Tag: Michigan Marijuana

MRA Proposed Expansion of Class A Microbusiness License

Last year the Michigan Marijuana Regulatory Agency (MRA) proposed changes to marijuana industry rules that would expand the state’s Class A microbusiness license.

Introduced in late July 2021, the proposed rule changes would add two new license types and reduce fees and costs associated with obtaining and renewing licenses. Previously, a Class A microbusiness could grow, process, and sell its own marijuana and marijuana products, but not purchase wholesale products from other licensed businesses for resale. The proposed rules would make the following changes:

  • Double the amount of plants a microbusiness can cultivate, from 150 to 300;
  • Allow for the purchase of marijuana concentrate and marijuana-infused products from licensed processors; and
  • Authorize licensees to purchase or accept mature plants from an individual, registered qualifying patient, or registered primary caregiver.

There is one important caveat – the new microbusiness license would ban in-house processing that was previously allowed under the old license.

The Michigan Cannabis Manufacturers Association (MCMA) has stated its opposition to the  proposed changes, arguing that the proposed Class A microbusiness license changes exceed the MRA’s authority to broaden license types under state statute.

We will continue to monitor this situation and other important developments in the Michigan legal cannabis industry. If you have any questions, 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. 

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. 

MRA Orders Largest Marijuana Product Recall in Michigan History

Michigan’s Marijuana Regulatory Agency (MRA) issued its largest marijuana recall ever on November 17 because of concerns over safety tests conducted by two companies.

Most products containing marijuana flower that had passed safety testing at Viridis Laboratories, LLC and Viridis North, LLC between August 10 and November 16 were recalled in a move that reportedly affected products sold at over 400 retail locations. The affected retailers were outlined in a 31-page Public Health and Safety Bulletin issued by the MRA. The recall did not impact inhalable marijuana concentrate products such as vape carts, live resin, distillate, and cannabis concentrate.

The value of the recalled marijuana products is estimated to be in the tens of millions of dollars and affected more than half the current stock for many retailers, according to multiple media reports.

The investigation is ongoing and additional findings may be released by the MRA at a later date.

The reasoning for the recall was “inaccurate and/or unreliable” microbial lab test results according to the MRA, although further details were not released by the agency. Microbial testing is required of cannabis products with the hope of eliminating products containing high levels of mold, bacteria, and yeast. Having a high level of those substances can lead to an increased risk of illness for users, including cases of E. coli and salmonella.

A large state recall mandated by the MRA also occurred in August 2020 after a marijuana flower failed safety and compliance testing for both mold and yeast.

What retailers and consumers should do with recalled products

Retailers are directed to properly dispose of any recalled products in adherence to MRA guidelines and along with processors must discontinue sales and transfers. Proof of product destruction must be sent to the MRA’s compliance email at MRA-Compliance@michigan.gov. Another option is for an affected product to be retested or sent back to the original licensee source.

Additionally, retailers must display recall notices in visible locations on their sales floors.

Customers who purchased the recalled product are expected to return those products to the retailer they purchased it from for disposal.

Product testing is at the heart of medical marijuana legislation

Proponents of a more heavily regulated medical marijuana market argue that a significant amount of marijuana sold in the state is done so illegally as part of an illicit market, which threatens the health and safety of consumers because there is no guarantee the products have been properly tested.

One of the outcomes of this debate is the recent introduction of bills in the Michigan Legislature that would limit the role and more heavily regulate caregivers in growing, storing, and distributing product.

Testing guidelines by the MRA are readily available online

The MRA has created and updated its Sampling and Testing Technical Guidance document for marijuana products. The basic tenet is that all sampling and analysis must be conducted by a laboratory licensed by the MRA and accredited to the International Organization for Standardization (ISO), ISO/IEC 17025:2017 by an International Laboratory Accreditation Cooperation (ILAC) recognized accreditation body or by an entity approved by the MRA.

Our team will continue to keep you updated on this recall and related news, and the progress of any legislation impacting the marijuana industry in Michigan. If you have any questions, 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. 

Governor Whitmer Signs Law Regulating Delta-8 THC Manufacturing and Sales Starting October 11, 2021

House Bill 4517 is part of a package of legislation that will regulate the manufacturing, sale, and distribution of delta-8 THC products much like other legal marijuana products in Michigan

Governor Whitmer has signed a law allowing only regulated delta-8 THC products to be manufactured and sold in Michigan, effective October 11, 2021. The move to regulate, rather than ban, the delta-8 THC strand was supported by the cannabis industry.

Starting this fall it will be illegal for businesses in Michigan to sell delta-8 products without proper licensing from the Michigan Marijuana Regulatory Agency (“MMRA”). As we detailed in a previous blog, there are currently no standards for selling or distributing delta-8 THC products, which has led to a number of Michigan-based retailers like gas stations and convenience stores selling unregulated delta-8 items.

These products have not undergone the testing and tracking that is required for other legalized recreational marijuana products in Michigan, including those derived from the more common delta-9 THC strand.

The legislation categorizes all THC isomers of the cannabis plant as marijuana, giving the MMRA oversight capabilities. As of mid-July, the sale of delta-8 products is banned in 14 states (Alaska, Arizona, Arkansas, Colorado, Delaware, Idaho, Iowa, Kentucky, Mississippi, Montana, New York, Rhode Island, Vermont and Utah). Delta-8 status is currently under review in four additional states.

The differences between delta-8 and delta-9

Delta-8 THC is a synthetic substance derived from hemp with the only difference being the inclusion of a double bond. The science behind the two compounds is still being researched but the consensus is that due to the location of its double bond, delta-8 binds to the body’s cannabinoid receptors in a slightly different manner than delta-9 THC, resulting in less of a high.

However, there is little research and no reliable clinical trials on delta-8 THC. Delta-9 marijuana products are strictly regulated and subject to stringent testing standards, whereas delta-8 products have typically been produced using unregulated, chemically synthesized cannabinoids that can include additives and byproducts that have not been researched and could be harmful to some consumers.

Impact on businesses

Unlicensed commercial production or sale of delta-8 in Michigan will be punishable by fines starting October 11, 2021. Any retailer operating in Michigan must obtain a state license to sell or distribute delta-8 THC products, which includes mandatory tracking and testing. Only adults 21 and older can legally have or use the compound in the state. The MMRA created a flyer that provides further details.

The Michigan Cannabis Industry Association and the Michigan Cannabis Manufacturers Association both expressed support for the regulation of delta-8 rather than a full ban. The MCMA’s Board Chair Shelly Edgerton told MLive in a July 14 article that the law “takes a giant step toward enforcing the same strict high testing, health and safety guidelines for any product that mimics a cannabis high that is either inhaled or ingested followed by our state’s licensed growers and processors.”

We will continue to provide additional updates on additional developments regarding delta-8 THC, and other issues affecting the marijuana industry in Michigan. If you have any questions, 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.