A Long Time Coming: Michigan Regulator Finally Issues Guidance on Penalties

Today, the Michigan Cannabis Regulatory Agency (the “CRA”) published a much-anticipated schedule of disciplinary guidelines after months of requests from stakeholders throughout the industry, including members of Honigman’s Cannabis Industry Group.  As should be expected, some of the guidelines seem disproportionately harsh or insubstantial, and we will continue to work with our clients and encourage the CRA to make various improvements where appropriate.  In the meantime, though, we commend the CRA for taking this important step towards greater transparency and providing some degree of predictability and consistency in the disciplinary process.   

The CRA has indicated that, while each disciplinary action against a licensee will be considered on a case-by-case basis, the guidelines will be used as a starting point in determining sanctions for violating the MMFLA, MRTMA, or the CRA’s administrative rules. In ultimately determining appropriate sanctions and proposing settlements, the CRA will also take into consideration a licensee’s disciplinary history, length of operations, whether or not the licensee holds multiple licenses, and other relevant aggravating, mitigating or extenuating circumstances. The current guidelines can be found here.

Honigman’s Cannabis Industry Group has reviewed these guidelines and is available to answer any questions or to discuss any concerns. These guidelines provide licensees with a degree of predictability with regard to the disciplinary process, and will be an important facet of the compliance conference negotiation process going forward. Any licensee facing potential disciplinary action should closely review these disciplinary guidelines and discuss the particulars of their circumstances with their attorneys.

We will continue to closely monitor developments related to the CRA’s disciplinary process and provide updates. If you have any questions related to the disciplinary process, compliance conferences, or alleged violations committed by a licensed business, please reach out to us for assistance.