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Michigan’s Marijuana Rules: Changes to Note

There is a lot of action is occurring in the legalized marijuana business on the state and local levels across Michigan and it feels like the rules change (and improve) often. Efforts to increase participation for many more Social Equity individuals have developed and are quite interesting.

So, what’s going on with Michigan’s marijuana rules?

the state of Michigan flag with the state's motto and some wildlifeThe new Marijuana Regulatory Agency (MRA) Rules are here. They are effective and in play and are topic-based. The old Emergency Rules are gone.

To highlight a few changes in Michigan’s marijuana rules:

  1. Pre-Qualifications are now valid for two years, this is a change over the one year as under the Emergency Rules. The Agency applies that retroactively.
  2. The previously touted “labor-peace agreements” never made it into the final approval. Those do not exist in these Rules.
  3. Marijuana delivery is permitted by retail operations. See Rule 420.207. Can a retail delivery system carry extra product other than that intended for delivery and be on-call while on the road to make a delivery out of inventory in the vehicle? Adult Use product is being delivered all over Michigan.

The Social Equity Program has been expanded to include many more people and communities in Michigan with an increase in the amount available for fee reduction. It’s easy to apply and the Social Equity staff offer help in the process. Make sure you apply for your Social Equity approval first before you apply for your MMFLA or Adult-Use license and pay that $6,000.00 because the fee reduction is prospective, not retroactive. Interestingly, we were all concerned about revelations on the Criminal History Attestations. Now the Social Equity Program makes having a marijuana-related felony almost financially worthwhile. We have been told that the Social Equity Program reviewers will liberally interpret. If you live outside the municipal boundaries of one of the impacted cities or areas but live close and use the post office address, you may qualify. Don’t just throw away the opportunity by a strict reading of that Rule.

If you are a licensee and have not already seen the state’s financial report format, you best become familiar with it soon. Your CPA has to provide an Independent Accountants Report to the Agency by October 31st. We do not yet have a quote from tax people as to what they think this report will cost. It’s not an audit; it’s not a review. It’s a “Report On Applying Agreed Upon Procedures.” Good luck with this one!

Make a note about September 30th.  That’s when the March 1st Advisory Bulletin/Phase 2 effective June 1, 2020 ends. Caregiver product is out of the system and your “get out of jail free card” evaporates.

Wait until you see the new and revised MMFLA and AU application forms. Easier to read and complete. No more financial statements! The Agency is still looking for tax returns but 12 months of bank accounts are no longer necessary.

Thank you to the MRA for updating and simplifying. Is this to get ready for an onslaught of applications for Adult Use on November 1, 2020? No word out of Lansing yet on that possible change.

If you need more information about these Rules and interpretations, give Cannalex Law a call. We’d be happy to help you understand them and consider how you can be part of Michigan’s ever-growing marijuana marketplace.