Dykema Gossett PLLC

Capitol View

201 Townsend Street, Suite 900

Lansing, MI 48933

WWW.DYKEMA.COM

Tel: (517) 374-9100

Fax: (517) 374-9191

R. Lance Boldrey

Direct Dial: (517) 374-9162

Direct Fax: (855) 259-3563

Email: LBoldrey@dykema.com

February 17, 2020

Marijuana Regulatory Agency

Legal Section

P.O. Box 30205

Lansing, MI 48909

Re:

Comments to Proposed Combined Topic-Based Rule Sets

To Whom it May Concern:

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

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

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

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

Marijuana Employees; Marijuana Hearings; Marijuana Disciplinary Proceedings; Industrial

Hemp for Marijuana Businesses; and Medical Marijuana Facilities (Rescinded) (collectively

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

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

Act (“MRTMA”).

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

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

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

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

recommendations on the proposed rules.

1. General Global Comments

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

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

are reflected by multiple proposed rules.

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

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

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

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

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

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

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

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

removed in entirety from all rule sets.

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

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

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

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

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

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

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

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

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

testing standards without having to destroy viable product.

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

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

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

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

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

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

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

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

numerous public interests.

2. Marijuana Licenses 2019-67 LR

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

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

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

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

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

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

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

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

metric. MRA guidance would be useful.

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

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

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

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

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

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

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

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

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

R 420.3—Application procedure; requirements

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

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

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

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

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

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

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

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

changed in a manner that affects suitability.

R 420.4—Application requirements; financial and criminal background

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

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

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

examine.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

sue either the MRA or the municipality.

R 420.5—Application requirements; complete application

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

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

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

R 420.10—Proof of financial responsibility; insurance

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

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

R 420.11—Capitalization requirements; medical marihuana facilities licensing act

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

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

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

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

facilities.

R 420.12—Denial of a marihuana license; additional reasons

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

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

R 420.13—Renewal of state license

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

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

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

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

language of the MMFLA.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

prior board approval of a transfer of interest under section 406, and only for applications

submitted on or after January 1, 2019, a managerial employee of the applicant, a person holding

a direct or indirect ownership interest of more than 10% in the applicant.” Id. The MMFLA

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

MCL 333.27402 provides that “[t]he board shall issue a license to an applicant who submits a

complete application and pays both the nonrefundable application fee required under section

401(5) and the regulatory assessment established by the board for the first year of operation, if

the board determines that the applicant is qualified to receive a license under this act.” MCL

333.27402(1). Section 27402 further provides that “[a] license shall be issued for a 1-year period

and is renewable annually. Except as otherwise provided in this act, the board shall renew a

license if all of the following requirements are met: (a) The licensee applies to the board on a

renewal form provided by the board that requires information prescribed in the rules; (b) The

application is received by the board on or before the expiration date of the current license; (c)

The licensee pays the regulatory assessment under section 603; and (d) The licensee meets the

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

333.27402(9).

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

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

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

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

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

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

definition of licensee refer to holders of licenses.

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

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

January 1, 2019.

R 420.21—Designated consumption establishment license

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

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

operations plan.”

R 420.27—Marihuana delivery business

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

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

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

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

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

3. Marijuana Licensees 2019-68 LR

R 420.108—Grower license

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

R 420.109—Processor license; exception for industrial hemp

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

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

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

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

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

mention hemp.)

4. Marijuana Operations 2019-69 LR

R 420.201—Definitions

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

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

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

testing standards.

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

under a licensing agreement.

R 420.203—Marihuana licenses; licensees; operations; general

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

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

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

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

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

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

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

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

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

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

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

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

and integrated grower and processor facilities.)

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

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

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

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

contiguous to mean structures located on one parcel.

Dykema suggests removing the prohibition against drive through operations in

420.203(2)(g).

R 420.204—Operation at same location

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

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

the same location.”

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

businesses must be contiguous.

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

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

building security, design, and other MRA operational rules.

R 420.205—Equivalent licenses; operation at same location

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

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

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

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

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

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

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

with the statutory requirements and prevent municipalities from sidestepping them.

R 420.206—Marihuana business; general requirements

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

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

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

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

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

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

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

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

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

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

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

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

products).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

statutory framework for the industry.

R 420.207—Marihuana delivery; limited circumstances

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

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

may choose not to engage in this practice.)

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

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

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

R 420.208—Building and fire safety

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

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

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

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

high tunnels.

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

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

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

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

doors are more secure.)

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5. Marijuana Sampling and Testing 2019-70 LR

R 420.301—Definitions

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

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

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

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

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

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

R 420.303—Batch; identification and testing.

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

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

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

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

entrants.

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

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

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

remediation.

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

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

R 420.304—Sampling; testing

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

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

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

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

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

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

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

take appropriate samples.)

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

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

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

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

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

basis, or to a laboratory under common ownership.”

R 420.305—Testing; laboratory requirements

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

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

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

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

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

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

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

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

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

the action limit allowable.

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

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

accurate.

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

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

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

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

sampling by another licensed lab.”

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

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

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

possess marijuana.)

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

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

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

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

420.501.

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

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

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

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

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

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

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

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

utilized.

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

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

material to another processor for remediation.

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

remediation protocol.”

R 420.307—Research and Development

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

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

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

product

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

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

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

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

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

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

R 420.404—Maximum THC concentration for marihuana-infused products

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

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

established by the agency.”

7. Marijuana Sale or Transfer 2019-72 LR

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

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

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

certain laboratories, batch numbers, and analysis dates.

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

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

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

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

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

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

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

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

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

growers and processors.

R 420.505—Sale or transfer; marihuana sales location

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

pursuant to the medical marihuana facilities licensing act.”

R 420.507—Marketing and advertising restrictions

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

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

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

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

caregivers.”

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

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

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

minors aged 17 years or younger.”

8. Marijuana Employees 2019-73 LR

R 420.602—Employees; requirements

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

“trade”.

071889.000098 4815-4954-6932.3

Marijuana Regulatory Agency

February 17, 2020

Page 14

9. Marijuana Hearings 2019-74 LR

R 420.706—Complaint by licensee

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

testing.

10. Marijuana Disciplinary Proceedings 2019-75 LR

R 420.808—Citation

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

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

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

R 420.1003—Processing industrial hemp.

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

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

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

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

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

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

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

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

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

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

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

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

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

finished marijuana products.

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

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

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

071889.000098 4815-4954-6932.3

Marijuana Regulatory Agency

February 17, 2020

Page 15

Regards,

DYKEMA GOSSETT, PLLC

R. Lance Boldrey

071889.000098 4815-4954-6932.3

February 17, 2020

Marijuana Regulatory Agency

Legal Section

P.O. Box 30205

Lansing, MI 48909

Re: Comments on the Proposed Combined Topic-Based Rule Sets

To Whom it May Concern:

R 420.201 (a) defines “active ingredient” as marihuana, as defined in section 7106 of the public

health code, 1978 PA 368, MCL 333.7106.”

The proposed definition of “active ingredient” excludes industrial hemp. If this definition is

adopted, we will find ourselves in a situation where the same chemical compounds—from the

same genus and species of plant—are considered either “active ingredients” or “inactive

ingredients” depending on the percentage of THC in the plant.

For example, CBD from a Cannabis Sativa L plant with more than .3% THC would be

considered “active ingredient”. This CBD could be added to products under the proposed

definition. On the other hand, Chemically identical CBD from a Cannabis Sativa L plant with

less than .3% THC would be considered “inactive ingredient”. This CBD could not be added to

products under the proposed definition because “inactive ingredients” must be approved by the

FDA under 420.206 (11).

As a second example, a terpene from a Cannabis Sativa L plant with more than .3% THC would

be considered “active ingredient”. This terpene could be added to products under the proposed

definition. On the other hand, a chemically identical terpene from a Cannabis Sativa L plant

with less than .3% THC would be considered “inactive ingredient”. This terpene could not be

added to products because inactive ingredients must be approved by the FDA under 420.206

(11).

Dual treatment of the same ingredient from the same genus and species of plant would be

confusing and misleading to patients and customers. The cannabinoids and terpenes in

marijuana products have the same medicinal properties regardless of the THC content in the

Cannabis Sativa L plant from which they were extracted. The common usage definition of

“active ingredient” carries the connotation of medicinal effect. A product label that listed a

biologically active ingredient as an “inactive ingredient” would be misleading.

1

This is important because listing “inactive ingredients” is a labeling requirement in 420.206 (11).

“All non-marihuana inactive ingredients must be clearly listed on the product label.” Listing the

same cannabinoid or terpene ingredient as an “active ingredient” on one package and an

“inactive ingredient” on another package would confuse customers, and it has the potential to

cause customers to take the wrong dose of the ingredients they are seeking. It’s easy to

imagine a patient or customer taking too large a dose or serving of a marijuana product because

he or she was over-compensating for an ingredient that was listed on the product label as

“inactive”.

We ask that MRA solve the problems described above by updating the definition of “active

ingredient” to include industrial hemp.

2

R420.305 (1) (h) defines “final package” as “the form a marihuana product is in when it is

available for sale by a marihuana sales location.”

It appears this definition of final package is attempting to conflate two independent and

important concepts, “final package” and “final form”.

We believe “final form” should be defined in the rules in addition to “final package”.

“Final form” should be defined as the “final set of ingredients, after all processing, mixing,

curing, filling, quality control, and other preparatory processes have been completed, such that

the product is in the same state it will be in when sold by a retailer”.

“Final package” should be defined as “the final retail-ready protective packaging that houses

and protects a product that is in final form, so it can be sold by a retailer”.

We worry that conflating the concepts of “final package” and “final form” could lead us to a

situation in which processors are not allowed to produce marijuana-infused products in a way

that allows for remediation and/or retesting because any product produced would be considered

a product in “final package” as soon as it was in “final form”.

We hope to be able to produce an item and have it tested in “final form” before we place it into a

“final package”. We hope to have the opportunity to remediate an item like a cartridge or edible

after a failed test, before it is placed into retail-ready packaging. Remediation is technically

possible and completely safe in situations like a potency fail in an edible or a residual solvent fail

in a cartridge. We ask that remediation and retesting be allowed in all situations where full

compliance testing can be performed after remediation, to ensure patient safety is in no way put

at risk.

R. 420.303 (10) says, “After a package is created by a producer of the marihuana product in its

final package, the producer shall have the sample tested pursuant to R 420.304 and R

420.305.

We believe this rule should be changed to say, “After a package is created by a producer of the

marihuana product in its final form, the producer shall have the sample tested pursuant to R

420.304 and R 420.305.

This change requires the addition of a definition of “final form”, which we believe will remove the

ambiguity from the definition of “final package”.

3

R. 420.304 (h) says, “a marihuana business that receives a certificate of analysis stating that

the sample meets specifications required by the agency shall ensure that the test results

entered into the statewide monitoring system matches the information provided on the certificate

of analysis received from the laboratory prior to transportation, sale, or transfer of the marihuana

product.”

We believe safety compliance facilities should be responsible for uploading accurate data to the

statewide monitoring system. We are unclear why the responsibility of uploading accurate test

data to the statewide monitoring system should extend to a grower, processor, or retailer. If an

audit step or additional redundancy is needed because a laboratory doesn’t have an automated,

error-free way of uploading results from their internal system to Metrc, this redundancy should

be provided by a second laboratory employee doing an audit of the certificate of analysis to

make sure accurate results have been uploaded to Metrc.

Growers and processors should not be responsible for laboratory mistakes. The statewide

monitoring system provides test results in a standardized format. On the other hand, each

certificate of analysis is formatted differently, and it’s often difficult to tell whether a product

passed or failed testing when looking at a certificate of analysis.

The statewide monitoring system should continue to be the system of record for test results.

Growers, processors, and retailers should be able to rely on the test results in Metrc. Growers,

processors, and retailers should not have to check a COA to verify the data in Metrc is accurate.

4

R420.305 (10) says, “For the purposes of chemical residue testing and target analyte testing,

the agency shall publish a list of quantification levels. Any result that exceeds the LOQ is a

failed sample.”

We understand and support the requirement in the MMFLA that marijuana be reasonably free

of chemical residues. MMFLA Sec. 505. (4) says: “A safety compliance facility shall… ...Perform

tests to certify that marihuana is reasonably free of chemical residues such as fungicides and

insecticides.”

The concern we have is that the proposed rule goes beyond the “reasonably free” standard.

Under the proposed rule, a marijuana product must be absolutely free of chemical residues in

order to pass testing. Any amount of chemical residue detected would result in a fail, and—if

remediation and retesting are not allowed—an order from MRA to destroy the material.

Modern laboratory equipment is so sensitive that it can pick up contamination into the

single-digit parts per billion. There must be some level at which a product can be considered

reasonably free of the chemical residue.

Extremely low levels of chemical residue in test results indicate contamination in the

environment or in the equipment, rather than use of a banned pesticide.

Growers are vulnerable to environmental contamination from neighboring farms. Processors

are vulnerable to low levels of contamination when they process material on equipment that has

previously been used to process caregiver material or industrial hemp.

In cases of low-level environmental or equipment contamination where the licensee has not

used a banned pesticide, we believe MRA should allow material that fails testing for chemical

residue to be remediated or used in edibles (assuming the level of chemical residue is below the

EPA’s Maximum Residue Limit for food).

We have an additional concern that MRA’s suggested approach of setting “Limits of

Quantitation”, rather than action limits, incentivises laboratories to use older testing equipment

so as not to detect contamination below the LOQs set by MRA.

This approach is akin to closing our eyes and hoping the problem isn’t there. It’s not the right

approach. Growers, processors, and regulators need more data—not less data—in the event of

low-level environmental contamination, so the problem can be understood and corrected.

Instead of reporting a result as “not detected” (below the LOQ), laboratories should be

incentivised to calibrate their equipment as accurately as possible and report the actual result

detected. Accurate residue data is crucial to the grower, the processor, and the regulator. All

three parties are aligned in their goal of eliminating the source of the contamination and

removing the residue contamination from the material.

5

We feel strongly that the LOQ approach is the wrong path forward for Michigan and the

Cannabis Industry. This standard goes far beyond the statutory requirement that marijuana be

reasonably free of chemical residue. And, it creates a situation where growers and processors

can have massive financial losses due to 1 or 2 parts per billion of chemical residue.

We ask that MRA use an approach more similar to the EPA’s approach in setting Maximum

Residue Limits for food, and/or the FDA’s approach in setting Maximum Residue Limits for

tobacco products.

6

R. 420.307 (1) defines “research and development testing” as “optional testing performed before

final compliance testing.”

Expanding the definition to allow for R&D testing before or after final compliance testing would

provide valuable data to growers, processors, and regulators.

When material fails a final compliance test, the grower or processor has no way to know

whether the failed result was accurate or due to laboratory error. Having an R&D test

performed after the failed compliance test would allow the grower or processor to gather

additional data. If the R&D test result conflicted with the final compliance test, the grower or

processor would then have data to provide MRA when asking MRA to investigate the accuracy

of the final compliance result.

Accurate results and clean, safe products are in everyone’s interest. We see no downside to

allowing R&D testing after final compliance testing.

If MRA is concerned growers or processors may use R&D testing for “lab shopping”, we would

point out that lab shopping would more likely occur prior to final compliance testing.

Additionally, we’d point out that R&D testing after final compliance testing would give MRA

access to valuable data about disparities between safety compliance facilities. To the extent

there are disparities in results issued by different laboratories, MRA would surely want to identify

and fix these issues as quickly as possible.

R&D testing after final compliance testing is an important tool for growers and processors to

help MRA identify false positives and other laboratory errors.

7

R. 420.306 (3) A marihuana product is prohibited from being retested if a final test for chemical

residue failed pursuant to these rules. If the amount of chemical residue found is not permissible

by the agency, the marihuana product is ineligible for retesting and remediation, and the product

must be destroyed. This subrule does not apply to marihuana product that has been obtained

under a Resolution on Marijuana Product Access for Patients adopted by the medical

marihuana licensing board.

This rule is problematic for several reasons:

1. In the past 12 months we’ve learned that safety compliance facilities do make errors from

time-to-time. The Choice Labs Processor Facility has had at least three false positives where

material failed testing for chemical residue, and that failed result was later updated in Metrc

when the lab acknowledged their mistake. We had an additional 8 samples where the lab

admitted mistakes that amplified the result, but was unwilling to correct the results in Metrc

without permission from MRA, which was not granted.

This rule is written under the assumption that labs don’t make errors, and that just isn’t the case.

What is the statutory justification for denying a facility the ability to retest an item that failed

testing for chemical residue? Are the labs so unreliable that a contaminated item could pass

two subsequent retests? If yes, that underscores the importance of allowing retests.

In fact, the labs do make mistakes. Samples are prepared by humans. There is always the

potential for contamination within the lab equipment, glassware, utensils, or elsewhere in the

facility. Retesting is the best way to find out whether the lab made an error. Why is retesting

prohibited? Retesting should be encouraged. Confirmation and reproducibility of data are

cornerstones of the scientific process.

2. The rule does not distinguish between growers who intentionally sprayed banned pesticides

on their plants, and growers or processors who suffered extremely low-level (but detectable)

environmental contamination.

Ultra-low levels of chemical residue indicate accidental contamination rather than use of a

banned pesticide. In the event of accidental contamination, processors should be allowed to

remediate the material to remove the chemical residue. The rule as written will result in

needless financial losses for licensees, and needless shortages of material for patients and

customers.

Growers are vulnerable to large losses from environmental contamination.

Processors are vulnerable to chemical residue contamination or accumulation during

processing, even though the processor never has used a banned pesticide.

8

Consider a processor who purchases trim from an outdoor grower intending to process the trim

into THC Distillate. The grower’s crop passes chemical residue testing. The processor takes

that material, extracts it, and concentrates it into THC Distillate. When the processor sends the

THC Distillate for testing, he discovers the concentrated material has failed testing. In other

words, the trim was below the LOQ, but the concentrated material is now above the LOQ.

Under the proposed rule, the material would be ordered destroyed. No retest would be allowed.

The parties negatively impacted by the failed test result would not even be able to verify that the

result was in fact accurate through an R&D test after the final compliance test.

We urge MRA to differentiate between banned pesticide use and accidental environmental or

equipment contamination. Licensees that haven’t used banned pesticides should be allowed to

remediate and/or retest in the event of low-level fails.

9

R. 420.306 (4) says, “The agency may publish a remediation protocol including, but not limited

to, the sale or transfer of marihuana product after a failed safety test as provided in these rules.”

We’ve been told by MRA that they’re currently not allowing a processor to transfer failed

material to another processor for remediation. We cannot see any way in which this policy

benefits licensees, regulators, or patients. A processor is unlikely to have every piece of

remediation and processing equipment.

We believe the rules and remediation protocol should allow a processor to transfer material to

another processor for remediation. As a processor, we intended to offer remediation services to

other processors who may not have the equipment we have. We were disappointed not to be

able to offer this service.

10

R 420.404 says, “A marihuana sales location shall not sell or transfer marihuana-infused

products that exceed the maximum THC concentrations established by the agency. For the

purposes of maximum THC concentrations for marihuana-infused products, the agency shall

publish a list of maximum THC concentrations and serving size limits.”

The maximum THC concentrations and serving size limits—as currently enforced by MRA—are

hard ceilings.

Given that potency results themselves have a margin of error, we ask that MRA allow for a +/-

range above the maximum THC concentrations and serving size limits that mirrors the

acceptable laboratory margin of error.

One additional suggestion:

Throughout the past year, we’ve seen potency variations of approximately 10% between labs.

It is our understanding that there is currently no mechanism in the rules to ensure that two

different labs would give the same (or nearly same) result.

We encourage MRA to create a rule or internal process designed to reduce variations in results

between labs.

It is our view that growers and processors should be able to have their products sampled by any

licensed lab and receive the same results within a very tight tolerance.

Sincerely,

Maxwell Murphy

Compliance Department

Choice Labs, LLC

11

Public Comment on Proposed Combined Topic-Based Rule Sets for the

MMFLA and MRTMA

I.

Definitions

It is clear that the Marijuana Regulatory Agency (MRA) has taken feedback from licensees,

applicants, and other stakeholders in order to add new definitions to the proposed rules and

clarify other existing terms and phrases. However, there are a couple of terms and phrases

in the proposed rules that Cannabis Legal Group strongly urges the MRA to clarify so that

licensees, applicants, and other stakeholders are able to better navigate the regulatory

requirements:

Definition of “Applicant” and the phrase “exercise control over or participate in the

management” of the partnership/company

R 420.1 Definitions¹

(1)(c) ”Applicant” means a person who applies for a marihuana

license, subject to paragraphs (i) and (ii):

(i) For purposes of this definition, an applicant includes a

managerial employee of the applicant, a person holding a

direct or indirect ownership interest of more than 10% in the

applicant, and the following for each type of applicant:

(C) For a limited partnership and limited liability

limited partnership: all general and limited partners,

not including a limited partner holding a direct or

indirect ownership interest of 10% or less who does not

exercise control over or participate in the management

of the partnership, and their spouses.

(D) For a limited liability company: all members and

managers, not including a member holding a direct or

indirect ownership interest of 10% or less who does not

exercise control over or participate in the management

of the company, and their spouses.



ISSUE

o The phrase “exercise control over or participate in the management” as it

applies to the definition of “applicant” is not 100% clear and contains no

¹For ease of reference, this definition is contained in 2019-67 LR, but the definition also appears in other

proposed rule sets. Any changes or revisions made by the MRA to this definition should be incorporated

throughout all proposed rule sets.

o guiding principle or clarification, which may result in both under- and over-

disclosure of an “applicant.”

o In other words, on the one hand there are likely individuals and entities who

have an ownership interest of 10% or less who “exercise control over or

participate in the management” that have not been characterized as an

“applicant.” Licensees and applicants may take a liberal approach with this

phrase in order to prevent characterizing an individual or entity as an

“applicant.”

o On the other hand, there are likely individuals and entities with an

ownership interest of 10% or less who have been identified as an

“applicant” even though they do not “exercise control over or participate in

the management.” Licensees and applicants may take a conservative

approach with this phrase which may result in the unnecessary submission

of a Supplemental Application for an individual or entity who does not meet

the definition of “applicant.”



SUGGESTION – The MRA should determine precisely what the phrase “exercise

control over or participate in the management” means in terms of who should be

disclosed as an “applicant” and provide additional clarification/guidance so that

there is no under- or over-disclosure of “applicants” on a license or application.

Definition of “Managerial Employee”

R 420.1 Definitions²

(1)(q) “Managerial employee” means those employees who have the

ability to control and direct the affairs of the marihuana business

or have the ability to make policy concerning the marihuana

business, or both



ISSUE

o Similar to the issue identified above, the definition of “managerial

employee” and the phrase “the ability to control and direct the affairs of the

marihuana business or have the ability to make policy concerning the

marihuana business” are not 100% clear and contains no guiding principle

or clarification, which may result in both under- and over-disclosure of an

“applicant.”

²Similar to the definition of “applicant,” this definition of “managerial employee” is contained in 2019-67

LR, but the definition also appears in other proposed rule sets. Any changes or revisions made by the MRA

to this definition should be incorporated throughout all proposed rule sets.

o

o In other words, on the one hand there are likely individuals who are

employed by a licensee or applicant that have not been characterized as a

“managerial employee.” Licensees and applicants may take a liberal

approach with this phrase in order to prevent characterizing an individual

or entity as a “managerial employee.”

o On the other hand, there are likely individuals who have been identified as

a “managerial employee” even though they do not actually “have the ability

to control and direct the affairs of the marihuana business or have the ability

to make policy concerning the marihuana business.” Licensees and

applicants may take a conservative approach with this phrase which may

result in the unnecessary submission of a Supplemental Application for an

individual or entity who does not meet the definition of a “managerial

employee.”



SUGGESTION – The MRA should determine precisely what the phrase “the

ability to control and direct the affairs of the marihuana business or have the ability

to make policy concerning the marihuana business” means in terms of who should

be disclosed as an “applicant” and provide additional clarification/guidance so that

there is no under- or over-disclosure of “applicants” on a license or application.

Definition of “Applicant” re: Spouses and Criminal History

The definition of “Applicant” generally requires that an individual’s spouse submit a

Supplemental Application.

 ISSUE

o There are certain instances where an individual’s spouse has a disqualifying

felony within the past ten (10) years or a disqualifying misdemeanor

conviction within the past five (5) years which prohibits the individual from

being an “Applicant.”

o Cannabis Legal Group supports this requirement overall and agrees that

spouses should be vetted.

o However, we believe that the automatic disqualification of an individual

based on his or her spouse’s felony or misdemeanor conviction is

discriminatory and would be better decided on a case-by-case basis.

 SUGGESTION

o We strongly urge the MRA to implement a policy that does not punish an

individual for his or her spouse’s conviction.

o While we understand that the primary purpose behind this requirement may

be to prevent an ineligible individual from “swapping” ownership with his

or her spouse, it also has the undesired effect of preventing otherwise

eligible and suitable individuals from applying and obtaining a license.

o If an otherwise eligible and suitable individual has a spouse that has a

disqualifying felony or misdemeanor conviction, the individual should be

permitted to petition to the MRA to allow his or her ownership of the

applicant company notwithstanding the spouse’s disqualifying conviction.

Definition of “Commercial License or Certificate”

R 420.4 Application requirements; financial and criminal background

(9) Each applicant shall disclose any application or issuance of

any commercial license or certificate issued in this state or any

other jurisdiction that meets the requirements under the acts and

these rules.

 ISSUE

o There is no definition of what constitutes “any commercial license or

certificate.”

o This results in under- and over-disclosure of licenses, permits, etc.

. For example, in certain instances Cannabis Legal Group has assisted

applicants who are a registered primary caregiver. This is not, by

definition, a “commercial license or certificate” yet the applicant has

been asked to include this information on Disclosure 6.

 SUGGESTION

o Add language to the administrative rules, include more examples in the

instruction book, or issue an advisory bulletin regarding what qualifies as

“any commercial license or certificate” so that licensees and applicants are

able to identify and correctly disclose any commercial licenses and

certificates.

II.

Calendar Days vs. Business Days

The MRA should insert language in the proposed rules to clarify the method upon which

to calculate “days” (calendar vs. business). For example, R 420.24 specifically indicates

that a temporary marihuana event application must be submitted not less than 90 calendar

days before the first day of the temporary marihuana event. Additionally, R 420.305(11)

provides that a laboratory must enter in test results within 3 business days of test

completion.

However, the majority of instances where “days” are mentioned does not include whether

they should be counted as “calendar” days or “business” days. This proposed change

should be implemented in order to ensure that licensees and applicants are on the same

page with the MRA regarding when application items, fees, etc. are due.

R 420.3

(3) The agency may request additional disclosures and documentation

to be furnished to the agency. The applicant shall submit the

information requested by the agency within 5 days pursuant to R.

420.5 or the application may be denied.

R 420.5

(4) If the agency identifies a deficiency in an application, the

agency shall notify the applicant and the applicant shall submit

the missing information or proof that the deficiency has been

corrected to the agency within 5 days of the date the applicant

received the deficiency notice.

(5) The failure of an applicant to correct a deficiency within 5

days of notification by the agency may result in the denial of the

application. An applicant denied under this subrule is not barred

from reapplying by submitting a new application and application

fee.

R 420.6

(1) The agency shall issue a state license under the Michigan

regulation and taxation of marihuana act to a qualified applicant

whose application has been approved for issuance and who pays the

required licensure or excess background investigation fees within

10 days of the state license being approved for issuance. Failure

to pay the fees required under R 420.7 may result in a denial of

state license.

R 420.7

(12) The agency shall not issue a marihuana license until a complete

application is submitted, the fees required under these rules are

paid, and the agency determines that the applicant is qualified to

receive a marihuana license under the acts and these rules. An

applicant must pay initial licensure fees within 10 days of

approval of the marihuana license or within 90 days of a complete

application being submitted, whichever date is first. An applicant

must pay renewal fees upon submission of the application for

renewal. Failure to pay the required fee may be grounds for the

denial of a marihuana license in accordance with Rule 420.12.

R 420.12

(2)(e) The applicant failed to correct a deficiency within 5 days

of notification by the agency in accordance with the acts and

these rules.

R 420.13

(5) If a license renewal application for a license under the medical

marihuana facilities licensing act is not submitted by the license

expiration date, the license may be renewed within 60 days after

its expiration date upon submission of the required application,

payment of the required fees, and satisfaction of any renewal

requirements. The licensee may continue to operate during the 60

days after the license expiration date if the licensee submits the

renewal application to the agency and complies with the other

requirements for renewal.

(8) If the licensee does not request a hearing in writing within

21 days after service of the notice of nonrenewal, the notice of

nonrenewal becomes the final order of the agency.

R 420.22

(11) An applicant shall pay the initial licensure fee for an excess

grower license within 10 days of approval or within 90 days of a

complete application being submitted, whichever date is first.

R 420.809

(3) The licensee must request a compliance conference or contested

case hearing, or both, within 21 days of receipt of the formal

complaint. If the licensee does not respond, the agency shall

request a contested case hearing.

III. Labor Peace Agreement Application Requirement

R 420.5

(6) The applicant shall attest, on a form provided by the agency

and signed by a bona fide labor organization, that the applicant

has entered into a labor peace agreement and will abide by the

terms of the agreement. Copies of the labor peace agreements must

be maintained and made available to the agency upon request

 ISSUE

o While Cannabis Legal Group favors unions, this application requirement is

too restrictive and prohibitive in the sense that it may allow bona fide labor

organizations to wrongfully and unreasonably withhold entering into a labor

peace agreement with an applicant.

 SUGGESTION

o 1) Eliminate the labor peace agreement application requirement entirely

o 2) Allow an application to be submitted and move forward in the application

process without a signed labor peace agreement

IV. Testing for Mycotoxins

R 420.305

(3)(h) Under the medical marihuana facilities licensing act,

mycotoxin screening if requested by the agency.

(19) Under the medical marihuana facilities licensing act, the

agency may request mycotoxin testing. A marihuana sample with a

value that exceeds the published acceptable level is considered to

be a failed sample. A marihuana sample that is below the acceptable

value is considered to be a passing sample.

 ISSUE - Mycotoxin screening should be required for both MMFLA/MRTMA.

 SUGGESTION – Add language requiring mycotoxin screening for MRTMA in

addition to MMFLA

V.

Clarification on R 420.306

R 420.306

(3) A marihuana product is prohibited from being retested if a

final test for chemical residue failed pursuant to these rules. If

the amount of chemical residue found is not permissible by the

agency, the marihuana product is ineligible for retesting and

remediation, and the product must be destroyed. This subrule does

not apply to marihuana product that has been obtained under a

Resolution on Marijuana Product Access for Patients adopted by the

medical marihuana licensing board.

 ISSUE – R 420.306 refers to the Resolution passed by the MMLB, but does not

mention the new Advisory Bulletin promulgated by the MRA effective 3/1/2020.

It is unclear whether this proposed rule would apply to the Advisory Bulletin.



SUGGESTION – Add language to clarify whether the new Advisory Bulletin for

caregiver sourcing of product is affected by this proposed rule

VI. Warnings and Citations

R 420.807 and R 420.808

 ISSUE/SUGGESTION

o The proposed rules regarding warnings and citations are vague.

. At a minimum, the proposed rules should indicate more precisely

the definition of a “warning” and “citation” and its consequences,

as well as a minimum burden of proof that must be satisfied in

order for the MRA to issue a “warning” or a “citation” to a

licensee.

o R 420.808(7)’s 1-page response limit is too restrictive and does not afford

licensees due process.

. The page limit should be eliminated.

VII. Conclusion

Thank you for your consideration of these proposed rule changes and clarifications.

From:

To:

Roma Thurin

MRA-Legal

Cc:

Gabriel Thurin

Subject:

Date:

Comments to the Proposed MMFLA/MRTMA Rules

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

Good afternoon,

Please find below, comments to proposed rules:

Extension of Pre-Qualification longer than one year

CONSIDERATION: Applicants were initially encouraged to apply with

BMMR/MRA for pre-qualification prior to many

municipalities passing ordinances. It takes a significant

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

property, build out a facility and obtain municipal special

use permits, certificate of occupancy, and permission to

operate. There are many unforeseen circumstances,

additional costs and construction delays with many

municipalities permitting facilities in areas with a lot of

blight and abandoned buildings.

RECOMMENDATION: Remove this unnecessary requirement that all pre-

qualified entities received an MRA state license within

one year. At a minimum require only an extension

application attesting to no changes in an entity’s

organizational structure and supplemental applicants’

status.

Support Labor Peace Agreements for cannabis licensees with more than

20 employees

CONSIDERATION: Assist with social equity into an industry where minorities

and women are marginalized. It does not necessarily

mean unionization. Assist with creating a solid labor

workforce.

RECOMMENDATION: Keep the requirement

Allow vertically integrated entities to have one access point for entrance

and exist (R 420.204)

CONSIDERATION: This would create more efficiency in cultivator security

measures on-premise such would be controlled through

a single access point.

RECOMMENDATION: Remove this unnecessary requirement.

One security camera system for multiple entities (R 420.204)

CONSIDERATION: Creating multiple security systems that are not

integrated creates administrative burden and can lead to

security risks as opposed to one centralized system that

can be easily monitored.

RECOMMENDATION: Allow one security system for multiple entities under the

same location

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

CONSIDERATION: As the industry expands, cultivators should have access

to “trusted contractors” who have been background

checked to be allowed to go unescorted in areas where

there is no marijuana product.

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

ensure that any person at the marihuana

business, except for employees of the licensee

trusted contractors of the licensee, are escorted

at all times by the licensee or an employee of the

licensee when in the limited access areas and

restricted access areas at the marihuana

business.”

A licensee required to have cameras that record continuously 24 hours

per day 402.209 (9)

CONSIDERATION: The current rule requires cameras to record constantly,

which drains resources and makes it harder to find

sections of recordings that have actual activity in them.

RECOMMENDATION: Remove “record continuously” language and replace it

with motion detection language.

Waste management /onsite mulching (420.211, Rule 11)

CONSIDERATIONS:

Currently there are no environmentally friendly ways

of disposing of cannabis waste products. As an

outdoor grower that is trying to limit the carbon

footprint of the cultivation facility, we would like for

the rules to reflect more environmentally friendly

manners of repurposing the waste vs the option of

incineration or transportation, both of which have an

adverse effect on the environment.

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

at a large-scale operation is impractical.

RECOMMENDATION: Allow outdoor grow operations to bury this waste within

the secure perimeter in a green-friendly manner.

The stringency of heavy metals tests (R 420.306)

CONSIDERATIONS:

There are ways to remediate cannabis flower and

trim without compromising safety or the other

important qualities of the plant.

Consideration should be given to the fact that there

is no standardized testing or exact science to

remediation and thus it may require more than a

couple of tests to get the plant to meet the required

testing standards.

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

Grace periods / ample warning for new rules and standards

CONSIDERATIONS:

In the 2019 calendar year, Nickel was added to the

list of heavy metals without warning to cultivators

who already had their harvests in the ground.

Due to the sudden addition of the test, cultivators

were not able to react accordingly and remediate or

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

RECOMMENDATION: For future implementations of restrictive rules changes

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

situation that presents a clear and present danger.

Testing prior to moving product between entities

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

CONSIDERATIONS:

When moving product between cultivation and

processing, the proposed system of testing would be

inefficient.

If product is tested prior to moving between a

cultivator and a processor, and then again before it

reaches consumers, it would have an adverse effect

on the industry due to costs.

It also has adverse effects on testing facilities which

are already overburdened and have been the source

of bottlenecking flower getting to market.

RECOMMENDATION: Remove or do not move forward with this unnecessary

requirement, not only between co-located entities, but

between co-owned entities as well.

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

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

the market. However, requiring permission to remediate

creates additional and unnecessary steps that slow down

the production process.

RECOMMENDATION: Remove this unnecessary requirement.

Sale and Transfer (420.501-511)

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

price of flower, there are no current processors that are

producing excess distillate for resale.

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

have an associated cultivation facility that produces biomass

for extraction.

RECOMMENDATION: Allow for the intake of caregiver concentrate for infused

product production and caregiver RSO for medical.

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

adult-use if it passes all testing requirements.

Background checks (to R 420.602)

CONSIDERATION: In order to create and expand upon the existing

employment opportunities for residents of Michigan in

the industry we would propose making the background

check process more efficient.

RECOMMENDATION: Begin tracking individual background checks and issue

permits based on their status vs. forcing background

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

within the cannabis industry. This could possibly be done

through METRC in order to build efficiencies into the

system.

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

grows.

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

the field, which is tedious and time-consuming.

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

improve efficiency while maintaining the accuracy of data. Delete this

requirement.

Warmest regards,

Roma

Roma Thurin, Esq.

Managing Partner | Executive Consultant

office: (734) 744-7662

mobile: (484) • 632 •1973

romathurin@thurinlawgroup.com

thurinlawgroup.com

CONFIDENTIAL COMMUNICATION: This message, including attachments, is confidential and may

contain information protected by the attorney-client privilege or work product doctrine. If you are not the

addressee, any disclosure, copying, distribution, or use of the contents of this message are prohibited. If you

have received this email in error, please destroy it and notify me immediately.

From:

To:

Kale, Kavita (LARA)

Fox, Jessica (LARA)

Subject:

Date:

Fwd: November 15, 2019 Technical Bulletin and Rule 46

Tuesday, December 10, 2019 12:38:59 PM

See below for rules input...

Kavita Kale

Marijuana Regulatory Agency

Sent from my iPhone

Begin forwarded message:

From: "Brisbo, Andrew (LARA)" <BrisboA@michigan.gov>

Date: December 10, 2019 at 12:17:50 PM EST

To: "Kale, Kavita (LARA)" <KaleK@michigan.gov>

Subject: FW: November 15, 2019 Technical Bulletin and Rule 46

Input for the rules.

Andrew Brisbo, Executive Director

Marijuana Regulatory Agency

From: Hendricks, Robert <rhendricks@wnj.com>

Sent: Tuesday, December 10, 2019 11:31 AM

To: Brisbo, Andrew (LARA) <BrisboA@michigan.gov>

Cc: Steve Goldner <sgoldner@pure.green>; Hendricks, Robert <rhendricks@wnj.com>

Subject: November 15, 2019 Technical Bulletin and Rule 46

Dear Andrew - thank you for your prompt feedback last week to our

inquiries concerning inhalation device testing. Our client Pure Green,

LLC has another testing related issue on which we would like your,

or your staff’s, feedback.

The Technical Bulletin on remediation issued November 15, 2019,

implements Rule 333.246 of the Administrative Rules. We believe

that the bulletin and Rule 46 are unduly restricting scientific based

development of processing and reprocessing cannabis biomass. The

prohibition of repeated testing and remediation effectively prevents

discovery of “out of specification” ("OOS”) results. We also believe

that the application of the bulletin and the Rule prevent root cause

analysis of marijuana crop failures.

Like MRA, our objective is to produce safe and effective cannabis-

based medicines. Without the ability to repeatedly remediate and

retest, we feel that we do not have a scientifically viable

methodology for continuous improvement of our products.

Again, thank you for your prompt attention to this concern. Mr.

Steve Goldner of Pure Green and I are available for whatever form

of communication is appropriate to address these concerns.

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

This email and any attachments are solely for the confidential use of the intended recipient. If you

are not the intended recipient, please do not read, distribute or act in reliance on it or any

attachments. If you received this email by mistake, please notify us immediately by email, and

promptly delete this email and any attachments.

The attorney-client and work product privileges are not waived by the transmission of this email.

Marijuana Regulatory Agency

Legal Section

P.O. Box 30205

Lansing, MI 48909

RE: Proposed Marijuana Rule Set

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

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

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

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

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

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

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

many others in regard to the proposed rules:

-

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

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

licensees.

-

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

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

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

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

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

enforcement know who is impacted by a licensed business.

-

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

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

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

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

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

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

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

Container Transportation. Michigan statute currently requires that medical product be

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

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

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

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

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

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

testing/processing is necessary.

-

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

facilitate collaboration and communication regarding the various areas of overlap that

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

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

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

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

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

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

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

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

Marijuana Regulatory Agency representatives to discuss our concerns more thoroughly.

Thank you,

Sandra McCormick

Communications and Membership Director

Great Lakes Cannabis Chamber of Commerce

sandra@glccoc.com

(517) 420.5417

From:

To:

Jim LaPorte

MRA-Legal

Subject:

Date:

Live Resin-Fresh Frozen

Tuesday, February 11, 2020 10:06:03 AM

MRA,

Could you please change the phrase “Live Resin” to “Fresh Frozen”. Live Resin is made from Fresh

Frozen.

Thank you.

James B LaPorte

Vice President

E: jlaporte@highlifefarms.com

D: 248.465.1550 Ext. 2225

C: 940.867.9904

Sent from Mail for Windows 10

To: Director Brisbo, Marijuana Regulatory Agency

Re: Emergency Adult-use Rule Comments

Proposed Change: Rule 1(o)

(o) "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, tissue

culture, or seedling that is in a growing or cultivating medium or in a growing or cultivating container.

PLANTS MEETING THESE REQUIREMENTS ARE NOT ATTRIBUTABLE TO A LICENSEE’S MAXIMUM

ALLOWABLE PLANT COUNT, BUT MUST BE FULLY ACCOUNTED FOR IN THE INVENTORY TRACKING

SYSTEM.

Rational: This has become an industry standard, a number of plants at this stage do not survive the

cultivation process therefore we usually plant more of these than we need anticipating a loss in plants

throughout the process.

Proposed Change: Rule 35(9)

(9) A licensee shall have cameras that record continuously 24 hours per day and recorded images must

clearly and accurately display the time and date. THE USE OF MOTION DETECTION IS AUTHORIZED

WHEN A LICENSEE CAN DEMONSTRATE THAT MONITORED ACTIVITIES ARE ADEQUATELY RECORDED.

Rational: For example, a low-traffic hallway could be motion activated, while the entrance and exits of

the facility remain 24-hours. Allowing motion activated cameras helps the business know when there is

activity in low-traffic areas, especially during times of the day when there should not be any activity.

Using motion-activated cameras will save time during investigations, rather than having to scroll through

hours of footage to find when a given event took place, the person reviewing the cameras will know

exactly when activity took place at a given area.

Proposed Change: Rule 40

Option 1 – allow for growing of just regulated marijuana then designation as “medical” or “adult-use”

upon first transfer out of cultivation facility

Rational: This will allow cultivation facilities to use the market to determine how much product to

produce for medical or adult-use based on current supply and demand, rather than making the decision

3 months in advance

Option 2 – allow new adult-use licensees a window to “re-designate” their medical plants as adult-use

Rational: This will allow cultivators an opportunity to have some inventory available immediately upon

receiving licensure for adult-use cultivation and ensure supply is available to adult-use consumers

Proposed Change: Rule 41(2)

(2) A marihuana grower shall tag each plant that is greater than 8 inches in height from the growing or

cultivating medium or AND more than 8 inches in width with an individual plant tag and record the

identification information in the statewide monitoring system.

Rational: attaching a physical tag to an immature plant that is only 8 inches tall is next to impossible to

achieve, the plant is not strong enough at the stage to support a tag. Additionally, this requirement is

inconsistent with the definition of “immature plant” Rule 1(o).

Alternatively: (2) A marihuana grower shall ENSURE ALL IMMATURE PLANTS WITHIN A GROWING OR

CULTIVATING MEDIUM ARE APPORPRIATELY IDENTIFIED AND ACCOUNTED FOR WITHIN THE STATES

SEED TO SALE TRACKING SYSTEM. ONCE A PLANT HAS REACHED A VIABLE POINT TO SUPPORT THE

WEIGHT OF THE RFID TAG AND ATTACHMENT STRAP, THE MARIHUANA GROWER SHALL tag each plant

that is greater than 8 inches in height from the growing or cultivating medium or AND more than 8

inches in width with an individual plant tag and record the identification information in the statewide

monitoring system.

Proposed Change: Rule 42(b)

(b) The marihuana safety compliance facility shall collect a sample size sufficient to complete all analyses

required, but the sample shall not be less than 0.5% of the weight of the harvest batch. The maximum

harvest batch size must be 15 pounds. The agency may publish requirements for this subdivision based

on the type of marihuana product being tested. BASED ON THE FOLLOWING GUIDELINES:

(i) FOR HARVEST BATCHES WEIGHING UP TO 10 POUNDS, A MINIMUM OF EIGHT SEPARATE 0.5 GRAM

SAMPLES MUST BE COMBINED INTO ONE 4 GRAM SAMPLE AND SUBMITTED AS ONE TEST BATCH.

(ii) FOR HARVEST BATCHES WEIGHING MORE THAN 10 POUNDS BUT LESS THAN 20 POUNDS, A

MINIMUM OF 12 SEPARATE 0.5 GRAM SAMPLES MUST BE COMBINED INTO ONE 6 GRAM SAMPLE AND

SUBMITTED AS ONE TEST BATCH.

(iii) FOR HARVEST BATCHES WEIGHING 20 POUNDS OR MORE BUT LESS THAN 30 POUNDS, A MINIMUM

OF 15 SEPARATE 0.5 GRAM SAMPLES MUST BE COMBINED INTO ONE 7.5 GRAM SAMPLE AND

SUBMITTED AS ONE TEST BATCH.

(iv) FOR HARVEST BATCHES WEIGHING 30 POUNDS OR MORE BUT LESS THAN 40 POUNDS, A MINIMUM

OF 18 SEPARATE 0.5 GRAM SAMPLES MUST BE COMBINED INTO ONE 9 GRAM SAMPLE AND SUBMITTED

AS ONE TEST BATCH.

(v) FOR HARVEST BATCHES OR WEIGHING 40 POUNDS OR MORE BUT LESS THAN 100 POUNDS, A

MINIMUM OF 23 SEPARATE 0.5 GRAM SAMPLES MUST BE COMBINED INTO ONE 11.5 GRAM SAMPLE

AND SUBMITTED AS ONE TEST BATCH.

(vi) FOR HARVEST BATCHES WEIGHING 100 POUNDS OR MORE, A MINIMUM OF 29 SEPARATE 0.5 GRAM

SAMPLES MUST BE COMBINED INTO ONE 14.5 GRAM SAMPLE AND SUBMITTED AS ONE TEST BATCH.

Rational: The current requirement for sample size is too large based on the harvest batch size, based on

the current requirement each harvest batch will be required to submit 34 grams for testing. Safety

compliance facilities do not need that much product to conduct all applicable tests and the remaining

sample will be wasted. These guidelines provide an adequate sample to reflect the different harvest

batch sizes while not wasting product that can be placed into commerce.

Proposed Change: Rule 49(h)

(h) Activation time expressed in words or through a pictogram

Rational: Currently, there is no credible research to support any claims based on this requirement. Each

person is different and different products effect every consumer differently. Additionally, this

information may subject licensees to potential litigation

Proposed Change: Rule 49(i)

(i) Name of the marihuana safety compliance facility that performed any test, any associated test batch

number, and any test analysis date.

Rational: This information is available from both the cultivation facility and testing facility. There needs

to be a delicate balance between providing enough information to preserve public safety, but not

include too much information that it will take up the entire container. So long as the METRC ID number

is included on the label anyone interested in testing analysis information that is not already contained

on the label can easily obtain that information.

Marijuana Regulatory Agency – Legal Section

P.O. Box 30205

Lansing, MI 48909

MRA‐Legal@michigan.gov

SUBMITTED VIA EMAIL

Re:

Draft Rules – Safety Compliance Facility Sampling & Testing

Dear Sir or Madam:

I write today to add the support of North Coast Testing Laboratories of Michigan, LLC to each of the

comments on the draft rules for safety compliance facility sampling and testing that were submitted on

January 8, 2020 by the Michigan Coalition of Independent Cannabis Testing Laboratories (MICIL) (copy

attached).

In particular, we note that the “unlimited” batch size proposed in R 420.304(2)(b), in lieu of the present

15 lb. maximum batch size, poses an unnecessary risk to patient health and safety.

In our view, maximum batch sizes are necessary to protect patient health and safety from potentially

hazardous contamination. Unlimited batch sizes – with no corresponding incremental testing

requirement – allow far too much opportunity for hazardous contamination to go undetected.

We strongly believe that, as a statistical matter, it will only be a matter of time before an “unlimited

batch” allowance will result in a “false negative” for an unreasonably‐sized batch that “passes” testing,

despite significant amounts of contamination actually present.

To take MICIL’s illustration using a 1,500 lb. batch, 3 lbs. of toxically‐contaminated marijuana would only

represent 0.2% of the batch – which would almost certainly be missed by any viable sampling and

homogenization protocol, and would ultimately be consumed by patients.

The 15 lb. maximum batch size, or an equivalent incremental testing requirement, fairly balances

questions of testing costs against the potentially catastrophic health hazards posed by undetected

contamination.

In conclusion, in addition to supporting MICIL’s commentary on all rules, we particularly urge MRA to

revise the draft rules in a manner that re‐incorporates the 15 lb. maximum batch size.

Sincerely,

David A. Moorhead

President, North Coast Testing Laboratories of Michigan, LLC

Response to Draft Rules and Technical Bulletin

R 420.304(2)(b) Unlimited Batch Size:

•

“Except otherwise required by the agency, the laboratory shall collect a sample size that

is sufficient to complete all required analyses, and not less than 0.5% of the weight of the

harvest batch. At least 50% of the sample taken must be homogenized for testing. The

agency may publish sample sizes for other marihuana products being tested.”

The draft rules remove the 15 lb. maximum flower batch size, leaving an unlimited

batch size in its place. It will be extremely difficult for SCFs to obtain a truly

representative sample if there is an unlimited batch size. Sampling will take longer, be

more labor intensive, create more of a bottleneck in a system that is already stressed.

For example, imagine an outdoor grow with a 1,500 lb. total harvest:

•

Draft Rules: 1,500 lb. batch

o

= 7.5 lbs. of 1,500 lb. batch required (0.5% minimum of the batch)

o

Rule 4(2)(b): "At least 50% of the batch must be homogenized for

testing":

§

In the example above, this would mean needing to

homogenize nearly 4 lbs. of flower for testing.

•

Current Rules: 100, 15 lb. batches

=100, 0.075 lb. samples required

o

•

Contamination can often spread out in a heterogeneous manner – especially for

microbiological contamination. Splitting samples up across 15lb. batches helps samplers

(and facilities) identify areas of the harvest batch that may be more problematic.

Recommendation: Michigan should not change the 15 lb. maximum batch size.

R 420.301(g):”Final Package”

•

“‘Final Package’ means the form a marihuana product will be in after fully complying

with these rules. This is the form marihuana product is in when it goes from a marihuana

sales location to a consumer, registered qualifying patient, or a registered primary

caregiver.”

•

This definition requires more clarity - especially since SCFs can be given citations for

providing retests of a product that is in its “final package”.

As an example, it is unclear if the following would be considered final packaging:

o

Products in boxes/packaging, but without affixed test result labels.

Products in packages but without any labels whatsoever.

Products in packages that have failed, but were taken out of the packages and

submitted for a retest?

o

Products in packages, but would be further packaged (e.g., gummies in a bag, but

will be placed in an additional container) or would be repackaged.

•

There is no clear scientific reason to suggest that once a product has reached a final

package state it cannot be safely repackaged without compromising safety or quality. If a

processor is able to package a product once safely it seems likely they would be able to

unpack and repack product as needed.

Recommendation: the definition of "Final Package" needs an explicit, clarifying

definition to help alleviate industry confusion.

R 420.304(2)(e)(iv): "laboratory confirms"

•

“If the product test sample is obtained for a retest, the laboratory confirms that it is not

accepting a product test sample that is prohibited from being retested.”

•

The state has placed the responsibility on SCFs to monitor their clients, ensuring they are

in compliance with the rules. In effect - an SCF must act as both a laboratory and a

branch of MRA-Enforcement. However, in failure of those Enforcement duties, the SCF

(whose most important duty, and expertise, lies with the testing of samples for

compliance) faces penalties, including citation or even suspension.

•

Should the onus not be on the sample-submitting facility itself? And because MRA

regulates and monitors all traffic via Metrc, could MRA not take this on as their

responsibility?

•

For example, if a sample has failed for chemical residue, it should automatically be

placed on hold and not be able to be transferred to another facility.

Recommendation: MRA should handle all aspects of enforcement, tracking and

monitoring, rather than relying upon (and penalizing) licensed facilities, who should

spend their time perfecting their own processes.

R 420.305(1)(a): Scope of Accreditation

•

A lab must be accredited within 1 year of licensing. However, there is no mention (and

has never been mention in any previous rule set) that after 1 year a lab must have each

specific assay (and analyte) in its scope of accreditation in order to perform that test.

•

Recommendation: The state should further clarify this verbiage to allow MRA to

approve and validate a SCF’s new method, and allow at least 6 months for a scope

expansion (which should fall within the SCF's regular ISO surveillance period).

R 420.305(12): COAs to MRA

•

Sending COAs of all failing results to MRA is unreasonably burdensome - especially

when all of the data is available to MRA in Metrc. However, upon request the SCF can

send any and all COAs. The need to send all failing COAs will slow a SCF's turnaround

time and, generally, negatively impact industry health.

•

Recommendation: MRA should rely upon Metrc-submitted lab data, and request

COAs on an as-needed basis.

R 420.304(2)(f): Three Day Rule:

•

“The laboratory shall enter into the statewide monitoring system the test results within 3

business days of test completion.”

•

Mandating a testing facility to meet deadlines, imparts undue pressure on the analytical

staff that will ultimately lead to quality assurance issues within the laboratory. The very

standard that the MRA requires the Safety Compliance Facilities to meet for accreditation

purposes (ISO 17025), specifically addresses these pressures that have a negative impact

on the impartiality of the test results and the laboratory’s quality management system

governing those results.

•

Recommendation: MRA needs to narrowly define “test completion”, given that

technical and administrative reviews are a standard, necessary practice.

R 420.305(4): GMP Certification to Replace Aspects of Safety Compliance Testing:

•

“All marihuana businesses may become certified to GMP by an ISO 17065 accreditation

body. This accreditation may enable the licensee certain allowances with testing. The

agency will publish those allowances and information on how to obtain approval for

allowances.”

•

The ISO 17065 standard is what certification bodies become accredited to which brings

higher credibility to their product certification operations. They are not an accrediting

body and subsequently cannot offer accreditation, rather they certify the quality of a

product being manufactured. Nowhere in the FDA’s Code of Federal Regulations Title

21, where Good Manufacturing Practice is addressed, does it suggest allowances can be

made from regulated testing requirements.

Good Manufacturing Practice (GMP) is internal to one’s processes and should not

be used as a measure to avoid testing requirements that ensure the health and safety

of consumers.

R 420.306(2): MRA-enforced lab shopping

•

"The laboratory that reported the initial failing results shall not perform the tests".

This is arbitrary and there is no scientific evidence to support the practice. The test should

be performed the same way each time, if a failed product is remediated and sent for

retesting, there is no reason why it could not be tested at the same SCF to confirm

whether the remediation was successful.

•

Lab shopping is already a known problem within the cannabis industry. This rule

mandates that a facility must attempt to find another lab that will pass their product.

Pursuant to Rule 5 (13), the state already mandates proficiency testing in an attempt to

ensure standardization across labs. Further, in order to perform the assay, the lab's

methods must have already been approved by both the state and an ISO 17025

accreditation body.

•

Recommendation: MRA should not promote doubt and a lack of confidence in its

licensed SCFs. MRA must not force facilities to shop for a lab that will give them the

most favorable results. Simply put, MRA should not mandate lab shopping.

Vape Cartridges - required ATA tests, additives and copper test

ATA Testing:

•

o

We want to ensure that moving forward (post-emergency rules), Vitamin E-

acetate (ATA) will be a required test for all newly manufactured vape cartridges -

not merely something notated on a waiver/attestation form, signed off by

processors. The recent outbreak of lung injury associated with vape cartridges

(EVALI) is becoming a serious health crisis.

o

Recommendation: Michigan must enact a mandatory ATA test for all vape

cartridges. Anything less would be irresponsible.

•

Additives:

o

It is currently unclear if botanical terpenes are allowed as an additive, though they

are chemically indistinguishable from cannabis-derived terpenes. All vape

cartridges (and other marihuana products) are tested for pesticides, metals,

solvents (and hopefully ATA) under MRA.

Recommendation: MRA should allow processors to use botanical terpenes as

additives, since they are chemically indistinguishable from cannabis-derived

terpenes, and they will ultimately undergo the same level of testing scrutiny

as all other marihuana products.

•

Required copper test:

Copper is now a required test - for vape cartridges only. This was amended, where

o

copper was first required for all marihuana products. Because copper-based

fungicide is a safe (approved by MRA) and effective tool in eliminating fungal

contamination, a vast majority of flowers we've tested are "contaminated" by

copper at high levels. MRA's indifferent knowledge of the fact that patients and

adults will be smoking plants "contaminated" with copper - but requiring a health

and safety copper test, solely for vape carts, is unusual and illogical.

§

One exception could be if there is scientific data to support the idea that

inhaling vaporized copper is more harmful than inhaling copper during

combustion of plant material.

o

Recommendation: Copper should either be a mandatory test for all inhaled

products, or be removed entirely as a required test.

Potency Test

Reported variance:

•

o

Scientific measurements are reported as ranges or with the ± sign rather than as

single values because every measurement has some degree of variance, which

must be reported

o

e.g., a cannabis lab may report the variance at 10% relative - an industry

standard.

Statistically speaking, an infused marihuana product reported at 200 mg is

equivalent to 180 - 220mg.

The potency action limit for certain infused marihuana products is 200mg. If a

processor yields a “fail” with a test result of 205mg ± 20.5mg (which is

statistically equal to 184.5mg), it should not result in a “fail”.

o

Conflicting information currently exists for this guideline.

§

There is no mention of variances or error tolerances in a recent bulletin on

infused product limits, however, a separate webpage for “Rule 34” says

that all limits have a variance of +/-10%

•

Recommendation: MRA should account for a lab's reported variance – possibly

rewriting the “error” section of the testing guide in ISO terms.

Homogeneity and Potency Test:

•

The Homogeneity Test was recently described to our lab by MRA as an optional test for

processors, though the technical bulletins read as it being mandatory for the first batch

and every 6 months thereafter.

•

Recommendation: A Homogeneity Test should be mandatory, and MRA

should clarify same to SCFs and Processors.

•

A related issue has to do with the difference between Precision and Accuracy – in this

case, the difference between the homogeneity of a batch of infused products (precision)

and the variance from the target dose (i.e., accuracy).

o

Precision is the variability from unit to unit within the batch which is covered by

the +/-15% variance allowed in Homogeneity Tests.

§

e.g., if each individual increment tested was within +/-15% of each other

(e.g., 10 mg, 11 mg., 10.5 mg, 12 mg.) - the product would pass

homogeneity. If the doses were significantly different (e.g., 10mg, 50mg

and 100 mg), the product would fail homogeneity.

o

Accuracy is how close the actual measured potency is to the target dose.

•

While it is very important to establish that tested products are homogenous (to ensure the

end user gets the same expected dose each time, that only addresses the precision of the

edible dosing. Accuracy is not being addressed with the current iteration of Homogeneity

Testing, and has thus far been ignored for Potency Testing, possibly as an oversight.

o

Example: Target dose of 200mg, and actual potency of:

§

201mg - fails Potency Test.

6 mg - passes Potency Test.

§

Increments tested w/in +/- 15% of each other – 6 mg, 6.4 mg, 6.1

mg, 6.3 mg – passes Homogeneity Test.

•

Recommendation: MRA should mandate the Homogeneity Test (Precision),

and also flag products as Potency Test failures if the tested potency is not +/-

15% of the target dose (Accuracy). Remediation can include repackaging with

a different label to reflect the lower/higher dose.

Measuring both Precision and Accuracy is crucial for establishing the

consistency of the products from package to package and dose to dose, and

will also help ensure that the dose is within +/- 15% of the target dose (often

permanently printed on packages as part of branding).

From:

Ching Ho

To:

MRA-Legal

Subject:

Date:

Ruleset public comment submission

Monday, February 17, 2020 11:14:59 PM

Attachments:

Nickel soil tests x8.pdf

Department_Approved_Pesticide_List_Update_620231_7 (1).pdf

MRA Public Comment - Email Submission

Five suggested submissions from Dragonfly licensed cultivator on proposed MRA ruleset

revisions. Additionally, we also spoke with Director Brisbo and Kavita Kale on these issues -

specifically the recent changes to copper and nickel.

1. Permanent organic heavy metal removal

We are 100% organic sun-grown cultivators - we use no pesticides and grow in 100%

composted organic soil. Our eight soil tests attached below show that all forms of soil -

whether potted, organic, or native soil - naturally contain copper, nickel, and chromium often

20X the current PPM limit. These are defined "essential minerals” that occur naturally and

organically and cannabis, as a bio-accumulator, will naturally absorb these heavy metals.

Should this regulation stand, licensed cannabis in Michigan cannot grow in most all forms of

natural soil - and impossible organically. Simply put, most licensees, especially outdoor

cultivators like us, would have no recourse but to retool our facilities and cultivate in an

artificial base.

Michigan is also the only state that tests for the recently added nickel and copper:

CA - no nickel, no copper

CO - no nickel, no copper

WA - no nickel, no copper

NV - no nickel, no copper

MA - no nickel, no copper

PA - no nickel, no copper

IL - no heavy metal testing

FL - no heavy metal testing

OR - no heavy metal testing

Please reconsider nickel, copper, and chromium as tested heavy metals.

2. Minimum six month advance notice on changes

When nickel and copper were published in the technical bulletins, ours and many licensed

producers' inventory were effectively frozen for a two to three month period. For example, it

took one lab an entire month to be able to test for these elements, and other labs over two

months before they could even start.

The lab testing process itself takes a month, so all combined = 2 to 3 months total frozen

inventory.

During this time, producers counting on sale were running low on capital as their inventory

was frozen.

All nickel tests were subcontracted out to one single compliance lab (Psi), and most every soil

based cultivator we’ve spoken to is failing nickel - statewide about 80% we believe.

Furthermore, licensees were not notified before nickel was enforced as a surprise testing

requirement. As our cultivation began in April, this unfortunate timing provided absolutely no

recourse for adjustment.

On copper, we were made aware that copper was being tested as a banned heavy metal in the

published Testing Guide 5.0 published October 25, however based on your MRA Technical

Bulletin attached, copper is listed as an approved ingredient on Feb 4 and July 15.

Because of this guidance, we sprayed an organic, OMRI-listed (Organic Material Research

Institute certified) copper octanoate over the summer, the exact same copper octanoate in the

"MRA Department Approved Active Ingredients for Growers”.

Our chemist has determined that a single recommended application of this product listed in the

approved ingredient list would now result in a PPM 25X in excess of the new guideline limit.

Because of this flip flop, our licenses, investment, and business viability were at risk of being

invalidated, even as we followed the exact MRA published guidance and used only approved

ingredients. We are asking that the MRA provide licensees with a minimum production cycle

advance notice (6 months) before instituting such changes.

3. Raise heavy metal and microbial limits, 10-gram consumption unrealistic

Even if nickel, copper, and chromium were to stand, the published guidelines assumes an

aggressive 10-gram a day consumption for an essential mineral which would not be inhaled

until the melting point of 2650-degree Fahrenheit.

We ask that the MRA not only consider melting points of specific heavy metals for

consumption but to also raise the PPM microbial and heavy metal limits based on realistic

daily consumption, which are currently based on 10 grams daily.

For reference, your typical joint is less than one gram and often shared within a group of

multiple people - a discrepancy of 10X-30X regular adult use consumption. We’ve researched

that most states only test for arsenic, cadmium, and lead, and even then at much higher limits -

and no other heavy metal.

4. Specific microbial testing > TYVM, no retesting limits

As organic outdoor cultivators, we also ask that the MRA consider testing for specific yeast

and mold that negatively impact health - many states typically test for specific microbial such

as coliforms, aspergillum, and e-coli. These states do not include “total yeast and mold” as

they recognize that good bacteria included in TYVM are often used to fight bad bacteria,

much like the healthy gut fauna example.

In organic cultivation, we use good bugs such as ladybugs to fight bad bugs, and good bacteria

to fight bad bacteria. Total yeast and mold TYVM often disregards the benefit of good and

non-harmful bacteria as natural competition against bad bacteria. Most all cultivators are

currently remediating for TYVM - and licensees should be able to retest as often as necessary

without having to destroy the product, as the product cannot be sold until testing is passed.

5. Eliminate cultivation to processing testing redundancy

We are asking the MRA to eliminate redundant biomass testing on the cultivation size and to

raise batch size weights above 15 pounds.

Currently, we must test processing biomass such as trim on the cultivation side which are

intended for processing conversion. These tests automatically fail, after which we are allowed

to transfer the 15-pound batch size. The processor then extracts the biomass (which kills

yeast, mold), retests it once as an R&D test, and then a third time as an official test.

No other state has this redundant testing on processing biomass because it is unnecessary and

expensive.

This is three rounds of testing on processing biomass that is intended for automatic transfer to

processor. Trim often sells in established licensed markets for $100 per pound, so testing and

transport eat up one third to one half of the sale value.

Along this same logic, the fifteen pound batch size is impractical. Our sun grown wet weight

this year was 131,000 pounds - had this been all wet weight trim, this would be 8,333 tests -

$4M in testing fees at today’s rates. As you can see from our METRC inventory, we have not

been able to move our processing biomass not because of demand but due to the massive

bottlenecks from regulatory changes and lab delays.

Thank you for listening. Please reach out to me anytime if you’d like to further discuss these

issues.

Ching Ho

(732) 540-0308