(1) As used in this section:

    (a) "Distribute" means the actual, constructive, or attempted transfer, sale, delivery, or dispensing from one person to another of an imitation controlled substance.

    (b) "Imitation controlled substance" means a substance that is not a controlled substance or is not a drug for which a prescription is required under federal or state law, which by dosage unit appearance including color, shape, size, or markings, and/or by representations made, would lead a reasonable person to believe that the substance is a controlled substance. However, this subsection does not apply to a drug that is not a controlled substance if it was marketed before the controlled substance that it physically resembles. An imitation controlled substance does not include a placebo or registered investigational drug that was manufactured, distributed, possessed, or delivered in the ordinary course of professional practice or research. All of the following factors shall be considered in determining whether a substance is an imitation controlled substance:

    (i) Whether the substance was approved by the federal food and drug administration for over-the-counter sales and was sold in the federal food and drug administration approved packaging along with the federal food and drug administration approved labeling information.

    (ii) Any statements made by an owner or another person in control of the substance concerning the nature, use, or effect of the substance.

    (iii) Whether the substance is packaged in a manner normally used for illicit controlled substances.

    (iv) Whether the owner or another person in control of the substance has any prior convictions under state or federal law related to controlled substances or fraud.

    (v) The proximity of the substance to controlled substances.

    (vi) Whether the consideration tendered in exchange for the substance substantially exceeds the reasonable value of the substance considering the actual chemical composition of the substance and, if applicable, the price at which the over-the-counter substances of like chemical composition sell.

    (c) "Manufacture" means the production, preparation, compounding, conversion, encapsulating, packaging, repackaging, labeling, relabeling, or processing of an imitation controlled substance, directly or indirectly.

    (2) In addition to all logically relevant factors, the following factors as related to "representations made" shall be considered in determining whether a substance is an imitation controlled substance:

    (a) Any express or implied representation made that the nature of the substance or its use or effect is similar to that of a controlled substance.

    (b) Any express or implied representation made that the substance may be resold for an amount considerably in excess of the reasonable value of the composite ingredients and the cost of processing.

    (c) Any express or implied representation made that the substance is a controlled substance.

    (d) Any express or implied representation that the substance is of a nature or appearance that the recipient of the substance will be able to distribute the substance as a controlled substance.

    (e) That the substance's package, label, or name is substantially similar to that of a controlled substance.

    (f) The proximity of the substance to a controlled substance.

    (g) That the physical appearance of the substance is substantially identical to a specific controlled substance, including any numbers or codes thereon, and the shape, size, markings, or color.

    (3) Except as provided in subsection (7), a person shall not manufacture, distribute, or possess with intent to distribute, an imitation controlled substance.

    (4) A person shall not use, or possess with intent to use, an imitation controlled substance, except under the direction of a person authorized pursuant to subsection (7). A person who violates this subsection is subject to a civil fine of not more than $100.00 and costs. Upon a second or subsequent violation of this subsection, a person is guilty of a misdemeanor punishable by imprisonment for not more than 90 days, or a fine of not more than $100.00, or both.

    (5) A default in the payment of a civil fine or costs ordered under subsection (4) or an installment thereof may be collected by any means authorized for the enforcement of a judgment under chapter 40 or chapter 60 of the revised judicature act of 1961, 1961 PA 236, MCL 600.4001 to 600.4065 and 600.6001 to 600.6098.

    (6) A person shall not place an advertisement or solicitation in this state to be distributed by any electronic media in this state, or place an advertisement or solicitation in this state in any newspaper, magazine, handbill, or other publication; or post or distribute an advertisement or solicitation in any public place in this state, knowing or having reason to know that the purpose of the advertisement or solicitation is to promote the distribution of an imitation controlled substance. A person who violates this subsection is guilty of a misdemeanor, punishable by imprisonment for not more than 1 year, or a fine of not more than $5,000.00, or both.

    (7) This section does not apply to any person who is authorized by the administrator or the federal food and drug administration to manufacture, distribute, prescribe, or possess an imitation controlled substance for use as a placebo for legitimate medical, therapeutic, or research purposes.

    (8) Except as provided in subsections (4) and (6), a person who violates this section is guilty of a felony, punishable by imprisonment for not more than 2 years, or by a fine of not more than $10,000.00, or both.