Cannabis Regulatory Agency Issues Proposed Rule Changes

The Michigan Cannabis Regulatory Agency (“CRA”) recently submitted a Request for Rulemaking, which formally commences the process to amend the state’s administrative rules for cannabis businesses. In a departure from typical rulemaking procedures, the CRA published a 13-page list of objectives and potential rule changes that it is contemplating, and is seeking stakeholder feedback on those proposals early in the process. Among the changes that the CRA is considering and seeking feedback about are:

• Proposals related to licensure, including changes that would allow the CRA to deny license applications or renewals for entities that have been subject to civil judgments or court orders related to owing money to other licensees or service providers for cannabis-related goods and services.
• Proposals related to licensee recordkeeping requirements, including requirements that licensees reconcile revenues on a monthly basis and provide those records to the CRA upon request.
• Proposals related to packaging requirements, including allowing licensees to use QR codes to provide some information and to require labeling on internal and external packaging materials.
• Proposals related to CRA enforcement authority, including allowing the CRA to audit licensees and require that certain products be tested to determine whether they are hemp or marijuana, and to establish protocols for product recalls.

These are just a few examples of the proposed changes under consideration, many of which could significantly impact the day-to-day operations of licensees if implemented.  We will be issuing a series of client alerts in the near future addressing particular issues and proposed rules in more detail.  Also, the CRA has repeatedly emphasized that the final rule set may include new rules or changes beyond those outlined in yesterday’s announcement, so they are also seeking stakeholder input on suggested proposals that they are not already considering.

The rulemaking process can be protracted, and we do not anticipate any changes to the current rule set being implemented until 2024. But it is important to keep up-to-date about developments throughout the process and to provide feedback, as appropriate, to ensure that the CRA does not create unintended consequences for licensees in an attempt to fix other issues.  Once this rule set is finalized, it could be another year or more before there is another opportunity to fix or clarify various provisions.

Several attorneys and government relations professionals with Honigman’s Cannabis Industry Group are already actively involved and communicating regularly with the CRA about our clients’ priorities.  We will continue to closely monitor the process and provide updates throughout the rulemaking process. If you need support providing input to the CRA, advocating for specific issues, or have any questions related to the rulemaking process, please reach out to us for assistance. 

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