Michigan Cannabis Regulations Previewed: Key Proposed Industry Changes Discussed at NECANN Convention

NECANN held the Michigan Cannabis Convention over the weekend at Devos Place in Grand Rapids. Brian Hanna, Executive Director of the Cannabis Regulatory Agency (the “CRA”) gave a presentation Saturday afternoon regarding industry trends and the long-awaited proposed rule set. During his presentation, Director Hanna discussed a number of items relevant to the cannabis industry, including how the CRA is working with Rep. Donavan McKinney on amendments to the Industrial Hemp Research and Development Act, which will create a more fulsome regulatory structure for hemp growers and processor-handlers in Michigan, and also about how a major announcement is coming soon with regard to fraud committed by a licensed safety compliance facility.

Additionally, Director Hanna addressed the upcoming administrative rules that will be issued by the CRA. Director Hanna stated that the rules are currently being reviewed by the Michigan Office of Administrative Hearings and Rules within the Department of Licensing and Regulatory Affairs, and will soon go to the Legislative Service Bureau for official formatting, after which, they will be released for a 30-day public comment period.

Director Hanna addressed a number of proposed rule changes, including several that he admitted had never been publicly discussed before. These proposed changes include rules that would:

• Completely ban the use of conversion oil;
• Allow multi-packs of products under a single Metrc tag;
• Exempt prerolls from having to be tested in final form;
• Change the definition of “temporary marihuana events,” to only require such events to be licensed if marihuana product is sold at the event, not just consumed;
• State that lobbies will be optional for retail locations;
• Eliminate the requirement that marihuana plant waste be rendered unusable, unrecognizable, or combined with other waste;
• Allow licensees to receive and recycle vape cartridges;
• Allow Class A Marihuana Microbusinesses to process marihuana and sell harvested flower;
• Clarify requirements as to when the CRA can place a product on hold; and
• Expand and clarify the CRA’s powers with regard to the summary suspension of licenses.

Among the changes announced by Director Hanna that generated the most controversy and conversation at the event was a proposed rule stating that, in addition to current requirements related to providing the CRA surveillance recordings immediately upon request, the new rule set will propose that all licensees will also be required to connect their surveillance systems to a web-based platform that will allow the CRA to have access to a licensee’s real-time surveillance videos upon request.

It should be noted that the proposed administrative rules have not yet been made public, so specific language is not currently available to review. Nevertheless, Honigman’s Cannabis Industry Group is available to answer any questions or concerns, or to assist in raising those questions or concerns with the CRA or other stakeholders. Several of our attorneys and lobbyists continue to be actively involved and communicate regularly with the CRA about our clients’ priorities.  We will continue to closely monitor updates to the CRA rules. If you have any questions related to the rules, please reach out to us for assistance.