Tag: cannabis license

Five Stories That Matter in Michigan This Week – August 18, 2023

  1. Hosting an Event that Involves Cannabis in Michigan Requires Proper Licensing

As the legal cannabis industry continues to grow in Michigan, more events involving the consumption of cannabis are being hosted across the state. As the Cannabis Regulatory Agency (CRA) discussed in a recent information release, such events require proper licensing. Specifically, according to the CRA, “CRA rules require a person who allows consumption of marijuana products on the premises of a non-residential location – and charges a fee for entry, sells goods or services while individuals are consuming on the premises, or requires membership for entry – must acquire either a designated consumption establishment license or a temporary marijuana event license. An application for a temporary marijuana event license must be submitted 90 days prior to the date of the event.”

Why it Matters: Violations of requirements may result in disciplinary action. If you have any questions, please contact your cannabis law attorneys at Fraser Trebilcock.

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  1. Fraser Trebilcock Attorney Thaddeus Morgan Obtains Summary Judgment for Firm Client; Sixth Circuit Affirms Dismissal

The U.S. Court of Appeals for the Sixth Circuit affirmed a decision by the U.S. District Court for the Western District of Michigan, which granted summary judgment for the firm’s client, who was represented by Fraser Trebilcock attorney Thaddeus Morgan.

Why it Matters: The U.S. Court of Appeals for the Sixth Circuit did not find either of the district court’s decisions erroneous, affirming the denial of the Plaintiff’s motion to amend and granting summary judgment to the defendants. Read more on the case.

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  1. Michigan Cannabis Sales Exceed $276 Million in July

Cannabis sales surpassed $276 million in July, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $270,603,217.84, while medical sales came in at $6,143,046.23, totaling $276,746,264.07.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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  1. Business Education Series – Setting Meaningful Goals and Time Blocking for Success

On August 22, 2023, gain valuable knowledge and skills to set meaningful goals, establish priorities, and effectively manage their time through the practice of time blocking.

Why it Matters: Participants will learn practical strategies and techniques to enhance their goal-setting abilities, develop a clear sense of direction, and optimize their productivity. Learn more.

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  1. Michigan Supreme Court Clarifies the Difference Between “Requirements” and “Release-by-Release” Contracts Under the Uniform Commercial Code

In an important decision that impacts customers and suppliers in the manufacturing industry, the Michigan Supreme Court, in MSSC, Inc. v. AirBoss Flexible Prods. Co., clarified the contractual circumstances under which a supplier can become bound to a long-term “requirements contract” under the Uniform Commercial Code.

Why it Matters: In light of the Supreme Court’s decision, buyers and sellers of goods should review their contracts with legal counsel to evaluate whether they meet the standards for a requirements contract.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Litigation | Thaddeus Morgan
Business & Tax | Ed Castellani

Five Stories that Matter in Michigan This Week – September 16, 2022

  1. Small Michigan Cannabis Growers Ask State to Stop Issuing Grow Licenses

Small cannabis businesses “overwhelmingly” asked the Michigan Cannabis Regulatory Agency to stop issuing new grow licenses (at least temporarily) at the CRA’s recent public quarterly meeting, according to MLive.com. They also requested that the number of plants any business can grow be capped at 10,000, and that there be better enforcement of black-market sales.

Why it Matters: Despite sales of recreational marijuana growing 126% over the last year, recreational marijuana flower prices have sunk 47% over the last period. Accordingly, while there is clearly demand, many businesses will struggle to be profitable if prices continue to tumble.

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  1. U of M Study Finds that Wind and Solar Industries Could Fully Replace Jobs Lost at U.S. Coal-Fired Power Plants

A recent University of Michigan study found that the wind and solar industries could fully replace the number of lost jobs at U.S. coal-fired power plants that are expected to close to meet emission-reduction targets.

Why it Matters: The recently enacted Inflation Reduction Act includes substantial funding for wind and solar energy tax incentives. The bill is intended to spur growth and investment in clean energy projects across the country. Michigan has recently seen growth in jobs in the energy sector. In fact, the state ranked first in the nation for energy job growth in a recent U.S. Department of Energy report. Michigan added more than 35,000 energy-sector jobs from 2020 to 2021.

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  1. Automotive Edge Talking Point at Auto Show

On Wednesday, Governor Whitmer and other elected officials spoke at the 2022 North American International Auto Show in Detroit, highlighting key investments in the automotive industry aimed to keep Michigan maintaining its automotive edge.

Why it Matters: Governor Whitmer focused on recently secured investments such as the $7 billion investment with GM to build batteries in the state, and a $3.2 billion investment from Ford that adds 3,200 jobs across Southeast Michigan in advanced mobility.

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  1. Brian Hanna Named CRA’s Acting Executive Director

On Thursday, September 15, Governor Whitmer appointed Brian Hanna as acting Executive Director of the state’s Cannabis Regulatory Agency while a nationwide search for a permanent executive director ensues.

Why it Matters: Following the departure of Andrew Brisbo last month who accepted a position as Director of Michigan’s Bureau of Construction Codes, Brian Hanna fills the role until a permanent hire takes place. The state is seeing prices of marijuana continue to drop, calling for changes to occur in the market as businesses struggle to maintain profits.

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  1. Michigan Plans Statewide Electric Vehicle Charging Network

Michigan submitted a plan to deploy $110 million over the next five years to install quick-charging stations for electric vehicles across the state. The plan was required to receive funds under last year’s federal Infrastructure Investment and Jobs Act.

Why it Matters: Given the credits available for the purchase of electric vehicles under the federal Inflation Reduction Act, there are likely to be even more electric vehicles on the road, and a new charging infrastructure will likely help Michigan attract more of those drivers to its roads for tourism and other purposes.

Related Practice Groups and Professionals

Energy, Utilities & Telecommunication | Michael Ashton
Business & Tax | Ed Castellani
Cannabis Law | Sean Gallagher

City of Detroit Faces Lawsuits Over Adult-Use Recreational Licenses

Following the Detroit City Council’s vote on the revised ordinance to allow adult-use recreational cannabis sales, multiple medical marijuana companies have filed suit against the city over the licensing program.

JARS Cannabis and House of Dank, two companies that own medical marijuana dispensaries licensed in Detroit, are suing the City of Detroit over the revised ordinance claiming that the new law would signal the end for existing medical marijuana facilities already in the area. The two companies pointed to a provision in the revised ordinance that prevents existing medical facilities in the area from getting a recreational license until 2027.

In its lawsuit, JARS Cannabis argues that Detroit’s revised ordinance violates a state law providing that municipalities cannot adopt ordinances that are “unreasonably impracticable.” Rather than provide a competitive application process, the city utilizes a scoring system for choosing which companies receive a license.

Detroit has faced lawsuits over its cannabis licensing ordinances before. In 2021, a federal district judge found that the city’s first recreational marijuana ordinance, which gave licensing preference to “legacy” Detroit residents, was “likely unconstitutional.”

JARS Cannabis and House of Dank, in their respective lawsuits, both argue that the revised ordinance still shows too much preference to certain potential applicants—namely, Detroit residents and newcomers to the cannabis business.

While these lawsuits are actively pending, we are monitoring the situation and will provide updates. At Fraser Trebilcock, we have handled multiple lawsuits in the cannabis field and are able to assist you. Please contact Klint Kesto, Matthew Meyerhuber, or your Fraser Trebilcock attorney.

Fraser Trebilcock attorney and former Michigan State Legislator Klint Kesto has nearly two decades of experience working in both the public and private sectors, including serving as Co-Chair of the CARES Task Force. You can reach him at kkesto@fraserlawfirm.com or 517.377.0868.

Matthew J. Meyerhuber is an attorney at Fraser Trebilcock focusing on general litigation, cannabis law, environmental law, and real estate. Matthew can be reached at mmeyerhuber@fraserlawfirm.com or 517.377.0885. 

Michigan Law Imposes New Product Liability Insurance Requirements on Legal Cannabis Licensees

At the end of 2021, the Michigan legislature passed and Governor Whitmer signed into law a new cannabis liability insurance law that mandates proof of product liability insurance coverage for licensed cannabis businesses and new applicants. The new rules take effect March 30, 2022.

Michigan Senate Bill 461 (Public Act 160 of 2021) requires every licensee or applicant to file with the Michigan Marijuana Regulatory Authority (MRA): “[P]roof of financial responsibility for liability for bodily injury to lawful users resulting from the manufacture, distribution, transportation, or sale of adulterated marihuana or adulterated marihuana-infused product in an amount not less than $100,000.00 for each license.”

The statute defines “adulterated marihuana” as “a product sold as marihuana that contains any unintended substance or chemical or biological matter other than marihuana that causes adverse reaction after ingestion or consumption.”

Additional requirements include:

  • The insurance policy is issued by a licensed insurance company or licensed captive insurance company in Michigan.
  • The insurance policy does not include a provision relieving an insurer from liability for payment of any claim for which the insured may be held liable under the act.
  • Covers bodily injuries to a qualifying patient, including injuries that are caused by the intentional conduct of the licensee (but not if the licensee acted with the intent to harm).

In addition, a licensee must file an “attestation of compliance” with the requirements of the statute with the MRA, on a form approved by the MRA, which is signed by the officer of the licensed insurance company or licensed captive insurance company that issues the policy.

To the extent a licensee fails to maintain proof of financial responsibility as required under statute, the MRA will immediately suspend the licensee’s license until such proof is provided. A licensee also cannot cancel required liability insurance unless the licensee gives the MRA 30 days’ prior written notice and procures new proof of financial responsibility and delivers that proof to the MRA within 30 days after giving notice.

Given that this law takes effect on March 30, 2022, it is important for existing licensees and applicants to move fast in order to meet its requirements. For questions or assistance, please contact Paul Mallon or your Fraser Trebilcock attorney.

mallon-paulPaul C. Mallon, Jr.  is Shareholder and Chair of Fraser Trebilcock’s cannabis law practice. You can reach him at pmallon@fraserlawfirm.com or (313) 965-9043.