Michigan Marihuana Regulatory Agency Currently Examining New Rules | Dickinson wright

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For those who operate, manage, maintain or contract with state-licensed cannabis operations in Michigan, the Marihuana Regulatory Agency (“MRA”)1 is currently reviewing new rules as well as comments to support, challenge or comment on them in some other way. The MRA will hold a public hearing on Monday, September 27, 2021 at 9:30 am, at the Williams Building, 1st Floor Auditorium, 525 W. Ottawa Street, Lansing, MI. Alternatively, public comments can be made by mail (to MRA, ATTN: Legal Section, PO Box 30205, Lansing, MI 48906) or by email until September 27, 2021, 5:00 p.m. to [email protected]2 Our firm’s cannabis practice team will provide feedback.

Below are some of the proposed rules that we have identified as potentially problematic, and we anticipate that most operators will raise objections or serious concerns. Do not hesitate to contact one of our lawyers to understand how these rules could have a negative impact on your business or your structure.

1. DISCIPLINARY PROCEDURES ON MARIHUANA

Rule 420.801 Definitions

This rule would add definitions for “Management or other agreement” and “License agreement”. The MRA proposes a broad definition of such agreements to include any contract between a licensee and a service provider, whether that service affects facilities or whether the provider has effective control over the day-to-day operations of the licensed business. establishment. In addition, this rule would include the catch-all phrase “Management or other agreements”, which would essentially give the MRA the authority to pre-approve any agreement between a licensee and a service provider.

Rule 420.802 Notification and report.

Summary of changes:
This rule would broaden the definition of “material change” by defining it as any action that would result in modifications or changes in the marihuana trade to achieve the desired result of a material change. The MRA seeks to place an undue burden on licensees by increasing the frequency with which operators must notify them of any minor action that may or may not result in a material change.

Rule 420.802 Notification and report.

Summary of changes:
Under this rule, a licensee would be required to inform the MRA if he or she knows, or should have known, of an alleged violation of the Act or the rules by a party with whom the licensee concludes. contract.

Rule 420.802 Notification and report.

Summary of changes:
The MRA seeks to better control licensing, management and other service agreements by requiring operators to notify the MRA whenever it terminates a service contract.

2. MARIHUANA INFUSED PRODUCTS AND MARIHUANA EDIBLE PRODUCTS

Rule 420.403 Requirements and Restrictions for Marihuana-infused Products; edible marihuana product.

Summary of changes:
Under this rule, producers of marihuana-infused products would be required to: 1) license holders be required to include in product names an appropriate descriptive phrase that accurately describes the basic nature of the product; 2) that licensees be required to disclose the ingredients of the components on the labels of infused products; 3) that licensees must indicate the date the marihuana product was manufactured on the label; and 4) the MRA proposes that not only producers of infused products employ a person certified as a food protection officer, but also that this person be “responsible”.

3. MARIHUANA LICENSEE

R 420.101 Definitions.

Summary of changes:
This rule would add definitions for management and license agreements. First, this rule would establish a broad definition of such agreements to include any contract between a licensee and a service provider, whether that service affects facilities or whether the provider has effective control over the day-to-day operations of the licensed establishment. Second, this rule would include the catch-all phrase “Management or other agreements”, which would essentially give it pre-approval power over any agreement between a licensee and a service provider as it sees fit.

R 420.203 Marijuana license; license holders; operations; general.

Summary of changes:
This rule would clarify the types of financial records that must be kept, including, but not limited to, cash registers, invoices, canceled checks and tax records. It is important that certified public accounts working with licensees have this information, as these records should be retained for review by the MRA upon request. The rules in this section are all operational in nature. As operators, you get the big picture of what is reasonable and what is excessive. The rules may not properly reflect technology and best practices, so please review them carefully and identify for us any rules that are unreasonable, impractical or otherwise objectionable.

R 420.206a Standard operating procedures.

Summary of changes:
Under this rule, licensees would be required to maintain all standard operating procedures on site at the licensed facility at all times and to make these SOPs available to the MRA upon request. In addition, this rule would add the requirement that all SOPs found to be deficient or inaccurate be updated immediately.

R 420.207 A contactless and limited contact transactions.

Summary of changes:
This rule would formalize the temporary rules developed due to the COVID-19 pandemic to allow licensees to conduct contactless or limited contact transactions. The proposed rule clarifies that these types of transactions are subject to the same rules as traditional face-to-face transactions, including the need for SOPs for such transactions which cover security protocols and compliance with all other rules and regulations regarding the distribution of marihuana.

DW has no objections to these proposed rules, but if you, as the operator, believe that any of these rules are unreasonable and should be challenged, please identify these rules.

R 420.214a Internal analytical tests.

Summary of changes:
Under this rule, licensees would be permitted to designate a space to conduct internal analytical testing on marihuana or a marihuana product grown or produced by the marihuana business. It is important for licensees to note that a number of proposed requirements accompany this allocation for on-site testing, including security, inventory tracking and destruction protocols.

R 420.214c Product returns.

Summary of changes:
This rule would allow license holders to accept the return of a marihuana product that has caused an adverse reaction or is found to be defective. Licensees should note that accepting returns would require the development of policies covering inventory tracking and destruction, among other procedures.

DW has no objections to these proposed rules, but if you, as the operator, believe that any of these rules are unreasonable and should be challenged, please identify these rules.

4. MARIHUANA LICENSES

R 420.4 Application requirements; financial and criminal history.

Summary of changes:
This rule would reduce the shareholder disclosure threshold for adult use from 5% to 2.5%.
Additional proposed changes to note:

R 420.401 Definitions.

Summary of changes:
This rule would define the final form of products intended for inhalation as the marihuana concentrate in the electronic cigarette or vaping device.

R 420.403 Requirements and Restrictions for Products Infused with Marihuana; edible marihuana product.

Summary of changes:
This rule would change the MRA’s standards from the FDA Food Safety Modernization Act to current GMP under 21 CFR part 117.

R 420.403 Requirements and Restrictions for Products Infused with Marihuana; edible marihuana product.

Summary of changes:
1) This rule would change the current rule that prohibits producers from producing packaging or labels that would appeal to minors to include the shape of the edible product.
2) This rule would extend the ban on the production of edible products which can be easily confused with sweets sold in commerce to include all food products available in commerce.

R 420.20 Financial statements.

Summary of changes:
The ARM seeks to clarify that the financial statements must include all the information requested for each license held by the licensee. It is important that the licensee’s certified public accountants know this, as failure to submit a complete financial statement could result in the licensee’s renewal application being denied.

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[1] Marihuana is the standard spelling used by the state of Michigan.

[2] Following the comment period, the MRA will prepare a report and submit the proposed rules to the state’s Joint Administrative Rules Committee (“JCAR”) for further consideration. JCAR typically retains jurisdiction over proposed rules for at least 15 sitting days (counted as days the state legislature is in session), during which it can oppose, stop, or delay rules, or take no action and allow the rules to move forward to finalization with the Secretary of State. At the earliest, we believe the proposed rules could enter into force in mid-November 2021.

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