Five Stories That Matter in Michigan This Week – February 14, 2025

  1. Large Michigan Cannabis Operator Temporarily Shutters Part of its Operations Due to Market Challenges

Pincanna, which has retail cannabis outlets in East Lansing, Kalamazoo, and Kalkaska, recently announced that it is temporarily closing the greenhouse portion of its cultivation operation (located in Bay County) and laying off part of its workforce.

Why it Matters: One of the company’s co-founders cited an oversupply of cannabis in Michigan, which has created a highly competitive and unsustainable market, as the driving force behind the decision. Despite record sales of product, many Michigan cannabis operators have struggled to remain profitable due to falling prices.

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  1. Governor Whitmer Unveils Proposed Tax Increases to Fund Roads

This week, Governor Whitmer released a proposal that seeks $3 billion in a long-term plan that will lower vehicle repair costs, invest $1 billion in local roads and $250 million in transit.

Why it Matters: Among the components of the proposal, it seeks to close the gap in road funding, ensuring each dollar paid at the gas pump is invested back into the road infrastructure. Additionally will require businesses, specifically Big Tech, to pay more in taxes for doing business in Michigan, and to introduce a wholesale tax on the marijuana industry.

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  1. Latest Product Recall from Michigan CRA on Vapes Containing MCT Oil

On February 11, 2025, the Michigan Cannabis Regulatory Agency released a bulletin on a voluntary product recall on certain vapes from the brand BLOOM Classic and BLOOM Live that were found to contain Medium Chain Triglyceride (MCT) Oil, which had been banned for use in 2024.

Why it Matters: The products affected are from the brand Platinum Vapes. MCT Oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. The CRA banned the use of MCT Oil starting October 1, 2024.

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  1. U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech. However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment.

Why it Matters: This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch. Read more.

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  1. Business Education Series: Anatomy of a Data Breach

Data breaches can wreak havoc on your company and almost always lead to litigation. With each new breach, we gain valuable insight into what companies could have done better. Your legal, contractual, and business obligations can sometimes be confusing and in conflict with each other.

Why it Matters: During the March Business Education Series facilitated by Nate Steed and Kelly R. Hollingsworth, this session will examine recent cases and best practices to protect your company from a breach including: lessons learned from recent data breaches; proactive strategies to insulate your business. Learn more.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Intellectual Property | Andrew Martin

Five Stories That Matter in Michigan This Week – August 9, 2024

  1. Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

In Mothering Justice v Attorney General, a 105-page, 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018. In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025.

Why it Matters: Employers will need to educate their staff on these changes, adjust payroll systems, and ensure their company’s policies are updated to reflect the new laws before the February 21, 2025, deadline to remain compliant. Learn more.

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  1. IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

The Internal Revenue Service (IRS) recently announced the resumption of processing some Employee Retention Credit (ERC) claims, with a focus on those considered “low risk.” This move comes after a 10-month moratorium implemented to investigate fraudulent activity surrounding these claims. In the same announcement, the IRS communicated its plans to deny tens of thousands of improper high-risk ERC claims.

Why it Matters: According to the IRS, between 10% and 20% of the claims it analyzed fall into what the agency considers the highest-risk group. An estimated 60% to 70% of claims show what the IRS terms an “unacceptable level of risk.” The remaining claims, approximately 10% to 20%, are considered low-risk, and according to the IRS, “some of the first payments in this group will go out later this summer.” Read more.

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  1. Comment Period Ends for Federal Cannabis Rescheduling

On May 20, the U.S. Department of Justice and the Drug Enforcement Administration issued a Notice of Proposed Rulemaking to initiate the proposed rescheduling of cannabis from Schedule I to Schedule II under the Controlled Substance Act. A 60-day public comment period then began, which ended in late July.

Why it Matters: Following the end of the public comment period, the DEA will review the public comments, may incorporate comments as appropriate, and then finalize the rescheduling rule. Typically, a final rule becomes effective 30 days after being published in the Federal Register.

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  1. Michigan Cannabis Regulatory Agency Set to Ban MCT Oil

In a recent technical bulletin from the CRA, effective October 1, 2024, “MCT (medium-chain triglyceride) oil will be added as a target analyte for marijuana vape cartridges as part of the Sampling and Testing Technical Guidance for Marijuana Products.

Why it Matters: MCT oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. Businesses will need to adhere to the new testing parameters and begin to eliminate MCT oil from their products before October 1, 2024, if not sooner in a proactive manner.

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  1. DOL Issues Bulletin to Wage and Hour Field Staff Regarding AI Use in Workplace

The United States Department of Labor recently issued a Field Assistance Bulletin to its Wage and Hour Division field staff regarding the application of the Fair Labor Standards Act (FLSA) and other federal labor standards as employers increasingly use artificial intelligence (AI) and other automated systems in the workplace. For example, the bulletin advises that, “Reliance on automated timekeeping and monitoring systems without proper human oversight, however, can create potential compliance challenges with respect to determining hours worked for purposes of federal wage and hour laws.”

Why it Matters: As AI use becomes more pervasive across businesses, employers must be aware that their use of AI can create legal compliance challenges, and that regulatory agencies are paying attention to these issues.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert Burgee
Business & Tax | Paul McCord
Cannabis Law | Sean Gallagher

Five Stories That Matter in Michigan This Week – July 12, 2024

  1. Proposed Bipartisan Legislation Would Streamline Michigan Cannabis Market Regulatory Oversight

Recently introduced Michigan House Bills 5884-85 would merge the regulations for recreational and medical marijuana into a single regulatory framework. For example, the legislation would require only one license for activities such as growing, processing, transporting, or selling cannabis.

Why it Matters: The legislation seeks to streamline and simplify the regulatory process, lower costs of compliance for businesses, and improve efficiency for the state’s Cannabis Regulatory Agency.

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  1. Michigan Cannabis Regulatory Agency Set to Ban MCT Oil

In a recent technical bulletin from the CRA, effective October 1, 2024, “MCT (medium-chain triglyceride) oil will be added as a target analyte for marijuana vape cartridges as part of the Sampling and Testing Technical Guidance for Marijuana Products.”

Why it Matters: MCT oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. Businesses will need to adhere to the new testing parameters and begin to eliminate MCT oil from their products before October 1, 2024, if not sooner in a proactive manner.

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  1. Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Why it Matters: Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

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  1. A Health Professional’s Guide to Navigating the Disciplinary Process: What to Expect if You Are Facing a Professional Licensing Investigation or Administrative Complaint

Health professionals are committed to caring for patients with expertise, compassion, and integrity. However, in the heavily regulated healthcare field, those professionals can sometimes find themselves navigating not just the medical challenges of their patients but licensing issues of their own as well. Licensing issues can arise unexpectedly, and, when they do, they can cause tremendous stress and uncertainty.

Why it Matters: As an attorney with years of experience handling professional licensing matters for health professionals, Robert J. Andretz has witnessed firsthand how professional licensing investigations and Administrative Complaints can disrupt health professionals’ careers and their ability to provide patient care. He will explore how to navigate the disciplinary process in Michigan so that you can know what to expect if you are ever faced with a threat to your license. Learn more.

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  1. Fraser Trebilcock Shareholder Sean P. Gallagher Recognized as a ‘Michigan Go To Lawyer’ for Cannabis Law by Michigan Lawyers Weekly

Fraser Trebilcock Shareholder Sean P. Gallagher has been recognized by Michigan Lawyers Weekly as a ‘Michigan Go To Lawyer’ in 2024 for cannabis law. “I am honored to have been recognized by Michigan Lawyers Weekly as a ‘Michigan Go To Lawyer’ for cannabis law,” said Sean.

Why it Matters: Michigan Lawyers Weekly’s program honors leading lawyers in a particular field of law as nominated by their peers. Michigan’s Go To Lawyers identifies and recognizes the top lawyers across the state in a given practice area. Read more.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Professional Licensing | Robert Andretz