Michigan Medical Marijuana Regulation: Changes Coming?

There is a lot happening with Michigan cannabis right now beyond just the two ballot initiatives that may go to voters next November. In addition to various groups collecting signatures on behalf of ballot initiatives, there are also bills in the State Legislature that would create regulations and a licensing board for the State’s medical marijuana industry. The aptly named HB 4209, or “Medical Marihuana Facilities Licensing Act” was approved by the House of Representatives in October of this year and is currently in the Senate Judiciary Committee, along with HB 4210 which would allow for the sale of medical marijuana in non-smokeable forms and HB 4827 which would establish a seed-to-sale tracking system.

The bill is seen as a foundation for regulating marijuana in Michigan, and it is part of broader preparations for legalizing recreational marijuana in the state. Widespread legalization may happen as soon as next fall if voters approve either the MILegalize or Michigan Cannabis Coalition ballot initiatives, one or both of which we may see on the November 2016 ballot.

Michigan Medical Marijuana. Change will be a constant. (Photo from
Michigan Medical Marijuana. Change will be a constant.

What would HB 4209 do? This bill would license and regulate medical marijuana growers, processors, provisioning centers, transporters, and safety compliance facilities (collectively, “medical marijuana facilities”). To do this, the bill creates a “Medical Marihuana Licensing Board” and extensive rules on creating and operating the Board.

Michigan’s Department of Licensing and Regulatory Affairs and local governments currently regulate Michigan medical marijuana. Under the existing Michigan Medical Marijuana Act, “caregivers” may grow up to twelve marijuana plants for up to five patients each. HB4209 would allow more businesses to get into Michigan’s legal marijuana market by setting out licensing and regulation for companies looking to grow, process, and provide medical marijuana across the State.

The Licensing Board would consist of five members appointed by the governor, and it would establish licensing and rule making at the state level. The bill allows municipalities to authorize or limit facilities in its jurisdiction and to collect up to $5,000 as a non-refundable annual licensing fee. The bill would also create an advisory panel to advise the board, with participants from state and local government, as well as the public.

In addition to creating the Licensing Board and the rules for authorizing or denying licenses, the bill would create revenue for the State through application fees, a tax on gross retail income of facilities, and a “regulatory assessment.” The bill would impose a 3% tax on the gross retail income of facilities  and create a “medical marihuana excise fund” to receive the majority of fees, fines, and charges collected under the Act. The bill currently earmarks 30% of this revenue for municipalities and 45% for counties, based on the number of marihuana facilities in the jurisdiction, with the remaining 25% going to the State’s general fund.

In addition to licensing fees and the 3% tax on gross retail income, the bill would create a “regulatory assessment” on facilities, to be based on the administrative costs of the regulation. Class A growers (the largest grow facilities) can only be charged up to $10,000, but there there are no limits on how much other types of facilities may be charged.

These three bills are currently in the Senate Judiciary Committee headed by Sen. Rick Jones, R-Grand Ledge, who says his Committee could have a bill before the State Senate before the end of next year. We will keep you posted on the status of these various bills.