Recreational marijuana sales in Michigan are a step closer to reality.
Wednesday, Michigan’s Marijuana Regulatory Agency released emergency regulations for businesses planning on entering the recreational marijuana retail marketplace.
The regulations establish temporary rules governing Michigan’s recreational market, which is expected to be worth billions of dollars.
Michigan voters approved legalizing the recreational use of marijuana last November. The law took effect in December, but commercial sales have been on hold as the state developed the regulations to manage the new industry.
“We want to ensure that the regulated market is successful,” says Andrew Brisbo, director of the Marijuana Regulatory Agency, “so that products purchased by consumers are done through a mechanism where we can ensure the products they’re obtaining are safe for use by any person.”
Under the regulations, the state of Michigan will start taking applications for recreational marijuana businesses starting November 1. The original plan was to start taking applications in September. It’s unclear exactly when commercial sales will begin.
The application process for adult-use marijuana licenses will follow the two-step process that the Marijuana Regulatory Agency has been using for the processing of medical marijuana licenses. Existing businesses will have their recreational licensing process expedited.
There is a lot of overlap between the existing medical marijuana regulations and the new regulations governing adult recreational use.
Among other things, the emergency regulations will allow an adult-use retailer and medical provisioning center licensee to operate at the same location. The rules require the two operations to physically separate their inventories so customers can clearly identify medical marijuana products from adult-use marijuana products.
The regulations will also permit licensed businesses to allow adults 21 years of age and older to consume marijuana and cannabis products on the premises. The rules will not permit the sale of food or alcohol at those businesses.
“The release of the rules today provides local municipalities and prospective licensees with the information they need to decide how they want to participate in this new industry,” says Brisbo.
Elected officials in many Michigan cities and towns have been waiting to see what the state regulations would look like before deciding whether to opt in to letting recreational marijuana businesses open in their communities. So far, 506 communities have opted out. But many Michigan cities and towns have taken steps to allow recreational cannabis businesses to apply for operating permits once the state regulations are in place.
Marijuana business leaders now expect to see a rush of companies trying to become the first to the marketplace.
“The race to be the first to get applications submitted and approved has now officially begun,” says Josh Hovey, the spokesman for the Michigan Cannabis Industry Association. “Every business in the state that is looking at this industry … they’re putting on their running shoes.”
Hovey cites provisions placing no capitalization requirements on businesses and the creation of an excess grower license as helping small businesses and avoiding potential cannabis product shortages.
The emergency regulations will be in effect for six months. The regulations can be extended for an additional six months.
Under the emergency rules:
There are no capitalization requirements for adult-use licenses and fewer financial documents are requested from applicants.
Adult-use home delivery includes designated consumption establishments and any residence. Medical home delivery is to registered marijuana cardholders only.
Adult-use license renewal fees are divided into three tiers in which larger volume licensees will pay more on renewal and smaller volume licensees will pay less.
Growers and microbusinesses may accept the transfer of marijuana seeds, tissue cultures, and clones from another grower licensed under the adult-use law or the medical marijuana law.
Class A growers and microbusinesses may accept the transfer of marijuana plants one time from (a) registered primary caregiver(s) so long as the caregiver(s) was an applicant for that license.
Current medical marijuana licensees who apply for adult-use licenses will be expedited through the application process if there are no changes in ownership.
All adult-use applicants are required to submit a social equity plan. The social equity plan must detail a strategy to promote and encourage participation in the marijuana industry by people from communities that have been disproportionately impacted by marijuana prohibition and enforcement and to positively impact those communities.
Adult-use safety compliance facilities are required to hire a laboratory manager.