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  
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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;