frequency as all required safety tests. There are no established safety standards for this  
analysis.”  
The MICIA recommends that the phrase “[t]here are no established safety standards for  
this analysis” be omitted, because safety tests for beverages include a requirement to test for  
phytol.  
Laboratory Policy for Potentially Hazardous Contaminants  
Proposed Rule 420.305(21) states that “[a] laboratory shall have a policy or procedure in  
place for handling and reporting any potentially hazardous contaminants that may be encountered  
during routine testing. A laboratory shall notify the agency if a test batch is found to contain levels  
of a contaminant that could be injurious to human health.”  
The MICIA suggests that this requirement is vague and overbroad and should not be  
included in the Proposed Rules without further clarification. Licensed laboratories are not  
equipped or otherwise required to identify unknown compounds of any type in product samples.  
In addition, under the right conditions and without further clarification, just about any compound  
fits the terms “potentially hazardous” and “potentially injurious to human health.”  
STEC Reporting Deadline  
Proposed Rule 420.305(22) states that “[m]arihuana-infused products found to contain  
Salmonella spp. or Shiga toxin producing E. coli (STEC) must be reported to the agency  
immediately.”  
The MICIA submits that it is unclear how immediate reporting for STEC required under  
this Proposed Rule fits with Rules 420.305(12) and (13) which requires reporting within three  
business days. The MRA should consider omitting or clarifying this Proposed Rule. If the MRA  
chooses to clarify this Proposed Rule, the MICIA suggests that the term “immediately” should be  
replaced with the phrase “within one business day.”  
Validation Protocols  
Proposed Rule 420.305a sets forth a litany of new validation protocols and requirements.  
The MICIA submits that these new requirements will increase laboratory costs and that the MRA  
has failed to engage in any cost-benefit analysis related to the impact of these requirement on the  
industry. MCL 24.245(3).  
Proposed Rule 420.305a(2)(b) provides that “[v]alidation protocols should perform  
inoculation of marihuana matrices with live organisms where feasible to ensure that both extraction  
and detection for the assay are tested. To further test the accuracy of the assay, probability of  
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detection (POD) analyses, inclusivity, exclusivity, lot-to-lot stability, and robustness studies must  
be included in the validation studies.”  
The MICIA submits that “lot-to-lot stability” testing is not appropriate as a test method  
validation requirement and should be removed from this sub-rule. “Lot-to-lot stability” is a process  
validation, typically included in validation of a manufacturing process, and is not appropriately  
employed as an element of analytical method validation.  
Quality Assurance and Control  
Proposed Rule 420.305b creates a quality assurance and quality control monitoring regime  
and requires that laboratories adopt and follow detailed written quality assurance measures and  
standard operating procedures approved by the agency.  
The MICIA is concerned that the quality control acceptance criteria currently published by  
the agency exceed the capabilities of established, industry-accepted test methods, and are more  
stringent than criteria assigned to those methods by the method authors / innovators. MICIA  
submits that while published MRA guidance is essential and appropriate, where available, method  
author / innovator quality control acceptance criteria should prevail. The MICIA further submits  
that these new requirements are likely to substantially increase laboratory costs and that the MRA  
has failed to engage in any cost-benefit analysis related to the impact of these requirement on the  
industry. MCL 24.245(3). Abandoning existing, approved and accredited methods simply to meet  
tightened MRA specifications without regard to actual existing method capabilities may include  
major financial impact, including purchasing expensive new equipment and discarding perfectly  
adequate existing equipment.  
The MICIA additionally identifies that the phrase “method acceptance criteria is required”  
in Rule 420.305b(6) should be revised to “method acceptance criteria are required.”  
Aspergillus Remediation  
Proposed Rule 420.306(3) provides that “[p]roducts that failed testing for Aspergillus are  
ineligible for remediation.”  
The MICIA suggests that products which fail testing for Aspergillus should be further  
tested and, if applicable, remediated for Mycotoxins. Testing for mycotoxins identifies the  
presence of aspergillus which, itself, is ubiquitous. This proposed process is similar to the process  
followed by the USDA https://www.ams.usda.gov/publications/content/fgis%E2%80%99s-role-  
aflatoxin-testing  
Retest Costs  
Proposed Rule 420.306(5) provides that “[t]he marihuana business that provided the  
sample is responsible for all costs involved in a retest.”  
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The MICIA highlights that the various license types have different perspectives on this  
provision. The MICIA submits that the MRA should not inflexibly dictate commercial terms but  
should instead leave it to the individual businesses to contract amongst themselves for apportioning  
such costs.  
CONCLUSION  
MICIA appreciates the opportunity to comment on the MRA’s proposed rules and the  
MRA’s efforts to develop a sound regulatory structure for the cannabis industry. MICIA believes  
that with the changes suggested above, greater industry feedback, and more thorough vetting of  
the costs and benefits of proposed regulations, Michigan can be a leader both economically and in  
its promotion of good business practices for the industry.  
Respectfully submitted,  
Robin Schneider, Executive Director  
Michigan Cannabis Industry Association  
www.MICannabisIndustryAssociation.org  
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Sep 27, 2021  
To: Marijuana Regulatory Agency  
Attn: Legal Section  
2407 N. Grand River Ave.  
Lansing, MI 48906  
Cc: Andrew Brisbo, Executive Director  
Re: Public Comment, Proposed Rules  
Thank you for the opportunity to provide comment on the Marijuana Regulatory  
Agency’s (MRA) rule changes proposed on August 30, 2021. Weedmaps is the leading  
technology and software infrastructure provider to the cannabis industry. Specifically, we  
provide software and other technology solutions to licensed cannabis businesses,  
including our leading online listings platform, but also SaaS offerings to help businesses  
operate efficiently and compliantly.  
As the Government Relations arm of Weedmaps, WM Policy is constantly learning and  
refining our recommendations on what makes effective cannabis policy as related to  
protecting public health and safety and promoting a thriving and equitable industry. We  
commend the MRA for its leadership in this constantly evolving space, and moreover for  
its willingness to solicit public feedback in its efforts to generate the best possible  
cannabis policies. To that end, below we have highlighted a change that we recommend  
in the next iteration of regulations.  
The current proposed text reads;  
R 420.101: Definitions  
(c) “Another party” or “other party” means an individual or company with which a  
licensee contracts to use the individual’s or company’s intellectual property or to  
utilize management or other services provided by the individual or company.  
(k) “Intellectual property” means all original data, findings, or other products of  
the mind or intellect commonly associated with claims, interests, and rights that  
are protected under trade secret, patent, trademark, copyright, or unfair  
competition law and includes brands or recipes.  
(l) “Licensing agreement” means any understanding or contract concerning the  
licensing of intellectual property between a licensee and another party.  
41 Discovery, Irvine, CA 92618  
R 420.112a: Licensing, management, or other agreements.  
(2) A licensee shall submit a complete, unredacted, signed copy of the licensing,  
management, or other agreement to the agency for review and approval prior to  
performance under the agreement. Approval by the agency indicates an agency  
determination that it does not appear based upon the information provided that  
the other party meets the definition of applicant.  
We believe that these regulatory provisions were created to confirm current MRA  
practices, and not to expand or create new regulatory requirements. Specifically, we  
believe that these definitions, as well as the duplicate definitions of “(e)Another party or  
other party” and “(i)Licensing agreement” from R 402.801 were intended to ensure that  
parties that should be considered applicants for a cannabis license were not evading  
the MRA’s regulatory authority by entering into a licensing agreement with a current  
licensee. Plainly said, if the non-licensed party in the agreement crossed the threshold  
of conducting business akin to a licensee, then that party should indeed be considered  
an applicant that would need to be licensed upon review and adjudication by the MRA.  
As written, we believe these definitions could encapsulate mere technology platforms  
that are outside of this intent, including Weedmaps, which would not meet the definition  
of an applicant. We suggest amending the definition of “Licensing Agreement” in both  
sections by adding the highlighted text:  
“Licensing agreement” means any understanding or contract concerning the  
licensing of intellectual property between a licensee and another party except for  
agreements related to the provision of technology services.  
We sincerely thank you for all of your work for Michigan’s cannabis industry and for  
thoughtfully taking public sentiment into account as you work to refine the industry.  
Thank you for your consideration and the opportunity to submit public comments. If you  
have any questions or concerns, please let us know.  
Respectfully,  
/s/Cedric Haynes  
Weedmaps  
41 Discovery, Irvine, CA 92618  
;