From:  
To:  
Hendricks, Robert  
MRA-Legal  
Cc:  
Johnson, Matthew; Martin, Rodney; Hendricks, Robert; Sheets, Kaitlin; Nimphie, Benjamin; Hajali, Mazen;  
Chitwood, Alexandra  
Subject:  
Date:  
Comments on proposed rule revisions  
Monday, September 27, 2021 3:28:05 PM  
Attachments:  
image001.jpg  
22355973_1 Proposed MRA Rule Comments (Combined)-c.DOCX  
CAUTION: This is an External email. Please send suspicious emails to abuse@michigan.gov  
Marijuana Regulatory Agency  
Legal Section  
P.O. Box 30205  
Lansing, MI 48909  
Attached please find our comments on the proposed revised rules.  
Thank you for your attention and assistance.  
Respectfully yours,  
Robert A. Hendricks | Senior Counsel  
Warner Norcross + Judd LLP  
1500 Warner Building, 150 Ottawa Ave., NW, Grand Rapids, MI 49503  
d 616.752.2291 | m 616.302.3480 | rhendricks@wnj.com  
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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Rule states that partial applications to obtain prequalification status may be administratively withdrawn if  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 After a partial application has been withdrawn,  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
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.  
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.”  
R. 420.305(16)(c)  
Testing;  
laboratory  
requirements  
10  
2
Rule Citation  
Rule Title  
Page  
Comments  
Number  
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.  
Page 2 of 10  
BDJ PLLC  
Comments on Proposed Rule Amendments  
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  
Page 3 of 10  
BDJ PLLC  
Comments on Proposed Rule Amendments  
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.  
Page 5 of 10  
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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  
Page 6 of 10  
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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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Comments on Proposed Rule Amendments  
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.  
Page 8 of 10  
BDJ PLLC  
Comments on Proposed Rule Amendments  
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.  
Page 9 of 10  
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Comments on Proposed Rule Amendments  
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  
From:  
To:  
Rick Thompson  
MRA-Legal  
Subject:  
Date:  
Comments on the proposed topic-based rules- Administrative Rules hearing Sept 27  
Sunday, September 26, 2021 10:37:10 PM  
CAUTION: This is an External email. Please send suspicious emails to  
abuse@michigan.gov  
Please add these comments to the official record for the proposed rule changes. Thank you.  
Rick Thompson  
Executive Director, NORML of Michigan  
--  
To MRA:  
In regards to the proposed Administrative Rule changes, these are our concerns and wishes:  
2020-117 LR:  
420.802 Rule 2, section 4 sub a  
Eliminating the requirement to report any adverse reaction to cannabis products is detrimental  
to the purpose of Marijuana Regulatory Agency oversight of the MMFLA and MRTMA  
programs. Without safety reporting, retailers will behave in a less safe manner and this  
disadvantages consumers. We oppose this change.  
420.803 Rule 3 sub 3  
Eliminating this reporting requirement means the MRA is not in a position to know if a  
proposed business has actually satisfied all the requirements for operations in the municipality  
in question. This seems not to be a burdensome requirement on business. We oppose this  
change.  
420.805 Rule 5 sub 2  
Issuance of these notifications of violation is the only way consumers can track how the MRA  
is disciplining their regulated businesses. This is an important aspect of consumer protection  
and is part of the transparency mission the MRA continues to maintain. We are opposed to this  
change.  
Rule 5 sub 10 and 11  
Giving the MRA additional powers to take action against companies which violate the rules is  
consistent with greater consumer safety. We support this change.  
R420.806 Rule 6 sub f  
If this has never been clearly expressed in the language of the MRTMA or MMFLA, then it is  
welcome as an addition here. Businesses which violate the MRA rules are likely to perform  
acts which compromise consumer safety. Denial of license renewal is an appropriate tool for  
the MRA to have available, in their effort to secure licensee compliance. We support this  
change.  
R420.808a  
We oppose this entire rules section. This codifies the ability for the MRA to apply subjective  
evaluations of individuals and apply differential standards toward two people striving for the  
same task. This is the same tool used by Rick Johnson and the Marijuana Regulatory Board to  
discriminate against caregivers and other individuals with a history in the cannabis industry.  
The current MRA regulations are strict enough regarding ownership, employability and fitness  
to operate within the industry. We oppose this change.  
R2020-118 LR  
Rule 420.704 sub a  
We stand opposed to the entire idea of subjective decisions made by the Agency regarding a  
person's fitness to participate in the industry. Hard and clear guidelines are the only way to  
ensure bias and favoritism are not used in determining who can participate in the industry, and  
who cannot. We stand opposed to this series of subjective and discriminatory changes.  
2020-119 LR:  
R420.401 Rule 1d  
This change is appropriate as it tests the product in final form, instead of testing components.  
Devices sometimes contribute to the chemical profile of the cannabis concentrate, and testing  
while product is in the dispensing device is justified. We support this change.  
Rule 1 o  
Requiring the formulation and proofs of shelf stability is reasonable from a regulatory  
standpoint. Any recall issues might be facilitated by a knowledge of internal ingredients,  
especially if additives are banned by future action of the MRA. We oppose this change.  
R420.403 Rule 7 sub a  
Without transparent packaging, the consumer has to be able to accurately identify what's in the  
sealed package prior to purchase. An appropriate description of contents will remove  
ambiguity and clarify purchase decisions for consumers. We support this change.  
Same, sub e  
This is valuable information. Consumers will benefit from knowing when a product was  
manufactured. We support this change.  
Same, Rule 10 sub a  
This is a responsibility dodge by the MRA. If two companies produce the exact same  
gummies, but each is allowed to figure their own expiration date, there is unacceptable  
variance in the industry and consumers could potentially suffer. The MRA needs to establish  
expiration periods for ALL consumable products and all manufacturers will have to adhere to  
the standard, instead of composing their own product life expectancies. We support the intent  
of the changes made, but oppose the lack of specificity and industry ambiguity.  
2020-120 LR:  
R420.102 Rule 12  
also  
R420.105 Rule 8  
R420.108 Rule 10  
This rule defies explanation. It seemingly is covered under other rules within this regulatory  
framework, and therefore seems redundant. In the absence of an explanation for this change,  
we are opposed to the provision barring cannabis cultivators from acquiring cannabis from  
sources outside the regulated market.  
420.103 Rule 3 sub 3  
also  
420.104 Rule 4 sub 4  
We support the removal of this clause from the Administrative Rules. This loophole gives  
processors and retailers with multiple licenses an unfair advantage over single-licensed  
entities, and therefore is potentially detrimental to a fair market and consumer benefit. We  
support this change.  
R420.105a  
We support the creation of this new license type. We specifically support the addition of sub 8  
to the language of the proposal. We support this change.  
R420.107 sub c  
Preventing common citizens from cross-checking the results of lab analysis of cannabis from  
the regulated system is highly detrimental to the cannabis industry as a whole, and consumer  
safety in particular. Having a double-check on lab results is essential to ensuring consumers  
have trust in the products you take to market. This seems to be blatant industry protectionism  
and is at its core, anti-consumer, as it limits what we can do with our medicine. We stand  
opposed to this change, with great vehemence.  
Rule 420.112a  
This entire section is new and seems to include MRA approval of partnerships, ownership  
stakes, licensing deals and other internal corporate information, which must be sent to the  
MRA and held in their files. The proposed level of scrutiny seems less regulatory and more  
investigatory, which is a stage usually reserved for entities which have violated agreements.  
We stand neutral on this change.  
2020-121 LR  
R420.4 Rule 4 sub 3  
There seems no logical reason for the MRA to reduce the revealed percentage share from 5%  
to 2.5%. In the absence of clear and compelling reasoning, we oppose this change.  
R420.5 Rule 1 sub e  
This is a clear definition of what is required for municipal approval of potential licensed  
facility locations. We support this series of changes.  
R420.25 sub 6  
A temporary event can only be authorized if the municipality has approved on-site sales AND  
consumption of cannabis? Some communities would approve one or the other. This rule is off-  
target and puts unnecessary restrictions on the event license holder. We stand opposed to this  
change.  
Additionally, the regulations regarding temporary events gives attendance permission to  
people over 21, but fails to include registered medical marihuana patients. We suggest  
including them in the language everywhere, alongside the over 21 designation.  
R420.27a  
The research grant funding was approved this year under current rules, as contained in the  
MRTMA, and these regs seem to restrict the execution of that mandate. For example, the need  
for a floor plan of the research location is unclear. We stand neutral on these changes,  
although the intent of the voter-directed initiative is supported by consumers everywhere.  
2020-122 LR  
R420.206 sub 13 and 14  
--  
Rick Thompson  
CANNABIS MEDIA SPECIALIST  
phone: 586 350-8943  
Publisher, Michigan Cannabis Industries Report mcirmagazine.com  
Owner, Michigan Cannabis Business Development Group micbd.com  
Editor, TheSocialRevolution.org  
Named Citizen Activist of the Year 2015 by national media source  
Crystal Trichome Award winner- Journalist of the Year 2016  
Radio: Jazz Cabbage Cafe, The Planet Green Trees Radio Show, more  
Activism: MiNORML and MiLegalize, Board member of both  
Print: High Times, Hybrid:Life Magazine, Culture Magazine, more  
Internet: Editor, The Social Revolution; contributor, The Weed News, more  
4mrick@gmail.com  
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  
California | Illinois | Michigan | Minnesota | Texas | Washington, D.C.  
118728.000002 4846-8058-6748.2  
Marijuana Regulatory Agency, Legal Division  
September 27, 2021  
Page 2  
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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From:  
To:  
Rick Thompson  
MRA-Legal  
Subject:  
Date:  
Part 2 - Comments on the proposed topic-based rules- Administrative Rules hearing Sept 27  
Sunday, September 26, 2021 11:18:10 PM  
CAUTION: This is an External email. Please send suspicious emails to  
abuse@michigan.gov  
This is the continuation of the earlier email. Thank you for combining the two into one single  
entry on my behalf.  
Rick Thompson  
Executive Director, NORML of Michigan  
--  
2020-122 LR  
R420.206 sub 13 and 14  
This may disallow the inclusion of certain cannabinoids which are beneficial to consumers.  
The sourcing of the cannabinoids is not necessary to establish, because each component must  
pass testing and if it passes, its origin is irrelevant. We stand neutral on this change; greater  
reporting is good for consumers but overregulation is bad for everyone.  
R420.207a  
We support the diversity in cannabis retail experience this ruleset provides. Although born  
during the pandemic, this program has value even in non-crisis times. We support these  
changes.  
R420.214a  
We heartily endorse product testing prior to release to the public. The establishment of these  
areas is a welcome addition to the ruleset. We support these changes.  
R420.214c  
The ability to return product which is poor or unsatisfactory is important to consumer  
confidence in the regulated market. We support these changes.  
2020 R123 LR  
R420.503a  
We support this but wonder why this privilege is not extended to caregivers and patients who  
have immature plants available to supply retailers. We support these changes.  
R420.504 Rule 4 sub 1 sub K sub 5  
This label is mandated by an act of the legislature but there is insufficient and contradictory  
evidence to make this claim, and we oppose the inclusion of these labels. We stand opposed to  
these changes.  
Same, Rule 4 sub 4  
The incidence of minor use is so slight that the mandated presence of pamphlets is an  
overreaction to an underwhelming and extremely rare occurrence. These pamphlets do not  
serve a real purpose but are public relations tools. We stand opposed to this change.  
2020-124 LR  
No notes  
2021-10 LR  
R420.602a  
We find this unnecessary, as diversion of product is defeated by the METRC system, and  
working more than one job is almost a necessity in 2021 America. Ownership of different  
license types should be restricted, but employment should not. We stand opposed to this  
change.  
2021-29 LR  
No notes  
--  
Rick Thompson  
CANNABIS MEDIA SPECIALIST  
phone: 586 350-8943  
Publisher, Michigan Cannabis Industries Report mcirmagazine.com  
Owner, Michigan Cannabis Business Development Group micbd.com  
Editor, TheSocialRevolution.org  
Named Citizen Activist of the Year 2015 by national media source  
Crystal Trichome Award winner- Journalist of the Year 2016  
Radio: Jazz Cabbage Cafe, The Planet Green Trees Radio Show, more  
Activism: MiNORML and MiLegalize, Board member of both  
Print: High Times, Hybrid:Life Magazine, Culture Magazine, more  
Internet: Editor, The Social Revolution; contributor, The Weed News, more  
4mrick@gmail.com  
;