Bill Text: MI HB4209 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Health; medical marihuana; Health; medical marihuana; state and local regulation of medical marihuana facilities; provide for. Creates new act. TIE BAR WITH: HB 4827'15
Spectrum: Bipartisan Bill
Status: (Passed) 2016-09-22 - Assigned Pa 281'16 With Immediate Effect [HB4209 Detail]
Download: Michigan-2015-HB4209-Engrossed.html
HB-4209, As Passed House, October 7, 2015
SUBSTITUTE FOR
HOUSE BILL NO. 4209
A bill to license and regulate medical marihuana growers,
processors, provisioning centers, secure transporters, and safety
compliance facilities; to provide for the powers and duties of
certain state and local governmental officers and entities; to
create a medical marihuana licensing board; to create an advisory
panel; to provide immunity from prosecution for marihuana-related
offenses for persons engaging in marihuana-related activities in
compliance with this act; to prescribe civil fines and sanctions
and provide remedies; to provide for taxes, fees, and assessments;
to make an appropriation; and to require the promulgation of rules.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
PART 1. GENERAL PROVISIONS
Sec. 101. This act shall be known and may be cited as the
"medical marihuana facilities licensing act".
Sec. 102. As used in this act:
(a) "Advisory panel" or "panel" means the marihuana advisory
panel created in section 801.
(b) "Affiliate" means any person that controls, is controlled
by, or is under common control with; is in a partnership or joint
venture relationship with; or is a co-shareholder of a corporation,
a co-member of a limited liability company, or a co-partner in a
limited liability partnership with a licensee or applicant.
(c) "Applicant" means a person who applies for a state
operating license. With respect to disclosures in an application,
or for purposes of ineligibility for a license under section
402(2), the term applicant includes an officer, director, or
managerial employee of the applicant or a person who holds a
greater than 1% direct or indirect ownership interest in the
applicant.
(d) "Board" means the medical marihuana licensing board
created in section 301.
(e) "Department" means the department of licensing and
regulatory affairs.
(f) "Grower" means a licensee that is a commercial entity
located in this state that cultivates, dries, trims, or cures and
packages marihuana for sale to a processor or provisioning center.
(g) "Licensee" means a person holding a state operating
license.
(h) "Marihuana" means that term as defined in section 7106 of
the public health code, 1978 PA 368, MCL 333.7106.
(i) "Marihuana facility" means a location from which any of
the following license holders operate:
(i) A grower.
(ii) A processor.
(iii) A secure transporter.
(iv) A provisioning center.
(v) A safety compliance facility.
(j) "Marihuana-infused product" means a topical formulation,
tincture, beverage, edible substance, or similar product containing
marihuana that is intended for human consumption in a manner other
than smoke inhalation.
(k) "Michigan medical marihuana act" means the Michigan
medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430.
(l) "Municipality" means a city, township, or village.
(m) "Paraphernalia" means any equipment, product, or material
of any kind that is designed for or used in growing, cultivating,
producing, manufacturing, compounding, converting, storing,
processing, preparing, transporting, injecting, smoking, ingesting,
inhaling, or otherwise introducing into the human body, marihuana.
(n) "Person" means an individual, corporation, limited
liability company, partnership, limited partnership, limited
liability partnership, limited liability limited partnership,
trust, or other legal entity.
(o) "Processor" means a licensee that is a commercial entity
located in this state that purchases marihuana from a grower and
that extracts resin from the marihuana or creates a marihuana-
infused product for sale and transfer in packaged form to a
provisioning center.
(p) "Provisioning center" means a licensee that is a
commercial entity located in this state that purchases marihuana
from a grower or processor and sells, supplies, or provides
marihuana to registered qualifying patients, directly or through
the patients' registered primary caregivers. Provisioning center
includes any commercial property where marihuana is sold at retail
to registered qualifying patients or registered primary caregivers.
A noncommercial location used by a primary caregiver to assist a
qualifying patient connected to the caregiver through the
department's marihuana registration process in accordance with the
Michigan medical marihuana act is not a provisioning center for
purposes of this act.
(q) "Registered primary caregiver" means a primary caregiver
who has been issued a current registry identification card under
the Michigan medical marihuana act.
(r) "Registered qualifying patient" means a qualifying patient
who has been issued a current registry identification card under
the Michigan medical marihuana act or a visiting qualifying patient
as that term is defined in section 3 of the Michigan medical
marihuana act, MCL 333.26423.
(s) "Registry identification card" means that term as defined
in section 3 of the Michigan medical marihuana act, MCL 333.26423.
(t) "Rules" means rules promulgated under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, by the
department in consultation with the board to implement this act.
(u) "Safety compliance facility" means a licensee that is a
commercial entity that receives marihuana from a marihuana facility
or a registered qualifying patient or a registered primary
caregiver, tests it for contaminants and for tetrahydrocannabinol
and other cannabinoids, and returns it to the marihuana facility or
a registered qualifying patient or registered primary caregiver
with the test results.
(v) "Secure transporter" means a licensee that is a commercial
entity located in this state that stores marihuana and transports
marihuana between marihuana facilities for a fee.
(w) "State operating license" or, unless the context requires
a different meaning, "license" means a license that is issued under
this act that, except for a secure transporter authorized for
mobile operations at multiple sites, allows the licensee to operate
at a single site as any of the following, specified in the license:
(i) A grower.
(ii) A processor.
(iii) A secure transporter.
(iv) A provisioning center.
(v) A safety compliance facility.
PART 2. APPLICATION OF OTHER LAWS
Sec. 201. (1) Except as otherwise provided in this act, if a
person has been granted a state operating license and is operating
within the scope of the license, the licensee and its agents are
not subject to any of the following for engaging in activities
described in subsection (2):
(a) Criminal penalties under state law or local ordinances
regulating marihuana.
(b) State or local criminal prosecution for a marihuana-
related offense.
(c) State or local civil prosecution for a marihuana-related
offense.
(d) Search or inspection, except for an inspection authorized
under this act by law enforcement officers, the municipality, or
the department.
(e) Seizure of marihuana, real property, personal property, or
any thing of value based on a marihuana-related offense.
(f) Any sanction, including disciplinary action or denial of a
right or privilege, by a business or occupational or professional
licensing board or bureau based on a marihuana-related offense.
(2) The following activities are protected under subsection
(1) if performed under a state operating license within the scope
of that license and in accord with this act, rules, and any
ordinance adopted under section 205:
(a) Growing marihuana.
(b) Purchasing, receiving, selling, transporting, or
transferring marihuana from or to a licensee, a licensee's agent, a
registered qualifying patient, or a registered primary caregiver.
(c) Possessing marihuana.
(d) Possessing or manufacturing marihuana paraphernalia for
medical use.
(e) Processing marihuana.
(f) Transporting marihuana.
(g) Testing, transferring, infusing, extracting, altering, or
studying marihuana.
(h) Receiving or providing compensation for products or
services.
(3) Except as otherwise provided in this act, a person who
owns or leases real property upon which a licensed facility is
located and who has no knowledge that the licensee violated this
act is not subject to any of the following for owning, leasing, or
permitting the operation of a licensed facility on the real
property:
(a) Criminal penalties under state law or local ordinances
regulating marihuana.
(b) State or local civil prosecution based on a marihuana-
related offense.
(c) State or local criminal prosecution based on a marihuana-
related offense.
(d) Search or inspection, except for an inspection authorized
under this act by law enforcement officers, the municipality, or
the department.
(e) Seizure of any real or personal property or any thing of
value based on a marihuana-related offense.
(f) Any sanction, including disciplinary action or denial of a
right or privilege, by a business or occupational or professional
licensing board or bureau.
(4) Any other state law that is inconsistent with this act
does not apply to a marihuana facility operating in compliance with
this act.
Sec. 203. A registered qualifying patient or registered
primary caregiver is not subject to criminal prosecution or
sanctions for purchasing marihuana from a provisioning center if
the quantity purchased is within the limits established under the
Michigan medical marihuana act.
Sec. 204. This act does not limit the medical purpose defense
provided in section 8 of the Michigan medical marihuana act, 2008
IL 1, MCL 333.26428, to any prosecution involving marihuana.
Sec. 205. A municipality may adopt an ordinance to authorize 1
or more types of marihuana facilities within its boundaries and to
limit the number of each type of marihuana facility. A marihuana
facility shall not be licensed unless the municipality in which the
marihuana facility is located has adopted an authorizing ordinance.
The ordinance may establish an annual, nonrefundable licensing fee
of not more than $5,000.00 to help defray administrative and
enforcement costs associated with the operation of a marihuana
facility in the municipality. A municipality may adopt other
ordinances relating to marihuana facilities within its
jurisdiction, including zoning regulations, but shall not impose
regulations that would interfere or conflict with uniform statewide
regulation of licensees. A municipality must approve an applicant
for a new state operating license within its boundaries before the
board may consider the application. Information obtained by a
municipality from an applicant under this section is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
Sec. 206. The department, in consultation with the board,
shall promulgate rules and emergency rules as necessary to
implement, administer, and enforce this act. The rules shall ensure
the safety, security, and integrity of the operation of marihuana
facilities, and shall include, but are not limited to, rules to do
the following:
(a) Set appropriate standards for marihuana facilities and
associated equipment.
(b) Establish minimum levels of insurance that licensees must
maintain.
(c) Establish operating regulations for each category of
license to ensure the health, safety, and security of the public
and the integrity of marihuana facility operations.
(d) Establish qualifications and restrictions for persons
participating in or involved with operating marihuana facilities.
(e) Establish testing standards, procedures, and requirements
for marihuana sold through provisioning centers.
(f) Provide for the levy and collection of fines for a
violation of this act or rules.
(g) Prescribe use of a statewide database to track all
marihuana transfers, as provided in the marihuana tracking act.
(h) Establish quality control standards, procedures, and
requirements for marihuana facilities.
(i) Establish chain of custody standards, procedures, and
requirements for marihuana facilities.
(j) Establish standards, procedures, and requirements for
waste product disposal and storage by marihuana facilities.
(k) Establish chemical storage standards, procedures, and
requirements for marihuana facilities.
(l) Establish standards, procedures, and requirements for
House Bill No. 4209 as amended October 7, 2015
securely and safely transporting marihuana between marihuana
facilities.
(m) Establish standards, procedures, and requirements for the
storage of marihuana by marihuana facilities.
(n) Establish labeling and packaging standards, procedures,
and requirements for marihuana sold or transferred through
provisioning centers, including a prohibition on labeling or
packaging that is intended to appeal to or has the effect of
appealing to minors.
(o) Establish daily purchasing limits at provisioning centers
for registered qualifying patients and registered primary
caregivers to ensure compliance with the Michigan medical marihuana
act.
(p) Establish marketing and advertising restrictions for
marihuana products and marihuana facilities.
(q) Establish maximum tetrahydrocannabinol levels for
marihuana-infused products sold or transferred through provisioning
centers.
[(r) Establish restrictions on edible marihuana-infused products to prohibit shapes that would appeal to minors.]
PART 3. MEDICAL MARIHUANA LICENSING BOARD
Sec. 301. (1) The medical marihuana licensing board is created
within the department of licensing and regulatory affairs.
(2) The board consists of 5 members who are residents of this
state, not more than 3 of whom are members of the same political
party. The governor shall appoint the members. One of the members
shall be appointed from 3 nominees submitted by the senate majority
leader and 1 from 3 nominees submitted by the speaker of the house.
The governor shall designate 1 of the members as chairperson.
(3) The members shall be appointed for terms of 4 years,
except, of those who are first appointed, 1 member shall be
appointed for a term of 2 years and 2 members shall be appointed
for a term of 3 years. A member's term expires on December 31 of
the last year of the member's term. If a vacancy occurs, the
governor shall appoint a successor to fill the unexpired term in
the manner of the original appointment.
(4) Each member of the board shall be reimbursed for all
actual and necessary expenses and disbursements incurred in
carrying out official duties.
(5) A board member shall not hold any other public office for
which he or she receives compensation other than necessary travel
or other incidental expenses.
(6) A person who is not of good moral character or who has
been indicted for, charged with, or convicted of, pled guilty or
nolo contendere to, or forfeited bail concerning any felony or a
misdemeanor involving a controlled substance violation, theft,
dishonesty, or fraud under the laws of this state, any other state,
or the United States or a local ordinance in any state involving a
controlled substance violation, dishonesty, theft, or fraud that
substantially corresponds to a misdemeanor in that state is not
eligible to serve on the board.
(7) The governor may remove any member of the board for
neglect of duty, misfeasance, malfeasance, nonfeasance, or any
other just cause.
(8) The department in conjunction with the board shall employ
an executive director and other personnel as necessary to assist
the board in carrying out its duties. The executive director shall
devote his or her full time to the duties of the office and shall
not hold any other office or employment.
(9) The board shall not appoint or employ an individual if any
of the following circumstances exist:
(a) During the 3 years immediately preceding appointment or
employment, the individual held any direct or indirect interest in,
or was employed by, a person who is licensed to operate under this
act or under a corresponding license in another jurisdiction or a
person with an application for an operating license pending before
the board or in any other jurisdiction. The board shall not employ
an individual if his or her interest in a licensee or marihuana
facility constitutes a controlling interest in that licensee or
facility. However, an individual may be employed if his or her
interest in any licensee or marihuana facility is not a controlling
interest and would not, in the opinion of the board, interfere with
the objective discharge of the individual's employment obligations.
(b) The individual or his or her spouse, parent, child,
child's spouse, sibling, or spouse of a sibling has an application
for a license pending before the board or is a member of the board
of directors of, or an individual financially interested in, any
licensee or marihuana facility.
(10) Each member of the board, the executive director, and
each key employee as determined by the department shall file with
the governor a financial disclosure statement listing all assets
and liabilities, property and business interests, and sources of
income of the member, executive director, and key employee and his
or her spouse, if any, affirming that the member, executive
director, and key employee are in compliance with subsection (9)(a)
and (b). The financial disclosure statement shall be made under
oath and filed at the time of employment and annually thereafter.
(11) Each employee of the board shall file with the board a
financial disclosure statement listing all assets and liabilities,
property and business interests, and sources of income of the
employee and his or her spouse. This subsection does not apply to
the executive director or a key employee.
(12) A member of the board, executive director, or key
employee shall not hold any direct or indirect interest in, be
employed by, or enter into a contract for services with an
applicant, a board licensee, or a marihuana facility for a period
of 4 years after the date his or her employment or membership on
the board terminates. The department in consultation with the board
shall define the term "direct or indirect interest" by rule.
(13) For 2 years after the date his or her employment with the
board is terminated, an employee of the board shall not acquire any
direct or indirect interest in, be employed by, or enter into a
contract for services with any applicant, licensee, or marihuana
facility.
(14) For 2 years after the termination of his or her office or
employment with the board, a board member or an individual employed
by the board shall not represent any person or party other than
this state before or against the board.
(15) A business entity in which a former board member or
employee or agent has an interest, or any partner, officer, or
employee of the business entity, shall not make any appearance or
represent a party that the former member, employee, or agent is
prohibited from appearing for or representing. As used in this
subsection, "business entity" means a corporation, limited
liability company, partnership, limited liability partnership,
association, trust, or other form of legal entity.
Sec. 302. The board has general responsibility for
implementing this act. The board has the powers and duties
specified in this act and all other powers necessary and proper to
fully and effectively implement and administer this act for the
purpose of licensing, regulating, and enforcing the licensing and
regulation system established under this act for marihuana growth,
processing, testing, and transporting. The board is subject to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328. The board's duties include, but are not limited to, all of
the following:
(a) Granting or denying each application for a state operating
license within a reasonable time.
(b) Deciding all license applications in reasonable order.
(c) Conducting its public meetings in compliance with the open
meetings act, 1976 PA 267, MCL 15.231 to 15.246.
(d) Consulting with the department in promulgating rules and
emergency rules as necessary to implement, administer, and enforce
this act.
(e) Implementing and collecting the application fee described
in section 401 and, in conjunction with the department of treasury,
the tax described in section 601 and regulatory assessment
described in section 603.
(f) Providing for the levy and collection of fines for a
violation of this act or rules.
(g) Providing oversight of a marihuana facility through the
board's inspectors, agents, and auditors and through the state
police or attorney general for the purpose of certifying the
revenue, receiving complaints from the public, or conducting
investigations into the operation of the marihuana facility as the
board considers necessary and proper to ensure compliance with this
act and rules and to protect and promote the overall safety,
security, and integrity of the operation of a marihuana facility.
(h) Reviewing and ruling on any complaint by a licensee
regarding any investigative procedures of this state that are
believed to be unnecessarily disruptive of marihuana facility
operations. The need to inspect and investigate is presumed at all
times. The board may delegate authority to hear, review, or rule on
licensee complaints to a subcommittee of the board. To prevail on
the complaint, a licensee must establish by a preponderance of the
evidence that the procedures unreasonably disrupted its marihuana
facility operations.
(i) Holding at least 2 public meetings each year. Upon 72
hours' written notice to each member, the chairperson or any 2
board members may call a special meeting. Three members of the
board constitute a quorum, including when making determinations on
an application for a license. Three votes are required in support
of final determinations of the board on applications for licenses
and all other licensing determinations, except that 4 votes are
required in support of a determination to suspend or revoke a
license. The board shall keep a complete and accurate record of all
of its meetings and hearings. Upon order of the board, 1 of the
board members or a hearing officer designated by the board may
conduct any hearing provided for under this act or by rules and may
recommend findings and decisions to the board. The board member or
hearing officer conducting the hearing has all powers and rights
regarding the conduct of hearings granted to the board under this
act. The record made at the time of the hearing shall be reviewed
by the board or a majority of the board, and the findings and
decision of the majority of the board are the order of the board in
the case.
(j) Maintaining records that are separate and distinct from
the records of any other state board. The records shall be made
available for public inspection subject to the limitations of this
act and shall accurately reflect all board proceedings.
(k) Reviewing the patterns of marihuana transfers by the
licensees under this act as recorded in a statewide database
established for use in administering and enforcing this act and
making recommendations to the governor and the legislature in a
written annual report to the governor and the legislature and
additional reports that the governor requests. The annual report
shall be submitted by April 15 of each year and shall include the
report required under section 702, a statement of receipts and
disbursements by the board, the actions taken by the board, and any
additional information and recommendations that the board considers
appropriate or that the governor requests.
(l) Except as otherwise provided in this act, all information,
records, interviews, reports, statements, memoranda, or other data
supplied to or used by the board are subject to the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246, except for the
following:
(i) Unless presented during a public hearing or requested by
the licensee or applicant who is the sole subject of the data, all
of the information, records, interviews, reports, statements,
memoranda, or other data supplied to, created by, or used by the
board related to background investigation of applicants or
licensees and to trade secrets, internal controls, and security
measures of the licensees or applicants.
(ii) All information, records, interviews, reports, statements,
memoranda, or other data supplied to or used by the board that have
been received from another jurisdiction or local, state, or federal
agency under a promise of confidentiality or if the release of the
information is otherwise barred by the statutes, rules, or
regulations of that jurisdiction or agency or by an
intergovernmental agreement.
(iii) All information in the statewide database of marihuana
transactions.
Sec. 303. (1) The board has jurisdiction over the operation of
all marihuana facilities. The board has all powers necessary and
proper to fully and effectively oversee the operation of marihuana
facilities, including, but not limited to, the authority to do all
of the following:
(a) Investigate applicants for state operating licenses,
determine the eligibility for licenses, and grant licenses to
applicants in accordance with this act and the rules.
(b) Investigate all individuals employed by marihuana
facilities.
(c) At any time, through its investigators, agents, auditors,
or the state police, without a warrant and without notice to the
licensee, enter the premises, offices, facilities, or other places
of business of a licensee, if evidence of compliance or
noncompliance with this act or rules is likely to be found and
consistent with constitutional limitations, for the following
purposes:
(i) To inspect and examine all premises of marihuana
facilities.
(ii) To inspect, examine, and audit relevant records of the
license, and, if the licensee fails to cooperate with an
investigation, impound, seize, assume physical control of, or
summarily remove from the premises all books, ledgers, documents,
writings, photocopies, correspondence, records, videotapes,
including electronically stored records, money receptacles, other
containers and their contents, or equipment in which the records
are stored.
(iii) To inspect the person, and inspect or examine personal
effects present in a marihuana facility, of any holder of a state
operating license while that person is present in a licensed
facility.
(iv) To investigate alleged violations of this act or rules.
(d) Investigate alleged violations of this act or rules and
take appropriate disciplinary action against a licensee.
(e) Consult with the department in adopting rules to establish
appropriate standards for marihuana facilities and associated
equipment.
(f) Require all relevant records of licensees, including
financial or other statements, to be kept on the premises
authorized for operation of the marihuana facility of the licensee
or in the manner prescribed by the board.
(g) Require that each licensee of a marihuana facility submit
to the board a list of the stockholders or other persons having a
1% or greater beneficial interest in the facility in addition to
any other information the board considers necessary to effectively
administer this act and rules, orders, and final decisions made
under this act.
(h) Eject, or exclude or authorize the ejection or exclusion
of, an individual from a facility if the individual violates this
act, rules, or final orders of the board. However, the propriety of
the ejection or exclusion is subject to a subsequent hearing by the
board.
(i) Conduct periodic audits of facilities licensed under this
act.
(j) Consult with the department in establishing minimum levels
of insurance that licensees must maintain.
(k) Delegate the execution of any of its powers that are not
specifically and exclusively reserved to the board under this act
for the purpose of administering and enforcing this act and rules.
(l) Take disciplinary action as the board considers appropriate
to prevent practices that violate this act and rules.
(m) Review a licensee if that licensee is under review or the
subject of discipline by a regulatory body in any other
jurisdiction for a violation of a controlled substance or marihuana
law or regulation in that jurisdiction.
(n) Take any other reasonable or appropriate action to enforce
this act and rules.
(2) The board may seek and shall receive the cooperation and
assistance of the department of state police and department of
attorney general in conducting background investigations of
applicants and in fulfilling its responsibilities under this act.
Sec. 305. (1) By January 31 of each year, each member of the
board shall prepare and file with the governor's office and the
board a disclosure form in which the member does all of the
following:
(a) Affirms that the member or the member's spouse, parent,
child, or child's spouse is not a member of the board of directors
of, financially interested in, or employed by a licensee or
applicant.
(b) Affirms that the member continues to meet any other
criteria for board membership under this act or the rules
promulgated by the board.
(c) Discloses any legal or beneficial interests in any real
property that is or that may be directly or indirectly involved
with operations authorized by this act.
(d) Discloses any other information as may be required to
ensure that the integrity of the board and its work is maintained.
(2) By January 31 of each year, each employee of the board
shall prepare and file with the board an employee disclosure form
in which the employee does all of the following:
(a) Affirms the absence of financial interests prohibited by
this act.
(b) Discloses any legal or beneficial interests in any real
property that is or that may be directly or indirectly involved
with operations authorized by this act.
(c) Discloses whether the employee or the employee's spouse,
parent, child, or child's spouse is financially interested in or
employed by a licensee or an applicant for a license under this
act.
(d) Discloses such other matters as may be required to ensure
that the integrity of the board and its work is maintained.
(3) A member, employee, or agent of the board who becomes
aware that the member, employee, or agent of the board or his or
her spouse, parent, or child is a member of the board of directors
of, financially interested in, or employed by a licensee or an
applicant shall immediately provide detailed written notice thereof
to the chairperson.
(4) A member, employee, or agent of the board who within the
previous 10 years has been indicted for, charged with, or convicted
of, pled guilty or nolo contendere to, or forfeited bail concerning
a misdemeanor involving controlled substances, dishonesty, theft,
or fraud or a local ordinance in any state involving controlled
substances, dishonesty, theft, or fraud that substantially
corresponds to a misdemeanor in that state, or a felony under
Michigan law, the laws of any other state, or the laws of the
United States or any other jurisdiction shall immediately provide
detailed written notice of the conviction or charge to the
chairperson.
(5) Any member, employee, or agent of the board who is
negotiating for, or acquires by any means, any interest in any
person who is a licensee or an applicant, or any person affiliated
with such a person, shall immediately provide written notice of the
details of the interest to the chairperson. The member, employee,
or agent of the board shall not act on behalf of the board with
respect to that person.
(6) A member, employee, or agent of the board shall not enter
into any negotiations for employment with any person or affiliate
of any person who is a licensee or an applicant and shall
immediately provide written notice of the details of any such
negotiations or discussions in progress to the chairperson. The
member, employee, or agent of the board shall not take action on
behalf of the board with respect to that person.
(7) Any member, employee, or agent of the board who receives
an invitation, written or oral, to initiate a discussion concerning
employment or the possibility of employment with a person or
affiliate of a person who is a licensee or an applicant shall
immediately report that he or she received the invitation to the
chairperson. The member, employee, or agent of the board shall not
take action on behalf of the board with respect to the person.
(8) A licensee or applicant shall not knowingly initiate a
negotiation for or discussion of employment with a member,
employee, or agent of the board. A licensee or applicant who
initiates a negotiation or discussion about employment shall
immediately provide written notice of the details of the
negotiation or discussion to the chairperson as soon as he or she
becomes aware that the negotiation or discussion has been initiated
with a member, employee, or agent of the board.
(9) A member, employee, or agent of the board, or former
member, employee, or agent of the board, shall not disseminate or
otherwise disclose any material or information in the possession of
the board that the board considers confidential unless specifically
authorized to do so by the chairperson or the board.
(10) A member, employee, or agent of the board or a parent,
spouse, sibling, spouse of a sibling, child, or spouse of a child
of a member, employee, or agent of the board shall not accept any
gift, gratuity, compensation, travel, lodging, or anything of
value, directly or indirectly, from any licensee or any applicant
or affiliate or representative of a licensee or applicant, unless
the acceptance conforms to a written policy or directive that is
issued by the chairperson or the board. Any member, employee, or
agent of the board who is offered or receives any gift, gratuity,
compensation, travel, lodging, or anything of value, directly or
indirectly, from any licensee or any applicant or affiliate or
representative of an applicant or licensee shall immediately
provide written notification of the details to the chairperson.
(11) A licensee or applicant, or an affiliate or
representative of an applicant or licensee, shall not, directly or
indirectly, give or offer to give any gift, gratuity, compensation,
travel, lodging, or anything of value to any member, employee, or
agent of the board that the member, employee, or agent of the board
is prohibited from accepting under subsection (10).
(12) A member, employee, or agent of the board shall not
engage in any conduct that constitutes a conflict of interest and
shall immediately advise the chairperson in writing of the details
of any incident or circumstances that would present the existence
of a conflict of interest with respect to performing board-related
work or duties.
(13) A member, employee, or agent of the board who is
approached and offered a bribe as described in section 118 of the
Michigan penal code, 1931 PA 328, MCL 750.118, or this act shall
immediately provide written account of the details of the incident
to the chairperson and to a law enforcement officer of a law
enforcement agency having jurisdiction.
(14) A member, employee, or agent of the board shall disclose
his or her past involvement with any marihuana enterprise in the
past 5 years and shall not engage in political activity or
politically related activity during the duration of his or her
appointment or employment.
(15) A former member, employee, or agent of the board may
appear before the board as a fact witness about matters or actions
handled by the member, employee, or agent during his or her tenure
as a member, employee, or agent of the board. The member, employee,
or agent of the board shall not receive compensation for such an
appearance other than a standard witness fee and reimbursement for
travel expenses as established by statute or court rule.
(16) A licensee or applicant or any affiliate or
representative of an applicant or licensee shall not engage in ex
parte communications with a member of the board. A member of the
board shall not engage in any ex parte communications with a
licensee or an applicant or with any affiliate or representative of
an applicant or licensee.
(17) Any board member, licensee, or applicant or affiliate or
representative of a board member, licensee, or applicant who
receives any ex parte communication in violation of subsection
(16), or who is aware of an attempted communication in violation of
subsection (16), shall immediately report details of the
communication or attempted communication in writing to the
chairperson.
(18) Any member of the board who receives an ex parte
communication in an attempt to influence that member's official
action shall disclose the source and content of the communication
to the chairperson. The chairperson may investigate or initiate an
investigation of the matter with the assistance of the attorney
general and state police to determine if the communication violates
subsection (16) or subsection (17) or other state law. The
disclosure under this section and the investigation are
confidential. Following an investigation, the chairperson shall
advise the governor or the board, or both, of the results of the
investigation and may recommend action as the chairperson considers
appropriate. If the chairperson receives such an ex parte
communication, he or she shall report the communication to the
governor's office for appropriate action.
(19) A new or current employee or agent of the board shall
obtain written permission from the executive director before
continuing outside employment held at the time the employee begins
to work for the board. Permission shall be denied, or permission
previously granted shall be revoked, if the executive director
considers the nature of the work to create a possible conflict of
interest or if it would otherwise interfere with the duties of the
employee or agent for the board.
(20) An employee or agent of the board granted permission for
outside employment shall not conduct any business or perform any
activities, including solicitation, related to outside employment
on premises used by the board or during the employee's working
hours for the board.
(21) The chairperson shall report any action he or she has
taken or proposes to take under this section with respect to an
employee or agent or former employee or former agent to the board
at the next meeting of the board. The board may direct the
executive director to take additional or different action.
(22) Except as allowed under the Michigan medical marihuana
act, a member, employee, or agent of the board shall not enter into
any personal transaction involving marihuana with a licensee or
applicant.
(23) If a licensee or applicant, or an affiliate or
representative of a licensee or applicant, violates this section,
the board may deny a license application, revoke or suspend a
license, or take other disciplinary action as provided in section
407.
(24) Violation of this section by a member of the board may
result in disqualification or constitute cause for removal under
section 301(7) or other disciplinary action as recommended by the
board to the governor.
(25) A violation of this section by an employee or agent of
the board need not result in termination of employment if the board
determines that the conduct involved does not violate the purpose
of this act. However, all of the following apply:
(a) If, after being offered employment or beginning employment
with the board, the employee or agent intentionally acquires a
financial interest in a licensee or an applicant, or an affiliate
or representative of a licensee or applicant, the offer or
employment with the board shall be terminated.
(b) If a financial interest in a licensee or an applicant, or
an affiliate or representative of a licensee or applicant, is
acquired by an employee or agent that has been offered employment
with the board, an employee of the board, or the employee's or
agent's spouse, parent, or child, through no intentional action of
the employee or agent, the individual shall have up to 30 days to
divest or terminate the financial interest. Employment may be
terminated if the interest has not been divested after 30 days.
(c) Employment shall be terminated if the employee or agent is
a spouse, parent, child, or spouse of a child of a board member.
(26) Violation of this section does not create a civil cause
of action.
(27) As used in this section:
(a) "Outside employment", in addition to employment by a third
party, includes, but is not limited to, the following:
(i) Operation of a proprietorship.
(ii) Participation in a partnership or group business
enterprise.
(iii) Performance as a director or corporate officer of any for-
profit or nonprofit corporation or banking or credit institution.
(iv) Performance as a manager of a limited liability company.
(b) "Political activity" or "politically related activity"
includes all of the following:
(i) Using his or her official authority or influence for the
purpose of interfering with or affecting the result of an election.
(ii) Knowingly soliciting, accepting, or receiving a political
contribution from any person.
(iii) Running for the nomination or as a candidate for election
to a partisan political office.
(iv) Knowingly soliciting or discouraging the participation in
any political activity of any person who is either of the
following:
(A) Applying for any compensation, grant, contract, ruling,
license, permit, or certificate pending before the board.
(B) The subject of or a participant in an ongoing audit,
investigation, or enforcement action being carried out by the
board.
PART 4. LICENSING
Sec. 401. (1) Beginning 180 days after the effective date of
this act, a person may apply to the board for state operating
licenses in the categories of class A, B, or C grower; processor;
provisioning center; secure transporter; and safety compliance
facility as provided in this act. The application shall be made
under oath on a form provided by the board and shall contain
information as prescribed by the board, including, but not limited
to, all of the following:
(a) The name, business address, business telephone number,
social security number, and, if applicable, federal tax
identification number of the applicant.
(b) The identity of every person having a greater than 1%
direct or indirect ownership interest in the applicant with respect
to which the license is sought. If the disclosed entity is a trust,
the application shall disclose the names and addresses of the
beneficiaries; if a corporation, the names and addresses of all
shareholders, officers, and directors; if a partnership or limited
liability partnership, the names and addresses of all partners; if
a limited partnership or limited liability limited partnership, the
names of all partners, both general and limited; or if a limited
liability company, the names and addresses of all members and
managers.
(c) An identification of any business that is directly or
indirectly involved in the growing, processing, testing,
transporting, or sale of marihuana, including, if applicable, the
state of incorporation or registration, in which an applicant or,
if the applicant is an individual, the applicant's spouse, parent,
or child has an equity interest of more than 5%. If an applicant is
a corporation, partnership, or other business entity, the applicant
shall identify any other corporation, partnership, or other
business entity that is directly or indirectly involved in the
growing, processing, testing, transporting, or sale of marihuana in
which it has an equity interest of 5% or more, including, if
applicable, the state of incorporation or registration. An
applicant may comply with this subdivision by filing a copy of the
applicant's registration with the Securities and Exchange
Commission if the registration contains the information required by
this subdivision.
(d) Whether an applicant has been indicted for, charged with,
arrested for, or convicted of, pled guilty or nolo contendere to,
forfeited bail concerning any criminal offense under the laws of
any jurisdiction, either felony or controlled-substance-related
misdemeanor, not including traffic violations, regardless of
whether the offense has been reversed on appeal or otherwise,
including the date, the name and location of the court, arresting
agency, and prosecuting agency, the case caption, the docket
number, the offense, the disposition, and the location and length
of incarceration.
(e) Whether an applicant has ever applied for or has been
granted any commercial license or certificate issued by a licensing
authority in Michigan or any other jurisdiction that has been
denied, restricted, suspended, revoked, or not renewed and a
statement describing the facts and circumstances concerning the
application, denial, restriction, suspension, revocation, or
nonrenewal, including the licensing authority, the date each action
was taken, and the reason for each action.
(f) Whether an applicant has filed, or been served with, a
complaint or other notice filed with any public body, regarding the
delinquency in the payment of, or a dispute over the filings
concerning the payment of, any tax required under federal, state,
or local law, including the amount, type of tax, taxing agency, and
time periods involved.
(g) A statement listing the names and titles of all public
officials or officers of any unit of government, and the spouses,
parents, and children of those public officials or officers, who,
directly or indirectly, own any financial interest in, have any
beneficial interest in, are the creditors of or hold any debt
instrument issued by, or hold or have any interest in any
contractual or service relationship with an applicant. As used in
this subdivision, public official or officer does not include a
person who would have to be listed solely because of his or her
state or federal military service.
(h) A description of the type of marihuana facility; written
approval of the marihuana facility location from the municipality;
anticipated or actual number of employees; and projected or actual
gross receipts.
(i) Financial information in the manner and form prescribed by
the board.
(j) A paper copy or electronic posting website reference for
the ordinance that the municipality adopted to authorize operation
of 1 or more licensed marihuana facilities in the municipality.
(k) Any other information the department requires by rule.
(2) The board shall use information provided on the
application as a basis to conduct a thorough background
investigation on the applicant. A false application is cause for
the board to deny a license. The board shall not consider an
incomplete application but shall, within a reasonable time, return
the application to the applicant with notification of the
deficiency and instructions for submitting a corrected application.
Information the board obtains from the background investigation is
exempt from disclosure under the freedom of information act, 1976
PA 442, MCL 15.231 to 15.246.
(3) An applicant must provide written consent to the
inspections, examinations, searches, and seizures provided for in
section 303(1)(c)(i) to (iv) and to disclosure to the board and its
agents of otherwise confidential records, including tax records
held by any federal, state, or local agency, or credit bureau or
financial institution, while applying for or holding a license.
Information the board receives under this subsection is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(4) An applicant must certify that the applicant does not have
an interest in any other state operating license that is prohibited
under this act.
(5) A nonrefundable application fee must be paid at the time
of filing to defray the costs associated with the background
investigation conducted by the board. The department in
consultation with the board shall set the amount of the application
fee for each category and class of license by rule. If the costs of
the investigation and processing the application exceed the
application fee, the applicant shall pay the additional amount to
the board. All information, records, interviews, reports,
statements, memoranda, or other data supplied to or used by the
board in the course of its review or investigation of an
application for a license under this act shall be disclosed only in
accordance with this act. The information, records, interviews,
reports, statements, memoranda, or other data are not admissible as
evidence or discoverable in any action of any kind in any court or
before any tribunal, board, agency, or person, except for any
action considered necessary by the board.
Sec. 402. (1) The board shall issue a license to an applicant
who submits a complete application and pays both the nonrefundable
application fee required under section 401(5) and the regulatory
assessment established by the board for the first year of
operation, if the board determines that the applicant is qualified
to receive a license under this act.
(2) An applicant is ineligible to receive a license if any of
the following circumstances exist:
(a) The applicant has been convicted of or released from
incarceration for a felony under the laws of this state, any other
state, or the United States within the past 5 years or has been
convicted of a controlled substance-related felony within the past
10 years.
(b) Within the past 5 years the applicant has been convicted
of a misdemeanor involving a controlled substance, theft,
dishonesty, or fraud in any state or been found responsible for
violating a local ordinance in any state involving a controlled
substance, dishonesty, theft, or fraud that substantially
corresponds to a misdemeanor in that state.
(c) The applicant has knowingly submitted an application for a
license under this act that contains false information.
(d) The applicant is a member of the board.
(e) The applicant fails to demonstrate the applicant's ability
to maintain adequate premises liability and casualty insurance for
its proposed facility.
(f) The applicant holds an elective office of a governmental
unit of this state, another state, or the federal government; is a
member of or employed by a regulatory body of a governmental unit
in this state, another state, or the federal government; or is
employed by a governmental unit of this state. This subdivision
does not apply to an elected officer of or employee of a federally
recognized Indian tribe or to an elected precinct delegate.
(g) The applicant fails to meet other criteria established by
rule.
(3) In determining whether to grant a license to an applicant,
the board may also consider all of the following:
(a) The integrity, moral character, and reputation; personal
and business probity; financial ability and experience; and
responsibility or means to operate or maintain a facility of the
applicant and of any other person that either:
(i) Controls, directly or indirectly, the applicant.
(ii) Is controlled, directly or indirectly, by the applicant or
by a person who controls, directly or indirectly, the applicant.
(b) The financial ability of the applicant to purchase and
maintain adequate liability and casualty insurance.
(c) The sources and total amount of the applicant's
capitalization to operate and maintain the proposed facility.
(d) Whether the applicant has been indicted for, charged with,
arrested for, or convicted of, pled guilty or nolo contendere to,
forfeited bail concerning, or had expunged any relevant criminal
offense under the laws of any jurisdiction, either felony or
misdemeanor, not including traffic violations, regardless of
whether the offense has been expunged, pardoned, or reversed on
appeal or otherwise.
(e) Whether the applicant has filed, or had filed against it,
a proceeding for bankruptcy within the past 7 years.
(f) Whether the applicant has been served with a complaint or
other notice filed with any public body regarding payment of any
tax required under federal, state, or local law that has been
delinquent for 1 or more years.
(g) Whether the applicant has a history of noncompliance with
any regulatory requirements in this state or any other
jurisdiction.
(h) Whether at the time of application the applicant is a
defendant in litigation involving its business practices.
(i) Whether the applicant meets other standards in rules
applicable to the license category.
(4) Each applicant shall submit with its application, on forms
provided by the board, a passport quality photograph and 1 set of
fingerprints for each person having a greater than 1% direct or
indirect ownership interest in the facility and each person who is
an officer, director, or managerial employee of the applicant.
(5) The board shall review all applications for licenses and
shall inform each applicant of the board's decision.
(6) A license shall be issued for a 1-year period and is
renewable annually. Except as otherwise provided in this act, the
board shall renew a license if all of the following requirements
are met:
(a) The licensee applies to the board on a renewal form
provided by the board that requires information prescribed in
rules.
(b) The application is received by the board on or before the
expiration date of the current license.
(c) The licensee pays the regulatory assessment under section
603.
(d) The licensee meets any other renewal requirements set
forth in rules.
(7) The department shall notify the licensee by mail or
electronic mail at the last known address on file with the board
advising of the time, procedure, and regulatory assessment under
section 603. The failure of the licensee to receive notice under
this subsection does not relieve the licensee of the responsibility
for renewing the license.
(8) If a license renewal application is not submitted by the
license expiration date, the license may be renewed within 60 days
after its expiration date upon application, payment of the
regulatory assessment under section 603, and satisfaction of any
renewal requirement and late fee set forth in rules. The licensee
may continue to operate during the 60 days after the license
expiration date if the license is renewed by the end of the 60-day
period.
(9) License expiration does not terminate the board's
authority to impose sanctions on a licensee whose license has
expired.
(10) In its decision on an application for renewal, the board
shall consider any specific written input it receives from an
individual or entity within the local unit of government in which
the applicant for renewal is located.
(11) A licensee must consent in writing to inspections,
examinations, searches, and seizures that are permitted under this
act and must provide a handwriting exemplar, fingerprints,
photographs, and information as authorized in this act or by rules.
(12) An applicant or licensee has a continuing duty to provide
information requested by the board and to cooperate in any
investigation, inquiry, or hearing conducted by the board.
Sec. 403. If the board identifies a deficiency in an
application, the board shall provide the applicant with a
reasonable period of time to correct the deficiency.
Sec. 404. (1) The board shall issue a license only in the name
of the true party of interest.
(2) For the following true parties of interest, information
concerning the indicated individuals must be included in the
disclosures required of an applicant or licensee:
(a) For an individual or sole proprietorship: the proprietor
and spouse.
(b) For a partnership and limited liability partnership: all
partners and their spouses. For a limited partnership and limited
liability limited partnership: all general and limited partners and
their spouses. For a limited liability company: all members,
managers, and their spouses.
(c) For a privately held corporation: all corporate officers
or persons with equivalent titles and their spouses and all
stockholders and their spouses.
(d) For a publicly held corporation: all corporate officers or
persons with equivalent titles and their spouses.
(e) For a multilevel ownership enterprise: any entity or
person that receives or has the right to receive a percentage of
the gross or net profit from the enterprise during any full or
partial calendar or fiscal year.
(f) For a nonprofit corporation: all individuals and entities
with membership or shareholder rights in accordance with the
articles of incorporation or the bylaws and their spouses.
(3) For purposes of this section, "true party of interest"
does not mean:
(a) A person or entity receiving reasonable payment for rent
on a fixed basis under a bona fide lease or rental obligation,
unless the lessor or property manager exercises control over or
participates in the management of the business.
(b) A person who receives a bonus as an employee if the
employee is on a fixed wage or salary and the bonus is not more
than 25% of the employee's prebonus annual compensation or if the
bonus is based on a written incentive/bonus program that is not out
of the ordinary for the services rendered.
Sec. 405. Subject to the laws of this state, before hiring a
prospective employee, the holder of a license shall conduct a
background check of the prospective employee. If the background
check indicates a pending charge or conviction within the past 5
years for a controlled substance-related felony, a licensee shall
not hire the prospective employee without written permission of the
board.
Sec. 406. Each license is exclusive to the licensee, and a
licensee or any other person must apply for and receive the board's
approval before a license is transferred, sold, or purchased. The
attempted transfer, sale, or other conveyance of an interest of
more than 1% in a license without prior board approval is grounds
for suspension or revocation of the license or for other sanction
considered appropriate by the board.
Sec. 407. (1) If an applicant or licensee fails to comply with
this act or rules, if a licensee fails to comply with the marihuana
tracking act, if a licensee no longer meets the eligibility
requirements for a license under this act, or if an applicant or
licensee fails to provide information the board requests to assist
in any investigation, inquiry, or board hearing, the board may
deny, suspend, revoke, or restrict a license. The board may
suspend, revoke, or restrict a license and require the removal of a
licensee or an employee of a licensee for a violation of this act,
rules, the marihuana tracking act, or any ordinance adopted under
section 205. The board may impose civil fines of up to $5,000.00
against an individual and up to $10,000.00 or an amount equal to
the daily gross receipts, whichever is greater, against a licensee
for each violation of this act, rules, or an order of the board.
(2) The board shall comply with the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328, when denying,
revoking, suspending, or restricting a license or imposing a fine.
The board may suspend a license without notice or hearing upon a
determination that the safety or health of patrons or employees is
jeopardized by continuing a marihuana facility's operation. If the
board suspends a license under this subsection without notice or
hearing, a prompt postsuspension hearing must be held to determine
if the suspension should remain in effect. The suspension may
remain in effect until the board determines that the cause for
suspension has been abated. The board may revoke the license or
approve a transfer or sale of the license upon a determination that
the licensee has not made satisfactory progress toward abating the
hazard.
(3) After denying an application for a license, the board
shall, upon request, provide a public investigative hearing at
which the applicant is given the opportunity to present testimony
and evidence to establish its suitability for a license. Other
testimony and evidence may be presented at the hearing, but the
board's decision must be based on the whole record before the board
and is not limited to testimony and evidence submitted at the
public investigative hearing.
(4) Except for license applicants who may be granted a hearing
at the discretion of the board under subsection (3), any party
aggrieved by an action of the board suspending, revoking,
restricting, or refusing to renew a license, or imposing a fine,
shall be given a hearing before the board upon request. A request
for a hearing must be made to the board in writing within 21 days
after service of notice of the action of the board. Notice of the
action of the board must be served either by personal delivery or
by certified mail, postage prepaid, to the aggrieved party. Notice
served by certified mail is considered complete on the business day
following the date of the mailing.
(5) The board may conduct investigative and contested case
hearings; issue subpoenas for the attendance of witnesses; issue
subpoenas duces tecum for the production of books, ledgers,
records, memoranda, electronically retrievable data, and other
pertinent documents; and administer oaths and affirmations to
witnesses as appropriate to exercise and discharge the powers and
duties of the board under this act. The executive director or his
or her designee may issue subpoenas and administer oaths and
affirmations to witnesses.
Sec. 408. Alcoholic beverages shall not be sold, distributed,
or consumed on the premises of a provisioning center.
PART 5. LICENSEES
Sec. 501. (1) A grower license authorizes the grower to grow
not more than the following number of plants under the indicated
license class:
(a) Class A – 500 plants.
(b) Class B – 1,000 plants.
(c) Class C – 1,500 plants.
(2) A grower license authorizes sale of marihuana seeds or
seedlings only to a grower by means of a secure transporter and
purchase of marihuana seeds or seedlings only from a grower,
registered qualifying patient, or registered primary caregiver.
(3) A grower license authorizes sale of marihuana, other than
seeds or seedlings, only to a processor or provisioning center.
(4) Except as provided in subsection (5), a grower license
authorizes the grower to transfer marihuana only by means of a
secure transporter.
(5) A grower license authorizes the grower to transfer
marihuana to and from a safety compliance facility for testing or
to or from a processor or provisioning center located within the
same marihuana facility.
(6) To be eligible for a grower license, the applicant and
each investor in the grower must not have a greater than 10%
interest in a secure transporter or a safety compliance facility.
(7) A grower shall comply with all of the following:
(a) Until December 31, 2021, have, or have as an active
employee an individual who has, a minimum of 2 years' experience as
a registered primary caregiver.
(b) While holding a license as a grower, not be a registered
primary caregiver and not employ an individual who is
simultaneously a registered primary caregiver.
(c) Enter each transfer of marihuana into this state's
database for marihuana tracking, as provided in the marihuana
tracking act.
Sec. 502. (1) A processor license authorizes purchase of
marihuana only from a grower and sale of processed marihuana or
marihuana-infused products only to a provisioning center.
(2) Except as provided in subsection (3), a processor license
authorizes the processor to transfer marihuana only by means of a
secure transporter.
(3) A processor license authorizes the processor to transfer
marihuana to and from a safety compliance facility for testing or
to or from a grower or provisioning center located within the same
marihuana facility.
(4) To be eligible for a processor license, the applicant and
each investor in the processor must not have a greater than 10%
interest in a secure transporter or safety compliance facility.
(5) A processor shall comply with all of the following:
(a) Until December 31, 2021, have, or have as an active
employee an individual who has, a minimum of 2 years' experience as
a registered primary caregiver.
(b) While holding a license as a processor, not be a
registered primary caregiver and not employ an individual who is
simultaneously a registered primary caregiver.
(c) Enter each transfer of marihuana into this state's
database for marihuana tracking, as provided in the marihuana
tracking act.
Sec. 503. (1) A secure transporter license authorizes the
licensee to store and transport marihuana and money associated with
the purchase or sale of marihuana between marihuana facilities for
a fee upon request of a person with legal custody of that marihuana
or money.
(2) To be eligible for a secure transporter license, the
applicant and each investor with a greater than 10% interest in the
secure transporter must not have a greater than 10% interest in a
grower, processor, provisioning center, or safety compliance
facility.
(3) A secure transporter shall enter each transfer of
marihuana into this state's database for marihuana tracking, as
provided in the marihuana tracking act.
Sec. 504. (1) A provisioning center license authorizes the
purchase or transfer of marihuana only from a grower or processor
and sale or transfer to only a registered qualifying patient or
registered primary caregiver. Except as provided in subsection (2),
all transfers of marihuana to a provisioning center from a separate
marihuana facility shall be by means of a secure transporter.
(2) A provisioning center license authorizes the provisioning
center to transfer marihuana to or from a safety compliance
facility for testing.
(3) To be eligible for a provisioning center license, the
applicant and each investor in the provisioning center must not
have a greater than 10% interest in a secure transporter or safety
compliance facility.
(4) A provisioning center shall comply with all of the
following:
(a) Sell or transfer marihuana to a registered qualifying
patient or registered primary caregiver only after it has been
tested and bears the label required for retail sale.
(b) Enter each transfer of marihuana into this state's
database for marihuana tracking as provided in the marihuana
tracking act.
Sec. 505. (1) A safety compliance facility license authorizes
the facility to receive, test, and return marihuana.
(2) A safety compliance facility must be accredited by an
entity approved by the board by 1 year after the date the license
is issued. The board may grant a variance from this requirement
upon a finding that the variance is necessary to protect and
preserve the public health, safety, or welfare.
(3) To be eligible for a safety compliance facility license,
the applicant and each investor with a greater than 10% interest in
the safety compliance facility must not have a greater than 10%
interest in a grower, secure transporter, processor, or
provisioning center.
(4) A safety compliance facility shall comply with all of the
following:
(a) Perform tests to certify that marihuana is reasonably free
of chemical residues such as fungicides and insecticides.
(b) Use validated test methods to determine
tetrahydrocannabinol, tetrahydrocannabinol acid, cannabidiol, and
cannabidiol acid levels.
(c) Perform tests that determine whether marihuana complies
with the standards the department establishes for microbial and
mycotoxin contents.
(d) Perform other tests necessary to determine compliance with
any other good manufacturing practices as prescribed in rules.
(e) Enter each transfer of marihuana into this state's
database for marihuana tracking, as provided in the marihuana
tracking act, along with test results.
PART 6. TAXES AND FEES
Sec. 601. (1) A tax is imposed on each provisioning center at
the rate of 3% of the provisioning center's gross retail income. If
a law authorizing the recreational or non-medical use of marihuana
in this state is enacted, this section does not apply beginning 90
days after the effective date of that law.
(2) The taxes imposed under this section shall be administered
by the department of treasury in accordance with 1941 PA 122, MCL
205.1 to 205.31, and this act. In case of conflict between the
provisions of 1941 PA 122, MCL 205.1 to 205.31, and this act, the
provisions of this act prevail.
Sec. 602. (1) The medical marihuana excise fund is created in
the state treasury.
(2) Except for the application fee under section 401, the
regulatory assessment under section 603, and any local licensing
fees, all money collected under section 601 and all other fees,
fines, and charges, imposed under this act shall be deposited in
the medical marihuana excise fund. The state treasurer shall direct
the investment of the fund. The state treasurer shall credit to the
fund interest and earnings from fund investments.
(3) Money in the medical marihuana excise fund at the close of
the fiscal year shall remain in the fund and shall not lapse to the
general fund.
(4) The department shall be the administrator of the medical
marihuana excise fund for auditing purposes.
(5) The money in the medical marihuana excise fund shall be
allocated, upon appropriation, as follows:
(a) 30% to municipalities in which a marihuana facility is
located, allocated in proportion to the number of marihuana
facilities within the municipality.
(b) 40% to counties in which a marihuana facility is located,
allocated in proportion to the number of marihuana facilities
within the county.
(c) 5% to counties in which a marihuana facility is located,
allocated in proportion to the number of marihuana facilities
within the county. Money allocated under this subdivision shall be
used exclusively to support the county sheriffs and shall be in
addition to and not in replacement of any other funding received by
the county sheriffs.
(d) 25% to this state to be deposited in the state general
fund.
Sec. 603. (1) A regulatory assessment is imposed on certain
licensees as provided in this section. All of the following shall
be included in establishing the total amount of the regulatory
assessment established under this section:
(a) The department's costs to implement, administer, and
enforce this act, except for the costs to process and investigate
applications for licenses supported with the application fee
described in section 401.
(b) Expenses of medical-marihuana-related legal services
provided to the department by the department of attorney general.
(c) Expenses of medical-marihuana-related services provided to
the department by the department of state police.
(d) $500,000.00 to be allocated to the department for
expenditures of the department for licensing substance use disorder
programs.
(e) An amount equal to 5% of the sum of the amounts provided
for under subdivisions (a) to (d) to be allocated to the department
of health and human services for marihuana-related expenditures
including, but not limited to, substance use disorder prevention,
education, and treatment programs.
(2) The regulatory assessment is in addition to the
application fee described in section 401, the tax described in
section 601, and any local licensing fees.
(3) The regulatory assessment shall be collected annually from
licensed growers, processors, provisioning centers, and secure
transporters. The regulatory assessment for a class A grower
license shall not exceed $10,000.00.
(4) Beginning in the first year marihuana facilities are
authorized to operate in this state, and annually thereafter, the
department, in consultation with the board, shall establish the
total regulatory assessment at an amount that is estimated to be
sufficient to cover the actual costs and support the expenditures
listed in subsection (1).
(5) On or before the date the licensee begins operating and
annually thereafter, each grower, processor, provisioning center,
and secure transporter shall pay to the state treasurer an amount
determined by the department to reasonably reflect the licensee's
share of the total regulatory assessment established under
subsection (4).
Sec. 604. (1) The marihuana regulatory fund is created in the
state treasury.
(2) The application fee collected under section 401 and the
regulatory assessment collected under section 603 shall be
deposited in the marihuana regulatory fund. The state treasurer
shall direct the investment of the fund. The state treasurer shall
credit to the fund interest and earnings from fund investments.
(3) Money in the marihuana regulatory fund at the close of the
fiscal year shall remain in the fund and shall not lapse to the
general fund.
(4) The state treasurer shall be the administrator of the
marihuana regulatory fund for auditing purposes.
(5) Except as provided in section 603(1)(d) and (e), the
department shall expend money from the marihuana regulatory fund,
upon appropriation, only for implementing, administering, and
enforcing this act.
Sec. 605. There is appropriated to the department for the
fiscal year ending September 30, 2016 $8,500,000.00 from the
marihuana regulatory fund for the purpose of funding the operations
of the department and the board in implementing, administering, and
enforcing this act.
PART 7. REPORTS
Sec. 701. By 30 days after the end of each state fiscal year,
each licensee shall transmit to the board and to the municipality
compiled financial statements of the licensee's total operations.
The financial statements shall be compiled by a certified public
accountant in a manner and form prescribed by the board. The
certified public accountant must be licensed in this state under
article 7 of the occupational code, 1980 PA 299, MCL 339.720 to
339.736. The compensation for the certified public accountant shall
be paid directly by the licensee to the certified public
accountant.
Sec. 702. The board shall submit with the annual report to the
governor under section 302(k) and to the chairs of the legislative
committees that govern issues related to marihuana facilities a
report covering the previous year. The report shall include an
account of the board actions, its financial position, results of
operation under this act, and any recommendations for legislation
that the board considers advisable.
PART 8. MARIHUANA ADVISORY PANEL
Sec. 801. (1) The marihuana advisory panel is created within
the department.
(2) The marihuana advisory panel shall consist of 15 members,
including the director of state police or his or her designee, the
director of this state's department of health and human services or
his or her designee, the director of the department of licensing
and regulatory affairs or his or her designee, the attorney general
or his or her designee, the director of the department of
agriculture and rural development or his or her designee, and the
following members appointed by the governor:
(a) One registered medical marihuana patient or medical
marihuana primary caregiver.
(b) One representative of growers.
(c) One representative of provisioning centers.
(d) One representative of safety compliance facilities.
(e) One representative of townships.
(f) One representative of cities and villages.
(g) One representative of counties.
(h) One representative of sheriffs.
(i) One representative of local police.
(j) One physician licensed under article 15 of the public
health code, 1978 PA 368, MCL 333.16101 to 333.18838.
(3) The members first appointed to the panel shall be
appointed within 3 months after the effective date of this act and
shall serve at the pleasure of the governor. Appointed members of
the panel shall serve for terms of 3 years or until a successor is
appointed, whichever is later.
(4) If a vacancy occurs on the advisory panel, the governor
shall make an appointment for the unexpired term in the same manner
as the original appointment.
(5) The first meeting of the panel shall be called by the
director of the department or his or her designee within 1 month
after the advisory panel is appointed. At the first meeting, the
panel shall elect from among its members a chairperson and any
other officers it considers necessary or appropriate. After the
first meeting, the panel shall meet at least 2 times each year, or
more frequently at the call of the chairperson.
(6) A majority of the members of the panel constitute a quorum
for the transaction of business. A majority of the members present
and serving are required for official action of the panel.
(7) The business that the panel performs shall be conducted at
a public meeting held in compliance with the open meetings act,
1976 PA 267, MCL 15.261 to 15.275.
(8) A writing prepared, owned, used, in the possession of, or
retained by the panel in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
(9) Members of the panel shall serve without compensation.
However, members of the panel may be reimbursed for their actual
and necessary expenses incurred in the performance of their
official duties as members of the panel.
(10) The panel shall make recommendations to the board
concerning promulgation of rules and, as requested by the board or
the department, the administration of this act.
(11) State departments and agencies shall cooperate with the
panel and, upon request, provide it with meeting space and other
necessary resources to assist it in the performance of its duties.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.
Enacting section 2. The legislature finds that the necessity
for access to safe sources of marihuana for medical use and the
immediate need for growers, processors, secure transporters,
provisioning centers, and safety compliance facilities to operate
under clear requirements establish the need to promulgate emergency
rules to preserve the public health, safety, or welfare.
Enacting section 3. This act does not take effect unless House
Bill No. 4827 of the 98th Legislature is enacted into law.
