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Rule states that partial applications to obtain prequalification status may be administratively withdrawn if  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 After a partial application has been withdrawn,  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  
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.  
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.  
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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  
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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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Comments on Proposed Rule Amendments  
3. Marijuana Licensees – R 420.101 et seq.  
R 420.101—Definitions  
• All references to "industrial hemp" throughout the Rules and Proposed Amendments  
(including the Proposed Amendment to RR 420.101(1)(i) and (j)) should be updated to  
include reference to the Industrial Hemp Growers Act.10  
• The phrases "exercise control over" and "participate in the management of" are susceptible  
to the same ambiguities noted above for R 420.1(1)(c)(i).  
• The definition of "Managerial employee" provided in Proposed Amendment for R  
420.101(1)(m) includes ambiguous terms and phrases like "ability to control and direct the  
affairs of" and "ability to make policy concerning" a marihuana business that are  
susceptible to the same ambiguities noted above for R 420.1(1)(c)(i).  
R 420.112a—Licensing, management, or other agreements  
• Though we support MRA's decision to formally promulgate substantive rules pertaining to  
these agreements, we respectfully re-iterate the concerns noted in our General Global  
Comments above regarding MRA's historical practice introducing these regulatory  
obligations through Bulletins or other "guidance" documents that it routinely seeks to  
enforce as binding legal authority.  
• The difference between "gross" and "net" profits is substantial, however, MRA treats them  
as equivalent synonyms throughout the Rules and Proposed Amendments (including R  
420.112a(4)(ii)).  
o "Gross Profit" is traditionally defined as total revenue (sales) minus the cost of  
goods sold (COGS).  
o "Net Profit" is traditionally defined as Gross Profit minus operating expenses and  
all other expenses (e.g. taxes, interest paid on debt, etc.)11  
• Proposed R 420.112a(5) would create an unreasonable burden on licensees that seek to use  
an assumed name or dba as authorized by another party to a licensing agreement—insofar  
as the mechanics of registering the assumed name when it is already registered to another  
entity is unduly cumbersome and time consuming. Under the statutory authority referenced  
in the Proposed Rule, if an unlicensed Michigan LLC (Entity A) registers the assumed  
name "ABC Cannabis" and enters into an agreement with a licensed Michigan entity  
(Entity B) that provides non-exclusive rights to use the assumed name "ABC Cannabis"—  
Entity A would have to withdraw its original assumed name registration and refile a new  
assumed name registration listing itself and Entity B on the registration. If Entity A  
subsequently entered into another agreement with licensed Entity C that provides the same  
non-exclusive use rights for the assumed name "ABC Cannabis"—it would have to  
withdraw the updated assumed name registration (listing Entity A and B) and refile a new  
assumed name registration listing Entities A, B, and C. While MRA could reasonably  
request copies of the licensing agreement as executed by the parties to verify that a given  
licensee has received proper authority from the party holding legal rights to an assumed  
10 Public Act 220 of 2020.  
11 The formula for calculating Net Income is traditionally stated as NI = R – COGS – OE – O – I – T; where NI =  
Net Income, R = Revenue, OE = Operating Expenses, O = Other Expenses, I = Interest, and T = Taxes.  
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Comments on Proposed Rule Amendments  
name or dba—there is no rational basis for requiring non-licensees to amend their assumed  
name filings every time they execute a new licensing agreement assigning use rights of  
their assumed name(s).  
4. Marijuana Licensees – R 420.201 et seq.  
R 420.201—Definitions  
• The definition of "Applicant" provided in R 420.201(d) is inconsistent with the definition  
of "Applicant" provided in R420.1(1)(c)(i).  
• The definition of "Applicant" for a trust provided in R 420.201(1)(d)(i)(I) is inconsistent  
with the definition of "Applicant" for a trust provided in the Proposed Amendment to  
R420.1(1)(c)(i)(I).  
• The phrase "direct or indirect ownership interest" is susceptible to the same ambiguities  
noted above for R 420.1(1)(c)(i).  
• The language in RR 420.201(1)(d)(i)(E) and (F) has not been amended to eliminate the  
incoherent reference to "indirect stockholders" discussed above in the Proposed  
Amendment for R 420.4(3)(c).  
R 420.204—Operation at same location  
• The phrase "combined space" as used in the Proposed Amendment to R 420.204(4) should  
be further clarified or defined.  
R 420.206 Marihuana business; general requirements  
• We implore MRA to expedite its work with MDARD to develop a pathway for licensed  
hemp growers and processors to enter cannabinoid biproducts into METRC.  
R 420.206a Standard operating procedures  
• This newly proposed Rule seems duplicative of the existing requirements for applicants to  
submit a business plan—which licensees must maintain and update with MRA—including  
the applicant's plans for maintaining inventory and other business records, staffing and  
training employees, securing and otherwise operating the proposed marihuana business,  
etc.  
• The language proposed in R 420.206a(4) seeks to delegate substantive rulemaking  
authority over "standard operating procedure requirements" to MRA, which would likely  
be issued in the form of Bulletins or other guidance. Under the MAPA, any new compliance  
obligations pertaining to the "standard operating procedures" contemplated throughout this  
proposed Rule would likely constitute substantive rulemaking that must be promulgated  
with an opportunity for public notice and comment. Since Agency guidance "does not have  
the full effect of law,"12 a licensee could possibly challenge the use of Bulletins or other  
12 See MCL § 24.203(7) (defining "guideline" as "an agency statement or declaration of policy that the agency  
intends to follow, that does not have the force or effect of law, and that binds the agency but does not bind any other  
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Comments on Proposed Rule Amendments  
guidance issued under this proposed Rule in any future enforcement action or  
proceedings.13  
R 420.207 Marihuana delivery; limited circumstances.  
• R 420.207(2)'s restriction of delivering medical marihuana product only to a patient "at the  
patient's residential address" raises numerous questions and concerns about the measures  
medical licensees and their delivery employees must take to prevent mis-delivery to an  
address that reasonably appears to be the patient's bona fide residential address but is later  
determined not to be the bona fide residential address. We respectfully request further  
clarification of this topic.  
5. Marijuana Sampling and Testing – R 420.301 et seq.  
R 420.304 Sampling; testing  
• R 420.304(2)(d) should specifically set forth standards for the "statistically valid sampling  
method" that safety compliance licensees must have "approved by the agency." When  
MRA's scientific department has been given discretion to issue interpretative guidance—  
they have produced new substantive rules that impose unduly draconian standards that are  
treated by MRA as binding legal authority.  
R 420.305 Testing; laboratory requirements  
• Please list the mycotoxins that licensees must test for. MRA's scientific department has had  
ample opportunity to develop a list of the mycotoxins that licensees should be required to  
test for. Since Agency guidance "does not have the full effect of law," a licensee could  
possibly challenge the use of Bulletins or other guidance issued under this proposed Rule  
in any future enforcement action or proceedings.14  
• The definition of "Cherry pick" provided in proposed R 420.305(16)(c) should be moved  
to the definitions section of this rule set.  
R 420.305a—Validations  
• Without including clear standards for receiving agency approval of the "validations" and  
"validated methodologies" contemplated in this newly proposed Rule, MRA is self-  
delegating substantive rulemaking authority. We would request that the approval methods  
be included in the rules for public review and comment. Since Agency guidance "does not  
have the full effect of law," a licensee could possibly challenge the use of Bulletins or other  
person."). Cf. MCL § 24.207(1) (defining "rule" as "an agency regulation, statement, standard, policy, ruling, or  
instruction of general applicability that implements or applies law enforced or administered by the agency or that  
prescribes the law enforced or administered by the agency.").  
13  
See AFSCME v Mich Dep't of Mental Health, 452 Mich 1 (1996); Detroit Base Coalition for Human Rights of  
Handicapped v Dir, Dep't of Social Servs, 431 Mich 172 (1988).  
14 See notes 12 and 13, supra.  
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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.  
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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.  
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8. Marihuana Hearings–R 420.701 et seq.  
R 420.704a—Hearing on exclusion of individuals or employees  
• Insofar as the exclusion of an individual or employee from participation in Michigan's  
marihuana industry amounts to a restriction of individual liberty—we believe MRA's  
burden of proof should be higher than the "preponderance of the evidence" standard  
contemplated in proposed R 420.704a(5) as individuals liberty and pursuit of happiness  
may include working for a Marijuana establishment or facility and that type of restriction  
should not be taken lightly  
9. Marihuana Disciplinary Proceedings–R 420.801 et seq.  
R 420.802—Notification and Reporting  
• The Proposed Amendment to R 420.802(3)(g) implicates the same concerns noted above  
in our comments regarding the Proposed Amendment to R 420.14. It is unclear how an  
applicant could report the "appointment of a court-appointed personal representative,  
guardian, conservator, receiver, or trustee of the applicant" before such an appointment is  
made. At best, it seems that an applicant could report the possibility of a court ordering  
such appointments before they occur—but MRA cannot reasonably expect applicants to  
report a court order before the order has been issued.  
• The Proposed tattletale Amendment to R 420.802(4)(c) creates an unrealistic burden for  
licensees.  
R 420.808a—Exclusion  
• The phrase "valid and current exclusion list from another jurisdiction in the United States"  
as used in proposed R 420.808a(1)(e) should be further clarified, as it is presently unclear  
what "exclusion lists" would potentially implicate this proposed Rule.  
Regards,  
BENJAMIN D JOFFE, PLLC  
Benjamin D Joffe  
Ari D Goldstein  
Page 10 of 10  
September 9, 2021  
Samantha K. Balk  
Compliance Manager  
42 Degrees Processing, LLC  
C: 918-779-8192  
E: samantha@42-deg.com  
To the Marijuana Regulatory Agency:  
The following documentation encompasses the comments of myself and some of  
my coworkers in the marijuana industry regarding necessary clarifications and/or  
suggestions about the ruleset. I have it broken down by each rule.  
As the compliance manager at 42 Degrees Processing, LLC, a medical and adult  
use processing facility in Kalkaska, MI, my first priority is to protect our licenses by  
making sure that our facility is compliant with all requirements set forth by the  
MRA. Primarily, that goal is accomplished by a clearly defined set of rules to which  
can be adhered. What follows are observations based on the challenges I have  
faced as a compliance officer, as well as comments heard in the public. Any  
criticism and/or request is my own, but proposed as a means toward the end of  
clear rules that we can follow without further requirement for clarification. If any  
further clarification on my comments is required, I would be happy to take a phone  
call.  
My greatest concern is with the areas of potential loopholes. I may also mention  
cost, though this is frequently due to the cost of operations, which I must also be  
mindful of.  
Thank you very much for the time put into clarifying the ruleset and frequently  
providing guidance, most especially to me. And thanks to everyone at the MRA for  
providing and supporting this industry that I thoroughly enjoy, as it presents  
constant challenges that have given me a rewarding and important job here at 42  
Degrees.  
MARIHUANA DECLARATORY RULINGS  
● Definitions  
○ Define what is a “declaratory ruling”  
○ When would this be used instead of requesting a clarification on the  
interpretation of a rule?  
EMPLOYEES  
● R 420.602 Rule 2 (1) “A licensee shall conduct a criminal history  
background check…”  
○ Does this mean a state background check, federal background  
check, or both?  
○ Do subsequent background checks need to be performed after an  
employee has been hired? At what interval?  
SAMPLING AND TESTING  
● Definitions:  
○ The definition for a “production batch” needs to be clearer, especially  
considering edibles. If you would, please include this clear definition  
everywhere a rule discusses production batches.  
■ What defines similar conditions? Same operator, same pot,  
same tools, same formulation, etc. all should be considered.  
■ Is there a batch size limit?  
■ The current methodology across the industry as I understand  
it, from talking to testing laboratories, is that there are multiple  
pots of gummies being formulated in a linear fashion. First  
pot, then second pot, then third pot, etc, up until an indefinite  
number of pots, ie, 30-40 pots, defining a single production  
batch. However, from the standpoint of recipe and  
formulation, each pot could vary by a variety of small factors.  
One pot may get more color than another. One pot may get  
more THC distillate. Even if it is a small amount, it’s still not  
exactly the same. Although homogeneity testing is intended to  
account for this variation, it is only performed every 6 months  
after initial formulation and will not be able to capture if one  
pot of 30, 60, 100 (what even is the limit?) is out of sorts.  
Essentially, this is the same as considering 30-40 (or more)  
tiny single batches of gummies as one uniform batch. This  
presents potential safety concerns regarding dosing.  
○ The definition for a “production batch” needs to be more clearly  
defined for concentrates as well. If you would, please include this  
clear definition everywhere a rule discusses production batches.  
■ If two different production runs of extracted concentrate are  
mixed together, is that acceptable? It seems that it would be  
unlikely to mix two batches of concentrate together into a  
homogeneous mixture, which could yield a product of an  
inconsistent potency. For example, if you produce a  
concentrate that is 60% potency and mix it with a concentrate  
that is 80% potency, then the resulting product could be  
inconsistently mixed with a potency that varies between  
60-80%. This would be a more pronounced inconsistency if  
two different product consistencies were mixed, such as a  
“sugar” and a “sauce” together.  
● If this is acceptable, are any parameters needed?  
○ The definition for “final form” versus “in packaging” needs to be  
crystal clear.  
■ In some bulletins and rules, final form further clarifies that it  
means “not necessarily in its packaging for sale,” but in the  
laboratory testing handbook entitled Sampling and Testing  
Technical Guidance for Marijuana Products, it very clearly  
states “A sample of marijuana edible product must be in final  
form for a laboratory to accept this material for compliance  
testing. Laboratories are not permitted to sample product in  
bulk without packaging [italics mine] for compliance testing.  
Units should be easily distinguishable.”  
● We ended up changing around our entire standard  
operating procedure to accommodate having to test  
gummies in their sale packaging, only to then be  
corrected by a customer, who had an email from the  
MRA, stating that it was acceptable to test gummies  
prior to packaging.  
● R 420.306. Guidelines for retesting should be clearer. There were times in  
the past when the rule was not clear enough, as it stated that when a  
product failed a retest it must be destroyed. However, we found out after we  
destroyed it that remediation was allowed. The following clarifications are  
needed:  
○ Which failed tests can be retested. Please state these specifically  
(ie, heavy metals, certain pesticides, etc).  
○ How many times a retest can be performed. As written, it is currently  
allowable to retest as many times as needed until a passing result is  
achieved, which is an irresponsible practice.  
○ If retesting is permitted at a different lab than the one that delivered  
the failing result, and how that should be submitted if so.  
○ Is there a time limit on performing a retest, given that there’s now a  
90 day deadline for destruction?  
○ Which failed tests can be remediated. Please state these specifically  
(ie, heavy metals, certain pesticides, etc).  
● R 420.305, 9(h): states that potency should be reported in milligrams. It  
should read milligrams per ____.  
● R 420.307, Rule 7, 3: states that R&D testing is prohibited after compliance  
testing has been completed. This needs further clarification to cover the  
following:  
○ Continued quality studies, such as how a product might degrade or  
change over time.  
○ Reserving a subset of a finished product to perform additional small  
tests upon it not related to safety, such as terpene composition.  
○ It sounds as if the intent of the rule is to not perform R&D testing on  
the same production batch number, which historically created a  
problem in METRC by reverting Test Passed product into a Testing  
in Progress state. But if you pull an amount of and give it its own  
production batch number so as not to affect test results, would it be  
acceptable to perform R&D testing on this product?  
● Requiring safety compliance tests on small batches of new formulations  
makes formulating new products prohibitively expensive as the recipe or  
methodology might be tweaked several times prior to being finalized. We  
would be grateful if alternative rulings could be explored that allows for  
more creativity and flexibility as new products are developed.  
MARIHUANA SALE OR TRANSFER  
● Definitions:  
○ Need more clarification on types of transfers.  
■ Define what type of transfer should be used for which  
purposes. When to use them, which forms are required,  
where the forms are located, where to send requests, etc.  
● Specifically, we’ve had some trouble with untested WIP  
transfers, fresh frozen transfers, infusion transfers.  
● Some forms are simply not listed on the MRA’s  
website, such as the inventory transfer request form. It  
would be very helpful if all of the forms were listed in  
one location. Please investigate, and make compliance  
easier to do.  
● Ensure that METRC and AFS are cohesive for financial audits. The rules  
for processors make tracking monetary value back and forth unnecessarily  
cumbersome, as it has forced us to assign monetary value to something for  
which there was no cost (such as for toll processing, where we charge for  
services).  
● 420.508 (Trade Samples), Rule 8, 4, and 420.509 (Internal Samples), Rule  
9, 3: The rules need to clarify what needs to be recorded in METRC during  
sampling. It was clarified to me personally that I should be recording the ID  
and employee name for Internal sampling, and I have been recording the  
License and Vendor name for trade samples.  
○ Is any other information required for tracking purposes?  
○ It is possible that there needs to be a lot more definition regarding  
trade samples and employee samples in general. This rule has been  
the one I’ve been most aggressively questioned on as to what the  
MRA’s language allows versus what the MRA’s intent was when  
writing the rule.  
○ Rules are possibly unclear as to whether or not the Processor  
license is allowed to internally sample flower to its employees.  
○ The rules have an issue with loopholes regarding trade and internal  
samples, as follows:  
■ There is a limit on both internal samples and trade samples.  
However, when asked, and also provided with intent, the MRA  
clarified that they do not regulate sale prices. It is therefore  
possible for a processor to sell product to a retailer for a  
penny, who can then sell it to the processor’s own employees  
for a penny, and thus makes having a rule pertaining to limits  
pointless.  
● Which means it is also possible to do exactly the same  
thing for trade samples, and have either a  
representative of a retailer or a sales representative to  
purchase products for a penny and offer them for free  
to anyone.  
● The same could be said of coupons or rebates, or  
steep discounts of any kind. If there is the ability to  
legally obtain products for virtually nothing, then why  
bother with a limit at all?  
● Nothing currently prevents employees from giving all of  
their samples to someone else outside of work hours,  
either, which means that it is also possible for  
employees to band together and pool their samples for  
a single person, such as sales personnel.  
○ I also have concerns about the custody of products after trade  
sampling, as follows:  
■ It is currently stated that up to a certain limit, anyone may  
transport trade samples to a retailer. I do not think it is wise to  
allow anyone other than a secure transporter to transport  
products. There are a lot of strong relationships between  
retailer management and sales personnel, and I think it may  
be possible to abuse the trade sample mechanism to funnel  
products out of the regulated market in this manner. There is  
currently no control over ensuring that the trade sample  
actually makes it to the intended recipient in this manner.  
What is to stop a sales person from requesting samples for a  
retailer and simply never delivering them?  
■ We’ve heard that frequently, trade samples go only to retailer  
management and never make it into the hands of budtenders  
for the purpose of product sampling. I’m not sure that this  
would be considered an MRA problem, but wanted to bring it  
to your attention anyway, as trade samples handled in this  
matter do not bring much value to the processor value  
stream.  
○ Please clarify how a sample intended for an employee should be  
treated if the employee refuses the sample.  
■ Should it be destroyed? Does it now need two adjustments  
(one to put it back on its tag, and one to destroy it), or can it  
just go to destruction, since it has already been removed from  
METRC?  
● R 420.504 (Labeling and packaging requirements): Compliance stickers  
have been unclear for more than a year now. Clarification was promised but  
never came. Our customers have been told different things by the MRA  
which has now forced us to operate under two different SOPs. Please make  
this clearer as to which tags are required on the compliance label.  
○ Define that Package ID means the tag that is delivered to a retailer.  
■ We maintain that this should not actually be required. A store  
that receives the package will have the Source tag ID in their  
METRC should an issue with the customer’s product arise,  
which makes it easy to search. It is the source that would be  
the issue anyway if an adverse reaction was reported. Being  
allowed to label all of our products with only the Package’s  
Source ID and Testing ID would significantly improve  
operational efficiency and greatly reduce the amount of  
potential for error. If one batch were to be sent to 100 stores,  
this is the difference between being forced to create 100  
different compliance labels instead of only one.  
○ Define that Source ID is the parent tag of the Package ID regardless  
of testing status.  
○ Whether or not a Testing ID is required.  
■ Define that Testing ID is the tag that was delivered to the  
testing facility for the purpose of Safety Compliance Test only.  
○ Clarify how to treat a retest for potency when stating potency and  
testing facility information on the compliance label  
○ Remove “any” test analysis date, replace with “safety compliance”  
test analysis date.  
○ Release an example scenario or scenarios with an example label to  
eliminate all potential confusion.  
○ Clarify that the universal symbol must be printed in full color (green).  
○ Specify whether or not it is acceptable to say either marijuana or  
marihuana on the universal symbol.  
■ Basically, whether or not ANY modifications to the universal  
symbol are acceptable whatsoever.  
○ Specify that the words must be legible/easily read on the compliance  
label and universal symbol. Is a size requirement needed? Some of  
them are so tiny they cannot be read.  
● R 420.505 Rule 5. (1) Transferring needs two Rs.  
OPERATIONS  
● R 420.206, Rule 6, 14: “When combining more than 1 form of marihuana or  
marihuana product into a single marihuana product, each form of  
marihuana or marihuana product must have passing safety compliance test  
results in the statewide monitoring system prior to the creation of the new  
combined product.  
○ What defines a “form” of marihuana product?  
○ What if products are combined prior to a safety compliance test?  
Examples:  
■ Mixing a distillate with a high terpene content product, which  
will fill cartridges and go to safety compliance testing as a  
cartridge.  
■ Mixing together two concentrates, ie batter plus batter.  
● R 420.214a (Internal analytical testing):  
○ For the internal analytical testing area, what defines a “separate”  
testing area?  
● R 420.214b-c:  
○ How does a retailer return defective/undesirable products that are  
not involved in an adverse reaction to a processor if they are not  
allowed to transfer it back?  
■ For example, poor product quality, or if it has been on the  
shelf too long and they wish to trade it in.  
LICENSES  
● Definitions:  
○ Please include more clarity on separate areas.  
■ Food and marijuana areas are supposed to be kept separate.  
● Separation includes walls and a ceiling and a locked  
door.  
● Define the purpose of hallways, clarify the difference  
between a hallway and a room.  
○ No food or marijuana in hallways?  
○ Storage in hallways  
○ Carrying marijuana through the hallways to get  
to the next room  
○ Carrying food through the hallways to get to the  
next room.  
○ It was clarified to me that areas of different task types are also  
supposed to be maintained separately with a locked door between  
them, such as:  
■ Laboratory rooms can be connected, but not to packaging or  
storage  
■ Packaging rooms can be connected, but not to any production  
or storage  
■ Storage has to be kept separate from packaging and  
production.  
■ These are not terribly specific. Items will be stored temporarily  
in production areas. Does an edibles kitchen need to be  
separated from its own packaging operation? Where are the  
lines defined?  
■ Is this really necessary?  
■ Why is further security needed within the building when entry  
to the building itself is controlled by secure entry?  
○ Provide more specificity regarding the storage of inventory. Access  
should be restricted, but if it is behind a locked door and all the staff  
has access to the locked door, is it really restricted? So whom  
should have access?  
LICENSEES  
No questions  
MARIHUANA-INFUSED PRODUCTS AND EDIBLE MARIHUANA PRODUCTS  
● R 420.403, rule 3, 2: The potency variance has been changed to +/- 10%,  
not 15%. If this is not the case, there are multiple points throughout the rule  
set and bulletins where this variance is not in agreement.  
● 420.403, Rule 3, 10(a): There is currently no control expressed in the  
guidelines for an expiration date. It’s too arbitrary and does not require a  
product to demonstrate quality up until its expiration date. Documentation is  
required for shelf stability, but not for an expiration date qualification. This  
seems like an oversight.  
● 420.403, Rule 3, 9(e): Clarification is needed on what is considered a  
“commercially available food product”. This could feasibly eliminate most  
forms that an edible product might take, such as:  
○ Other types of candies:  
■ Chocolates  
■ Fudge  
■ Peanut butter cups  
○ Granola bars  
○ Rice krispies treats  
○ Brownies  
○ Cookies  
● 420.403, Rule 3, 9(f): Packaging specifications could use more clarity as  
well. “Not produce an edible marihuana product that is associated with or  
has cartoons, caricatures, toys, designs, shapes, labels, or packaging that  
would appeal to minors.”  
○ We’ve ruled out animals and fruit already. But there are other ways  
to appeal to children or teenagers. What about such things as:  
■ Vehicles such as sailboats, cars, trains, bicycles  
■ Color schemes, such as pastels, tie-dyes, bright colors, glitter  
■ Other icons, such as moon and stars, clouds, rainbows,  
flowers, gem stones.  
MARIHUANA HEARINGS  
No questions  
MARIHUANA DISCIPLINARY PROCEEDINGS  
● R 420.805, rule 5, 10-11: The list of excluded individuals is kept by the MRA  
and we do not currently have access to it. How are we going to be able to  
know that an individual has been excluded from employment or  
participation in a marihuana business? Would that come up in the  
background check?  
○ Also, we’d like to be able to see this list to protect ourselves and the  
integrity of the industry.  
OTHER QUESTIONS  
● With the limitations on names, shapes, and packaging that appeal to  
children, will there be further restrictions on the names of strains for  
concentrates and/or vapes?  
In conclusion,  
Thank you very much for your time and consideration in hearing comments from  
the public. I fully support clear rules, and greatly appreciate the time and effort that  
goes into refining this rule set.  
Sincerely,  
Samantha K. Balk  
Compliance Manager  
42 Degrees Processing, LLC  
Phone: 918-779-8192  
samantha@42-deg.com  
DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS  
MARIJUANA REGULATORY AGENCY  
MARIHUANA SALE OR TRANSFER  
Filed with the secretary of state on  
These rules take effect immediately upon filing with the secretary of state unless adopted under  
section 33, 44, or 45a(6)(9) of the administrative procedures act of 1969, 1969 PA 306, MCL  
24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after  
filing with the secretary of state.  
(By authority conferred on the executive director of the marihjuana regulatory agency by section  
206 of the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27206, sections 7  
and 8 of the Michigan Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27957  
and 333.27958, and Executive Reorganization Order No. 2019-2, MCL 333.27001)  
R 420.501, R 420.502, R 420.503, R 420.504, R 420.505, R 420.506, R 420.507, R 420.508, R  
420.509, and R 420.510 of the Michigan Administrative Code are amended, and R 420.503a is  
added, as follows:  
R 420.501 Definitions.  
Rule 1. (1) As used in these rules:  
(a) “Acts” refers to the medical marihuana facilities licensing act, 2016 PA 281, MCL  
333.27101 to 333.27801, and the Michigan Regulation and Taxation of Marihuana Act, 2018 IL  
1, MCL 333.27951 to 333.27967, when applicable.  
(b) “Administrative hold” means a status given to marihuana product by the agency during an  
investigation into alleged violations of the acts and these rules. This status includes no sale or  
transfer of the marihuana product until the hold is lifted.  
(c) “Agency” means the marijuana regulatory agency.  
d) “Batch” means all marihuana product of the same variety that has been processed together  
and exposed to substantially similar conditions throughout processing.  
(ed) “Cultivator” means a grower under the medical marihuana facilities licensing act or a  
marihuana grower under the Michigan rRegulation and tTaxation of mMarihuana aAct, or both.  
(fe) “Designated consumption establishment” means a commercial space that is licensed by the  
agency and authorized to permit adults 21 years of age and older to consume marihuana products  
at the location indicated on the state license.  
(gf) “Employee” means a person performing work or service for compensation. “Employee”  
does not include individuals providing trade or professional services who are not normally  
engaged in the operation of a marihuana business.  
g) “Final form” means the form a marihuana product is in when it is available for sale  
by a marihuana sales location. For marihuana products intended for inhalation, final form  
means the marihuana concentrate in an e-cigarette or a vaping device.  
(h)"Immature plant” means a nonflowering marihuana plant that is no taller than 8 inches from  
the growing or cultivating medium and no wider than 8 inches produced from a cutting, clipping,  
July 14, 2021  
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tissue culture, or seedling that is in a growing or cultivating medium or in a growing or cultivating  
container.  
(i) “Internal product sample” means a sample of marijuana products possessed by that a  
cultivator, producer, or marihuana sales location that is provided transfers directly to an  
employee for the purpose of ensuring product quality and making determinations about whether  
to sell or transfer the marihuana product.  
(j) “Laboratory” refers to a safety compliance facility under the medical marihuana facilities  
licensing act or a marihuana safety compliance facility under the Michigan rRegulation and  
tTaxation of mMarihuana aAct, or both.  
(k) “Marihuana business” refers to a marihuana facility under the medical marihuana  
facilities licensing act or a marihuana establishment under the Michigan rRegulation and  
tTaxation of mMarihuana aAct, or both.  
(l) “Marihuana customer” refers to a registered qualifying patient or registered primary  
caregiver under the medical marihuana facilities licensing act, or an individual 21 years of age or  
older under the Michigan rRegulation and tTaxation of mMarihuana aAct, or both.  
(m) “Marihuana equivalent” means usable marihuana equivalent as that term is defined in  
section 3(o) of the Michigan mMedical mMarihuana aAct, MCL 333.264243.  
(n) “Marihuana establishment” means a location at which a licensee is licensed to operate a  
marihuana grower, marihuana safety compliance facility, marihuana processor, marihuana  
microbusiness, class A marihuana microbusiness, marihuana retailer, marihuana secure  
transporter, or any other type of marihuana related business licensed to operate by the agency  
under the Michigan rRegulation and tTaxation of mMarihuana act.  
(o) “Marihuana facility” means a location at which a licensee is licensed to operate under the  
medical marihuana facilities licensing act.  
(p) “Marihuana license” means a state operating license issued under the medical  
marihuana facilities licensing act, or a state license issued under the Michigan Regulation  
and Taxation of Marihuana Act, or both.  
(pq) “Marihuana product” means marihuana or a marihuana-infused product, or both, as those  
terms are defined in the acts unless otherwise provided for in these rules.  
(qr) “Marihuana sales location” refers to a provisioning center under the medical marihuana  
facilities licensing act, or a marihuana retailer, or marihuana microbusiness, or class A  
marihuana microbusiness under the Michigan rRegulation and tTaxation of mMarihuana aAct,  
or both.  
(rs) “Marihuana tracking act” means the marihuana tracking act, 2016 PA 282, MCL  
333.27901 to 333.27904.  
(st) “Medical marihuana facilities licensing act” or “MMFLA” means the medical marihuana  
facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801.  
(tu) “Michigan mMedical mMarihuana aAct” means the Michigan Medical Marihuana Act,  
2008 IL 1, MCL 333.26421 to 333.26430.  
(uv) “Michigan rRegulation and tTaxation of mMarihuana aAct” or “MRTMA” means the  
Michigan Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27951 to 333.27967.  
(vw) “Package tag” means an RFID tag supplied through the statewide monitoring system for  
the purpose of identifying a package containing a marihuana product.  
(wx) “Plant” means that term as defined in section 102 of the MMFLA, MCL 333.27102,  
unless otherwise defined in these rules.  
3
(xy) “Producer” means a processor under the medical marihuana facilities licensing act or a  
marihuana processor under the Michigan rRegulation and tTaxation of mMarihuana aAct, or  
both.  
(yz) “These rules” means the administrative rules promulgated by the agency under the  
authority of the medical marihuana facilities licensing act, the marihuana tracking act, the  
Michigan rRegulation and tTaxation of mMarihuana aAct, and Executive Reorganization Order  
No. 2019-2, MCL 333.27001.  
(zaa) “Tag” or “RFID tag” means the unique identification number or Radio Frequency  
Identification (RFID) issued to a licensee by the agency statewide monitoring system for  
tracking, identifying, and verifying marihuana plants, marihuana products, and packages of  
marihuana products in the statewide monitoring system.  
(aabb) “Trade sample” means a sample of marihuana products provided to licensees by that a  
cultivator or producer provides to licensees for the purpose of the licensee determining whether  
to purchase the marihuana product.  
(2) Terms defined in the acts have the same meanings when used in these rules unless otherwise  
indicated.  
R 420.502 Tracking identification; labeling requirements; general.  
Rule 2. (1) All Each marihuana products sold or transferred between marihuana businesses must  
be clearly labeled with have the tracking identification numbers that are assigned by the statewide  
monitoring system affixed, tagged, or labeled and recorded, and any other information required by  
the agency, the acts, and these rules.  
(2) To ensure access to safe sources of marihuana products, the agency, if alerted in the  
statewide monitoring system, The agency may place an administrative hold on marihuana  
products, recall marihuana products, issue safety warnings, and require a marihuana business to  
provide material information material or notifications to a marihuana customer at the point of  
sale.  
(3) A marihuana business shall not sell or transfer a marihuana product that has been placed on  
administrative hold, recalled, or ordered or otherwise required to be destroyed.  
) A marihuana business shall not sell or a transfer marihuana product after the printed  
expiration date on the package. An expired marihuana product must be destroyed.  
(45) Prior to selling or transferring a marihuana product, aA marihuana business must  
verify in the statewide monitoring system, prior to any sale or transfer, that the marihuana  
product has not been placed on an administrative hold, recalled, or ordered to be destroyed.  
(6) A marihuana business shall destroy all product required to be destroyed for any  
reason within 90 calendar days of when the marihuana business became aware of the fact  
that the product must be destroyed.  
R 420.503 Marihuana plant; tracking requirements.  
Rule 3. Before a marihuana plant is sold or transferred, a package tag must be affixed to the plant  
or plant container and enclosed with in a tamper proof seal that includes all of the following  
information:  
(a) Business or trade name, licensee number, and the RFID package tag assigned by the statewide  
monitoring system that is visible.  
4
(b) Name of the strain.  
(c) Date of harvest, if applicable.  
(d) Seed strain, if applicable.  
(e) Universal symbol, if applicable.  
R 420.503a Sale or transfer of immature plant batches from a cultivator to a marihuana  
sales location.  
Rule 3a. (1) A cultivator approved by the agency to sell or transfer immature plant  
batches to a marihuana sales location is not required to transfer the immature plant  
batches using a marihuana transporter.  
(2) Immature plant batches transferred from a cultivator to a marihuana sales location  
are not required to undergo the testing required by R 420.304 and R 420.305.  
R 420.504 Marihuana product sale or transfer; labeling and packaging requirements.  
Rule 4. (1) Before a marihuana product is sold or transferred to or by a marihuana sales  
location, the container, bag, or product holding the marihuana product must be sealed and  
labeled with all of the following information:  
(a) The name and the state license number of the producer, including business  
or trade name, and tag and source number as assigned by the statewide monitoring system.  
(b)The name and the marihuana license number of the licensee that packaged the product,  
including business or trade name, if different from the producer of the marihuana product.  
(c) The unique identification number for the package or the harvest, if applicable.  
(d) Date of harvest, if applicable.  
(e) Name of strain, if applicable.  
(f) Net weight in United States customary and metric units.  
(g) Concentration of Tetrahydrocannabinol (THC) and cannabidiol (CBD) as reported by the  
laboratory after potency testing along with a statement that the actual value may vary from the  
reported value by 10%.  
(h) Activation time expressed in words or through a pictogram.  
) Name of the laboratory that performed any passing compliance test testing on the product  
in final form and any test analysis date.  
(j) The universal symbol for marihuana product published on the agency’s website.  
(k) A warning that states includes all the following statements:  
(i) "It is illegal to drive a motor vehicle while under the influence of marihuana."  
(ii) “National Poison Control Center 1-800-222-1222.”  
(iii) For products being sold by a licensee under the medical marihuana facilities licensing act  
marihuana facility that exceed the maximum THC levels allowed for products sold under  
MRTMA, “For use by registered qualifying patients only. Keep out of reach of children.”  
(iv) For all other products, being sold by a licensee “For use by individuals 21 years of age or  
older or registered qualifying patients only. Keep out of reach of children.”  
(v) In clearly legible type and surrounded by a continuous heavy line: “WARNING: USE  
BY PREGNANT OR BREASTFEEDING WOMEN, OR BY WOMEN PLANNING TO  
BECOME PREGNANT, MAY RESULT IN FETAL INJURY, PRETERM BIRTH, LOW  
BIRTH WEIGHT, OR DEVELOPMENTAL PROBLEMS FOR THE CHILD.”  
5
(2) An edible marihuana product sold by a marihuana sales location shall must comply with R  
420.403(7) to (10).  
(3) An infused marihuana product sold by a marihuana sales location must comply with R  
420.403(7).  
) Before a marihuana product is sold or transferred by a marihuana sales location, the  
sales location shall make available to each customer a pamphlet measuring at least 3.5  
inches by 5 inches, that includes safety information related to marihuana use by minors  
and the poison control hotline number. The pamphlet must substantially conform to the  
design published on the agency’s website.  
R 420.505 Sale or transfer; marihuana sales location.  
Rule 5. (1) A marihuana sales location shall verify all of the following prior to may selling or  
transfering marihuana or a marihuana product to a marihuana customer if all of the following are  
met:  
(a) The marihuana product has not been placed on administrative hold, recalled, or ordered or  
otherwise required to be destroyed.  
(b) The marihuana product is not past its expiration date.  
(bc) The licensee confirms that the marihuana customer presented his or her valid driver’s  
license or government-issued identification card that bears a photographic image of the  
qualifying patient or primary caregiver, under the medical marihuana facilities licensing  
actMMFLA; or bears a photographic image and proof that the individual is 21 years of age or  
older, under the Michigan regulation and taxation of marihuana actMRTMA.  
(cd) The licensee determines the completed transfer or sale will not exceed the purchasing  
limit prescribed in R 420.506.  
(de) Any The marihuana product that is sold or transferred under this rule has been tested in  
accordance with R 420.305.  
(f) The marihuana product and is labeled and packaged for sale or transfer in accordance  
with R 420.504.  
(eg) A licensee selling marihuana product pursuant to the medical marihuana facilities  
licensing act verifies with the statewide monitoring system that the The registered qualifying  
patient or registered primary caregiver holds a valid, current, unexpired, and unrevoked registry  
identification card.  
(2) A marihuana sales location shall enter all transactions, current inventory, and other  
information required by these rules in the statewide monitoring system in compliance with the  
acts and these rules. The marihuana sales location shall maintain appropriate records of all sales  
or transfers under the acts and these rules and make them available to the agency upon request.  
(3) A provisioning center licensed under the medical marihuana facilities licensing act  
MMFLA shall verify all of the following prior to may selling or transfering a marihuana  
product to a visiting qualifying patient if all of the following are met:  
(a) The licensee verifies that the visiting qualifying patient has a valid unexpired medical  
marihuana registry card, or its equivalent issued in another state, district, territory,  
commonwealth, or insular possession of the United States that allows the medical use of  
marihuana.  
6
(b) The licensee confirms that the visiting qualifying patient presented his or her valid driver  
license or government-issued identification card that bears a photographic image of the visiting  
qualifying patient.  
(c) The licensee determines, if completed, that any transfer or sale, if completed, will not  
exceed the purchasing limit prescribed in R 420.506.  
(d) Any The marihuana product that is sold or transferred under this rule has been tested in  
accordance with R 420.305.  
(e) The marihuana product is labeled and packaged for sale or transfer in accordance with R  
420.504.  
(ef) As used in this subrule, “visiting qualifying patient” means that term as defined in section  
3 of the Michigan mMedical mMarihuana aAct, MCL 333.26423.  
(4) A marihuana retailer, or marihuana microbusiness, or class A marihuana microbusiness  
licensed under the Michigan regulation and taxation of marihuana act MRTMA is not required to  
retain information from customers other than the following:  
(a) Payment method.  
(b) Amount of payment.  
(c) Time of sale.  
(d) Product quantity.  
(e) Other product descriptors.  
R 420.506 Purchasing limits; transactions; marihuana sales location.  
Rule 6. (1) Before the sale or transfer of marihuana product to a registered qualifying patient or  
registered primary caregiver, under the medical marihuana facilities licensing actMMFLA, the  
licensee shall verify in the statewide monitoring system that the sale or transfer does not exceed  
either of the daily purchasing limits as follows:  
(a) For a registered qualifying patient, an amount of marihuana product that does not, in total,  
exceed 2.5 ounces of marihuana or marihuana equivalent per day.  
(b) For a registered primary caregiver, an amount of marihuana product that does not, in total,  
exceed 2.5 ounces of marihuana or marihuana equivalent per day for each registered qualifying  
patient with whom he or she is connected through the agency’s registration process.  
(2) Before the sale or transfer of marihuana product to a registered qualifying patient or  
registered primary caregiver, under the medical marihuana facilities licensing actMMFLA, the  
licensee shall verify in the statewide monitoring system that the sale or transfer does not exceed  
the monthly purchasing limit of 10 ounces of marihuana product per month to a qualifying  
patient, either directly or through the qualifying patient’s registered primary caregiver.  
(3) A marihuana retailer, under the Michigan regulation and taxation of marihuana  
actMRTMA, is prohibited from making a sale or transferring marihuana to an adult 21 years of  
age or older in a single transaction that exceeds 2.5 ounces., except that nNot more than 15  
grams of marihuana may be in the form of marihuana concentrate.  
(4) A marihuana sales location may sell no more than 3 immature plants to a marihuana  
customer per transaction.  
R 420.507 Marketing and advertising restrictions.  
7
Rule 7. (1) A marihuana product may only be advertised or marketed in a way that complies  
compliance with all applicable municipal ordinances, state law, and these rules that regulate  
signs and advertising.  
(2) A licensee may not advertise a marihuana Marihuana product must not be advertised in a  
way that is deceptive, false, or misleading, or. A person shall not make any deceptive, false, or  
misleading assertions or statements on any marihuana product, sign, or document provided.  
(3) Marihuana product marketing, advertising, packaging, and labeling must not contain any  
claim related to health or health benefits, unless a qualified health claim has received and  
complies with a Letter of Enforcement Discretion issued by the United States Food and Drug  
Administration (FDA), or the health claim has been approved under the significant scientific  
agreement standard by the FDA.  
(4) A marihuana product must not be advertised or marketed to members of the public unless  
the person advertising the product has reliable evidence that no more than 30% percent of the  
audience or readership for the television program, radio program, internet website, or print  
publication, is reasonably expected to be under the age listed in subrules (7) and (8) of this rule.  
Any marihuana product advertised or marketed under this rule must include the warnings listed  
in R 420.504(1)(k).  
(5) A person receiving reasonable payment under a licensing agreement or contract approved  
by the agency concerning the licensing of intellectual property, including, but not limited to,  
brands and recipes, is responsible for any marketing or advertising undertaken by either party to  
the agreement.  
(6) A marihuana product marketed or advertised under the medical marihuana facilities  
licensing act MMFLA must be marketed or advertised as “medical marihuana” for use only by  
registered qualifying patients or registered primary caregivers.  
(7) A marihuana product marketed or advertised under the medical marihuana facilities  
licensing act MMFLA must not be marketed or advertised to minors aged 17 years or younger.  
Sponsorships targeting individuals aged 17 years or younger are prohibited.  
(8) A marihuana product marketed or advertised under the Michigan regulation and taxation  
of marihuana act MRTMA must be marketed or advertised as “marihuana” for use only by  
individuals 21 years of age or older.  
(9) A marihuana product marketed or advertised under the Michigan regulation and taxation  
of marihuana act MRTMA must not be marketed or advertised to individuals under 21 years of  
age. Sponsorships targeting individuals under 21 years of age are prohibited.  
R 420.508 Trade samples.  
Rule 8. (1) The following licensees may provide trade samples:  
(a) A cultivator may provide transfer trade samples of marihuana products to a producer or a  
marihuana sales location.  
(b) A producer may provide transfer trade samples of marihuana products to a producer or  
marihuana sales location.  
(2) The transfer of trade samples does not require the use of a secure transporter under the  
MMFLA or a marihuana secure transporter under the MRTMA if the amount of trade samples  
does not exceed either of the following:  
(a) 15 ounces of marihuana.  
(b) 60 grams of marihuana concentrate.  
8
(3) Trade samples must not be sold or transferred by the receiving producer or marihuana  
sales location to another licensee another producer or marihuana sales location or to a  
consumer.  
(4) Any trade sample provided transferred to another licensee a producer or marihuana  
sales location or received by a licensee producer or a marihuana sales location must be  
recorded in the statewide monitoring system.  
(5) Any trade samples provided transferred under this rule must be tested in accordance with  
these rules prior to being transferred to another licensee a producer or marihuana sales  
location.  
(6) A licensee cultivator and producer is are limited to providing transferring the following  
aggregate amounts of trade samples to another licensee a producer or a marihuana sales  
location in a 30-day period:  
(a) 2.5 ounces of marihuana.  
(b) 15 grams of marihuana concentrate.  
(7) Any In addition to the information required in R 420.403, a trade sample given to a  
licensee must have a label containing the following in a legible font:  
(a) A statement that reads: “TRADE SAMPLE NOT FOR RESALE” in bold, capital letters  
attached to the trade sample.  
(b) All other information required in R 420.403.  
(8) A licensee producer or marihuana sales location that who receives a trade sample may  
distribute the trade sample to its employees to determine whether to purchase the marihuana  
product. A producer or marihuana sales location is limited to transferring a total of 1 ounce  
of marihuana, a total of 2 grams of marihuana concentrate, and marihuana infused  
products with a total THC content of 2000 mgs of internal product samples to each of its  
employees in a 30-day period.  
R 420.509 Internal product samples.  
Rule 9. (1) A cultivator, producer, marihuana sales location, or marihuana microbusiness, or  
class A marihuana microbusiness may provide transfer internal product samples directly to  
its employees for the purpose of ensuring product quality and making determinations about  
whether to sell the marihuana product.  
(2) Internal product samples may not be transferred or sold to another licensee or consumer.  
(3) A licensee shall record the transfer of an Any internal product sample provided under  
this rule must be recorded in the statewide monitoring system.  
(4) A cultivator is limited to providing transferring a total of 1 ounce of internal product  
samples to each of their its employees in a 30-day period.  
(5) A producer is limited to providing transferring a total of 2 grams of marihuana concentrate  
and marihuana infused products with a total THC content of 2000 mgs of internal product  
samples to each of theirits employees in a 30-day period.  
(6) A marihuana sales location, marihuana microbusiness, and class A marihuana  
microbusiness are limited to transferring a total of 1 ounce of marihuana, a total of 2  
grams of marihuana concentrate, and marihuana infused products with a total THC  
content of 2000 mgs of internal product samples to each of its employees in a 30-day  
period.  
9
(7) A licensee shall have internal product samples tested pursuant to R 420.304 and R  
420.305 before transfer to its employees.  
R 420.510 Product development.  
Rule 10. (1) A cultivator or producer may engage in product development. No other marihuana  
business may engage in product development.  
(2) A cultivator may designate marihuana plants for product development. Any marihuana  
plants designated for product development count towards toward the authorized total amount of  
marihuana plants for a cultivator and must be tracked in the statewide monitoring system.  
(3) A producer may designate marihuana concentrate for product development. Any marihuana  
concentrates designated for product development must be tracked in the statewide monitoring  
system.  
(4) A licensee engaged in product development may submit their his or her product  
development inventory to a laboratory for research and development testing in accordance with  
these rules.  
(5) Disciplinary action shall may not be taken against a licensee for failed research and  
development test results on their his or her product development inventory.  
(6) A licensee authorized under this rule to engage in product development cultivator or  
producer may transfer its product development inventory to its employees for consumption. A  
licensee shall have product development inventory tested pursuant to R 420.3045 and R  
420.3056 before transferring it to its an employees. The licensee shall not transfer or sell  
product development inventory to a marihuana sales location until after test results in the  
statewide monitoring system indicate a passed test. Any product development inventory that is  
not properly transferred to an employee must be destroyed pursuant to these rules. All product  
development inventory transferred to an employee counts toward the limitations in R  
420.509(4) and R 420.509(5), as applicable.  
(7) A licensee shall record the transfer of product development inventory in the statewide  
monitoring system.  
(78) The inventory designated for pProduct development inventory may not be consumed or  
used on the premises of the licensee.  
(89) A licensee shall not transfer or sell inventory designated for product development to a  
marihuana sales location, or to a marihuana customer, until after the inventory is tested  
pursuant to R 420.304 and R 420.305, and the test results in the statewide monitoring system  
indicate a passed full compliance testing.  
(10) Any product development inventory that is transferred to a marihuana sales location  
must be labeled in accordance with R 420.504.  
(911) A licensee authorized under this rule to engage in product development cultivator or  
producer may also engage in a research study with an college, university, or hospital approved  
by the United States Food and Drug Administration and sponsored by a non-profit organization  
or researcher within an academic institution researching entity duly authorized by the Drug  
Enforcement Administration to handle marihuana. A licensee’s participation in a research  
study must be approved by the agency.  
(102) A licensee participating in an approved research study shall track all marihuana product  
involved in the research study in the statewide monitoring system.  
Dykema Gossett PLLC  
Capitol View  
201 Townsend Street, Suite 900  
Lansing, MI 48933  
WWW.DYKEMA.COM  
Tel: (517) 374-9100  
R. Lance Boldrey  
Direct Dial: (517) 374-9162  
Direct Fax: (855) 259-3563  
Email: LBoldrey@dykema.com  
September 27, 2021  
Marijuana Regulatory Agency  
Legal Section  
P.O. Box 30205  
Lansing, MI 48909  
Via E-mail: MRA-Legal@michigan.gov  
Re:  
Proposed Marijuana Regulatory Agency Rules  
Dear Marijuana Regulatory Agency Staff:  
On behalf of the Michigan Cannabis Manufacturer’s Association (“MCMA”), I write to offer  
public comments on the proposed changes to the Marijuana Regulatory Agency’s (“MRA”)  
administrative rule sets (the “Draft Rules”). The MCMA is an association of the largest business  
stakeholders in Michigan’s cannabis industry. MCMA’s members represent hundreds of millions  
of dollars of private investment and employ thousands of Michigan citizens, but the Number One  
priority of the MCMA is protecting the health and safety of Michigan citizens. The MCMA  
appreciates the opportunity to provide stakeholder feedback on the issues that directly impact the  
public and our members, and MRA’s willingness to engage its stakeholders.  
By way of introduction, MCMA finds much to praise in MRA’s Draft Rules. In particular, MCMA  
believes that the Draft Rules will continue to advance product safety to the benefit of patients and  
customers. Revisions to facilitate internal testing, address the potential for the manipulation of  
testing results before we see such problems in Michigan (issues that have arisen in other states),  
and authorizing testing of homegrown adult-use cannabis are all extremely positive steps. So too  
are changes to allow drive-though and curbside service, and to simplify the fee structure to allow  
for greater predictability. The addition of a formal process for declaratory rulings is also welcome.  
MCMA does nonetheless find some areas of the Draft Rules that could use some additional review  
and improvement. As explained in more detail below, the Draft Rules leave important terms and  
requirements undefined, and would improperly rely upon guidance and administrative bulletins,  
rendering important rule topics vulnerable to legal challenge. MCMA also strongly objects to the  
creation of a Class A Microbusiness License, a license that would violate the Michigan Regulation  
and Taxation of Marihuana Act (“MRTMA”) and authorize activity that presently constitutes a  
felony under the Michigan Medical Marihuana Act (“MMMA”). MCMA also opposes efforts to  
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limit “non-marijuana” cannabinoid sourcing. And MCMA believes that there are a number of  
additional areas where the rules should be changed based on lessons learned, most especially with  
respect to the operation of co-located grower and processor facilities and the excess grow license.  
MCMA’s comments follow.  
Utilization of Guidance  
As we all well know, the cannabis industry has been evolving at light speed since the first state  
licenses were issued just over three years ago. MRA has been evolving too, and we understand  
the need for MRA to be flexible and respond to new developments. That said, one significant  
over-arching concern for MCMA is MRA’s practice of relying on the issuance of ad hoc advisory  
or technical bulletins in lieu of the formal rulemaking process of the Administrative Procedures  
Act, 1969 PA 306, MCL 24.201 to 24.328 (“APA”). While understandable in the very early days  
of the industry, we are concerned that in many places the Draft Rules appear intended to extend  
and expand that practice. By way of example, proposed R 420.304(2)(l) provides that licensees  
must comply with to-be-published guidance with respect to chain of custody documentation.  
Proposed R 420.206a(4) mandates that licensees have Standard Operating Procedures that “must  
comply with any guidance issued by the agency.” There are numerous other instances.  
While the objectives of the underlying rules may be laudable, MRA’s reliance on such guidance—  
and imposition of that guidance on licensees—violates the APA. The APA defines a “rule” as “an  
agency regulation, statement, standard, policy, ruling, or instruction of general applicability that  
implements or applies law enforced or administered by the agency, or that prescribes the  
organization, procedure, or practice of the agency, including the amendment, suspension, or  
rescission of the law enforced or administered by the agency.” MCL 24.207. Relying on a long  
line of precedent, the Michigan Court of Claims reiterated this principle earlier this year, ruling  
that, “A ‘rule’ not promulgated in accordance with the APA’s procedures is invalid.” Genetski v  
Benson, Ct. Claims Docket #20-000261-MM (March 9, 2021) at pp. 7-8, citing MCL 24.243;  
MCL 24.245; Pharris v Secretary of State, 117 Mich App 202, 205; 323 NW2d 652 (1982).  
As the Genetski decision explains,  
An agency must utilize formal APA rulemaking procedures when establishing policies that  
“do not merely interpret or explain the statute or rules from which the agency derives its  
authority,” but rather “establish the substantive standards implementing the program.”  
Faircloth v Family Indep Agency, 232 Mich App 391, 403-404; 591 NW2d 314 (1998).  
“[I]n order to reflect the APA’s preference for policy determinations pursuant to rules, the  
definition of ‘rule’ is to be broadly construed, while the exceptions are to be narrowly  
construed.” AFSCME v Dep’t of Mental Health, 452 Mich 1, 10; 550 NW2d 190 (1996).  
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Genetski at 8. Unlike a guideline, which “binds the agency but does not bind any other person”,  
MCL 24.203(6), a rule, whether labeled as such or not, must involve notice, a public hearing, and  
review by the Legislature’s Joint Committee on Administrative Rules. AFSCME v Dep’t of Mental  
Health, 452 Mich at 9.  
MCMA certainly appreciates and understands MRA’s desire to be flexible to respond to new  
situations as data becomes available or new lessons are learned. MCMA is also thankful that  
MRA has regularly sought industry and public input, be it through public meetings or MRA  
workgroups and advisory boards. But however receptive to input today’s MRA has been,  
enshrining the use of guidance in the rules creates the very real risk that future MRA leadership  
will attempt to regulate by fiat. And even more importantly, if MRA guidance is challenged in the  
courts, the result could easily be an environment where the regulated industry and market are left  
without legal standards on important topics, such as requirements for safety testing.  
Accordingly, we recommend that MRA resolve these concerns by removing references to  
guidance in the rulesets and instead codifying any technical guidance and bulletins in the  
administrative rules themselves. If a new situation arose that required immediate action, the APA  
gives MRA the power to promulgate emergency rules to address matters that concern the  
preservation of public health, safety, or welfare. MRA has used emergency rules to great success  
and effect historically to combat and address matters of urgent public health, such as the Vitamin  
E Acetate vaping crisis. MRA should conform to the APA’s requirements.  
With respect the various proposed rulesets, the MCMA offers the following comments:  
2020-121 LR – Marihuana Licenses Rule Set  
R 420.1(1)(c) – The definition of “Applicant” contains language covering both a direct “or  
indirect” ownership interest, yet does not define the terms. In interpreting “indirect  
ownership interest,” MRA has looked primarily to the right of a party to receive any share  
of revenues or profits. Recently, though, uncertainty has been created by MRA relying on  
language in its Statement of Money Lender form to conclude that a lender has an interest  
for purposes of the rule prohibiting holding interests in both a safety compliance facility  
and other license types. “Indirect ownership interest” should be specifically defined to  
provide clarity to the industry as to what types of relationships constitute an “indirect  
ownership interest” for purposes of meeting the definition of “applicant.”  
R 420.1(1)(f) – The definition of “common ownership” should be clarified to specify that  
“common ownership” includes 2 or more state licenses or 2 or more equivalent licenses  
held directly or indirectly by the same legal person, which among other effects would  
provide clear authority for transfers between the subsidiaries of a parent company.  
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R 420.1(1)(o) and (dd) – MRA should consider clarifying the definitions of “limited access  
area” and “restricted access area” as there is overlap in these definitions—particularly with  
respect to marijuana sales locations.  
R 420.1(1)(s) – The definition of “Marihuana establishment” in the Draft Rule (and in the  
current rules) is inconsistent with the definition in MRTMA, MCL 333.27953(h).  
MRTMA defines an “establishment” as a “business,” not a “location.” While MCMA  
understands the desire to harmonize definitions in MRTMA with those in the Medical  
Marihuana Facilities Licensing Act (“MMFLA”), the definition of “marihuana  
establishment” in the rules should be consistent with the statutory definition.  
R 420.3 – The MCMA supports the changes proposed to provide clear guidance as to when  
applications may be administratively withdrawn or for prequalification approvals to be  
revoked for subsequent ineligibility.  
R 420.4(2) and (9) – The Draft Rules continue requiring information not requested on  
MRA’s current applications, such as financial account statements. MRA progressed in  
easing the regulatory burden of the application process and focusing on information that is  
truly important for determining applicant suitability. The rule should be amended to  
conform to the MRA’s current application disclosure practice, by “required information  
includes” with “may include” and making similar revisions elsewhere in R 420.4.  
R 420.4(3) – The proposed language as to who meets the disclosure requirement is  
internally inconsistent. It starts with a statement that every person having an interest of  
2.5% or greater must be disclosed. It then specifies by entity type who must be disclosed,  
varying from the 2.5% threshold. This could be readily clarified by changing the  
introductory language as follows: “Each applicant shall disclose the identity of all persons  
having an ownership interest in the applicant with respect to which the license is sought as  
follows:”. Also, it should be noted that the definition of applicant is proposed to be changed  
with respect to trusts, but the disclosure requirement does not reflect that.  
R 420.5(1) – This rule should be modified to conform to the current application  
requirements of the MRA. For example, the reference to a business plan in Subsection  
(1)(ii) should be modified to reflect a marketing plan, technology, plan, and staffing plan.  
R 420.5(1)(e) – The MCMA applauds and supports the proposed rule change with respect  
to MRTMA municipal attestations, as the proposed change conforms to MCL  
333.27959(3)(b).  
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R 420.6(2)(d) – This subrule should be either removed or revised. While this prohibition  
on holding any governmental office or position of employment appears in the MMFLA,  
this statutory prohibition does not appear in the MRTMA. This prohibition should be either  
stricken or narrowed to focus on addressing true issues of concern as opposed to importing  
the broad exclusion from the MMFLA. The public health, safety, and welfare of the State  
of Michigan is unlikely to be implicated if the spouse of a marijuana licensee happens to  
be a public elementary schoolteacher or an appointee on the Ski Area Safety Board. If this  
rule is maintained, then “regulatory body” should be defined and exclude Boards and  
Commissions that do not issue licenses or promulgate regulations governing the activities  
of third parties. (Relatedly, MCMA recommends that “regulatory body” also be defined  
for MMFLA applications, and that the rules expressly incorporate the bases for license  
denial contained in the MMFLA.)  
R 420.6(2)(h) – This rule prohibiting an ownership interest in more than 5 adult-use Class  
C Grower licenses is inconsistent with the definition of “marihuana grower” in the  
MRTMA. A “marihuana grower” is defined as a “person licensed to cultivate marihuana  
and sell or otherwise transfer marihuana to marihuana establishments.” MCL 333.27953(i).  
In the context of MCL 333.27959(3)’s prohibition on holding an interest in more than 5  
“marihuana growers,” there is not a prohibition on the number of licenses. Instead, the  
statute prohibits a “person” from holding an ownership interest in more than 5 different  
businesses that hold Grower licenses, as opposed to 5 or more licenses. Accordingly, the  
rule should be modified to conform to the statute by prohibiting an applicant from holding  
an interest in more than 5 different entities that hold Grower licenses as opposed to  
restricting the number of licenses that any individual entity may hold. This change would  
not only reflect the actual statutory language, but would also eliminate what has become  
an impediment to capital investment.  
R 420.6(6) – This added subsection, which imports for MRTMA licenses the language  
from the MMFLA, MCL 333.27409, stating that a license is a revocable privilege and not  
a property right should be stricken, as the same statutory language does not appear in  
MRTMA. Whether a MRTMA license is a revocable privilege or a property right is the  
subject of ongoing litigation. Absent express statutory authority, MRA should not  
promulgate a rule to opine on an open question of law. Indeed, the determination of  
whether a license is a property right and the definition of the scope of that right is a  
legislative determination, not one delegated to the MRA.  
R 420.7 – The MCMA applauds the MRA’s decision to reduce prequalification application  
fees and licensing fees across the board. The MCMA also applauds the MRA’s decision to  
provide uniform fees for renewals, which gives clarity and certainty to the regulated  
industry for purposes of budgeting the costs of licensure.  
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R 420.8 – The MCMA applauds MRA’s decision to allow limited contact and contactless  
options for marijuana sales locations. The COVID-19 pandemic has shown that the  
industry can safely and securely provide limited contact and contactless options to  
customers. While we recognize that the Draft Rule strikes the prohibition on drive-thru  
transactions, MCMA recommends that the MRA be explicit in authorizing drive-through,  
so that no municipalities are confused and claim that drive-through’s are not allowed  
because they are not specifically authorized.  
R 420.12(2)(s) – The denial of a license for failure to pass a pre-licensure inspection should  
be clarified to indicate that this means the failure of a MRTMA applicant to pass a pre-  
licensure inspection within 60 days of the submission of its establishment license  
application. The current proposed language simply states that a failure to initially pass a  
pre-licensure inspection could be grounds for denial of the application, which is contrary  
to MRA’s practice. It is typical in a pre-licensure inspection for an applicant to add  
additional security cameras or make other minor changes to the facility in response to  
concerns or direction from the MRA field agent. These types of corrections to ensure  
compliance and to respond to the direction of the field agent—even if initially a failing pre-  
inspection report is issued—should not be grounds for denial of a license if the applicant  
cures any noted deficiencies.  
R 420.12(2)(t) – The proposed rule seeks to give MRA authority to deny an applicant’s  
application if they submit an amendment to add an individual or entity that MRA then  
determines is not eligible for licensure. It is unclear what issue this rule is seeking to fix,  
as the amendment application would be denied if it was determined that an individual or  
entity proposed to be added was ineligible or unsuitable. In practical terms, applicants  
could be expected to cause any and all individuals or entities they wished to add to  
ownership first be separately prequalified. Only then would applicants be able to add new  
parties without fear of possibly jeopardizing the original applicant’s status by attempting  
to add an unsuitable partner. This would create inefficiencies in the process and inhibit the  
ability of applicants to raise capital after they have been prequalified. MCMA proposes  
striking this proposed addition to the rules.  
R 420.14 – The reporting requirements for licensees should be consistently changed from  
“calendar days” to “business days” to conform with the proposed changes in R 420.802,  
which exclusively uses “business days.” The timelines for reporting to the MRA should be  
consistent to avoid inconsistency or misunderstandings.  
R 420.18(2) – The MRA should clarify and make explicit the fees that will be required for  
a change of location. The current rule uses permissive language by using the word “may”  
as to whether additional fees will be required, yet our experience has been that MRA  
charges a full new licensure fee or regulatory assessment even when a licensee is moving  
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from a facility that has been licensed for a short period of time. MCA recommends that  
MRA charge a specific transfer fee limited to MRA’s actual expense in reviewing a new  
facility application and inspecting a new location.  
R 420.20 – MCMA wholeheartedly supports MRA reviewing financial records of licensees  
for critical compliance matters. Nevertheless, in its application of the MMFLA’s Annual  
Financial Statement to MRTMA licensees, MCMA believes that the AFS has metastasized  
to become something it was never intended to be. There is nothing to suggest that the  
Legislature intended the AFS to be anything other than what is commonly understood to  
be financial statements, i.e., a balance sheet, income statement, and a statement of cash  
flows. Instead, what MRA has turned into a searching audit takes enormous amounts of  
time and expense. For smaller businesses (e.g., stand-alone provisioning centers or  
retailers, microbusinesses), the cost is extreme enough that a credible argument can be  
made that the AFS constitutes an “unreasonably impracticable” mandate in violation of  
MCL 333.27958(3)(d). The MRA should provide definitive clarity as to the breadth and  
scope of the AFS mandate, and should strongly reconsider its current practice to focus on  
requiring applicants to provide only those financial documents that are necessary for the  
MRA to confirm regulatory compliance. Relatedly, MCMA recommends that a rule be  
added to define the AFS requirement under the MMFLA.  
R 420.23 – Again, MCMA believes that MRA should conform its definition of “marihuana  
grower” in R 420.6(2)(h) to the language of the statute. This would obviate the need for  
excess grower licenses. If MRA keeps the excess grow license, MRA should re-evaluate  
the ratio of Medical Class C Grower Licenses that are required to secure each excess  
grower license. Medical product is now only 25% of the marijuana market and likely to  
become an even smaller share. A ratio of 1 medical Class C license to 4 excess grow  
licenses would much better reflect the market.  
2020-120 LR – Marihuana Licensees Rule Set  
R 420.101(c) – The definition of “another party” becomes unclear in certain contexts, such  
as the obligation to report misconduct of “another party” being limited to parties to a  
contract rather than other licensees. “Outside party” or “unlicensed third party” may be  
preferable.  
R 420.101(1)(m) – The definition of “management or other agreement” should be clarified  
to provide clear definitions for the terms “gross profit” and “net profit.” “Gross profit”  
should be defined as “Revenue less Cost of Goods Sold.” “Net Profit” should be defined  
as “Gross profit less expenses.” These terms would eliminate ambiguity that exists in the  
context of licensing agreements today. Additionally, the definition for management or  
other agreement states that such an agreement is one by which an outside party either can  
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exercise control or receive more than 10% of gross or net profit. Consequently, the other  
party would be an applicant under both the statutory definitions and the provisions of  
proposed new rule 420.112a(4). That being the case, the management or other agreement  
definition should also include the fact that the outside party will be a supplemental  
applicant and must be reviewed by MRA as such.  
R 420.102(1) – MCMA recommends that the broader term “cultivate” should be used in  
this rule as opposed to the term “grow.” This would mirror the language used in Section  
10 of MRTMA, MCL 333.27960(1)(a) and also the language used in R 420.105(1)(a) for  
microbusinesses with respect to the authorization to cultivate marijuana plants.  
R 420.102(3) and (5) –The rule allows growers to acquire mature plants, seeds, seedlings,  
tissue cultures, and immature plants from other adult-use growers, but does not authorize  
acquiring harvested marijuana from another adult-use grower. MRTMA, however,  
expressly allows a grower to sell marijuana, broadly defined, to other licensed  
establishments. MCL 333.27960(1)(a). The rule should be modified to track the statute  
and also allow growers to acquire “marihuana” from other growers.  
R 420.102(9) – By providing that a grower may obtain from another grower “seeds, tissue  
cultures and clones that do not meet the definition of marihuana plant,” this subrule  
conflicts with subrule (3), which explicitly allows an adult-use grower to transfer mature  
plants to another adult-use grower. It also conflicts with MRTMA. To reflect the language  
of MRTMA, the subrule should either broadly grant authority to acquire “marihuana” from  
another grower, or simply be deleted in favor of reliance upon subrule (3). If the intent of  
this subpart is to address the acquisition of seeds, tissue cultures and clones by an adult-  
use grower from a medical grower, then the subrule should be limited to such acquisitions.  
Finally, the entirety of R 420.109 fails to recognize that MRTMA authorizes adult-use  
growers “acquiring marihuana seeds or seedlings from a person who is 21 years of age or  
older.” MCL 333.27960(1)(a). In the interests of clarity, this statutory authorization  
should be placed into the rule.  
R 420.103 – Subrule (1) allows processors to purchase from or sell to adult-use  
establishments, which would obviously include other processors. The proposed rule would  
delete subrule (3), which permits a licensee who holds processor licenses at multiple  
locations to transfer inventory between locations. This would appear to still be allowed  
under subrule (1), but it would be helpful for MRA to confirm that. Furthermore, when  
the present rules were adopted, they were for a brief time misinterpreted as allowing  
microbusinesses to acquire processed product, which contravenes MRTMA’s requirement  
that microbusinesses sell only “marihuana cultivated or processed on the premises.” MCL  
333.27960(1)(f). To avoid such a misinterpretation arising again in the future, MCMA  
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recommends that subrule (1) expressly exclude microbusinesses from the establishments  
to which a processor may sell or transfer marijuana.  
R 420.104 – MCMA’s comments regarding R 420.103 apply to R 420.104 as well.  
R 420.105 – As noted above, R 420.105(7) provides that microbusinesses are subject to all  
“applicable” rules that govern the activities of growers, processors and retailers. The rule  
also notes the obvious that microbusinesses are subject to the provisions of MRTMA  
pertaining to this license type. This includes that activities related to cultivation, processing  
and sale of marijuana must take place solely on the premises of the microbusiness. MCL  
333.27960(1)(f). Because subrule (7) was for a brief time misinterpreted as allowing  
microbusinesses to participate in the full range of activities permitted for growers,  
processors, and retailers, MCMA recommends that the rule more clearly incorporate the  
limits of MRTMA. This could be accomplished by:  
o Inserting “All marijuana must be cultivated solely on the premises” at the end of  
subrule (1)(a);  
o Inserting the phrase “cultivated on the premises” after the word “marihuana” in  
subrule 1(b); and  
o Inserting the phrase “cultivated or processed on the premises” after the word  
“marihuana” in subrule (1)(c).”  
To align the rule with the statutory language, MCMA recommends that proposed subrule  
(8) read “A marihuana microbusiness may not purchase or accept a mature plant from  
another establishment, an individual, a registered qualifying patient, or a registered primary  
caregiver.” (Should pending House Bills 5300 and 5301 be enacted, “specialty medical  
grower” should be added to the above, as well as in other applicable rules.)  
R 420.105a – This new proposed license should be stricken entirely from the rule set.  
The proposed “Class A microbusinesses” would be the farthest thing from any conception  
of a “microbusiness,” and completely disrupt the market and settled expectations of  
incumbent businesses at every level. Instead, these so-called microbusinesses would be  
full-fledged retailers able to acquire unlimited just-harvested plants from multiple sources  
including caregivers and individuals, acquire and sell unlimited amounts of concentrate  
and infused product, and to still operate as a grower and retailer, all for a lower license fee.  
The suggested authorization to allow mature plants to be acquired from patients,  
caregivers, and anyone over the age of 21 would without question lead to microbusinesses  
that would be based on mature plants collectively grown by unlicensed individuals, greatly  
exacerbating current problems with caregivers and unlicensed individuals functioning as  
de facto commercial growers in neighborhoods throughout the state. MRA would  
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effectively be blessing and encouraging the movement of cultivation activities outside of  
MRA licensed and regulated facilities. Even worse, the conduct that would be authorized  
by rule is flat-out illegal and would blatantly violate both MRTMA and the MMMA.  
MRTMA is explicit that adults cannot sell marijuana, but can only gift marijuana to  
individuals (not businesses). MCL 333.27955(1)(d). Our Supreme Court has ruled that  
the only transfers of medical marijuana authorized by the MMMA and that are lawful are  
transfers from caregivers to their maximum of five patients connected to them through the  
medical marihuana registry. People of the State of Michigan v McQueen, 493 Mich 135  
(2013). Indeed, a caregiver or patient selling their marijuana cultivated under the MMMA  
is committing a felony. MCL 333.26424(l). Patients and caregivers are authorized only to  
transfer or sell marihuana seeds or seedlings to MMFLA growers. MCL 333.26424a(2)(b).  
Quite simply, this proposed new license type would facilitate and reward the illicit market  
and unregulated actors.  
It is also worth noting that this concept originated with MRA’s Racial Equity Workgroup,  
yet the proposed rule is not in any way tied to social equity. MCMA has in the past  
supported legislative changes to authorize a higher plant count for social equity applicants  
(as well as improvements to MRA’s determination of what makes up definition of  
“disproportionately impacted communities.”)  
R 420.106 – MCMA recommends that this rule be revised to simply require ongoing  
reporting to MRA Compliance of any off-site addresses where vehicles may be stored, not  
require these locations to be identified by address in a secure transporter’s staffing plan.  
This would alleviate any need for a secure transporter to constantly update a plan that  
would need to be sent through MRA Applications.  
R 420.107 – MCMA strongly supports the proposal to allow MRTMA safety compliance  
facilities to test marijuana from individuals who are home growing under MRTMA.  
R 420.108 – Unlike MRTMA, the MMFLA does not allow growers to accept returns of  
product from processors or provisioning centers. As you know, MRA has taken  
disciplinary action against MMFLA licensees for product returns to growers. To parallel  
other rules and make the prohibition more clear, MCMA recommends placing that  
prohibition in the rule.  
R 420.110 – While the MMFLA limits to whom some license types may transfer product,  
this is not the case for secure transporters, who may “transport marihuana and money …  
between marihuana facilities.” MCL 333.27503(1). Although a secure transporter’s place  
of business is a “facility,” there has been some confusion over whether secure transporter  
to secure transporter transfers are permissible. MCMA recommends that the rule expressly  
state that such transfers are lawful. As with R 420.106, MCMA also recommends that this  
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rule be revised to require ongoing reporting to MRA Compliance of any off-site addresses  
where vehicles may be stored, not require these locations to be identified by address in a  
staffing plan.  
R 420.112 – This rule today states that safety compliance facilities are authorized to “Take  
marihuana from, test marihuana for, and return marihuana to only a marihuana facility.” R  
420.112(1)(a) (emphasis added). Although the rule tracks the statutory language of the  
MMFLA, it must also account for the fact that the MMMA allows patients and caregivers  
to transfer “marihuana for testing to and from a safety compliance facility licensed under  
the medical marihuana facilities licensing act.” MCL 333.26424a(2)(c). This provision of  
the MMMA was enacted at the same time as the MMFLA, via a tie-barred bill, and was  
contingent upon the MMFLA being enacted. The two statutes, therefore, should be  
construed in pari materia, and the rule should therefore reflect that safety compliance  
facilities may also test patient and caregiver medical marihuana.  
R 420.112a – MCMA appreciates MRA placing the standards for licensing agreements in  
the rules and recognizing the need to address management agreements and other similar  
agreements. MRA is also pleased that the rule removes the current Advisory Bulletin  
requirement that licensing royalties be based on the number of units sold or a monthly rate.  
As the Advisory Bulletin provisions are being enshrined in the rules, though, MCMA  
believes that there are aspects that should be made more clear.  
First, the definition of “other agreement” and the test for whether another party meets the  
definition of “applicant” both depend on whether the other party could receive “more than  
10% of the gross or net profit from the licensee.” As with proposed R 420.101(1)(m), this  
rule should provide clear definitions for the terms “gross profit” and “net profit.”  
(“Revenue less Cost of Goods Sold” and “Gross profit less expenses” respectively.)  
Second, “profit from the licensee” should be defined as being based on the licensee’s total  
revenues, not just the revenues attributable to the products that are the subject of the  
licensing agreement. This would then track the statutory definition of applicant. Third, it  
should be made clear that the 10% payment cap does not include payments for services,  
equipment, packaging, etc. so long as they are provided at fair market value and the contract  
shows how that is calculated. (This is MRA’s current practice.)  
In addition to these points of clarification, MCMA recommends striking the provision on  
how and by whom payments may be made (the second sentence of subrule 3(i)), as payment  
flow should not be an issue unless the other party is being given the ability to control or  
participate in the management of the licensee. For the same reason, MCMA recommends  
striking subrule (3)(iii). Finally, MCMA asks that the rule be applied only prospectively  
or to agreements that have not previously been approved by MRA. This would avoid what  
would be the unconstitutional impairment of contracts.  
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2020-122 LR – Marihuana Operations Rule Set  
R 420.203 – MRTMA prohibits MRA from adopting any rule requiring a “marihuana  
retailer to acquire or record personal information about customers other than information  
typically required in a retail transaction.” MCL 333.27958(3)(b). In requiring that licensees  
maintain sales records and receipts, MRA should make clear, at least for adult-use, that  
personal information about customers at the retail level need not be provided to MRA.  
R 420.204 – MCMA supports the accommodation that would permit internal analytical  
testing space to be utilized by co-located licensees. Based on the experience MCMA  
members have in numerous other jurisdictions, however, MCMA discerns no regulatory  
purpose that is being achieved with the artificial separation of grower and processor spaces  
within co-located facilities. In other states, no such separation is required, and licensees  
are free to design facilities that are far more efficient. MCMA strongly recommends  
eliminating the separation requirements altogether, at least as pertains to grower and  
processor activities. METRC tags are sufficient to determine if marijuana or marijuana  
products that are in progress or finished are associated with the grower license or processor  
license, just as with adult-use and medical marijuana and products being in the same grower  
or processor space. For co-located growers and processors, MRA should permit inventory,  
record keeping, and point of sale operations to be shared, and there is no reason to mandate  
that licenses be posted in separate spaces. If MRA does, for some reason, believe that the  
separation of these operations is necessary, MRA should at a minimum allow both licenses  
to use some areas simultaneously (e.g., shipping and receiving).  
R 420.206(4) – This rule presently provides that MRA is to publish lists of approved and  
banned chemicals, but the rule is silent about the use of chemicals that are on neither list.  
MRA’s present stance is that if a cultivator wishes to use an unlisted chemical, they must  
ask MRA, which will first work with MDARD to determine if use should be allowed. This  
should be spelled out in the rule.  
R 420.206(8)(b) – This rule currently provides that when a lab manager leaves and an  
interim is designated, that interim must meet the qualifications of a “supervisory analyst.”  
These qualifications should be set out in the rule.  
R 420.206(13) – MCMA believes that the ability of licensees to utilize hemp-derived inputs  
would be unnecessarily hampered by mandating that all ingredients containing  
cannabinoids, whether naturally occurring or synthesized, be sourced from an entity that is  
licensed by a governmental authority and entered into METRC. First, there is not presently  
any mechanism for MRA licensees to add ingredients to METRC, and there is no METRC  
access for hemp producers. Second, the function of protecting patient and customer safety  
would be better served by requiring Certificates of Analysis to be provided by all suppliers  
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of cannabinoids that do not meet the definition of “marihuana” than by requiring that all  
come from licensed sources. Testing of the resulting product then will further confirm  
safety.  
If MRA is to retain the proposed requirement, at a minimum it should be modified to clearly  
provide that the licensing authority is not restricted to MDARD or other Michigan  
agencies, as interstate commerce in hemp-derived products is now federally legal. Any  
hemp-based ingredients originating from a producer operating under a USDA approved  
hemp plan should be acceptable. Additionally, there should be some phase-in of this rule  
so that it does not take effect until (1) the necessary functionality is added to METRC, and  
(2) MDARD has provided a clear pathway for Michigan hemp growers and processors to  
transfer hemp and derivatives to MRA licensees. In the interim, MRA could require that  
all COAs and licenses of suppliers be kept on file for inspection, and that they be uploaded  
to MRA once MRA creates a way to do this.  
R 420.206a – While requiring written standard operating procedures is appropriate and  
welcome, the proposed rule provides no clarity or definition to permit a licensee to identify  
the specific processes for which SOP’s are required. The rule lacks any description about  
the level of detail that SOP’s must contain. The rule leaves all this and more to “any  
guidance issued” by MRA. Again, the use of binding guidance documents rather than  
notice and comment rulemaking violates the APA. MRA should also recognize the value  
of industry operational experience being considered when developing required parameters  
for SOP’s. For both legal and practical reasons, SOP requirements should not be produced  
without industry input.  
R 420.207 – MCMA recommends eliminating the current restriction that a delivery  
employee may only be employed for one sales location. At a minimum, MRA should allow  
drivers to be employed by multiple sales locations if those locations are under common  
ownership. It serves no regulatory purpose to require companies that have multiple stores  
to have employees be restricted to working at only one location.  
R 420.207a – MCMA is highly supportive of permitting sales locations to designate an  
area for contactless or limited contact transactions, unless prohibited at the municipal level.  
To avoid uncertainty, MCMA recommends that the rule state explicitly that drive-through  
and curbside sales are acceptable. MCMA also recommends that subrule (7), which would  
direct that the area for contactless or limited contact transactions meet the security  
requirements of R 420.209, be modified to exclude R 420.209(3)’s mandate for locks.  
R 420.208 – Michigan is an outlier, perhaps the only state in the nation, in classifying  
marijuana grow facilities as “industrial uses.” The sprinkler systems, minimum aisleway  
widths, and other requirements for manufacturing facilities simply make no sense for  
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buildings used for the cultivation of marijuana. MCMA recommends that MRA and the  
Bureau of Fire Services work with industry to adopt or develop standards that are more  
appropriate to the actual use of facilities. Also, as MRA and BFS are no doubt aware, the  
National Fire Protection Association is currently developing new standards for cannabis  
facilities. MCMA recommends that the rule provide for re-evaluation of fire protection  
standards once the NFPA process is complete.  
R 420.212 – MCMA recommends that co-located facilities be permitted to store marijuana  
product in a common area.  
R 420.214 – MCMA suggests that “common ownership” be broadly defined such that  
transfers among subsidiaries of the same company are more clearly authorized. MCMA  
also recommends that the requirements and parameters for transfers be set forth in the rule,  
and not by “guidance,” which violates the APA. MCMA also recommends providing clear  
authority for transfers of all from expiring licenses that are not being renewed.  
R 420.214a – MCMA is strongly supportive of the express authorization of internal  
analytical testing, and suggests only that licensees be allowed to have product from more  
than one license in the space the same time.  
R 420.214b – MCMA recommends that the term “adverse reaction” be defined. MCMA  
also recommends that the reporting requirement be placed into R 420.14, which contains  
all of the other event reporting mandates.  
R 420.214c – MCMA recommends that the term “defective product” be defined.  
2020-124 LR – Marihuana Sampling and Testing Rule Set  
R 420.305 – MCMA strongly supports this proposed rule, which would give consumers  
and patients (as well as industry) greater confidence in the reliability of safety testing.  
R 420.307 – MCMA recommends striking the mandate that all marijuana businesses must  
follow guidance that may be published and instead set forth standards in the rules. By law,  
guidance cannot bind those outside of the agency; this rule should be modified to conform  
to the requirements of the APA.  
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2020-119 LR – Marihuana Infused Products and Edible Marihuana Products Rule Set  
R 420.403(6) – “Inactive ingredients” is defined in the rules in a manner that excludes from  
the definition ingredients “not derived from the plant Cannabis sativa L.” R 420.102(1)(e).  
By requiring “All non-marihuana inactive ingredients” (emphasis added) to be listed and  
approved, ambiguity is introduced. “Inactive ingredients” are by definition “non-  
marihuana,” so it is unclear what is accomplished by the addition of “non-marihuana” to  
the term. Because of the general interpretive rule that words in a rule should be interpreted  
so that they are not surplusage, licensees will be left to attempt to interpret the meaning.  
One implication could be that hemp-derived products and compounds (CBD, etc.) fall  
within the rule’s ambit. If this is the case, then virtually all such ingredients would be  
prohibited, because the FDA has not included them in the FDA Inactive Ingredient  
database. MCMA recommends that the words “non-marihuana” be deleted.  
R 420.406(7)(a) – MCMA recommends that MRA not adopt its proposed mandate that  
product names “must be an appropriately descriptive phrase that accurately describes the  
basic nature of the product.” This significant change seems to imply that products must be  
named “gummies” or “chocolate bars” and would undermine the value of branding.  
R 420.406(8)(d) – MCMA recommends that MRA not adopt the addition of “in charge” as  
that could be interpreted as requiring the certification of all managerial employees. MCMA  
recommends a more targeted requirement that “an employee who is certified as a Food  
Protection Manager must supervise the production of edible marihuana product.”  
R 420.406(9)(e) – MCMA recommends that this new proposed provision be deleted, or at  
the minimum, made more clear. It is not clear from the text of the rule what prohibiting  
edible marijuana packaging from containing “the characteristics of commercially available  
food products” means. Would this prohibit packaging like that used for a candy bar?  
Clarity should be provided.  
2020-123 LR – Marihuana Sale or Transfer Rule Set  
R 420.501 – MCMA recommends that “administrative hold” be expanded to also expressly  
encompass “potential health hazards.” Prior to the MRA’s emergency rules during the  
EVALI crisis, it was not a violation of either the acts or the rules to produce vape cartridges  
containing Vitamin E Acetate (although fortunately, there is no record of such products  
being manufactured by MRA licensees). MRA therefore arguably lacked legal authority  
at that time to impose an administrative hold. The rule should explicitly give MRA the  
authority to do so when public health is in jeopardy.  
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R 420.504(1)(f) – MCMA strongly believes that the requirement that product containers or  
bags include net weight in “United States customary” units should not be removed from  
the rules. Quantity limitations for products sold to patients and customers are virtually all  
expressed in ounces. See MCL 333.2424(c). Ounces and pounds have been customarily  
used in reference to cannabis since before the invention of the metric system and are widely  
understood by customers and patients.  
R 420.504(4) – By requiring that safety information pamphlets “substantially conform to  
the design published on the agency’s website,” MRA is again sidestepping the  
requirements of the APA. In addition, this approach violates the Acts. In the MMFLA,  
the Legislature mandated that the MRA “promulgate rules” that “must include rules to …  
[e]stablish informational pamphlet standards…” MCL 333.27206(u) (emphasis added).  
MRTMA also mandates the inclusion of informational pamphlet standards in promulgated  
rules. MCL 333.27958(1)(l). MCMA recommends that MRA conform to the requirements  
of the APA, MMFLA, and MRTMA and incorporate the pamphlet standards into the rules  
themselves. MCMA also recommends that MRA provide lead time for new pamphlet  
requirements (which would occur naturally under the framework of the APA).  
2021-10 LR – Marihuana Employees Rule Set  
R 420.602(2)(e) – MCMA believes that the requirement for “responsible operations plans”  
should be limited to designated consumption establishments, marijuana events,  
microbusinesses, and retailers. These are the only license types that deal directly with  
customers and patients. While MCMA recognizes that responsible operations plans are  
also to detail how employees will prevent underage access to the establishment, illegal sale  
of marihuana in the establishment, and potential criminal activity, each of these must be  
addressed in the establishment’s security plan. Having duplicative plans invites confusion.  
R 420.602(2)(j)-(k) – MCMA recommends that MRA include the statutory disqualifier for  
MMFLA employees, and the ability to obtain a waiver from MRA.  
R 420.602a – MCMA believes that extending to the employment context the prohibition  
on holding an interest in a secure transporter or safety compliance facility while holding  
an interest in any other license type is unnecessary and over-reaches. MCMA does not  
believe that there is an adequate rationale to provide that an employee of a secure  
transporter or laboratory may not also be an employee of any other licensee. MCMA is  
also concerned that a licensee could face regulatory discipline for unknowingly employing  
or continuing to employ someone who also has a job with a prohibited license type.  
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2020-118 LR – Marihuana Hearings Rule Set  
R 420.703 – MCMA is pleased to see the specific inclusion of authority for ALJ’s to  
subpoena witnesses.  
2020-117 LR – Marihuana Disciplinary Proceedings Rule Set  
R 420.801(1)(g) – MCMA recommends that the subrule read that contested case hearings  
be conducted “pursuant to the APA, the acts and these rules.”  
R 420.802 – MCMA asks that subrule (4)(c) be clarified to provide that reporting of  
violations of “another party” means the defined term “another party.” Otherwise, this rule  
could easily be misinterpreted as requiring notification to MRA when a licensee “should  
have been aware” of a regulatory violation by any other licensee. (Although MCMA  
certainly hopes that licensees who become aware of regulatory concerns will bring those  
to MRA’s attention.) MCMA also notes again that this rule would have reporting  
requirements measured in business days, while R 420.14 has the same reporting  
requirements measured in calendar days. These should be consistent.  
R 420.808a – While beneficial that MRA is adding a rule to implement the statutory  
requirement of an exclusion list, portions of the proposed rule should be modified. First,  
including individuals on the list for theft, fraud or dishonesty even when a conviction has  
not been obtained takes a step too far. Someone who has been acquitted of criminal activity  
should not be treated as a criminal. Second, exclusion for “conduct that could negatively  
impact public health, safety, and welfare” is far too subjective and broad. Third, the cross-  
reference in subrule (3) to R 420.705 should be corrected to cross-reference R 420.704a.  
Finally, MCMA is concerned that a hearing under R 420.704a must be requested within 21  
days, or else an individual stays on the exclusion list. Those excluded should have other  
opportunities to contest their exclusion. Subrule 5(c)’s proviso that exclusions are  
permanent if they are for reasons other than conduct (such as having been found ineligible  
for licensure at one time) eliminates the opportunity for someone who was denied licensure  
to reapply in the future, when they may have matured or circumstances otherwise have  
changed. The prospect of rehabilitation should not be foreclosed.  
2021-29 LR – Marihuana Declaratory Rulings Rule Set  
R 420.822(1) – MCMA believes that providing for declaratory rulings is a very positive  
step forward, and recommends that all declaratory rulings be posted on the MRA website.  
MCMA, however, believes that language should be added to this rule to clarify that MRA  
will still respond to questions from licensees concerning the application of rules and  
provide informal review of product packaging, but MRA’s answers to such questions will  
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be non-binding. A simple sentence should be added to the conclusion of R 420.822(1) that  
states: “Nothing in this rule is intended to limit or restrict the agency’s ability to respond  
to questions or inquiries from licensees or the general public, but any agency response to  
such questions or inquiries shall not be binding on the agency.”  
R 420.822(2)(c), (d) – The proposed language limits the scope of a declaratory ruling to  
“statutes, rules, or orders” that may apply to the requested declaratory ruling. The MRA  
should consider broadening the scope of these rules to also include “constitutional  
provisions,” “judicial opinions,” and “ordinances.” The implications of the Michigan  
constitution may factor into a declaratory ruling. Similarly, a judicial opinion, particularly  
one that constitutes binding legal precedent from the Michigan Court of Appeals or  
Michigan Supreme Court, may be implicated in a declaratory ruling. Lastly, both the  
MMFLA, MCL 333.27205(1), and MRTMA, MCL 333.27965(2), prohibit local  
municipalities from adopting ordinances that conflict with the MMFLA, MRTMA, or rules  
promulgated by the MRA. There may be instances in which it may be appropriate for the  
MRA to offer a declaratory ruling with respect to whether a local municipal ordinance  
conflicts with the MMFLA, MRTMA, or the rules.  
R 420.822(12) – The rule should be slightly modified to make clear that any declaratory  
ruling issued by the agency also contain the effective date of the ruling.  
In conclusion, MCMA again thanks MRA for the effort already put into the Draft Rules and looks  
forward to the number of positive steps proposed. MCMA also appreciates MRA’s consideration  
of the comments provided in this letter, and values the collaborative approach of the agency. If  
there are any questions with respect to these comments, please contact me.  
Regards,  
DYKEMA GOSSETT PLLC  
R. Lance Boldrey  
cc: MCMA Board  
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118728.000002 4846-8058-6748.2  
To: Andrew Brisbo, Executive Director Marijuana Regulatory Agency  
From: Nico Pento, VP External Affairs Terrapin  
Date: September 27, 2021  
Subject: Proposed Cannabis Rule Comments  
_____________________________________________________________________________________________  
Director Brisbo,  
We respectfully submit this public comment on the MRA’s current proposed cannabis rules. We ask that you take  
these comments into consideration prior to final approval.  
R 420.808a. Rule 8a. Exclusion  
This section needs further explanation. It is unclear to us whether or not the licensee is required to determine  
employees that should be excluded during the background check or upon discovery that the employee meets  
criteria for exclusion, or if only the agency has the authority to determine exclusion. If businesses could be  
penalized for not excluding an employee who meets the criteria defined within the rules, further clarification is  
necessary to ensure compliance.  
R 420.602. Rule 2. Employees; requirements  
We agree with including a responsible operations plan in the employee training manual, but much of the  
information required in this section does not apply to cultivation or processing labs. We request that the rules are  
clarified to apply only to marijuana sales locations.  
R 420.602a. Rule 2a. Prohibitions  
We agree that employees of a cultivator, producer or sales location should not be an employee of a testing  
laboratory. We also agree that owners of processing labs, cultivation facilities or sales locations should not own a  
testing lab or possess a transporter license. However, we believe it would be beneficial to permit transporter  
employees to also be employees of a producer, cultivation facility or sales location. At present, certain licensees use  
contract security that also own a marihuana transporter license. As the rules are currently written, these  
employees would be non-compliant. To ensure that licensees can still use such contract security without being  
sentenced to noncompliance, we recommend striking the following:  
(1) An employee of a cultivator may not also be employed by a marihuana transporter or a laboratory.  
(2) An employee of a producer may not also be employed by a marihuana transporter or a laboratory.  
(3) An employee of a marihuana sales location may not also be employed by a marihuana transporter or a  
laboratory.  
(4) An employee of a marihuana transporter may not also be employed by a cultivator, producer,  
marihuana sales location, or laboratory.  
(5) An employee of a laboratory may not also be employed by a cultivator, producer, or marihuana sales  
location. or marihuana transporter.  
(6) An employee of a marihuana microbusiness or a class A marihuana microbusiness may not also be  
employed by a laboratory. or a marihuana transporter.  
R 420.502 Rule 2. Tracking identification; labeling requirements; general  
Subrule 4 of this section requires marihuana businesses to destroy expired marihuana products. However, R  
420.214c (Product returns) states that “a marihuana retailer may return a marihuana product that is past its  
expiration date to the marihuana processor who produced the marihuana product for destruction instead  
of destroying the marihuana product.” To maintain consistency, we suggest referencing this rule  
in R 420.502 (2)(4).  
(4) A marihuana business shall not sell or a transfer marihuana product after the printed  
expiration date on the package. An expired marihuana product must be destroyed, either by the retailer or  
by being returned to the marihuana processor for destruction, consistent with the provisions in  
R420.502(2)(4).  
R 420.403. Rule 3. Requirements and restrictions on marihuana-infused products before sale or transfer  
To ensure compliance regarding the labeling of marihuana-infused products, we recommend that 7(a) and (b) of  
this section include specific definitions for “basic nature” and “component ingredients.” Or at a minimum  
additional guidance as to what the department will interpret as “basic nature” and “component ingredients.”  
R 420.303. Rule 3 (4). Batch; identification and testing  
Subrule 4 of this section is extremely concerning, particularly from an inventory and compliance perspective.  
Requiring the destruction of plant tags immediately after a tagged plant is harvested means that plants from  
harvest batches, which cannot get a package tag until passing testing, would be without a METRC tag while waiting  
for test results. If plants are unaccounted for any length of time, this can cause serious issues with inventory and  
create opportunities for diversion, potentially sentencing cultivators to noncompliance. We respectfully request  
that the MRA either remove the new proposed rules for R 420.303 (3)(4), or change the language to state that  
cultivators may, but are not required to destroy tags immediately after a tagged plant is harvested. Proposed  
language is below in red:  
(4) After A cultivator shall immediately destroy the individual plant tag once a tagged plant  
is harvested, it and is part of a harvest batch so that a sample of the harvest batch can be tested by a  
licensed laboratory as provided in R 420.304 and R 420.305. A cultivator shall separate the harvest batch  
by product type and quarantine a harvest batch the harvested batch from all other plants or batches  
marihuana and marihuana products when the marihuana batch has that have test results pending. A  
harvest batch must be easily distinguishable from other harvest batches until the batch is broken down  
into packages. A cultivator may not combine harvest batches.  
OR  
(4) A cultivator shall immediately may, but is not required to, destroy the individual plant tag once a  
tagged plant is harvested and is part of a harvest batch so that a sample of the harvest batch can be tested  
by a licensed laboratory as provided in R 420.304 and R 420.305.  
R 420.303. Rule 3 (6). Batch; identification and testing  
Subrule 6 allows cultivators to transfer or sell fresh frozen marihuana to a producer without being tested by a lab,  
with agency approval. Since the MRA also allows trim to get transferred to a lab without testing, we recommend  
clarifying current language to state that any harvest batches may be transferred to a lab without testing, pending  
agency approval  
(6) A cultivator may transfer or sell any harvest batches fresh frozen marihuana to a producer without first  
being tested by a laboratory in order to produce fresh frozen live resin, or if the marihuana product will be  
refined to a concentrate extracted, with agency approval.  
R 420.306. Rule 6. Testing marihuana product after failed initial safety testing and remediation.  
While we understand that safety testing and remediation for marihuana products is necessary to protect public  
health and safety, we believe that products that failed testing for Aspergillus, as indicated in subrule 3 of this  
section, should be eligible for remediation. Certain remediation processes, such as x-ray chamber decontamination  
and ozone-based decontamination, can effectively destroy contamination while maintaining marihuana’s  
biologically active ingredient. Both of these decontamination processes use scientifically proven technology to  
destroy the full complement of microbial cells, including aspergillus. This results in a product that has been  
successfully remediated, can pass state testing and is safe for human consumption.  
(3) Products that failed testing for Aspergillus are ineligible for remediation.  
R 420.306. Rule 6. Testing marihuana product after failed initial safety testing and remediation  
While we understand the provisions under subrule 4 and 5, we would like more information on failed testing. Since  
the threshold for certain medical marihuana products is different from certain adult use marihuana products, we  
would like more details and clarity on what constitutes failed testing.  
R 420.203. Rule 3. Marihuana licenses; licensees; operations, general  
We understand the intention of this rule and agree that licensees should maintain accurate and comprehensive  
financial records. However, many licensees have stacked licenses and operate separate businesses at the same  
location and as such, their accounting documentation is by entity rather than individual license. Since it is possible  
for licensees to meet the requirements of this rule by providing documentation per entity, we suggest removing  
“each license” from the language of this rule.  
(i) A licensee shall maintain accurate and comprehensive financial records for each  
license that clearly documents the licensee’s income and expenses. Applicable supporting source  
documentation must be maintained, including, but not limited to, all of the following:  
R 420.204. Rule 4. Operation at same location  
While we understand and agree with the provisions outlined in R 420.204 and 420.212, we recommend that  
licensees with any combination of marihuana licenses who are operating separate businesses at the same location  
be permitted to share an on-site storage area for all products in final form. That some marihuana products in final  
form are flower based and some are concentrate based offers no inherent reason for displacement and separation  
of storage. Since storage areas must be equipped with security features, requiring separate storage areas not only  
creates undue burden for marihuana businesses from a financial and operations perspective, but it also creates a  
burden for businesses that may not have sufficient space for separate storage areas. Allowing all products in final  
form to share a storage area would address these issues. Our proposed language follows below:  
4) Operation of marihuana licenses at the same location may include a combined space for the purposes of  
complying with R 420.214a.  
a. A licensee that has any combination of marihuana licenses and is operating separate marihuana  
businesses at the same location may share an on-site storage area for all marihuana products in final form  
if the licenses have a stacked licenses, pursuant to Rule 4, 420.204 and share common ownership, as  
defined in Rule 1, 420.1f.  
R 420.206. Rule 14  
We agree with safety compliance testing of marihuana products, but it is unclear whether the test requirements in  
this section would apply to intermediary steps in the processing lab. We believe that requiring testing during  
intermediary steps is unnecessary and inefficient, as the results of these tests may not be consistent with the final  
form of the product. Requiring tests during intermediary steps is also time consuming and increases operating costs  
for the licensee, which ultimately trickles down to the patient or consumer. Since cannabis products are already  
required to be tested in their final form, which is closest to what the patient or consumer would receive for  
consumption, we recommend final form testing throughout the program.  
(14) When combining more than 1 form of marihuana or marihuana product into a single marihuana  
product, each form of marihuana or marihuana product only the final form of the product must have  
passing safety compliance test results in the statewide monitoring system prior to the creation sale or  
distribution of the new combined product.  
R 420.212. Rule 12. Storage of marihuana product  
Consistent with the above comments regarding R 420.204, we recommend that licensees with any combination of  
marihuana licenses who are operating separate businesses at the same location be permitted to share an on-site  
storage area for all products in final form.  
1) All marihuana products must be stored at a marihuana business in a secured limited access area or restricted  
access area and must be identified and tracked consistently in the statewide monitoring system under these rules.  
a) A licensee that has any combination of marihuana licenses and is operating separate marihuana  
businesses at the same location may share an on-site storage area for all marihuana products in final form,  
if storage is compliant with the provisions of R 420.212 and the following requirements are met:  
i) Licensees have a stacked license pursuant to Rule 4, 420.204; and  
ii) Licensees have common ownership, pursuant to Rule 1, 420.1f; and  
iii) Local jurisdictions permit shared storage.  
Robin Schneider  
MiCIA  
Executive Director  
(517) 974-2265  
101 S. Washington Square #820  
Lansing, MI 48933  
robin@micannabisindustryassociation.org  
micannabisindustryassociation.org  
MICIA COMMENTS ON DRAFT MARIHUANA RULES  
(Rule Sets # 2021-29 LR, 2020-117 LR, 2020-118 LR, 2020-119 LR, 2020-120 LR, 2020-121  
LR, 2020-122 LR, 2020-123 LR, and 2020-124 LR)  
INTRODUCTION  
The Michigan Cannabis Industry Association (MICIA) is the leading voice for Michigan’s  
legal cannabis businesses. The association advocates for a responsible and successful medical and  
adult-use cannabis industry by promoting sensible laws and regulations and industry best practices  
among members. MICIA seeks to create a thriving industry for cannabis businesses in Michigan  
by developing opportunities for industry collaboration and partnerships and sharing industry  
knowledge and best practices among its membership.  
MICIA supports many elements of the proposed rules. But MICIA offers the following  
constructive comments with the hopes of developing policies that promote both the growth of the  
industry and the establishment of good business practices. Moreover, MICIA seeks to ensure that  
the Marijuana Regulatory Agency (MRA) receives adequate stakeholder input prior to the  
adoption of its generally applicable policies, standards, and enforcement procedures consistent  
with the rule of law and the Michigan Administrative Procedures Act, MCL 24.201 et seq. Lastly,  
MICIA notes that, though it has not exhaustively commented on all of the rules, its silence on some  
rules should not be understood as either approval or disapproval of those particular provisions.  
COMMENTS  
I.  
RULE SET 2021-29 LR (DECLARATORY RULINGS, R. 420.821 ET SEQ.)  
Proposed Rules 420.821 through 420.823 create a procedure through which the MRA may  
issue declaratory rulings as to the applicability to an actual state of facts of a statute, rule, final  
order, or decision administered, promulgated, or issued by the agency. The MICIA supports the  
MRA’s efforts to promulgate rules outlining the declaratory rulings process and offers the  
following industry feedback on how those proposed rules may be improved.  
The MRA’s Legal Authority for Declaratory Rulings Derives from the APA  
The MRA asserts that its legal authority for this Proposed Rule Set is conferred by “section  
5 of the Michigan Medical Marihuana Act, 2008 IL 1, MCL 333.26425, section 206 of the medical  
marihuana facilities licensing act, 2016 PA 281, MCL 333.27206, sections 7 and 8 of the Michigan  
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Regulation and Taxation of Marihuana Act, 2018 IL 1, MCL 333.27957 and 333.27958, and  
Executive Reorganization Order No. 2019-2, MCL 333.27001).”  
None of those statutes expressly confer on the MRA the authority to issue declaratory  
rulings or issue rules setting the procedure for same. Rather, Section 63 of the Administrative  
Procedures Act provides the MRA the authority to prescribe the form and procedure for declaratory  
ruling requests, submissions, consideration, and disposition by administrative rule. MCL 24.263.  
Specifically, Section 63 states:  
On request of an interested person, an agency may issue a declaratory ruling as to  
the applicability to an actual state of facts of a statute administered by the agency  
or of a rule or order of the agency. An agency shall prescribe by rule the form for  
such a request and procedure for its submission, consideration and disposition. A  
declaratory ruling is binding on the agency and the person requesting it unless it is  
altered or set aside by any court. An agency may not retroactively change a  
declaratory ruling, but nothing in this subsection prevents an agency from  
prospectively changing a declaratory ruling. A declaratory ruling is subject to  
judicial review in the same manner as an agency final decision or order in a  
contested case.  
As such, the boilerplate “authority” language at the outset of the Proposed Rule should be amended  
to reference Section 63 of the APA.  
The MRA’s Process Timing is Too Long  
Proposed Rule 420.822 affords the MRA 60 days to issue notification to a party seeking a  
declaratory ruling as to whether the MRA will issue a declaratory ruling and, if so, another 90 days  
to issue the ruling “unless the agency notifies the interested person in writing of the need for  
additional time, and the reasons for the additional time.” Consequently, the Proposed Rule would  
provide the MRA 150 days to issue a declaratory ruling unless the MRA decides to take longer for  
whatever written reason.  
The 150-day window with the potential to be extended further is outside of the standard  
time frame for a declaratory ruling and inconsistent with best practices. See, e.g., Mich Admin  
Code, R 324.81(2)(b) (requiring EGLE declaratory ruling to be issue “[w]ithin 60 days of receipt  
of the request” unless additional information is required); MCL 169.215(2) (requiring SOS to issue  
a ruling “within 60 business days after a request . . . is received”); Mich Admin Code, R 400.951  
(requiring MDHHS ruling “within 60 working days”); Mich Admin Code, R 436.1973(2)(f)  
(requiring Liquor Control Commission ruling “within 90 days after the receipt of the initial  
request.”). Therefore, the MICIA requests that the MRA consider shortening these timeframes to  
45 days and 60 days, respectively, and, rather than grant itself the discretion of unlimited extension,  
provide that: “A person requesting a declaratory ruling may waive, in writing, the time limitations  
provided by this section.” Timing is often a critical component of regulatory certainty and a more  
expedited process similar to those employed by other state agencies would better accomplish that  
objective.  
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There is a Lack of Public Transparency and Industry Participation  
The declaratory ruling process outlined by the Proposed Rules lacks transparency and  
precludes industry participation. For example, Proposed Rule 420.822(5) provides, in part, that:  
Before the issuance of the declaratory ruling, the agency, in its discretion, may  
choose to do 1 or more of the following: (a) Seek consultation, comments, or advice  
from legal counsel, experts within or outside the agency, local, state, or federal  
governmental agencies, or any other source. (b) Request information or  
clarification from other interested parties. (c) Advise the person requesting the  
ruling that further clarification of the facts must be provided, or that the agency  
requires additional time to conduct a review.  
But the Proposed Rule neither provides for public notification of a declaratory ruling request nor  
for participation of interested parties in a declaratory ruling request.  
Here, as well, the best practice includes the opportunity for interested persons other than  
the requestor to participate. See, e.g., MCL 169.215(2) (allowing interested members of the public  
to comment); Mich Admin Code, R 432.1715(2)(b) (considering “information from other  
interested persons”). Accordingly, the MICIA asks that the MRA consider amending the Proposed  
Rule to require the MRA to timely make declaratory ruling requests and decisions open to public  
view and to further allow for interested persons to submit comments regarding declaratory ruling  
requests. To accomplish that objective, the MRA could amend the Proposed Rule 420.822(5) to  
provide that:  
A request for a declaratory ruling that is submitted to the agency will be made  
available on its website for public inspection within 48 hours after its receipt. An  
interested person may submit written comments regarding the request to the agency  
within 10 business days after the date the request is made available to the public.  
The agency’s notification to a party seeking a declaratory ruling as to whether the  
MRA will issue a declaratory ruling will be made available on its website for public  
inspection at the time it is issued. If the agency’s notification provides that the  
agency will issue a declaratory ruling, an interested person may submit written  
comments regarding the subject matter of the declaratory ruling request to the  
agency within 10 business days after the notification is made available to the public.  
The MICIA further asks that the agency amend the Proposed Rule to provide that “The agency  
will make available to the public an annual summary of the declaratory rulings issued under this  
rule.” This added transparency and participation will aid the MRA in its mission and lead to more  
well-informed decision-making. An assessible compendium of declaratory rulings will also  
facilitate the compliance of licensees with applicable laws.  
The Substantive Scope of Review is Too Limited  
Proposed Rule 420.822(9) provides that “[r]equests regarding enforcement issues are not  
a proper subject for a declaratory ruling.” The MICIA asks that the MRA consider deleting or  
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altering this Proposed Rule for reason that it unnecessarily narrows the scope of subjects on which  
the agency may provide clarity. By its very nature, as a regulatory agency charged with enforcing  
the law, a wide swath of the issues that come before the MRA could properly be characterized as  
“enforcement issues.” The intent of an agency declaratory ruling, like a declaratory judgment  
action within the judiciary, is to provide clarity to affected persons “in order to guide or direct  
future conduct . . . .” Cf. UAW v Central Michigan University Trustees, 295 Mich App 486, 495;  
815 NW2d 132 (2012). Nowhere is such guidance more crucial than with respect to controversial  
matters, where enforcement may become an issue. Further, by limiting the scope of matters that  
may be addressed by declaratory ruling in this manner, the Proposed rule is far narrower than the  
controlling statute. MCL 24.263. As an alternative, MRA may consider rewriting Proposed Rule  
420.822(9) to clarify only that a matter that has already been referred for enforcement cannot be  
submitted by that licensee for a declaratory ruling.  
There is Judicial Review of Declaratory Rulings  
Proposed Rule 420.822(8) provides that “[a] denial or adverse decision of a declaratory  
ruling does not entitle a person to a contested case hearing.” This statement may have the  
inadvertent effect of chilling a licensee’s exercise of the right to appeal MRA’s decision on a  
declaratory ruling. For purposes of clarity, the MRA should consider adding additional language  
acknowledging that, under Section 63 of the Administrative Procedures Act, “[a] declaratory  
ruling is subject to judicial review in the same manner as an agency final decision or order in a  
contested case.” The MRA should further provide that its decision not to issue a declaratory ruling  
is subject to judicial review. See Human Rights Party v. Michigan Corrections Commission, 76  
Mich App 204; 256 NW2d 439 (1977) (“[W]e find that a refusal to issue a declaratory ruling under  
M.C.L.A. s 24.263 is subject to judicial review as an agency final decision or order in a contested  
case”).  
II.  
RULE SET 2020-117 LR (DISCIPLINARY PROCEEDINGS, R. 420.801 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.801 through Rule 420.808 to  
clarify and/or strengthen the MRA’s disciplinary processes and notification/reporting  
requirements. The Proposed Rule Set also seeks to add a new Rule 420.808a which sets forth the  
grounds on which, and processes by which, the MRA may exclude a person from employment or  
participation in a marihuana business. The MICIA supports the MRA’s efforts to clarify and/or  
strengthen its disciplinary processes and further agrees with the MRA that clear and transparent  
disciplinary rules facilitate regulatory compliance and the protection of the public health and  
safety. The MICIA does, however, highlight that these proposed changes will increase licensee  
costs and liability but a detailed cost-benefit analysis has not been provided as required by MCL  
24.245(3)(h), (3)(k), (3)(l), (3)(n), (3)(p), (3)(q)–(3)(t), & (3)(bb). The MICIA further offers  
industry feedback on how those Proposed Rules may be improved.  
Grounds for Exclusion of Employment or Participation in a Marihuana Business  
Proposed Rule 420.808a(1)(a)–(1)(f) sets for the grounds on which the MRA may, in its  
discretion and pursuant to a contested case hearing if requested, exclude a person from  
employment at, or participation in, a marihuana business. The MICIA generally supports the stated  
grounds for exclusion with the exception that a previous finding of ineligibility for licensure, as  
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stated in Rule 420.808a(1)(c), alone is not a proper basis for exclusion of employment where the  
standard for holding a license is and should be higher than the standard for general employment.  
Contents of Notice of Exclusion  
Proposed Rule 420.808a(2) sets forth the contents of a notice of exclusion filed by the  
agency including “(a) The identity of the subject. (b) The nature and scope of the circumstances  
or reasons that the person should be placed on the exclusion list. (c) A recommendation as to  
whether the exclusion or ejection is permanent.” The MICIA supports these general contents for a  
notice of exclusion but submits that the MRA should also provide to the charged person “a detailed  
factual statement of the alleged grounds for exclusion accompanied by any supporting  
documentation or witness statements.”  
Proposed Rule 420.808a(3) states that “[t]he notice shall also inform the person of the  
availability of a hearing in compliance with R 420.705.” In light of Proposed Rule Set 2020-118  
LR, the MICIA queries whether the proper citation here is R. 420.704a which will address the  
hearing process for notices of exclusion.  
Service of Notice of Exclusion  
Proposed Rule 420.808a(2) provides that the MRA “shall file a notice of exclusion.” It is  
unclear what the term “file” in this context means, and the MICIA submits that the notice of  
exclusion should be personally served on both the person being excluded and, if applicable, the  
licensee employing that person.  
Proposed Rule 420.808a(6) provides that “[t]he exclusion list must be a public record made  
available to licensees by the agency and must include information deemed necessary by the agency  
to facilitate identification of the person placed on the exclusion list.” The MICIA submits that the  
phrase “made available to licensees” lacks detail and that, in light of the resulting disciplinary  
proceedings that result from employing a person on the exclusion list, the exclusion list should be  
periodically mailed to licensees, included into the statewide monitoring system, and/or posted on  
the agency’s website. Making this requested change would additionally add clarity to the phrase  
“knows or reasonably should know is on the exclusion list” in Proposed Rules 420.808a(8),(9).  
Due-Process Concerns Regarding Exclusion List  
Proposed Rule 420.808a(4) states that “[i]f a hearing is not requested, then the subject’s  
name or excluded person’s name must remain on the exclusion list.” Proposed Rule 420.808a(7)  
further clarifies the MRA’s intention and provides that “[a] person who is placed on the exclusion  
list or served with a notice of exclusion is prohibited from being employed by or participating in a  
marihuana business until a determination by the agency or a court to the contrary.”  
The MICIA acknowledges that there may, at times, exist unique circumstances where a  
person’s continued involvement in a marihuana business presents an immediate threat to the public  
health and safety and, in those circumstances, immediate placement on the exclusion list may be  
warranted. However, aside from an immediate threat to public health and safety, the MRA should  
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provide basic a higher level of due process to the charged person and that person’s placement on  
the exclusion list should occur until after that person has been afforded a hearing pursuant to R.  
420.704a.  
Notification and Reporting – Material Changes  
Proposed Rule 420.802(3) requires reporting of proposed material changes to a marihuana  
business and delineates several examples of what constitute a proposed material change. In an  
apparent effort to further clarify what constitutes a “proposed material change,” the agency now  
provides that “[a] proposed material change is any action that would result in alterations or changes  
being made to the marihuana business to effectuate the desired outcome of a material change.”  
The MICIA submits that this clarifying language is unnecessary and overbroad and requests that  
it be removed or narrowed.  
Notification and Reporting – Third-Party Violations  
Proposed Rule 420.802(4)(c) requires reporting, within 1 business day, of any “[a]ction by  
another party in actual or alleged violation of the acts or these rules.” Proposed Rule 420.801(e)  
defines “[a]nother party” or “other party” as “an individual or company with which a licensee  
contracts to use the individual or company’s intellectual property or to utilize management or other  
services provided by the individual or company.” The Proposed Rule, which is accompanied by  
disciplinary action for failure to report, places licensees in an quasi-enforcement role that is  
unreasonably impracticable and could potentially subject licensees to substantial costs and liability  
including, but not limited to, third-party litigation for defamation and other claims. The MICIA  
requests that this aspect of the Proposed Rule be removed or narrowed.  
Notification and Reporting – Licensing and Management Agreements  
Proposed Rule 420.802(7) provides that “[t]he licensee shall notify the agency within 10  
business days of terminating a licensing, management, or other agreement.” Proposed Rule  
420.801(i) defines “[l]icensing agreement” as “any understanding or contract concerning the  
licensing of intellectual property between a licensee and another party.” And, Proposed Rule  
420.801(j) defines “[m]anagement or other agreement” as “any understanding or contract between  
a licensee and another party for the provision of management or other services that would allow  
the other party to exercise control over or participate in the management of the licensee or to  
receive more than 10% of the gross or net profit from the licensee during any full or partial calendar  
or fiscal year.”  
The MICIA opposes these notification requirements and submits that the agency appears  
to lack statutory and/or rulemaking authority for this expansion of the notification and reporting  
requirements, which strictly construed are unreasonably impracticable. The MRA has not  
articulated a rational basis on which it may justify its exercise of regulatory authority over  
“licensing agreements” of intellectual property. Moreover, the term “Management or other  
agreement” is overbroad and cuts against the agency’s proposed definition of “employee” which  
excludes trade or professional services. At a minimum, if the MRA persists with its notification  
requirements with respect to management agreements, MICIA asks that the agency consider  
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revising the definition of “management agreement” to mean “any contract between a licensee and  
another party for the provision of management services that allows the other party to exercise  
control over or participate in the management of the licensee.” Such a definition would more fairly  
mirror the statutory term “managerial employee” under MCL 333.27102(c).  
Definition of Employee  
Proposed Rule 420.801(h) defines “Employee” as “a person performing work or service  
for compensation” but “does not include a person providing trade or professional services who is  
not normally engaged in the operation of a marihuana business.” The MICIA supports this  
common-sense clarification.  
III.  
RULE SET 2020-118 LR (HEARINGS, R. 420.701 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.701 through Rule 420.706 to  
clarify and/or strengthen the MRA’s hearing processes and to add a new Rule 420.704a which sets  
forth a hearing process by which a person may challenge the agency’s decision to exclude the  
person from employment or participation in a marihuana business. The MICIA supports, without  
exception, the MRA’s Proposed Rules for hearings.  
IV.  
RULE SET 2021-10 LR (EMPLOYEES, R. 420.601 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.601 through Rule 420.602 to  
strengthen the MRA’s requirements for, inter alia, employee training manuals and operational  
plans. The Proposed Rule Set also seeks to add a new Rule 420.602a that, inter alia, restricts  
employees of a cultivator, producer, marihuana sales location, or microbusiness from also being  
employed by a laboratory or transporter. The MICIA generally supports this Proposed Rules Set  
and agrees that the changes will facilitate consistency in the hiring and employment practices of  
marihuana businesses. The MICIA, however, disagrees with the agency’s assertion that these  
changes will not increase compliance costs and submits that the agency’s cost-benefit analysis is  
deficient. See MCL 24.245(3)(h), (3)(k), (3)(l), (3)(n), (3)(p), (3)(q)–(3)(t), & (3)(bb). In  
particular, MCL 24.245(3)(bb) requires that the MRA identify “the sources the agency relied on  
in compiling the regulatory impact statement, including the methodology used in determining the  
existence and extent of the impact of a proposed rule and a cost-benefit analysis of the proposed  
rule.” This has not been done.  
V.  
RULE SET 2020-119 LR (MARIHUANA-INFUSED PRODUCTS AND EDIBLE  
MARIHUANA PRODUCTS, R. 420.401 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.401 through Rule 420.403 to  
continue to refine and make consistent requirements for infused and edible marihuana product to  
ensure safe handling, production, and labeling. The Rule Set also seeks to update standards  
referenced for the handling and production of these products. The MICIA’s supporting and  
opposing comments are below.  
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Product Labeling Requirements  
Proposed Rule 420.403(2) provides that “[m]arihuana-infused products processed under  
these rules must be homogenous” and that “[t]he allowable variation for weight and THC and CBD  
concentrations between the actual results and the intended serving is to be + or – 15%.” The MICIA  
submits that the labeling, homogeneity, and testing variance percentages should be consistent.  
Proposed Rule 420.403(7)(a) requires that producers label all marihuana-infused products  
with not only the name of the product but also that “[t]he name of the product must be an  
appropriately descriptive phrase that accurately describes the basic nature of the product.” The  
MICIA supports the agency’s labeling requirements but takes issue with the language  
“appropriately descriptive” for reason that it is vague. The MICIA recommends that the sentence  
read: “[t]he name of the product must accurately describe the basic nature of the product.”  
Proposed Rule 420.403(7)(b) requires that producers label all marihuana-infused products  
with not only the ingredients of the product but also the “component ingredients.” MICIA  
highlights that the term “component ingredients” is undefined and finds the term to be somewhat  
vague in application. The MICIA suggests that the agency consider striking the term and replacing  
it with the term “excipients.”  
Proposed Rule 420.403(7)(e) requires that producers label all marihuana-infused products  
with “[t]he date of the marihuana product was produced.” The MICIA supports this common-sense  
requirement.  
Proposed Rule 420.403(9)(b)-(e) clarifies product and labelling requirements to ensure that  
edible marihuana products are not confused with commercially available food products or  
attractive to children. The MICIA supports these clarifications but requests that the agency develop  
additional guidance and/or establish a process for issuing timely labelling approvals.  
Proposed Rule 420.403(10)(a) clarifies how producers are to set expiration dates for edible  
marihuana products and further provides that on the label that the product must be destroyed after  
the expiration date. The MICIA supports these changes but submits that the term “marihuana  
product” in this section should read “edible marihuana product.”  
Inflexible Product Storage Temperature Mandate  
Proposed Rule 420.403(8)(a) requires that producers of edible marihuana products comply  
with “Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative  
Controls for Human Food, 21 CFR part 117” but that “[a]ny potentially hazardous ingredients used  
to process shelf-stable edible marihuana products must be stored at 40 degrees Fahrenheit, 4.4  
degrees Celsius, or below.”  
The MICIA supports application of the federal reference but asserts that the agency’s  
specific storage temperature requirement for hazardous ingredients should be stricken because it  
is not appropriate in all contexts and not necessarily consistent with the federal reference. See 21  
CFR § 117.80(5). Specifically, the specific storage temperature requirement in R. 420.403(8)(a)  
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requires what is defined in 21 CFR § 117.135 as a “Preventive Control,” without offering a licensee  
the opportunity to conduct a proper Hazard Analysis according to 21 CFR § 117.130 to see if a  
Preventive Control is warranted. Further, the specific storage temperature requirement in R.  
420.403(8)(a) applies this Preventive Control to an undefined sub-category of ingredients  
(“potentially hazardous ingredients used to process shelf-stable edible marijuana products”)  
without identifying the critical product attribute that is affected by storage temperature.  
Recordkeeping  
Proposed Rule 420.403(8)(b) requires that producers of edible marihuana products keep  
formulation records which, inter alia, include “test results for all ingredients used.” The MICIA  
suggests that because testing is not required for non-active/excipient ingredients, the Proposed  
Rule is overbroad and should be appropriately narrowed.  
VI.  
RULE SET 2020-120 LR (LICENSING, R. 420.101 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.101 through Rule 420.11 to  
prohibit and authorize the purchase of caregiver product depending on licensee type; prohibit  
certain intra-license product transfers; authorize the provision of marihuana testing for non-  
licensee adults; and maintain laboratory accreditation exceptions. The Proposed Rule Set also adds  
a new Rule 420.105a which regulates Class A marihuana microbusiness licenses and a new Rule  
420.112a which regulates licensing and management agreements. The MICIA’s comments are  
below.  
Caregiver Product Transfers  
Proposed Rule 420.102(12) provides that “[a] marihuana grower [licensed under MRTMA]  
may not purchase or accept the transfer of a mature plant from an individual, registered qualifying  
patient, or registered primary caregiver.” Proposed Rule 420.105(8) contains the same prohibition  
with respect to microbusinesses licensed under MRTMA. Proposed Rule 420.108(10) contains the  
same prohibition with respect to growers licensed under the MMFLA.  
The MICIA does not take a position on whether grower licensees should be permitted to  
purchase or accept mature plants from registered qualifying patients or caregivers but submits that  
the various grower license types should be treated uniformly.  
Intra-license Transfers  
Proposed Rules 420.103(3) and 420.104(4), delete language authorizing marihuana  
processors and retailers, respectively, with two or more licenses at different establishments from  
transferring inventory between licensed establishments owned by the licensee.  
The MICIA opposes this change for reason that such transfers between licensed locations  
promote flexibility and help prevent product waste. Moreover, these proposed changes will  
increase licensee costs and a detailed cost benefit analysis has not been provided.  
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Class A Microbusinesses  
Proposed Rule 420.105a generally sets forth the rights and obligations of a Class A  
marihuana microbusiness license including, inter alia, the cultivation of not more than 300 mature  
plants, packaging of marihuana, purchasing of marihuana concentrate and infused products, sale  
of marihuana and marihuana products, and the purchase of seeds, tissue cultures, clones or  
marijuana plants from licensed growers.  
The MICIA supports these aspects of the Proposed Rules. However, Proposed Rule  
420.105a(8) specifically authorizes such license holders to “purchase or accept a mature plant from  
an individual, registered qualifying patient, or registered primary caregiver.” The MICIA does not  
take a position on whether grower licensees should be permitted to purchase or accept mature  
plants from registered qualifying patients or caregivers but submits that the various grower license  
types should be treated uniformly.  
Adult Marihuana Testing Services  
Proposed Rule 420.107(1)(c) provides that a marihuana safety compliance facility license  
authorizes the marihuana safety compliance facility to “Receive marihuana from and test  
marihuana for an individual 21 years of age or older, if the marihuana was produced by the  
individual and not purchased or obtained from a licensed marihuana business. The marihuana  
safety compliance facility shall keep documentation for proof of age.”  
The MICIA asks that the phrase “if the marihuana was produced by the individual and not  
purchased or obtained from a licensed marihuana business” be stricken. The MICIA’s position is  
that an adult in legal possession of marijuana should not be limited with respect to testing services  
based upon the legal source of the marijuana. Any adult should have access to product safety  
testing if they are concerned about the product for any reason, without limitation. When a sample  
is presented to a lab for testing that was obtained from a licensed business, the chain of custody  
will be broken on the sample and results cannot be used to represent batch quality. This makes the  
proposed limiting language unnecessary. Moreover, if a sample is presented to a lab for testing by  
an adult, the lab has no way of definitively verifying its source, and neither does the MRA. This  
renders the rule practically unenforceable.  
Laboratory Accreditation Exceptions are no Longer Needed  
Proposed Rule 420.107(2)(c) and 420.112(2) provide that “[a] safety compliance facility  
must be accredited by an entity approved by the agency by 1 year after the date the license is issued  
or have previously provided drug testing services to this state or this state’s court system and be a  
vendor in good standing in regard to those services” that “the agency may grant a variance from  
this requirement upon a finding that the variance is necessary to protect and preserve the public  
health, safety, or welfare.”  
The MICIA submits that these provisions should be amended to read only that “[a]  
marijuana safety compliance facility must be accredited by an entity approved by the agency prior  
to issuance of a state operating license.” Accreditation protects public health and safety and there  
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is no longer any need for post-licensure accreditation nor the issuance of variances for  
accreditation. When the MRA was established in 2018, only four labs were operating in the state,  
and thus good cause existed for these exceptions to accreditation. Now, almost three years later,  
with fifteen licensed and operating testing laboratories, there is no need for the lower bar.  
Accreditation ensures that a laboratory has a functional quality system, complete with validated  
test methods, to ensure the accuracy of published test results.  
Plant Count for MMFLA Grower  
Proposed Rule 420.108(2) provides that “[f]or the purposes of this rule, a marihuana plant  
that meets the definition of a plant in the MMFLA is included in the plant count in subrule (1) of  
this rule.” The MMFLA, however, defines the term “marihuana plant” and “plant” and it is unclear  
to which term the agency refers in this language. The MICIA submits that the term “marihuana  
plant” is the correct term.  
Regulation of Licensing and Management Agreements  
Proposed Rule 420.112a creates a new regulatory regime whereby the MRA seeks to  
require all “licensing agreements”1 and “management agreements”2 of a marihuana licensee to be  
submitted to the MRA for review and approval prior to performance thereunder and further  
requires those agreements to specify a litany of detailed contractual terms relating to payment,  
services, performance, and merger. The Proposed Rule 420.112a(4) further delineates a non-  
exclusive set of contract terms that would render the non-licensed party subject to the agency’s  
application requirements including: “[a]ny term or condition that would allow the other party to  
receive more than 10% of the gross or net profit from the licensee during any full or partial calendar  
or fiscal year” and “[a]ny term or condition that would require the licensee to name the other party  
as a named insured on any insurance policy required to be maintained as a condition of a marihuana  
license.”  
The MICIA opposes these new filing and approval requirements and submits that the  
agency appears to lack statutory and/or rulemaking authority for this expansion of government  
regulation, which strictly construed is unreasonably impracticable, and which may retroactively  
impair contracts. These proposed changes will also increase licensee costs and a detailed cost  
benefit analysis has not been provided. The MRA has not articulated a rational basis on which it  
1
Proposed Rule 420.101(l) defines “licensing agreement” as “any understanding or contract  
concerning the licensing of intellectual property between a licensee and another party.” Proposed  
Rule 420.101(k) defines “intellectual property” as “all original data, findings, or other products of  
the mind or intellect commonly associated with claims, interests, and rights that are protected  
under trade secret, patent, trademark, copyright, or unfair competition law and includes brands or  
recipes.”  
2 Proposed Rule 420.101(m) defines “management or other agreement” as “any understanding or  
contract between a licensee and another party for the provision of management or other services  
that would allow the other party to exercise control over or participate in the management of the  
licensee or to receive more than 10% of the gross or net profit from the licensee during any full or  
partial calendar or fiscal year.”  
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may justify its exercise of regulatory authority over “licensing agreements” of intellectual  
property. Moreover, the term “Management or other agreement” is overbroad and cuts against the  
agency’s proposed definition of “employee” which excludes trade or professional services. At a  
minimum, if the MRA persists with its filing and approval requirements with respect to  
management agreements, MICIA asks that the agency consider revising the definition of  
“management agreement” to mean “any contract between a licensee and another party for the  
provision of management services that allows the other party to exercise control over or participate  
in the management of the licensee.” Such a definition, albeit broader than the statute, would more  
fairly mirror the statutory term “managerial employee” under MCL 333.27102(c).  
VII. RULE SET 2020-121 LR (LICENSING, R. 420.1 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.1 through Rule 420.27 to,  
inter alia, provide for administrative withdrawals of license applications; expand applicant  
disclosure requirements; disclaim vested rights in licenses; lower and streamline renewal  
application fees; and continue to utilize moral character in licensure determination. The Proposed  
Rule Set also adds a new Rule 420.27a also creates a new class of regulated marihuana educational  
research licenses. The MICIA’s comments are below.  
Administrative Application Withdrawal  
Proposed Rules 420.3(3) and (6) authorize the MRA to withdraw applications for  
prequalification and licensure and force applicants to reapply in instances where an application  
has been pending for over one year. Proposed Rule 420.3(7) further provides that “[t]he agency  
may administratively withdraw an amendment to any application or marihuana license if the  
applicant or licensee fails to respond or submit documentation to cure all deficiencies within 30  
days after notice of the deficiency.”  
The MICIA opposes these changes for reason that they are patently unfair. Applicants  
should not be forced to reapply and/or pay additional licensure fees where, through no fault of  
their own, the MRA has failed to adjudicate a license application in under one year. Moreover, 60  
days would be a more reasonable timeframe in which applicants may cure deficiencies.  
Expanded Application Disclosure Requirements  
Proposed Rule 420.4(3) deletes language providing that “[e]ach applicant shall disclose all  
shareholders holding a direct or indirect interest of greater than 5%, officers, and directors in the  
proposed marihuana establishment” and adds language providing that “[e]ach applicant shall  
disclose the identity of every person having a 2.5% or greater ownership interest in the applicant  
with respect to which the license is sought. (a) If the disclosed entity is a trust, the applicant shall  
disclose the names and addresses of the beneficiaries. (b) If the disclosed entity is a privately held  
corporation, the names and addresses of all shareholders, officers, and directors. (c) If the disclosed  
entity is a publicly held corporation, the names and addresses of all shareholders holding a direct  
or indirect interest of greater than 5%, officers, and directors. (d) If the disclosed entity is a  
partnership or limited liability partnership, the names and addresses of all partners. (e) If the  
disclosed entity is a limited partnership or limited liability limited partnership, the names of all  
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partners, both general and limited. (f) If the disclosed entity is a limited liability company, the  
names and addresses of all members and managers.”  
The MICIA opposes this more stringent disclosure requirement for a de minimis ownership  
interest. It is unnecessary, will jeopardize licensee funding, is unreasonably impracticable, and  
may retroactively impair contracts. The MICIA further submits that the agency appears to lack  
statutory and/or rulemaking authority for this expansion of the disclosure requirement beyond the  
bounds of MCL 333.27102. These proposed changes will also increase licensee costs and a  
detailed cost benefit analysis has not been provided. The MRA has also failed to articulate a  
rational basis on which it may justify its increased disclosure requirements.  
Vested Rights in Marihuana License  
Proposed Rule 420.6(6) asserts that “[a] marihuana license is a revocable privilege granted  
by the agency and is not a property right” and that “[g]ranting a marihuana license does not create  
or vest any right, title, franchise, or other property interest.”  
The MICIA acknowledges that this language tracks and then expands on the language  
provided that MCL 333.27409. Nonetheless, the MICIA opposes this language for the reason that  
it may be legally incorrect where a license has been issued, substantial investments made, and state  
law only authorizes license revocation for cause. Regardless of whether the MRA’s assertions are  
legally accurate, it is patently unfair to deny the existence of a property right where substantial  
investments are made based on licensure and such licenses may only be revoked for good causes  
and pursuant to due process.  
Application Fees  
Proposed Rule 420.7 lowers initial licensure and renewal fees and abandons the process of  
calculating renewal fees based on gross weight transferred for growers, gross retail sales for  
retailers and microbusinesses, net weight transported for transporters, and number of tests  
completed for laboratories. The MICIA supports these common-sense changes.  
Moral Character  
Proposed Rule 420.13(1)(a) retains language for requiring license renewals under the  
MMFLA to include “information regarding the identification, integrity, moral character,  
reputation, relevant business experience, ability, probity, financial experience, and responsibility  
of the licensee and each person required to be qualified for renewal of the license under the  
MMFLA.” The MICIA opposes the inclusion of such subjective attributes of the licensee such as  
moral character and further notes Senate Bill 619, if enacted, would remove language allowing the  
MRA to deny a license to any applicant on account of their “moral character” or if they have any  
previous marijuana-related offenses. License denials based on hyper-subjective criteria create the  
appearance of arbitrary application.  
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Marihuana Educational Research License  
Proposed Rule 420.21(1)(e) adds marihuana educational research licenses to the list of  
special licenses which may be issued by the agency. And, Proposed Rule 420.27a sets forth the  
rights and obligations of a person holding a marihuana educational research license. The MICIA  
supports these changes.  
Excess Grower License Fees  
Proposed Rule 420.23(11) provides that “[a]n applicant for an excess grower license is not  
required to pay the application fee under these rules.”  
The MICIA highlights that this provision benefits the largest growers and that many of the  
growers who are not capable of achieving this license type view this fee waiver as inequitable. The  
MICIA submits that the various grower license types should be treated uniformly.  
VIII. RULE SET 2020-123 LR (MARIHUANA SALE OR TRANSFER, R. 420.501 ET  
SEQ)  
This Proposed Rule Set seeks to amend portions of Rule 420.501 through Rule 420.510 to,  
inter alia, address the transfer and/or destruction of expired products; product warning labels and  
advisory pamphlet distribution; and employee limits for internal and trade samples. The Proposed  
Rule Set also adds a new Rule 420.503a authorizing the transfer of immature plant batches without  
utilization of a transporter. The MICIA’s comments are below.  
Definition of Final Form  
Proposed Rule 420.501(g) defines “final form” as “the form a marihuana product is in  
when it is available for sale by a marihuana sales location. For marihuana products intended for  
inhalation, final form means the marihuana concentrate in an e-cigarette or a vaping device.”  
The MICIA requests that the agency clarify that prerolls, deli-style bulk flower packaged  
by a retailer, and batches of edibles divided into multiple packages, are not required to undergo an  
additional level of testing. See also Proposed Rule 420.504(1)(i).  
Destruction of Expired Products  
Proposed Rule 420.502(4) provides that “[a] marihuana business shall not sell or a [SIC]  
transfer marihuana product after the printed expiration date on the package. An expired marihuana  
product must be destroyed.” Proposed Rule 420.502(6) provides that “[a] marihuana business shall  
destroy all product required to be destroyed for any reason within 90 calendar days of when the  
marihuana business became aware of the fact that the product must be destroyed.”  
The MICIA supports these proposed changes for public safety purposes and requests that  
the agency clarify that expired product may be transferred from a retailer to a processor for  
destruction. The MICIA also identifies that this requirement will increase costs and submits that  
the agency’s cost-benefit analysis is deficient.  
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Transfer of Immature Plant Batches  
Proposed Rule 420.503a authorizes approved cultivators to sell or transfer immature plant  
batches to a marihuana sales location without using a marihuana transporter and without  
conducting testing. The MICIA supports these common-sense regulations.  
Labeling Warnings  
Proposed Rule 420.504(1)(v) creates the following labelling requirement: “In clearly  
legible type and surrounded by a continuous heavy line: “WARNING: USE BY PREGNANT OR  
BREASTFEEDING WOMEN, OR BY WOMEN PLANNING TO BECOME PREGNANT,  
MAY RESULT IN FETAL INJURY, PRETERM BIRTH, LOW BIRTH WEIGHT, OR  
DEVELOPMENTAL PROBLEMS FOR THE CHILD.”  
The MICIA supports this labelling requirement which is expressly required by MCL  
333.27206. The MICIA nevertheless asserts that this requirement will substantially increase  
labeling costs and submits that the agency’s cost-benefit analysis is incorrect in asserting  
otherwise.  
Advisory Pamphlet  
Proposed Rule 420.504(4) creates the following requirement: “Before a marihuana product  
is sold or transferred by a marihuana sales location, the sales location shall make available to each  
customer a pamphlet measuring at least 3.5 inches by 5 inches, that includes safety information  
related to marihuana use by minors and the poison control hotline number. The pamphlet must  
substantially conform to the design published on the agency’s website.”  
The MICIA supports this advisory requirement which is expressly required by MCL  
333.27206. The MICIA nevertheless asserts that this requirement will substantially increase  
labeling costs and submits that the agency’s cost-benefit analysis is incorrect in asserting  
otherwise.  
Employee Transfer Limits for Internal and Trade Samples  
Proposed Rule 420.508(8) provides that “[a] producer or marihuana sales location is  
limited to transferring a total of 1 ounce of marihuana, a total of 2 grams of marihuana concentrate,  
and marihuana infused products with a total THC content of 2000 mgs of internal product samples  
to each of its employees in a 30-day period.” Similarly, Proposed Rules 420.509(6) provides that  
“[a] marihuana sales location, marihuana microbusiness, and class A marihuana microbusiness are  
limited to transferring a total of 1 ounce of marihuana, a total of 2 grams of marihuana concentrate,  
and marihuana infused products with a total THC content of 2000 mgs of internal product samples  
to each of its employees in a 30-day period.”  
The MICIA supports these additional clarifications regarding internal and trade sample  
transfers.  
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IX.  
RULE SET 2020-122 LR (OPERATIONS, R. 420.201 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.201 through Rule 420.214 to,  
inter alia, require maintenance of certain financial records and provide for the regulation of natural  
and synthetic cannabinoid sourcing. The Proposed Rule Set also adds new Rules 420.206a  
(standard operating plan), 420.207a (contactless tracing), 420.214a (internal analytical testing),  
420.214b (adverse reactions), and 420.214c (product returns). The MICIA’s comments are below.  
Financial Records  
Proposed Rule 420.204(2) adds new language stating the following: “(i) A licensee shall  
maintain accurate and comprehensive financial records for each license that clearly documents the  
licensee’s income and expenses. Applicable supporting source documentation must be maintained,  
including, but not limited to, all of the following: (A) Cash logs. (B) Sales records. (C) Purchase  
of inventory. (D) Invoices. (E) Receipts. (F) Deposit slips. (G) Cancelled checks. (H) Employee  
compensation records. (I) Tax records. (ii) Bulk financial deposits or transactions must be traceable  
to the individual transactions that comprise the bulk deposit or transaction.”  
These new more granular financial recordkeeping requirements will increase costs and the  
MRA has failed to engage in any cost-benefit analysis related to the impact of these requirement  
on the industry. MCL 24.245(3).  
Cannabinoid Sourcing and Synthetically-Derived Cannabinoids  
Proposed Rule 420.206(13) adds new language providing that “[a]ll ingredients containing  
cannabinoids, whether naturally occurring or synthetically derived, that are added to marihuana or  
marihuana products must be from a source licensed to grow, handle, and produce cannabinoids  
under a license issued by a governmental authority and entered into the statewide monitoring  
system.”  
The MICIA submits that the use of the term “cannabinoids” in the Proposed Rule may be  
overbroad and may encompass any and all industrial hemp products. MCL 333.7106(2); MCL  
286.842(i). The MICIA requests that the MRA add language providing that “a source authorized  
to grow, handle, and produce cannabinoids pursuant to an Industrial Hemp Pilot Program created  
by state statute or regulation” is also acceptable. The MICIA further cautions against the blanket  
authorization of synthetic cannabinoids and synthetic processing where certain synthetic  
cannabinoids such as “K2” and “Spice” are extremely dangerous to public health and safety and  
synthetic production involves a substantial risk of product adulteration by toxic reagents and/or  
byproducts. The MICIA believes that this rule should be revised to explicitly ban all fully or semi-  
synthetic cannabinoids from the Michigan marijuana industry, except those produced incidentally  
by otherwise non-synthetic processing steps that have been approved by the agency.  
Testing for Product Combination  
Proposed Rule 420.206(14) adds new language providing that “[w]hen combining more  
than 1 form of marihuana or marihuana product into a single marihuana product, each form of  
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marihuana or marihuana product must have passing safety compliance test results in the statewide  
monitoring system prior to the creation of the new combined product.”  
The MICIA flatly opposes this new and non-sensical requirement as both ultra vires and  
unreasonably impractical. There is no added health or safety benefit gained by testing the same  
product three different times; only three separate testing fees and three separate samples being  
destroyed from each batch. These new testing requirements will substantially increase costs and  
the MRA has failed to engage in any cost-benefit analysis related to the impact of these  
requirement on the industry. MCL 24.245(3).  
Standard Operating Plan  
Proposed Rule 420.206a adds new language providing that “[a] marihuana business must  
have up-to-date written standard operating procedures on site at all times . . . [which] must detail  
the marihuana business operations and activities necessary for the marihuana business to comply  
with the acts and these rules [and] . . . comply with any guidance issued by the agency.”  
While not opposed to standard operating plans, which are beneficial to licensees, the  
MICIA opposes government mandates (and associated regulatory enforcement) of such a broad  
requirement for licensees to have “up-to-date” and “written” procedures that “detail” compliance  
with every single present or future statutory, regulatory, or even informal guidance requirement of  
the MRA. That a mandatory SOP detail compliance with informal guidance is plainly at odds with  
the APA and this Proposed Rule, as written, is unreasonably impractical. Moreover, this new  
requirement will substantially and continually increase costs and the MRA has failed to engage in  
any cost-benefit analysis related to the impact of these requirement on the industry. MCL  
24.245(3); MCL 243.203(7) (defining a “guideline” as “an agency statement or declaration of  
policy that the agency intends to follow, that does not have the force or effect of law,  
and that binds the agency but does not bind any other person”).  
Contactless and Limited Contact Transactions  
Proposed Rule 420.207a adds new language authorizing and regulating the process for  
contactless and limited contact transactions (including online orders) “unless prohibited by an  
ordinance adopted by the municipality where the marihuana sales location is located.” Such  
transactions are authorized during normal business hours provided that “the designated area for  
contactless or limited contact transactions [is] identified in the marihuana business location plan,”  
the “marihuana sales location [has] a written standard operating procedure in place,” the  
“marihuana sales location using a designated area for contactless or limited contact transactions  
[has] in place an anti-theft policy, procedure, or automatic capability,” the “designated area for  
contactless or limited contact transactions [complies] with R 420.209,” the “contactless and limited  
contact transaction [complies] with R 420.505 and R 420.506,” and the “[m]arihuana being  
transferred during a contactless or limited contact transaction [is] in an opaque bag and the contents  
[are] not be visible to the general public upon pick up.”  
The MICIA supports this very necessary Proposed Rule with the exception that any  
municipal prohibition on contactless transactions should be both direct and specific. As such, the  
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phrase should read “unless DIRECTLY AND SPECIFICALLY prohibited by an ordinance  
adopted by the municipality where the marihuana sales location is located.”  
Storage of Marihuana Product  
Proposed Rule 420.212(3) requires all chemicals or solved to be “stored separately from  
marihuana products and kept with a closed lid in locked storage areas.”  
The MICIA suggests that the phrase “with a closed lid” be replaced with the phrase “in a  
closed container” for reason that not all chemicals and solvents are packaged in a container with a  
lid.  
Internal Analytical Testing  
Proposed Rule 420.214a adds new language authorizing and regulating the process for  
internal analytical testing. The MICIA generally supports this Proposed Rule with the following  
exceptions:  
The MICIA asks for clarification and examples of the meaning of the phrase “fully  
partitioned” as used in Proposed Rule 420.214a(1)(a) (i.e., whether a partition includes walls,  
dividers, curtains, etc).  
The MICIA requests that the MRA strike the requirement in Proposed Rule 420.214a(1)(c)  
that the product of only one license may be in co-located internal analytical testing spaces at a  
time. The MICIA fails to see the necessity of this requirement where such products are required to  
be disposed of, the products cannot return to the licensee, and the results from the testing cannot  
be used to release the products to the public.  
The MICIA seeks clarification regarding the prohibition in Proposed Rule 420.214a(4) that  
“[n]o marihuana or marihuana product may be stored in the internal analytical testing space.” The  
MICIA submits that the samples of products being internally tested should be permitted to be  
stored in the space.  
The MICIA opposes the requirement in Proposed Rule 420.214a(8) that “[a]ny batch of  
marihuana or a marihuana product that has undergone internal analytical testing must undergo full  
safety compliance testing, with failing test results entered into the statewide monitoring system,  
prior to making a request for remediation.” This requirement seems to impose a requirement of  
outside finished testing prior to remediation and thus limits the ability of licensees to proactively  
remediate products. Such a requirement would mark a significant departure from current practice.  
Adverse Reactions  
Proposed Rule 420.214b adds new language requiring that “[a] licensee shall notify the  
agency within 1 business day of becoming aware or within 1 business day of when the licensee  
should have been aware of any adverse reactions to a marihuana product sold or transferred by any  
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licensee” and that “[a] licensee shall enter into the statewide monitoring system within 1 business  
day of becoming aware of or within 1 business day of when the licensee should have been aware  
of any adverse reactions to a marihuana product sold or transferred by any licensee.”  
The MICIA asks that the MRA define what constitutes an “adverse reaction” and clarify  
whether the phrases “becoming aware” or “should have been aware” encompass only actual  
adverse reactions or also customer alleged or perceived adverse reactions. The MICIA further  
requests that the agency issue a form or more detailed guidance as to how to submit such  
information and identifies that, at present, there is not a method for licensees to upload this  
information into METRC.  
Product Returns  
Proposed Rule 420.214c(1) adds new language applicable to marihuana sales locations that  
authorizes “the return of marihuana product that is reported to have caused an adverse reaction or  
is determined to be defective.” Proposed Rule 420.214c(2) further requires that “[a] marihuana  
sales location must have a written policy for the return of marihuana product that contains, at a  
minimum, the following: (a) Product returned to a marihuana sales location must be tracked  
consistently in the statewide monitoring system as waste in compliance with R 420.211. (b)  
Product returned to a marihuana sales location must be destroyed in compliance with R 420.211  
within 90 calendar days of when the marihuana business became aware of the fact that the product  
must be destroyed. (c) Product returned to a marihuana sales location cannot be re-sold, re-  
packaged, or otherwise transferred to a customer or another marihuana business. (d) Product  
returned to a marihuana sales location shall be returned by the customer who purchased the  
product. (e) Product returned to a marihuana sales location is prohibited from being returned to the  
marihuana sales location by way of a delivery driver. (f) A marihuana sales location that does not  
comply with these rules may be subject to disciplinary proceedings. (g) A marihuana retailer may  
return a marihuana product that is past its expiration date to the marihuana processor who produced  
the marihuana product for destruction instead of destroying the marihuana product.”  
The MICIA requests that the agency issue a form or more detailed guidance as to how to  
submit such information and identifies that, at present, there is not a method for licensees to upload  
this information into METRC. The MICIA further submits that the phrase “reported to have caused  
an adverse reaction or is determined to be defective,” is vague and potentially overbroad. The  
agency has neither defined the terms “adverse reaction” nor “defective” and the phrase “reported  
to have caused,” read literally, could mean “alleged by anyone no matter how far removed.”  
Furthermore, the MICIA asks that the agency reconsider the prohibition in Proposed Rule  
420.214c(2)(d) that “[p]roduct returned to a marihuana sales location shall be returned by the  
customer who purchased the product.” This requirement may be extraordinarily difficult to enforce  
and, as set out in the proposed rule, appears to potentially suggest that a marihuana sales location  
may be subject to disciplinary proceedings as a result of third-party conduct completely outside  
the location’s control.  
X.  
RULE SET 2020-124 LR (SAMPLING AND TESTING R. 420.301 ET SEQ.)  
This Proposed Rule Set seeks to amend portions of Rule 420.301 through Rule 420.307 to,  
inter alia, set maximum batch sizes, revise laboratory accreditation requirements and testing  
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methodologies, require safety tests on harvest batches, redefine potency analyses, and mandate  
laboratory policies for potentially hazardous contaminants. The Proposed Rule Set also adds a new  
Rule 420.303a, establishing producer and sales location packaging and testing requirements, and  
Rule 420.305a, establishing certain validation requirements. The MICIA’s comments are below.  
Batch Identification and Testing  
Proposed Rule 420.303(4) provides that “[a] cultivator shall immediately destroy the  
individual plant tag once a tagged plant is harvested and is part of a harvest batch so that a sample  
of the harvest batch can be tested by a licensed laboratory as provided in R 420.304 and R  
420.305.”  
The MICIA requests that the agency clarify that the individual plant tags (which are used  
to identify the plants during the drying stage) do not need to be destroyed until after the drying  
stage is complete.  
Proposed Rule 420.303(6) provides that “[a] cultivator may transfer or sell fresh frozen  
marihuana to a producer without first being tested by a laboratory in order to produce live resin,  
or if the marihuana product will be extracted, with agency approval.”  
The MICIA requests that the agency revise the Proposed Rule so that “fresh frozen”  
includes “any dried biomass” and to replace the term “live resin” with the term “concentrate.”  
Producer and Sales Location Packaging and Testing Requirements  
Proposed Rule 420.303a(1) and (2) clarifies that “[a] producer shall give a marihuana  
product a new package tag anytime the marihuana product changes form or is incorporated into a  
different product,” “[a] producer of a marihuana product in its final form shall have the sample  
tested pursuant to R 420.304 and R 420.305,” “[t]he producer shall quarantine products from all  
other products when the product has test results pending,” “[t]he producer shall not transfer or sell  
a marihuana product to a marihuana sales location until after test results entered into the statewide  
monitoring system indicate a passed result for all required safety tests,” and that “[n]othing in this  
subsection prohibits a producer from transferring or selling a package in accordance with the  
remediation protocol provided by the agency and these rules.” Proposed Rule 420.303a(3) further  
clarifies that “[a] marihuana sales location may sell or transfer a marihuana product only to a  
marihuana customer under both of the following conditions: (a) The marihuana product has  
received passing results for all required safety tests in the statewide monitoring system. (b) The  
marihuana product bears the label required under the acts and these rules for retail sale.”  
The MICIA supports these proposed clarifications.  
Sample Collection  
Proposed Rule 420.304(2)(a) provides that “[t]he laboratory shall physically collect the  
sample the marijuana product from another business to be tested at the laboratory.”  
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MICIA’s only comment is that it appears a typographic error exists; the sentence should  
read: “The laboratory shall physically collect the marijuana product sample from another business  
to be tested at the laboratory.”  
Maximum Batch Size  
Proposed Rule 420.304(2)(d) further provides that “[t]he laboratory shall develop a  
statistically valid sampling method and have it approved by the agency to collect a representative  
sample from each batch of marihuana product. The laboratory shall have access to the entire batch  
for the purposes of sampling.”  
The MICIA submits that “statistically valid sampling method” is too vague and that  
additional guidance should be provided in the proposed rule.  
Laboratory Accreditation Requirements  
Proposed Rule 420.305(1) provides that “A laboratory shall become fully accredited for all  
required safety tests in at least 1 required matrix to the International Organization for  
Standardization (ISO), ISO/IEC 17025:2017, by an International Laboratory Accreditation  
Corporation (ILAC) recognized accreditation body or by an entity approved by the agency within  
1 year after the date the laboratory license is issued and agree to have the inspections, reports, and  
all scope documents sent directly to the agency from the accreditation body.”  
The MICIA submits that these provisions should be amended to read only that:  
A laboratory shall become fully accredited for all required safety tests in all  
required matrices to the International Organization for Standardization (ISO),  
ISO/IEC 17025:2017, by an International Laboratory Accreditation Corporation  
(ILAC) recognized accreditation body or by an entity approved by the agency prior  
to and as a condition of license issuance and agree to have the inspections, reports,  
and all scope documents sent directly to the agency from the accreditation body.  
Accreditation protects public health and safety and there is no longer any need for post-licensure  
accreditation nor the issuance of variances for accreditation. When the MRA was established in  
2018, only four labs were operating in the state, and thus good cause existed for these exceptions  
to accreditation. Now, almost three years later, with fifteen licensed and operating testing  
laboratories, there is no need for the lower bar. Accreditation ensures that a laboratory has a  
functional quality system, complete with validated test methods, to ensure the accuracy of  
published test results.  
Laboratory Testing Methodologies  
Proposed Rule 420.305(2) provides, in part, that “[a] laboratory shall use analytical testing  
methodologies for the required safety tests in subrule (3) of this rule that are validated by an  
independent third party and may be monitored on an ongoing basis by the agency. In the absence  
of published, peer reviewed, validated cannabis methods, Appendix J or K of Official Methods of  
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Analysis authored by the Association of Official Analytical Collaboration (AOAC) International  
must be published in full with guidance from published cannabis standard method performance  
requirements where available.”  
The MICIA submits that the proposed language does not clearly reflect the intent of the  
Rule nor the way in which the Rule has been enforced to date. In its place, the MICIA asks the  
MRA to consider the following language:  
A laboratory shall use analytical testing methodologies for the required safety tests  
in subrule (3) of this rule that are based upon published peer-reviewed methods,  
have been validated for cannabis testing by an independent third party, may be  
monitored on an ongoing basis by the agency, and have been internally verified by  
the licensed laboratory according to Appendix K of Official Methods of Analysis  
authored by the Association of Official Analytical Collaboration (AOAC)  
International, with guidance from published cannabis standard method  
performance requirements where available. In the absence of published, peer-  
reviewed, validated cannabis methods, method validation requirements of  
Appendix K of Official Methods of Analysis must be met in full with guidance  
from published cannabis standard method performance requirements where  
available.  
Safety Tests on Harvest Batches  
Proposed Rule 420.305(3) provides, in part, that “[a] laboratory shall conduct the required  
safety tests specified in subdivisions (a) through (i) of this subrule on marijuana product that is  
part of a harvest batch as specified in R420.303, except as provided in subrule (4) of this rule. The  
agency may publish minimum testing portions to be used in compliance testing.”  
The MICIA reads this language as limiting safety testing to marijuana product that is part  
of a harvest batch (which is only plant material by definition) and thus as excluding testing  
requirements for marijuana products that are not part of a harvest batch such as concentrates and  
infused products. The agency should clarify its intention in that regard. The MICIA supports the  
agency publishing minimum testing portions to be used in compliance testing.  
Potency Analysis  
Proposed Rule 420.305(3)(a)(i) states that “[i]n the preparation of samples intended for  
potency analysis, the laboratory may not adulterate or attempt to manipulate the total potency of  
the sample by adding trichomes that were removed during the grinding and homogenization  
process.”  
The MICIA opposes this prohibition for reason that it leads to results that are not  
representative. Simply because a testing lab “damages” or knocks portions off of a licensee’s  
product, does not mean that those portions should not be included in the potency test.  
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Proposed Rule 420.305(3)(a)(ii) states, in part, that “Kief must not be reintroduced to the  
flower sample during the homogenization process.”  
The MICIA opposes this prohibition for reason that it leads to results that are not  
representative. Kief created during the grinding process is customarily kept and reintroduced by  
the average consumer.  
Proposed Rule 420.305(3)(a)(iii) defines the list of legally required cannabinoids for  
potency testing as: “(A) Total Tetrahydrocannabinol (THC); (B) Tetrahydrocannabinol Acid  
(THC-A); (C) Total Cannabidiol (CBD); (D) Cannabidiol Acid (CBDA); [and] (E) Additional  
cannabinoids may be tested with approval from the agency.”  
The MICIA reads the rule as only requiring potency test results for the four cannabinoids  
in items (A) through (D) of the subrule. Consequently, the subrule does not authorize potency  
testing of d9-THC or Cannabidiol. By default, these two important compounds fall into optional  
analyte category (E). Omitting mandatory reporting of d9-THC and Cannabidiol test results is not  
recommended. The MICIA also submits that the correct term for “Tetrahydrocannabinol Acid” is  
“Tetrahydrocannabinoic Acid” and the correct term for “Cannabidiol Acid” is “Cannabidiolic  
Acid.”  
Proposed Rule 420.305(9) further defines the list of legally required cannabinoids for  
potency testing and provides that “[p]otency shall include the following cannabinoid  
concentrations listed in subdivisions (a) to (f) of this subrule, subject to subdivisions (g) and (h) of  
this subrule:  
(a) Total THC concentration;  
(b) THC-A concentration;  
(c) Total THC, which includes Delta 7, Delta 8, Delta 9, Delta 10, and Delta 11  
THC and THC-A. The following calculation must be used for calculating Total  
THC, where M is the mass or mass fraction of delta-9 THC or delta-9 THC-A: Σ  
Delta 7-11 THC + Σ ((Delta 7-11 THCA) x 0.877)=Total THC;  
(d) Total CBD concentration;  
(e) CBD-A concentration;  
(f) Total CBD. The following calculation must be used for calculating Total CBD,  
where M is the mass or mass fraction of CBD and CBD-A: M total CBD = M CBD  
+ 0.877 x M CBD-A;  
(g) For marihuana and marihuana concentrates, total THC and total CBD must be  
reported in percentages; [and]  
(h) For marihuana infused products, potency must be reported as milligrams of  
Delta-9-THC and CBD.”  
The MICIA reads the proposed rule as only requiring reporting of test results for items (a)  
through (f) of the subrule. As such, this list no longer mandates individually reporting of d9-THC  
or Cannabidiol test results. By default, these important compounds fall into optional analyte  
category (E). Omitting mandatory reporting of d9-THC and Cannabidiol test results is not  
recommended. The MICIA also submits that Rules 420.305(9)(a) and (c) are redundant. The  
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agency should change “Total THC concentration” in Rule 420.305(9)(a) to “delta-9 THC  
Concentration.”  
Furthermore, the definition in Rule 420.305(9)(c) of compounds that comprise “Total  
THC” is problematic such that reporting of Total THC results, as defined, cannot be met at this  
time where (i) certified analytical reference standards for Delta7-THC (a fully synthetic and non-  
psychoactive cannabinoid) may not be fully and commercially available at this time; (ii) certified  
reference standards for Delta 10-THC (a fully synthetic cannabinoid) are available for two separate  
enantiomers: Delta 10 (6aR, 9S), which is not psychoactive, and Delta 10 (6aR, 9R), which is  
psychoactive;3 (iii) although there are various forms of nomenclature, the term “Delta 11 THC” is  
not a consistently recognized term in current scientific literature;4 and (iv) the calculation provided  
for determining Total THC includes summing the concentrations of “Delta 7-11 THCA.”5  
Consequently, MICIA recommends that the potency testing requirements be revised to allow the  
MRA to publish a list of cannabinoids for mandatory testing and reporting and to update the list  
as needed via bulletins separately from the Rules. It is important to address the emergence of  
additional THC isomers (like delta-8 THC) without prematurely and unnecessarily complicating  
the Proposed Rule.  
Residual Solvent Testing as Part of Harvest Batch  
Proposed Rule 420.305(3)(f) includes “Residual Solvents” as a required safety test for a  
marijuana product that is part of a harvest batch. Because residual solvent testing has not been  
required for plant material to date, the MICIA suggests that this subrule be deleted, especially  
where subrule 420.305(7) properly addresses residual solvent testing.  
Reporting Units for CBD  
Proposed Rule 420.305(9)(h) states that “[f]or marijuana infused products, potency must  
be reported in milligrams of Delta-9 THC and CBD.”  
The MICIA suggests that this language does not adequately define reporting units for CBD.  
While the definition provides a magnitude (milligrams), it does not specify the quantity. That is,  
the language does not specify whether the quantity be a milliliter of analytical solution, gram of  
product, serving, etc. By requiring reporting of individual test results for Delta 9-THC and CBD  
for infused products, the subrule also seems to conflict with Proposed Rules 420.305(3)(a)(iii) and  
420.305(9) which provide that these analytes are defined as optional.  
3
The Proposed Rule should clarify whether both enantiomers or, if only one, which enantiomer  
must be quantified.  
4
Provided that the term “Delta 11 THC” intends to describe THC with a double bond between  
carbon atoms 9 and 11, the MICIA would prefer the nomenclature “exo-THC,” as certified  
reference standards are available for “exo-THC.”  
5
This requires a laboratory to individually quantify delta 7, delta 8, delta 10, and delta 11 THC  
acids. Certified reference standards for these cannabinoic acids do not currently exist in the  
literature, and the delta-9 THC acid isomers themselves may not be known compounds at all at  
this time.  
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Terpene Analysis  
Proposed Rule 420.305(18) states that “[a] laboratory may perform terpene analysis on a  
marijuana product by a method approved by the agency, and the method must be accredited on the  
same frequency as all required safety tests. There are no established safety standards for this  
analysis.”  
The MICIA recommends that the phrase “[t]here are no established safety standards for  
this analysis” be omitted, because safety tests for beverages include a requirement to test for  
phytol.  
Laboratory Policy for Potentially Hazardous Contaminants  
Proposed Rule 420.305(21) states that “[a] laboratory shall have a policy or procedure in  
place for handling and reporting any potentially hazardous contaminants that may be encountered  
during routine testing. A laboratory shall notify the agency if a test batch is found to contain levels  
of a contaminant that could be injurious to human health.”  
The MICIA suggests that this requirement is vague and overbroad and should not be  
included in the Proposed Rules without further clarification. Licensed laboratories are not  
equipped or otherwise required to identify unknown compounds of any type in product samples.  
In addition, under the right conditions and without further clarification, just about any compound  
fits the terms “potentially hazardous” and “potentially injurious to human health.”  
STEC Reporting Deadline  
Proposed Rule 420.305(22) states that “[m]arihuana-infused products found to contain  
Salmonella spp. or Shiga toxin producing E. coli (STEC) must be reported to the agency  
immediately.”  
The MICIA submits that it is unclear how immediate reporting for STEC required under  
this Proposed Rule fits with Rules 420.305(12) and (13) which requires reporting within three  
business days. The MRA should consider omitting or clarifying this Proposed Rule. If the MRA  
chooses to clarify this Proposed Rule, the MICIA suggests that the term “immediately” should be  
replaced with the phrase “within one business day.”  
Validation Protocols  
Proposed Rule 420.305a sets forth a litany of new validation protocols and requirements.  
The MICIA submits that these new requirements will increase laboratory costs and that the MRA  
has failed to engage in any cost-benefit analysis related to the impact of these requirement on the  
industry. MCL 24.245(3).  
Proposed Rule 420.305a(2)(b) provides that “[v]alidation protocols should perform  
inoculation of marihuana matrices with live organisms where feasible to ensure that both extraction  
and detection for the assay are tested. To further test the accuracy of the assay, probability of  
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detection (POD) analyses, inclusivity, exclusivity, lot-to-lot stability, and robustness studies must  
be included in the validation studies.”  
The MICIA submits that “lot-to-lot stability” testing is not appropriate as a test method  
validation requirement and should be removed from this sub-rule. “Lot-to-lot stability” is a process  
validation, typically included in validation of a manufacturing process, and is not appropriately  
employed as an element of analytical method validation.  
Quality Assurance and Control  
Proposed Rule 420.305b creates a quality assurance and quality control monitoring regime  
and requires that laboratories adopt and follow detailed written quality assurance measures and  
standard operating procedures approved by the agency.  
The MICIA is concerned that the quality control acceptance criteria currently published by  
the agency exceed the capabilities of established, industry-accepted test methods, and are more  
stringent than criteria assigned to those methods by the method authors / innovators. MICIA  
submits that while published MRA guidance is essential and appropriate, where available, method  
author / innovator quality control acceptance criteria should prevail. The MICIA further submits  
that these new requirements are likely to substantially increase laboratory costs and that the MRA  
has failed to engage in any cost-benefit analysis related to the impact of these requirement on the  
industry. MCL 24.245(3). Abandoning existing, approved and accredited methods simply to meet  
tightened MRA specifications without regard to actual existing method capabilities may include  
major financial impact, including purchasing expensive new equipment and discarding perfectly  
adequate existing equipment.  
The MICIA additionally identifies that the phrase “method acceptance criteria is required”  
in Rule 420.305b(6) should be revised to “method acceptance criteria are required.”  
Aspergillus Remediation  
Proposed Rule 420.306(3) provides that “[p]roducts that failed testing for Aspergillus are  
ineligible for remediation.”  
The MICIA suggests that products which fail testing for Aspergillus should be further  
tested and, if applicable, remediated for Mycotoxins. Testing for mycotoxins identifies the  
presence of aspergillus which, itself, is ubiquitous. This proposed process is similar to the process  
followed by the USDA https://www.ams.usda.gov/publications/content/fgis%E2%80%99s-role-  
aflatoxin-testing  
Retest Costs  
Proposed Rule 420.306(5) provides that “[t]he marihuana business that provided the  
sample is responsible for all costs involved in a retest.”  
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The MICIA highlights that the various license types have different perspectives on this  
provision. The MICIA submits that the MRA should not inflexibly dictate commercial terms but  
should instead leave it to the individual businesses to contract amongst themselves for apportioning  
such costs.  
CONCLUSION  
MICIA appreciates the opportunity to comment on the MRA’s proposed rules and the  
MRA’s efforts to develop a sound regulatory structure for the cannabis industry. MICIA believes  
that with the changes suggested above, greater industry feedback, and more thorough vetting of  
the costs and benefits of proposed regulations, Michigan can be a leader both economically and in  
its promotion of good business practices for the industry.  
Respectfully submitted,  
Robin Schneider, Executive Director  
Michigan Cannabis Industry Association  
www.MICannabisIndustryAssociation.org  
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;