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  
1 For 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.”  
2 Similar 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.  
POLLICELLA TOMPKINS, PLLC  
COMMENTS TO PROPOSED JOINT PERMANENT RULES FOR MEDICAL AND  
RECREATIONAL ADULT USE MARIJUANA FACILITIES  
Delivery Business License  
We oppose the addition of the Delivery Business License on numerous grounds:  
Problems:  
1. The Delivery Business License will be an unmanageable and unenforceable vehicle for  
the black market marijuana trade. There is no amount of verification, compliance or  
enforcement that can prevent, among other things, home delivery to minors, diversion,  
operation out of residential areas, and counterfeit and unsafe products being sold to  
unwitting consumers. It is not the answer to the social equity owner problem. The only  
successful cannabis delivery business is an App created by a California billionaire, which  
will create a lot of pizza-cannabis-fast food delivery drivers, not business owners.  
Proposed Solution:  
Do not adopt this rule.  
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Warnings, Citations, and Formal Complaints  
Section: Disciplinary Proceedings, Rule 420.807-809  
Problems:  
1. There is no distinction between when a warning is issued and when a citation is  
issued. The rules use identical language for both.  
There is no distinction between when a “warning” is issued and when a “citation” is  
issued with the way the rules are drafted right now. This is significant because a warning does  
not have a fine associated with it, is not made available to the public, and remains in the  
licensee’s file for only 1 year, whereas a citation, as it is written now (which is quite different  
from how citations have been issued over the past year) has a fine associated with it, is made  
available to the public, and remains in the licensee’s file for 5 years.  
2. Citations can no longer be negotiated or settled. If they are not accepted, they will  
become a formal complaint.  
It appears that the ability to negotiate citations has been removed from the rules. Under  
the proposed rules, if a licensee is issued a citation and MRA does not accept the citation as is,  
a formal complaint “must” be issued. The rules do not provide any avenue to request a  
compliance conference or negotiate a settlement for citations, which is the common practice in  
place right now when they are issued. For a “formal complaint,” the rules expressly allow for  
negotiating a settlement with the agency or requesting a compliance conference. That language  
is omitted from the citation rule (Rule 420.808).  
The way it is drafted right now leaves the MRA with significant discretion as to what  
violations should receive warnings as opposed to citations, and to which licensees should  
receive warnings as opposed to citations. Warnings and citations can be issued and applied  
inconsistently across the state and across licensees. Assuming the MRA does issue both  
warnings and citations, there is nothing in the current rules to establish when each is  
appropriate. One licensee may simply receive a warning for something that a different licensee,  
who has an identical violation, receives a citation that is also accompanied by a substantial fine  
and will put that licensee in a more serious position to potentially lose its license. This creates,  
at the very least, the potential for the appearance of favoritism and retaliation, and could allow  
the MRA to effectively remove whomever it pleases from the industry through using the excuse  
of numerous citations to revoke a license, or to drown a licensee in fines. While the statutes do  
cap the maximum fines that can be imposed for license violations, it is a per day cap, and the  
case law in other regulated industries suggests that the courts will support an agency fining a  
licensee the maximum fine per day, for each day the licensee is out of compliance.  
Further, there is nothing preventing the MRA from skipping over the issuance of a  
warning entirely and going directly to issuing citations, which are accompanied by a fine that is  
now seemingly non-negotiable.  
Proposed Changes:  
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1. The first time something is found to be out of compliance, a warning is issued. The  
second time the same issue is found to be out of compliance at a subsequent  
inspection, it is a citation that is issued, etc.  
2. Create a list of serious offense as opposed to minor errors or oversights (for  
example: having large jars of distillate not logged in Metrc being a serious offense,  
having a safety compliance employee not date the visitors log when she signs in a  
minor offense). Minor offenses receive warnings where it is clear it was an oversight  
or an error and as a first-time offense. (see below)  
3. Place some kind of limitation on double jeopardy. Right now, licensees are receiving  
numerous citations for one single violation because the rules are very repetitive.  
(Example – having several large jars of distillate not logged in Metrc was citated as 4  
separate violations because there are 4 separate places where the rules prohibit it) If  
the rules are repetitive, a licensee can only be fined once per instance.  
Proposed new definitions:  
“Violation” means a single event or occurrence which violates one or more of the rules. In  
situations where numbers rules relate to a single event or occurrence, only one single violation  
shall be issued per occurrence.  
“Violation Affecting Safety or Health” means a violation that generally has an immediate impact  
on the health, safety and welfare of the public at large. This category of violations are the most  
severe, and may include: selling to person under the age of 21; medical marihuana sales to a  
non-patient; advertising to a minor; marihuana purchased from an unauthorized source;  
marihuana sold to an unauthorized source; refusal to allow an inspection and/or obstructing a  
law enforcement officer from performing their official duties; or failure to track marihuana in  
METRC.  
Rule 420.807 Warning.  
Rule 7. (1) The agency may issue a warning to a licensee if the agency determines through an  
investigation that the licensee violated the acts, these rules, or an order.  
(2) The agency shall issue a warning to a licensee who has violated the act, rules, or an order,  
provided it is the first offense of and is not classified as a violation affecting safety or health.  
(3) A warning must be served on a licensee by certified mail, return receipt requested, or served  
in person by a representative of the agency.  
(4) A warning must remain in the licensee’s file for one year from the date of service.  
(5) A warning may be considered in future licensing actions. Continued or repeated non-  
compliance or repeated warnings for the same violation may result in further action, including  
the imposition of fines or other sanctions against a licensee, or both.  
Rule 420.808 Citation.  
Rule 8. (1) The agency may issue a citation to a licensee if the agency determines through an  
investigation that the licensee violated the acts, these rules, or an order, and the licensee has  
already received a warning for the violation, when applicable.  
(2) A citation must be served on a licensee by certified mail, return receipt requested, or  
served in person by a representative of the agency.  
(3) A citation must contain all of the following:  
(a) The date of the citation.  
(b) The name and title of the individual issuing the citation.  
(c) The name and license number of the licensee.  
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(d) A brief description of the conduct or conditions that are considered violations of the acts,  
these rules, or orders.  
(e) A reference to the section of the acts, these rules, or orders that the licensee has allegedly  
violated.  
(f) The penalties or actions required for compliance.  
(g) A signature line for the licensee to agree and accept the terms and conditions.  
(h) A timeframe to agree and accept the terms and conditions.  
(4) A licensee shall have a specified time in which to notify the agency in writing that the  
licensee accepts the conditions set forth in the citation.  
(5) If the licensee accepts the conditions set forth in the citation, the licensee, within the listed  
time frame after receiving the citation, shall sign the citation and return it to the agency along  
with any fine or other material required to be submitted by the terms of the citation. The citation  
and accompanying material must be placed in the licensee’s file for 5 calendar years.  
(6) A citation issued under this section will be published to the public.  
(7) A licensee may provide a 1-page response to the citation. This response must be placed in  
the licensee’s file and published.  
(8) If the licensee does not accept the citation a formal complaint must be issued.  
Rule 420.809 Formal complaint.  
Rule 9. (1) After an investigation has been conducted, the agency shall serve the formal  
complaint on the licensee by certified mail, return receipt requested, or in person by a  
representative of the agency.  
(2) The licensee may do either of the following:  
(a) Meet with the agency to negotiate a settlement of the matter, or demonstrate compliance  
prior to holding a contested case hearing, as required by section 92 of the administrative  
procedures act of 1969, 1969 PA 306, MCL 24.292.  
(b) Proceed to a contested case hearing as set forth in these rules and section 71 of the  
administrative procedures act of 1969, 1969 PA 306, MCL 24.271.  
(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.  
(4) If the licensee agrees and accepts the terms negotiated at the compliance conference, the  
licensee and the agency shall execute a stipulation.  
(5) An executed stipulation is subject to review and approval by the executive director of the  
agency. If the stipulation is approved, the agency shall issue a consent order. If the stipulation  
is not approved, a compliance conference or a contested case hearing shall be scheduled. The  
consent order shall be published.  
(6) If a licensee does not comply with the terms of a signed and fully executed stipulation and  
consent order within the time frame listed in the consent order, the licensee’s license is  
suspended until full compliance is demonstrated.  
(7) If a compliance conference is not held or does not result in a settlement of a compliance  
action, a contested case hearing shall be held, pursuant to these rules and the administrative  
procedures act of 1969, 1969 PA 306, MCL 24.201 to MCL 24.328.  
Notes:  
In creating the definition for "Violation Affecting Safety or Health" we used several other states  
as a guide to determine what violates are the most severe. Almost all of them cited the same  
violations, so there do appear to be pretty standard violations other states agree are the most  
severe and relate to public health, safety, and welfare. Because of the way the MMFLA,  
MRTMA, and the APA are written, the agency does need to have some authority over when the  
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public health, safety, and welfare are at risk. However, other states also have similar  
constraints. By creating a definition with specific examples of situations in which there a public  
health, safety, and welfare concern, it does place some restrictions on inequitable enforcement,  
and provides the industry businesses with some predictability.  
We also attached Washington's statute and Colorado's statute as examples for reference.  
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Language omitted “at the time of application” and additional supporting invalid rules.  
Sections:  
Problem:  
Licenses, Rule 420.6(2)(g)  
The MRA eliminated the phrase “at the time of application” in its rule to deny an application due  
to a municipal ordinance. They also included the phrase “The agency determines…” which  
appears to add discretion for the agency and effectively alters the meaning of the statute in its  
application of the rule.  
MCL 333.27959(3) “[T]he department shall approve a state license application and issue a  
state license if . . . the municipality . . . does not notify the department that the proposed  
marihuana establishment is not in compliance with an ordinance. . . in effect at the time of  
application.”  
Proposed Rule R420.6(2)(g)  
“An applicant is ineligible to receive a state license if . . . the agency determines the  
municipality in which the applicant’s proposed marihuana establishment will operate has  
adopted an ordinance. . .”  
The way the rule was drafted has effectively subverted the meaning of the statute, and  
conflicts with the statutory language. In the statute, the burden is on the municipality to reach  
out to the MRA if they have an ordinance that was in effect at the time of application. It is not  
written to be a qualification for licensure, but rather something that can stop a license from being  
issued.  
The way the rules are written place the burden on the MRA to determine whether or not  
the municipality has enacted an ordinance. In this context, it is written as a qualification for  
licensure that requires affirmative action on the part of the MRA and the municipality. Because  
MRTMA is an opt-out statute, the presumption for the MRA should be that every municipality is  
opted in until they are told otherwise. Therefore, there is no statutory authority for the MRA to be  
confirming the status or existence of an ordinance relating to marihuana in each municipality.  
Proposed change:  
R 420.6(2)  
(g) The agency is notified by municipality in which the applicant’s proposed marihuana  
establishment will operate that: i) the municipality has adopted an ordinance that prohibits  
marihuana establishments that was in effect at the time of application; or ii) the proposed  
establishment is noncompliant with an ordinance adopted by the municipality under section 6 of  
the Michigan regulation and taxation of marihuana act, MCL 333.27956, and in effect at the time  
of application.  
Reinsert language in rules that was removed, and remove all rules inconsistent with Section 9.3  
of the MRTMA Statute.  
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Advertising and Marketing  
R 420.507(4)  
(4) Marihuana product must not be advertised or marketed to members of the public unless the  
person advertising the product has reliable evidence that no more than 30 percent of the  
audience or readership for the television program, radio program, internet website, or print  
publication, is reasonably expected to be under the age listed in subrules (7) and (8) of this rule.  
Any marihuana product advertised or marketed under this rule must include the warnings listed  
in R 420.504(1)(k).  
Problem:  
Provisioning centers have been getting in trouble for advertisements with brand logos and being  
told the brands are products. Many brands make multiple products, so punishing businesses for  
advertising the brands makes the term marijuana product too broad. Moreover, marijuana  
manufacturing and retail facilities often have no control over brand advertising, as they do now  
own the brand, but are merely licensees.  
Proposed language:  
This section needs an additional (i) that says,  
“marihuana sales locations may advertise certain brands for sale available at their location and  
this will not be construed as advertising marihuana products.”  
Or  
(1) A marihuana product may only be advertised or marketed in a way that complies with all  
municipal ordinances, state law, and these rules that regulate signs and advertising.  
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;