HOUSE BILL NO. 4963
A bill to amend 2018 IL 1, entitled
"Michigan Regulation and Taxation of Marihuana Act,"
by amending sections 3, 8, 11, and 14 (MCL 333.27953, 333.27958, 333.27961, and 333.27964), sections 3 and 8 as amended by 2023 PA 166 and section 14 as amended by 2023 PA 165.
the people of the state of michigan enact:
(a) "Agent of the cannabis regulatory agency" means an employee of the cannabis regulatory agency.
(b) (a) "Cannabis regulatory agency" means the marijuana regulatory agency created under Executive Reorganization Order No. 2019-2, MCL 333.27001, renamed the cannabis regulatory agency under Executive Reorganization Order No. 2022-1, MCL 333.27002.
(c) (b) "Cultivate" means to propagate, breed, grow, harvest, dry, cure, or separate parts of a marihuana plant by manual or mechanical means.
(d) (c) "Department" means the cannabis regulatory agency.
(e) (d) "Indian lands" means any of the following:
(i) All lands within the limits of an Indian reservation.
(ii) Any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power.
(f) (e) "Indian tribe" means any Indian tribe, band, nation, or other organized group or community of Indians which is recognized as eligible by the United States Secretary of the Interior for the special programs and services provided by the United States to Indians because of their status as Indians, and is recognized as possessing powers of self-government.
(g) (f) "Industrial hemp" means any of the following:
(i) A plant of the genus Cannabis, whether growing or not, with a THC concentration of 0.3% or less on a dry-weight basis.
(ii) A part of a plant of the genus Cannabis, whether growing or not, with a THC concentration of 0.3% or less on a dry-weight basis.
(iii) The seeds of a plant of the genus Cannabis with a THC concentration of 0.3% or less on a dry-weight basis.
(iv) If it has a THC concentration of 0.3% or less on a dry-weight basis, a compound, manufacture, derivative, mixture, preparation, extract, cannabinoid, acid, salt, isomer, or salt of an isomer of any of the following:
(A) A plant of the genus Cannabis.
(B) A part of a plant of the genus Cannabis.
(v) A product to which 1 of the following applies:
(A) If the product is intended for human or animal consumption, the product, in the form in which it is intended for sale to a consumer, meets both of the following requirements:
(I) Has a THC concentration of 0.3% or less on a dry-weight or per volume basis.
(II) Contains a total amount of THC that is less than or equal to the limit established by the cannabis regulatory agency under section 8(1)(n).
(B) If the product is not intended for human or animal consumption, the product meets both of the following requirements:
(I) Contains a substance listed in subparagraph (i), (ii), (iii), or (iv).
(II) Has a THC concentration of 0.3% or less on a dry-weight basis.
(h) (g) "Licensee" means a person holding a state license.
(i) (h) "Marihuana" means any of the following:
(i) A plant of the genus Cannabis, whether growing or not.
(ii) A part of a plant of the genus Cannabis, whether growing or not.
(iii) The seeds of a plant of the genus Cannabis.
(iv) Marihuana concentrate.
(v) A compound, manufacture, salt, derivative, mixture, extract, acid, isomer, salt of an isomer, or preparation of any of the following:
(A) A plant of the genus Cannabis.
(B) A part of a plant of the genus Cannabis.
(C) The seeds of a plant of the genus Cannabis.
(D) Marihuana concentrate.
(vi) A marihuana-infused product.
(vii) A product with a THC concentration of more than 0.3% on a dry-weight or per volume basis in the form in which it is intended for sale to a consumer.
(viii) A product that is intended for human or animal consumption and that contains, in the form in which it is intended for sale to a consumer, a total amount of THC that is greater than the limit established by the cannabis regulatory agency under section 8(1)(n).
(j) (i) Except for marihuana concentrate extracted from any of the following, "marihuana" does not include any of the following:
(i) The mature stalks of a plant of the genus Cannabis.
(ii) Fiber produced from the mature stalks of a plant of the genus Cannabis.
(iii) Oil or cake made from the seeds of a plant of the genus Cannabis.
(iv) A compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks of a plant of the genus Cannabis.
(v) Industrial hemp.
(vi) An ingredient combined with marihuana to prepare topical or oral administrations, food, drink, or other products.
(vii) A drug for which an application filed in accordance with 21 USC 355 is approved by the Food and Drug Administration.
(k) (j) "Marihuana accessories" means any equipment, product, material, or combination of equipment, products, or materials, that is specifically designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, ingesting, inhaling, or otherwise introducing marihuana into the human body.
(l) (k) "Marihuana concentrate" means the resin extracted from any part of a plant of the genus Cannabis.
(m) (l) "Marihuana establishment" means a marihuana grower, marihuana safety compliance facility, marihuana processor, marihuana microbusiness, marihuana retailer, marihuana secure transporter, or any other type of marihuana-related business licensed by the cannabis regulatory agency.
(n) (m) "Marihuana grower" means a person licensed to cultivate marihuana and sell or otherwise transfer marihuana to marihuana establishments.
(o) (n) "Marihuana-infused product" means a topical formulation, tincture, beverage, edible substance, or similar product containing marihuana and other ingredients and that is intended for human consumption.
(p) (o) "Marihuana microbusiness" means a person licensed to cultivate not more than 150 marihuana plants; process and package marihuana; and sell or otherwise transfer marihuana to individuals who are 21 years of age or older or to a marihuana safety compliance facility, but not to other marihuana establishments.
(q) (p) "Marihuana processor" means a person licensed to obtain marihuana from marihuana establishments; process and package marihuana; and sell or otherwise transfer marihuana to marihuana establishments.
(r) (q) "Marihuana retailer" means a person licensed to obtain marihuana from marihuana establishments and to sell or otherwise transfer marihuana to marihuana establishments and to individuals who are 21 years of age or older.
(s) (r) "Marihuana safety compliance facility" means a person licensed to test marihuana, including certification for potency and the presence of contaminants.
(t) (s) "Marihuana secure transporter" means a person licensed to obtain marihuana from marihuana establishments in order to transport marihuana to marihuana establishments.
(u) (t) "Marijuana regulatory agency", unless the context dictates otherwise, means the cannabis regulatory agency.
(v) (u) "Municipal license" means a license issued by a municipality pursuant to section 16 that allows a person to operate a marihuana establishment in that municipality.
(w) (v) "Municipality" means a city, village, or township.
(x) (w) "Person" means an individual, corporation, limited liability company, partnership of any type, trust, or other legal entity.
(y) (x) "Process" or "processing" means to separate or otherwise prepare parts of a marihuana plant and to compound, blend, extract, infuse, or otherwise make or prepare marihuana concentrate or marihuana-infused products.
(z) (y) "Qualifying Indian tribe" means an Indian tribe that meets all of the following conditions:
(i) The Indian tribe has entered into an agreement with the cannabis regulatory agency under section 7(2)(b) that is in effect.
(ii) The Indian tribe has entered into an agreement with the department of treasury that is in effect and that does all of the following:
(A) States that the revenue collected from the tax or fee described in subparagraph (iii) is not state money, and requires that this revenue be retained by and used as determined by only the Indian tribe, if the marihuana subject to the tax or fee was grown and processed on only the Indian tribe's Indian lands.
(B) States whether the revenue collected from the tax or fee described in subparagraph (iii) from marihuana not described in sub-subparagraph (A) is subject to revenue sharing between the Indian tribe and this state and, if so, the details of the revenue sharing arrangement.
(iii) The Indian tribe imposes a tax or fee on each sale or transfer of marihuana from a tribal marihuana business located in the Indian tribe's Indian lands to a person other than a tribal marihuana business or marihuana establishment. This subparagraph does not prohibit a qualifying Indian tribe from imposing the tax or fee on sales or transfers of marihuana that are not described in this subparagraph. The tax or fee must be based on the sales price of the marihuana and the rate of the tax or fee must be equal to or greater than the rate established under section 13.
(aa) (z) "State license" means a license issued by the cannabis regulatory agency that allows a person to operate a marihuana establishment.
(bb) (aa) "THC" means any of the following:
(i) Tetrahydrocannabinolic acid.
(ii) Unless excluded by the cannabis regulatory agency under section 8(2)(c), a tetrahydrocannabinol, regardless of whether it is artificially or naturally derived.
(iii) A tetrahydrocannabinol that is a structural, optical, or geometric isomer of a tetrahydrocannabinol described in subparagraph (ii).
(cc) (bb) "Tribal marihuana business" means a business that meets all of the following conditions:
(i) The business engages in the type of activities licensed under this act.
(ii) The business is not a marihuana establishment.
(iii) The business is wholly owned by a qualifying Indian tribe, the enrolled members of a qualifying Indian tribe, or a combination of a qualifying Indian tribe and the members of that qualifying Indian tribe.
(iv) The business is located in this state and in the Indian lands of the qualifying Indian tribe described in subparagraph (iii).
(v) The business is subject to a tax or fee described in subdivision (y)(iii).(z)(iii).
(dd) (cc) "Unreasonably impracticable" means that the measures necessary to comply with the rules or ordinances adopted pursuant to this act subject licensees to unreasonable risk or require such a high investment of money, time, or any other resource or asset that a reasonably prudent businessperson would not operate the marihuana establishment.
Sec. 8. (1) The cannabis regulatory agency shall promulgate rules to implement and administer this act that include all of the following:
(a) Procedures for issuing a state license pursuant to section 9 and for renewing, suspending, and revoking a state license.
(b) A schedule of fees in amounts not more than necessary to pay for implementation, administration, and enforcement costs of this act and that relate to the size of each licensee or the volume of business conducted by the licensee.
(c) Qualifications for licensure that are directly and demonstrably related to the operation of a marihuana establishment. However, a prior conviction solely for a marihuana-related offense must not disqualify an individual or otherwise affect eligibility for licensure, unless the offense involved distribution of a controlled substance to a minor.
(d) Requirements and standards for safe cultivation, processing, and distribution of marihuana by marihuana establishments, including health standards to ensure the safe preparation of marihuana-infused products and prohibitions on pesticides that are not safe for use on marihuana.
(e) Testing, packaging, and labeling standards, procedures, and requirements for marihuana, including, but not limited to, all of the following:
(i) A maximum THC level for marihuana-infused products.
(ii) A requirement that a representative sample of marihuana be tested by a marihuana safety compliance facility.
(iii) A requirement that the amount of marihuana or marihuana concentrate contained within a marihuana-infused product be specified on the product label.
(iv) A requirement that all marihuana sold through marihuana retailers and marihuana microbusinesses include on the exterior of the marihuana packaging the following warning printed in clearly legible type and surrounded by a continuous heavy line:
WARNING: USE BY PREGNANT OR BREASTFEEDING WOMEN, OR BY
WOMEN PLANNING TO BECOME PREGNANT, MAY RESULT IN FETAL
INJURY, PRETERM BIRTH, LOW BIRTH WEIGHT, OR DEVELOPMENTAL
PROBLEMS FOR THE CHILD.
(f) Security requirements, including lighting, physical security, and alarm requirements, and requirements for securely transporting marihuana between marihuana establishments. The requirements described in this subdivision must not prohibit cultivation of marihuana outdoors or in greenhouses.
(g) Record keeping requirements for marihuana establishments and monitoring requirements to track the transfer of marihuana by licensees.
(h) Requirements for the operation of marihuana secure transporters to ensure that all marihuana establishments are properly serviced.
(i) Reasonable restrictions on advertising, marketing, and display of marihuana and marihuana establishments.
(j) A plan to promote and encourage participation in the marihuana industry by people from communities that have been disproportionately impacted by marihuana prohibition and enforcement and to positively impact those communities.
(k) Penalties for failure to comply with a rule promulgated pursuant to this section or for a violation of this act by a licensee, including civil fines and suspension, revocation, or restriction of a state license.
(l) Informational pamphlet standards for marihuana retailers and marihuana microbusinesses, including, but not limited to, a requirement to make available to every customer at the time of sale a pamphlet measuring 3.5 inches by 5 inches that includes safety information related to marihuana use by minors and the poison control hotline number.
(m) Procedures and standards for approving an appointee to operate a marihuana establishment under section 9a.
(n) A limit on the total amount of THC that a product described in section 3(f)(v)(A) 3(g)(v)(A) may contain.
(2) The cannabis regulatory agency may promulgate rules to do any of the following:
(a) Provide for the issuance of additional types or classes of state licenses to operate marihuana-related businesses, including licenses that authorize any of the following:
(i) Limited cultivation, processing, transportation, delivery, storage, sale, or purchase of marihuana.
(ii) Consumption of marihuana within designated areas.
(iii) Consumption of marihuana at special events in limited areas and for a limited time.
(iv) Cultivation for purposes of propagation.
(v) Facilitation of scientific research or education.
(b) Regulate the cultivation, processing, distribution, and sale of industrial hemp.
(c) Exclude from the definition of THC in section 3 a tetrahydrocannabinol if, after the cannabis regulatory agency makes findings with respect to each of the following factors, the cannabis regulatory agency determines that the tetrahydrocannabinol does not have a potential for abuse:
(i) The actual or relative potential for abuse of the tetrahydrocannabinol.
(ii) The scientific evidence of the tetrahydrocannabinol's pharmacological effect, if known.
(iii) The state of current scientific knowledge regarding the tetrahydrocannabinol.
(iv) The history and current pattern of abuse of the tetrahydrocannabinol.
(v) The scope, duration, and significance of abuse of the tetrahydrocannabinol.
(vi) The tetrahydrocannabinol's risk to the public health.
(vii) The potential of the tetrahydrocannabinol to produce psychic or physiological dependence liability.
(3) The cannabis regulatory agency shall not promulgate a rule that is unreasonably impracticable or that does any of the following:
(a) Establishes a limit on the number of any type of state license that may be granted.
(b) Requires a customer to provide a marihuana retailer with identifying information other than identification to determine the customer's age or requires the marihuana retailer to acquire or record personal information about customers other than information typically required in a retail transaction.
(c) Prohibits a marihuana establishment from operating at a shared location of a marihuana facility operating pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801, or prohibits a marihuana grower, marihuana processor, or marihuana retailer from operating within a single facility.
(4) A rule promulgated under this act must be promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 11. (1) (a) A marihuana establishment may shall not allow cultivation, processing, sale, do any of the following:
(a) Cultivate, process, sell, or display of marihuana or sell or display marihuana accessories to be if the cultivating, processing, selling, or displaying is visible from a public place outside of the marihuana establishment without the use of binoculars, aircraft, or other optical aids.
(b) A marihuana establishment may not cultivate, Cultivate, process, test, or store marihuana at any location other than a physical address approved by the department and within an enclosed area that is secured in a manner that prevents access by persons not permitted by the marihuana establishment to access the area.cannabis regulatory agency.
(c) Allow an individual who is younger than 21 years of age to volunteer or work for the marihuana establishment.
(d) Sell or otherwise transfer marihuana that was not produced, distributed, and taxed in compliance with this act.
(e) Purchase marihuana from another marihuana establishment unless the marihuana establishment pays for the marihuana at the time the marihuana is transferred.
(f) Sell or otherwise transfer tobacco.
(2) (c) A marihuana establishment shall secure comply with all of the following:
(a) Cultivate, process, test, and store marihuana within an enclosed area that is secured in a manner that prevents access by persons not allowed by the marihuana establishment to access the area.
(b) Secure every entrance to the marihuana establishment so that access to areas containing marihuana is restricted to employees only the following:
(i) Employees and other persons permitted by the marihuana establishment to access the area. and to agents
(ii) Agents of the department or state.cannabis regulatory agency.
(iii) State and local law enforcement officers and emergency personnel. and shall secure
(c) Secure its inventory and equipment during and after operating hours to deter and prevent theft of marihuana and marihuana accessories.
(d) No marihuana establishment may refuse representatives Allow agents of the department the right cannabis regulatory agency, during the marihuana establishment's hours of operation, to inspect the licensed premises or to audit the books and records of the marihuana establishment.
(e) No marihuana establishment may allow a person under 21 years of age to volunteer or work for the marihuana establishment.
(f) No marihuana establishment may sell or otherwise transfer marihuana that was not produced, distributed, and taxed in compliance with this act.
(3) (g) A marihuana grower, marihuana retailer, marihuana processor, marihuana microbusiness, or marihuana testing facility or agents acting on their behalf may its agent shall not transport more than 15 ounces of marihuana or more than 60 grams of marihuana concentrate at one 1 time.
(4) (h) A marihuana secure transporter may shall not hold title to marihuana.
(5) (i) No A marihuana processor may shall not process and no a marihuana retailer may shall not sell edible marihuana-infused candy in shapes or packages that are attractive to children or that are easily confused with commercially sold candy that does not contain marihuana.
(6) (j) No A marihuana retailer may shall not sell or otherwise transfer marihuana that unless it is not contained in an opaque, resealable, child-resistant package designed to be significantly difficult for children under younger than 5 years of age to open and not difficult for normal adults to use properly as defined by 16 C.F.R. 1700.20 (1995), provided for under 16 CFR 1700.20, unless the marihuana is transferred for consumption on the premises where sold.
(k) No marihuana establishment may sell or otherwise transfer tobacco.
Sec. 14. (1) The marihuana regulation fund is created in the state treasury. The department of treasury shall deposit into the fund all money collected under section 13 and all money collected by the department of treasury in accordance with an agreement described in section 3(y)(ii), 3(z)(ii), and the cannabis regulatory agency shall deposit into the fund all fees collected under this act. The state treasurer shall direct the investment of the fund and shall credit to the fund interest and earnings from fund investments. The cannabis regulatory agency shall administer the fund for auditing purposes. Money in the fund at the close of the fiscal year must remain in the fund and must not lapse to the general fund.
(2) Funds for the initial activities of the cannabis regulatory agency to implement this act shall be appropriated from the general fund. The cannabis regulatory agency shall repay any amount appropriated under this subsection from proceeds in the fund.
(3) The cannabis regulatory agency shall expend money in the fund as follows:
(a) For the implementation, administration, and enforcement of this act.
(b) Until 2022 or for at least 2 years, whichever is later, for 1 or more development and research projects, including clinical trials, that are approved by the United States Food and Drug Administration and sponsored by a nonprofit organization or researcher within an academic institution researching the efficacy of marihuana in treating the medical conditions and preventing the suicide of United States Armed Services veterans. The cannabis regulatory agency shall expend $20,000,000.00 per year under this subdivision.
(4) Upon appropriation, the unexpended balances in the fund must be allocated as follows:
(a) Subject to subsection (5), 15% to municipalities in which a marihuana retailer or marihuana microbusiness is located, allocated in proportion to the number of marihuana retailers and marihuana microbusinesses within each municipality.
(b) Subject to subsection (5), 15% to counties in which a marihuana retailer or marihuana microbusiness is located, allocated in proportion to the number of marihuana retailers and marihuana microbusinesses within each county.
(c) 35% to the school aid fund to be used for K-12 education.
(d) 35% to the Michigan transportation fund to be used for the repair and maintenance of roads and bridges.
(5) If a marihuana retailer or marihuana microbusiness is located in Indian lands, the portions of the unexpended balances attributable to the marihuana retailer or marihuana microbusiness that would have otherwise been allocated to a municipality under subsection (4)(a) and a county under subsection (4)(b) must instead be allocated to the Indian tribe in whose Indian lands the marihuana retailer or marihuana microbusiness is located.