SENATE BILL No. 1243

 

 

November 29, 2018, Introduced by Senator MEEKHOF and referred to the Committee on Government Operations.

 

 

 

A bill to amend 2018 IL 1, entitled

 

"Michigan Regulation and Taxation of Marihuana Act,"

 

by amending the title and sections 1, 2, 3, 4, 5, and 15 (MCL

 

333.28101, 333.28102, 333.28103, 333.28104, 333.28105, and

 

333.28115), and by adding sections 201, 205, 206, 207, 208, 301,

 

302, 303, 305, 401, 402, 403, 404, 405, 406, 407, 408, 409, 501,

 

502, 503, 504, 505, 601, 602, 603, 604, 701, 702, and 801; and to

 

repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

An initiation of legislation to allow under state law the

 

personal possession and use of marihuana by persons 21 years of age

 

or older; to provide for the lawful cultivation and sale of


marihuana and industrial hemp by persons 21 years of age or older;

 

to permit the taxation of revenue derived from commercial marihuana

 

facilities; to license and regulate marihuana growers, processors,

 

provisioning centers, secure transporters, and safety compliance

 

facilities; to provide for the powers and duties of certain state

 

and local governmental officers and entities; to create a marihuana

 

licensing board; to provide for interaction with the statewide

 

monitoring system for commercial marihuana transactions; to create

 

an advisory panel; to provide immunity from prosecution and other

 

actions for marihuana-related offenses for persons engaging in

 

certain activities in compliance with this act; to provide

 

forfeiture of contraband; to permit require the promulgation of

 

administrative rules; and to prescribe certain penalties. for

 

violations of this act. If not enacted by the Michigan State

 

Legislature in accordance with the Michigan Constitution of 1963,

 

the proposed legislation is to be voted on at the General Election,

 

November 6, 2018.

 

Sec. 1. This act shall be known and may be cited as the

 

Michigan Regulation and Taxation of Marihuana Act."regulation and

 

taxation of marihuana act".

 

Sec. 2. The purpose of this act is to make marihuana legal

 

under state and local law for adults 21 years of age or older, to

 

make industrial hemp legal under state and local law, and to

 

control the commercial production and distribution of marihuana

 

under a system that licenses, regulates, and taxes the businesses

 

involved. The intent is to prevent arrest and penalty for personal

 

possession and cultivation of marihuana by adults 21 years of age


or older; remove the commercial production and distribution of

 

marihuana from the illicit market; prevent revenue generated from

 

commerce in marihuana from going to criminal enterprises or gangs;

 

prevent the distribution of marihuana to persons under 21 years of

 

age; prevent the diversion of marihuana to illicit markets; ensure

 

the safety of marihuana and marihuana-infused products; and ensure

 

security of marihuana establishments. To the fullest extent

 

possible, this act shall be interpreted in accordance with the

 

purpose and intent set forth in this section.

 

Sec. 3. As used in this act:

 

(a) "Advisory panel" or "panel" means the marihuana advisory

 

panel created in section 801.

 

(b) "Affiliate" means any person that controls, is controlled

 

by, or is under common control with; is in a partnership or joint

 

venture relationship with; or is a co-shareholder of a corporation,

 

a co-member of a limited liability company, or a co-partner in a

 

limited liability partnership with a licensee or applicant.

 

(c) "Applicant" means a person who applies for a state

 

operating license. With respect to disclosures in an application,

 

or for purposes of ineligibility for a license under section 402,

 

the term "applicant" includes an officer, director, and managerial

 

employee of the applicant and a person who holds any direct or

 

indirect ownership interest in the applicant.

 

(d) "Board" means the marihuana licensing board created in

 

section 301.

 

(e) (a) "Cultivate" means to propagate, breed, grow, harvest,

 

dry, cure, or separate parts of the marihuana plant by manual or


mechanical means.

 

(f) "Cutting" means a section of a lead stem or root stock

 

that is used for vegetative asexual propagation.

 

(g) (b) "Department" means the department of licensing and

 

regulatory affairs.

 

(h) "Grower" means a licensee that is a commercial entity

 

located in this state that cultivates, dries, trims, or cures and

 

packages marihuana for sale to a processor, provisioning center, or

 

another grower.

 

(i) (c) "Industrial hemp" means a plant of the genus cannabis

 

and any part of that plant, whether growing or not, with a delta-9

 

tetrahydrocannabinol concentration that does not exceed 0.3% on a

 

dry-weight basis, or per volume or weight of marihuana-infused

 

product, or the combined percent of delta-9-tetrahydrocannabinol

 

and tetrahydrocannabinolic acid in any part of the plant of the

 

genus cannabis regardless of moisture content.

 

(j) (d) "Licensee" means a person holding a state operating

 

license.

 

(k) (e) "Marihuana" means all parts of the plant of the genus

 

cannabis, growing or not; the seeds of the plant; the resin

 

extracted from any part of the plant; and every compound,

 

manufacture, salt, derivative, mixture, or preparation of the plant

 

or its seeds or resin, including marihuana concentrate and

 

marihuana-infused products. For purposes of this act, marihuana

 

Marihuana does not include any of the following:

 

(i) (1) the The mature stalks of the plant, fiber produced

 

from the stalks, oil or cake made from the seeds of the plant, any


other compound, manufacture, salt, derivative, mixture, or

 

preparation of the mature stalks, except the resin extracted from

 

those stalks, fiber, oil, or cake, or any sterilized seed of the

 

plant that is incapable of germination. ;

 

(ii) (2) industrial Industrial hemp. ; or

 

(iii) (3) any Any other ingredient combined with marihuana to

 

prepare topical or oral administrations, food, drink, or other

 

products.

 

(f) "Marihuana accessories" means any equipment, product,

 

material, or combination of equipment, products, or materials,

 

which 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) (g) "Marihuana concentrate" means the resin extracted from

 

any part of the plant of the genus cannabis.

 

(h) "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 department.

 

(i) "Marihuana grower" means a person licensed to cultivate

 

marihuana and sell or otherwise transfer marihuana to marihuana

 

establishments.

 

(m) "Marihuana facility" means a location at which a licensee

 

is licensed to operate under this act.


(n) (j) "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.

 

(k) "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.

 

(l) "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.

 

(m) "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.

 

(n) "Marihuana secure transporter" means a person licensed to

 

obtain marihuana from marihuana establishments in order to

 

transport marihuana to marihuana establishments.

 

(o) "Marihuana safety compliance facility" means a person

 

licensed to test marihuana, including certification for potency and

 

the presence of contaminants.

 

(p) "Municipal license" means a license issued by a

 

municipality pursuant to section 16 of this act that allows a

 

person to operate a marihuana establishment in that municipality.

 

(o) "Marihuana plant" means any plant of the species Cannabis


sativa L.

 

(p) "Marihuana tracking act" means the marihuana tracking act,

 

2016 PA 282, MCL 333.27901 to 333.27904.

 

(q) "Municipality" means a city, village, or township.

 

(r) "Paraphernalia" means any equipment, product, or material

 

of any kind that is designed for or used in growing, cultivating,

 

producing, manufacturing, compounding, converting, storing,

 

processing, preparing, transporting, injecting, smoking, ingesting,

 

inhaling, or otherwise introducing into the human body, marihuana.

 

(s) (r) "Person" means an individual, corporation, limited

 

liability company, partnership of any type, trust, or other legal

 

entity.

 

(t) "Plant" means any living organism that produces its own

 

food through photosynthesis and has observable root formation or is

 

in growth material.

 

(s) "Process" or "Processing" means to separate or otherwise

 

prepare parts of the marihuana plant and to compound, blend,

 

extract, infuse, or otherwise make or prepare marihuana concentrate

 

or marihuana-infused products.

 

(t) "State license" means a license issued by the department

 

that allows a person to operate a marihuana establishment.

 

(u) "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.


(u) "Processor" means a licensee that is a commercial entity

 

located in this state that purchases marihuana from a grower and

 

that extracts resin from the marihuana or creates a marihuana-

 

infused product for sale and transfer in packaged form to a

 

provisioning center or another processor.

 

(v) "Provisioning center" means a licensee that is a

 

commercial entity located in this state that purchases marihuana

 

from a grower or processor and sells, supplies, or provides

 

marihuana to individuals. Provisioning center includes any

 

commercial property where marihuana is sold at retail to

 

individuals.

 

(w) "Rules" means rules promulgated under the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, by the

 

department in consultation with the board to implement this act.

 

(x) "Safety compliance facility" means a licensee that is a

 

commercial entity that takes marihuana from a marihuana facility,

 

tests the marihuana for contaminants and for tetrahydrocannabinol

 

and other cannabinoids, returns the test results, and may return

 

the marihuana to the marihuana facility.

 

(y) "Secure transporter" means a licensee that is a commercial

 

entity located in this state that stores marihuana and transports

 

marihuana between marihuana facilities for a fee.

 

(z) "Seed" means the fertilized, ungerminated, matured ovule,

 

containing an embryo or rudimentary plant, of a marihuana plant

 

that is flowering.

 

(aa) "Seedling" means a marihuana plant that has germinated

 

and has not flowered and is not harvestable.


(bb) "State license" means a license issued by the department

 

that allows a person to operate a marihuana establishment.

 

(cc) "State operating license" or, unless the context requires

 

a different meaning, "license" means a license that is issued under

 

this act that allows the licensee to operate as 1 of the following,

 

specified in the license:

 

(i) A grower.

 

(ii) A processor.

 

(iii) A secure transporter.

 

(iv) A provisioning center.

 

(v) A safety compliance facility.

 

(dd) "Statewide monitoring system" or, unless the context

 

requires a different meaning, "system" means an internet-based,

 

statewide database established, implemented, and maintained by the

 

department under the marihuana tracking act, that is available to

 

licensees, law enforcement agencies, and authorized state

 

departments and agencies on a 24-hour basis for both of the

 

following:

 

(i) Tracking marihuana transfer and transportation by

 

licensees, including transferee, date, quantity, and price.

 

(ii) Verifying in commercially reasonable time that a transfer

 

will not exceed the limit that individual is authorized to receive

 

under this act.

 

(ee) "Tissue culture" means a marihuana plant cell, cutting,

 

tissue, or organ, that is kept under a sterile condition on a

 

nutrient culture medium of known composition and that does not have

 

visible root formation. A tissue culture is not a marihuana plant


for purposes of a grower.

 

(ff) "Usable marihuana" means the dried leaves, flowers, plant

 

resin, or extract of the marihuana plant, but does not include the

 

seeds, stalks, and roots of the plant.

 

Sec. 4. (1) 1. This act does not authorize any of the

 

following:

 

(a) operating, Operating, navigating, or being in physical

 

control of any motor vehicle, aircraft, snowmobile, off-road

 

recreational vehicle, or motorboat while under the influence of

 

marihuana. ;

 

(b) transfer Transfer of marihuana or marihuana accessories to

 

a person under the age of 21. ;

 

(c) any A person under the age of 21 to possess, consume,

 

purchase or otherwise obtain, cultivate, process, transport, or

 

sell marihuana. ;

 

(d) separation Separation of plant resin by butane extraction

 

or another method that utilizes a substance with a flashpoint below

 

100 degrees Fahrenheit in any public place, motor vehicle, or

 

within the curtilage of any residential structure. ;

 

(e) consuming Consuming marihuana in a public place or smoking

 

marihuana where prohibited by the person who owns, occupies, or

 

manages the property, except for purposes of this subdivision a

 

public place does not include an area designated for consumption

 

within a municipality that has authorized consumption in designated

 

areas that are not accessible to persons under 21 years of age. ;

 

(f) cultivating Unless otherwise authorized under a state

 

operating license, cultivating marihuana plants. if the plants are


visible from a public place without the use of binoculars,

 

aircraft, or other optical aids or outside of an enclosed area

 

equipped with locks or other functioning security devices that

 

restrict access to the area;

 

(g) consuming Consuming marihuana while operating, navigating,

 

or being in physical control of any motor vehicle, aircraft,

 

snowmobile, off-road recreational vehicle, or motorboat, or smoking

 

marihuana within the passenger area of a vehicle upon a public way.

 

;

 

(h) possessing Possessing marihuana accessories or possessing

 

or consuming marihuana on the grounds of a public or private school

 

where children attend classes in preschool programs, kindergarten

 

programs, or grades 1 through 12, in a school bus, or on the

 

grounds of any correctional facility. ; or

 

(i) Possessing more than 2.5 ounces of marihuana within a

 

person's place of residence unless the excess marihuana is stored

 

in a container or area equipped with locks or other functioning

 

security devices that restrict access to the contents of the

 

container or area.

 

(2) 2. This act does not limit any privileges, rights,

 

immunities, or defenses of a person as provided in the Michigan

 

medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430, the

 

medical marihuana facilities licensing act, 2016 PA 281, MCL

 

333.27101 to 333.27801, or any other law of this state allowing for

 

or regulating marihuana for medical use.

 

(3) 3. This act does not require do any of the following:

 

(a) Require an employer to permit or accommodate conduct


otherwise allowed by this act in any workplace or on the employer's

 

property. This act does not prohibit

 

(b) Prohibit an employer from disciplining an employee for

 

violation of a workplace drug policy or for working while under the

 

influence of marihuana. This act does not prevent

 

(c) Prevent an employer from refusing to hire, discharging,

 

disciplining, or otherwise taking an adverse employment action

 

against a person with respect to hire, tenure, terms, conditions,

 

or privileges of employment because of that person's violation of a

 

workplace drug policy or because that person was working while

 

under the influence of marihuana.

 

(4) 4. This act allows a A person to may prohibit or otherwise

 

regulate the consumption, cultivation, distribution, processing,

 

sale, or display of marihuana and marihuana accessories on property

 

the person owns, occupies, or manages. , except that However, a

 

lease agreement may not prohibit a tenant from lawfully possessing

 

and consuming marihuana by means other than smoking.

 

(5) 5. All other laws inconsistent with this act do not apply

 

to conduct that is permitted by this act.

 

Sec. 5. (1) 1. Notwithstanding any other law or provision of

 

this act, and except as otherwise provided in section 4, of this

 

act, the following acts by a person 21 years of age or older are

 

not unlawful, are not an offense, are not grounds for seizing or

 

forfeiting property, are not grounds for arrest, prosecution, or

 

penalty in any manner, are not grounds for search or inspection,

 

and are not grounds to deny any other right or privilege:

 

(a) except Except as permitted by under subdivision (b),


possessing, using or consuming, internally possessing, purchasing,

 

transporting, or processing 2.5 ounces or less of marihuana, except

 

that not more than 15 grams of marihuana may be in the form of

 

marihuana concentrate. ;

 

(b) within Within the person's residence, possessing, storing,

 

and processing not more than 10 ounces of marihuana. and any

 

marihuana produced by marihuana plants cultivated on the premises

 

and cultivating not more than 12 marihuana plants for personal use,

 

provided that no more than 12 marihuana plants are possessed,

 

cultivated, or processed on the premises at once;

 

(c) assisting Assisting another person who is 21 years of age

 

or older in any of the acts described in this section. ; and

 

(d) giving Giving away or otherwise transferring without

 

remuneration up to 2.5 ounces of marihuana, except that not more

 

than 15 grams of marihuana may be in the form of marihuana

 

concentrate, to a person 21 years of age or older, as long as the

 

transfer is not advertised or promoted to the public.

 

(2) 2. Notwithstanding any other law or provision of this act,

 

except as otherwise provided in section 4, of this act, the use,

 

manufacture, possession, and purchase of marihuana accessories by a

 

person 21 years of age or older and the distribution or sale of

 

marihuana accessories to a person 21 years of age or older is

 

authorized, is not unlawful, is not an offense, is not grounds for

 

seizing or forfeiting property, is not grounds for arrest,

 

prosecution, or penalty in any manner, and is not grounds to deny

 

any other right or privilege.

 

(3) 3. A person shall not be denied custody of or visitation


with a minor for conduct that is permitted by this act, unless the

 

person's behavior is such that it creates an unreasonable danger to

 

the minor that can be clearly articulated and substantiated.

 

Sec. 15. A person who commits any of the following acts, and

 

is not otherwise authorized by this act to conduct such activities,

 

may be punished only as provided in this section and is not subject

 

to any other form of punishment or disqualification, unless the

 

person consents to another disposition authorized by law:

 

(a) 1. Except for a person who engaged in conduct described in

 

sections section 4(1)(a), 4(1)(b), 4(1)(c), 4(1)(d), 4(1)(g), or

 

4(1)(h), a person who possesses not more than the amount of

 

marihuana allowed by section 5, cultivates not more than the amount

 

of marihuana allowed by section 5, delivers without receiving any

 

remuneration to a person who is at least 21 years of age not more

 

than the amount of marihuana allowed by section 5, or possesses

 

with intent to deliver not more than the amount of marihuana

 

allowed by section 5, is responsible for a civil infraction and may

 

be punished by a fine of not more than $100 $100.00 and forfeiture

 

of the marihuana.

 

(b) 2. Except for a person who engaged in conduct described in

 

section 4, a person who possesses not more than twice the amount of

 

marihuana allowed by section 5, cultivates not more than twice the

 

amount of marihuana allowed by section 5, delivers without

 

receiving any remuneration to a person who is at least 21 years of

 

age not more than twice the amount of marihuana allowed by section

 

5, or possesses with intent to deliver not more than twice the

 

amount of marihuana allowed by section 5:


(i) (a) for For a first violation, is responsible for a civil

 

infraction and may be punished by a fine of not more than $500

 

$500.00 and forfeiture of the marihuana. ;

 

(ii) (b) for For a second violation, is responsible for a

 

civil infraction and may be punished by a fine of not more than

 

$1,000 $1,000.00 and forfeiture of the marihuana. ;

 

(iii) (c) for For a third or subsequent violation, is guilty

 

of a misdemeanor and may be punished by a fine of not more than

 

$2,000 $2,000.00 and forfeiture of the marihuana.

 

(c) 3. Except for a person who engaged in conduct described by

 

section 4(1)(a), 4(1)(d), or 4(1)(g), a person under 21 years of

 

age who possesses not more than 2.5 ounces of marihuana: or who

 

cultivates not more than 12 marihuana plants:

 

(i) (a) for For a first violation, is responsible for a civil

 

infraction and may be punished as follows:

 

(A) (1) if If the person is less than 18 years of age, by a

 

fine of not more than $100 $100.00 or community service, forfeiture

 

of the marihuana, and completion of 4 hours of drug education or

 

counseling. ; or

 

(B) (2) if If the person is at least 18 years of age, by a

 

fine of not more than $100 $100.00 and forfeiture of the marihuana.

 

(ii) (b) for For a second violation, is responsible for a

 

civil infraction and may be punished as follows:

 

(A) (1) if If the person is less than 18 years of age, by a

 

fine of not more than $500 $500.00 or community service, forfeiture

 

of the marihuana, and completion of 8 hours of drug education or

 

counseling. ; or


(B) (2) if If the person is at least 18 years of age, by a

 

fine of not more than $500 $500.00 and forfeiture of the marihuana.

 

(d) 4. Except for a person who engaged in conduct described in

 

section 4, a person who possesses more than twice the amount of

 

marihuana allowed by section 5, cultivates more than twice the

 

amount of marihuana allowed by section 5, or delivers without

 

receiving any remuneration to a person who is at least 21 years of

 

age more than twice the amount of marihuana allowed by section 5,

 

shall be responsible for a misdemeanor, but shall not be subject to

 

imprisonment unless the violation was habitual, willful, and for a

 

commercial purpose or the violation involved violence.

 

Sec. 201. (1) Except as otherwise provided in this act, if a

 

person has been granted a state operating license and is operating

 

within the scope of the license, the licensee and its agents are

 

not subject to any of the following for engaging in activities

 

described in subsection (2):

 

(a) Criminal penalties under state law or local ordinances

 

regulating marihuana.

 

(b) State or local criminal prosecution for a marihuana-

 

related offense.

 

(c) State or local civil prosecution for a marihuana-related

 

offense.

 

(d) Search or inspection, except for an inspection authorized

 

under this act by law enforcement officers, the municipality, or

 

the department.

 

(e) Seizure of marihuana, real property, personal property, or

 

anything of value based on a marihuana-related offense.


(f) Any sanction, including disciplinary action or denial of a

 

right or privilege, by a business or occupational or professional

 

licensing board or bureau based on a marihuana-related offense.

 

(2) The following activities are protected under subsection

 

(1) if performed under a state operating license within the scope

 

of that license and in accord with this act, rules, and any

 

ordinance adopted under section 205:

 

(a) Growing marihuana.

 

(b) Purchasing, receiving, selling, transporting, or

 

transferring marihuana from or to a licensee or a licensee's agent.

 

(c) Possessing marihuana.

 

(d) Possessing or manufacturing marihuana paraphernalia.

 

(e) Processing marihuana.

 

(f) Transporting marihuana.

 

(g) Testing, transferring, infusing, extracting, altering, or

 

studying marihuana.

 

(h) Receiving or providing compensation for products or

 

services.

 

(3) Except as otherwise provided in this act, a person who

 

owns or leases real property upon which a marihuana facility is

 

located and who has no knowledge that the licensee violated this

 

act is not subject to any of the following for owning, leasing, or

 

permitting the operation of a marihuana facility on the real

 

property:

 

(a) Criminal penalties under state law or local ordinances

 

regulating marihuana.

 

(b) State or local civil prosecution based on a marihuana-


related offense.

 

(c) State or local criminal prosecution based on a marihuana-

 

related offense.

 

(d) Search or inspection, except for an inspection authorized

 

under this act by law enforcement officers, the municipality, or

 

the department.

 

(e) Seizure of any real or personal property or anything of

 

value based on a marihuana-related offense.

 

(f) Any sanction, including disciplinary action or denial of a

 

right or privilege, by a business or occupational or professional

 

licensing board or bureau.

 

(4) Except as otherwise provided in this act, a certified

 

public accountant who is licensed under article 7 of the

 

occupational code, 1980 PA 299, MCL 339.720 to 339.736, is not

 

subject to any of the following for engaging in the practice of

 

public accounting as that term is defined in section 720 of the

 

occupational code, 1980 PA 299, MCL 339.720, for an applicant or

 

licensee who is in compliance with this act and rules:

 

(a) Criminal penalties under state law or local ordinances

 

regulating marihuana.

 

(b) State or local civil prosecution based on a marihuana-

 

related offense.

 

(c) State or local criminal prosecution based on a marihuana-

 

related offense.

 

(d) Seizure of any real or personal property or anything of

 

value based on a marihuana-related offense.

 

(e) Any sanction, including disciplinary action or denial of a


right or privilege, by a business or occupational or professional

 

licensing board or bureau based on a marihuana-related offense.

 

(5) Except as otherwise provided in this act, a financial

 

institution is not subject to any of the following for providing a

 

financial service to a licensee under this act:

 

(a) Criminal penalties under state law or local ordinances

 

regulating marihuana.

 

(b) State or local civil prosecution based on a marihuana-

 

related offense.

 

(c) State or local criminal prosecution based on a marihuana-

 

related offense.

 

(d) Seizure of any real or personal property or anything of

 

value based on a marihuana-related offense.

 

(e) Any sanction, including disciplinary action or denial of a

 

right or privilege, by a business or occupational or professional

 

licensing board or bureau based on a marihuana-related offense.

 

(6) For the purposes of regulating the commercial entities

 

established under this act, any provisions of the following acts

 

that are inconsistent with this act do not apply to a grower,

 

processor, secure transporter, provisioning center, or safety

 

compliance facility operating in compliance with this act:

 

(a) The business corporation act, 1972 PA 284, MCL 450.1101 to

 

450.2098.

 

(b) The nonprofit corporation act, 1982 PA 162, MCL 450.2101

 

to 450.3192.

 

(c) 1931 PA 327, MCL 450.98 to 450.192.

 

(d) The Michigan revised uniform limited partnership act, 1982


PA 213, MCL 449.1101 to 449.2108.

 

(e) The Michigan limited liability company act, 1993 PA 23,

 

MCL 450.4101 to 450.5200.

 

(f) 1907 PA 101, MCL 445.1 to 445.5.

 

(g) 1913 PA 164, MCL 449.101 to 449.106.

 

(h) The uniform partnership act, 1917 PA 72, MCL 449.1 to

 

449.48.

 

(7) As used in this section:

 

(a) "Financial institution" means any of the following:

 

(i) A state or national bank.

 

(ii) A state or federally chartered savings and loan

 

association.

 

(iii) A state or federally chartered savings bank.

 

(iv) A state or federally chartered credit union.

 

(v) An insurance company.

 

(vi) An entity that offers any of the following to a resident

 

of this state:

 

(A) A mutual fund account.

 

(B) A securities brokerage account.

 

(C) A money market account.

 

(D) A retail investment account.

 

(vii) An entity regulated by the Securities and Exchange

 

Commission that collects funds from the public.

 

(viii) An entity that is a member of the National Association

 

of Securities Dealers and that collects funds from the public.

 

(ix) Another entity that collects funds from the public.

 

(b) "Financial service" means a deposit; withdrawal; transfer


between accounts; exchange of currency; loan; extension of credit;

 

purchase or sale of any stock, bond, certificate of deposit, or

 

other monetary instrument; or any other payment, transfer, or

 

delivery by, through, or to a financial institution, by whatever

 

means effected.

 

Sec. 205. (1) The board shall not issue a state operating

 

license to an applicant unless the municipality in which the

 

applicant's proposed marihuana facility will operate has adopted an

 

ordinance that authorizes that type of facility. A municipality may

 

adopt an ordinance to authorize 1 or more types of marihuana

 

facilities within its boundaries and to limit the number of each

 

type of marihuana facility. A municipality may adopt other

 

ordinances relating to marihuana facilities within its

 

jurisdiction, including zoning regulations, but shall not impose

 

regulations regarding the purity or pricing of marihuana or

 

interfering or conflicting with this act or rules for licensing

 

marihuana facilities. A municipality that adopts an ordinance under

 

this subsection that authorizes a marihuana facility shall provide

 

the department with all of the following on a form prescribed and

 

provided by the department:

 

(a) An attestation that the municipality has adopted an

 

ordinance under this subsection that authorizes the marihuana

 

facility.

 

(b) A description of any zoning regulations that apply to the

 

proposed marihuana facility within the municipality.

 

(c) The signature of the clerk of the municipality or his or

 

her designee.


(d) Any other information required by the department.

 

(2) A municipal ordinance may establish an annual,

 

nonrefundable fee of not more than $5,000.00 to help defray

 

administrative and enforcement costs associated with the operation

 

of a marihuana facility in the municipality.

 

(3) The department may require a municipality to provide the

 

following information to the department on a form prescribed and

 

provided by the department regarding a licensee who submits an

 

application for license renewal:

 

(a) Information that the board declares necessary to determine

 

whether the licensee's license should be renewed.

 

(b) A description of a violation of an ordinance or a zoning

 

regulation adopted under subsection (1) committed by the licensee,

 

but only if the violation relates to activities licensed under this

 

act and rules.

 

(c) Whether there has been a change to an ordinance or a

 

zoning regulation adopted under subsection (1) since the license

 

was issued to the licensee and a description of the change.

 

(4) Information a municipality obtains from an applicant under

 

this section is exempt from disclosure under the freedom of

 

information act, 1976 PA 442, MCL 15.231 to 15.246. Except as

 

otherwise provided in this subsection, information a municipality

 

provides to the department under this section is subject to

 

disclosure under the freedom of information act, 1976 PA 442, MCL

 

15.231 to 15.246.

 

Sec. 206. The department, in consultation with the board,

 

shall promulgate rules and emergency rules as necessary to


implement, administer, and enforce this act. The rules must ensure

 

the safety, security, and integrity of the operation of marihuana

 

facilities, and must include rules to do the following:

 

(a) Set appropriate standards for marihuana facilities and

 

associated equipment.

 

(b) Subject to section 408, establish minimum levels of

 

insurance that licensees must maintain.

 

(c) Establish operating regulations for each category of

 

license to ensure the health, safety, and security of the public

 

and the integrity of marihuana facility operations.

 

(d) Establish qualifications and restrictions for persons

 

participating in or involved with operating marihuana facilities.

 

(e) Establish testing standards, procedures, and requirements

 

for marihuana sold through provisioning centers.

 

(f) Provide for the levy and collection of fines for a

 

violation of this act or rules.

 

(g) Prescribe use of the statewide monitoring system to track

 

all marihuana transfers, as provided in the marihuana tracking act

 

and this act and provide for a funding mechanism to support the

 

system.

 

(h) Establish quality control standards, procedures, and

 

requirements for marihuana facilities.

 

(i) Establish chain of custody standards, procedures, and

 

requirements for marihuana facilities.

 

(j) Establish standards, procedures, and requirements for

 

waste product disposal and storage by marihuana facilities.

 

(k) Establish chemical storage standards, procedures, and


requirements for marihuana facilities.

 

(l) Establish standards, procedures, and requirements for

 

securely and safely transporting marihuana between marihuana

 

facilities.

 

(m) Establish standards, procedures, and requirements for the

 

storage of marihuana by marihuana facilities.

 

(n) Establish labeling and packaging standards, procedures,

 

and requirements for marihuana sold or transferred through

 

provisioning centers, including a prohibition on labeling or

 

packaging that is intended to appeal to or has the effect of

 

appealing to minors.

 

(o) Establish daily and monthly purchasing limits at

 

provisioning centers to ensure compliance with this act.

 

(p) Establish marketing and advertising restrictions for

 

marihuana products and marihuana facilities.

 

(q) Establish maximum tetrahydrocannabinol levels for

 

marihuana-infused products sold or transferred through provisioning

 

centers.

 

(r) Establish health standards to ensure the safe preparation

 

of products containing marihuana that are intended for human

 

consumption in a manner other than smoke inhalation.

 

(s) Establish restrictions on edible marihuana-infused

 

products to prohibit shapes that would appeal to minors.

 

Sec. 207. A licensee shall adopt and use a third-party

 

inventory control and tracking system that is capable of

 

interfacing with the statewide monitoring system to allow the

 

licensee to enter or access information in the statewide monitoring


system as required under this act and rules. The third-party

 

inventory control and tracking system must have all of the

 

following capabilities necessary for the licensee to comply with

 

the requirements applicable to the licensee's license type:

 

(a) Tracking all marihuana plants, products, packages,

 

purchase totals, waste, transfers, conversions, sales, and returns

 

that are linked to unique identification numbers.

 

(b) Tracking lot and batch information throughout the entire

 

chain of custody.

 

(c) Tracking all products, conversions, and derivatives

 

throughout the entire chain of custody.

 

(d) Tracking marihuana plant, batch, and product destruction.

 

(e) Tracking transportation of product.

 

(f) Performing complete batch recall tracking that clearly

 

identifies all of the following details relating to the specific

 

batch subject to the recall:

 

(i) Sold product.

 

(ii) Product inventory that is finished and available for

 

sale.

 

(iii) Product that is in the process of transfer.

 

(iv) Product being processed into another form.

 

(v) Postharvest raw product, such as product that is in the

 

drying, trimming, or curing process.

 

(g) Reporting and tracking loss, theft, or diversion of

 

product containing marihuana.

 

(h) Reporting and tracking all inventory discrepancies.

 

(i) Reporting and tracking adverse responses.


(j) Reporting and tracking all sales and refunds.

 

(k) Electronically receiving and transmitting information as

 

required under this act and the marihuana tracking act.

 

(l) Receiving testing results electronically from a safety

 

compliance facility via a secured application program interface

 

into the system and directly linking the testing results to each

 

applicable source batch and sample.

 

(m) Identifying test results that may have been altered.

 

(n) Providing the licensee with access to information in the

 

tracking system that is necessary to verify that the licensee is

 

carrying out the marihuana transactions authorized under the

 

licensee's license in accordance with this act.

 

(o) Providing information to cross-check that product received

 

the required testing.

 

(p) Providing the department and state agencies with access to

 

information in the database that they are authorized to access.

 

(q) Providing licensees with access only to the information in

 

the system that they are required to receive before a sale,

 

transfer, transport, or other activity authorized under a license

 

issued under this act.

 

(r) Securing the confidentiality of information in the

 

database by preventing access by a person who is not authorized to

 

access the statewide monitoring system or is not authorized to

 

access the particular information.

 

(s) Providing analytics to the department regarding key

 

performance indicators such as the following:

 

(i) Total daily sales.


(ii) Total marihuana plants in production.

 

(iii) Total marihuana plants destroyed.

 

(iv) Total inventory adjustments.

 

Sec. 208. A marihuana facility and all articles of property in

 

that facility are subject to examination at any time by a local

 

police agency or the department of state police.

 

Sec. 301. (1) The marihuana licensing board is created within

 

the department of licensing and regulatory affairs.

 

(2) The board consists of 5 members who are residents of this

 

state, not more than 3 of whom are members of the same political

 

party. The governor shall appoint the members. One of the members

 

shall be appointed from 3 nominees submitted by the senate majority

 

leader and 1 from 3 nominees submitted by the speaker of the house.

 

The governor shall designate 1 of the members as chairperson.

 

(3) The members shall be appointed for terms of 4 years,

 

except, of those who are first appointed, 1 member shall be

 

appointed for a term of 2 years and 2 members shall be appointed

 

for a term of 3 years. A member's term expires on December 31 of

 

the last year of the member's term. If a vacancy occurs, the

 

governor shall appoint a successor to fill the unexpired term in

 

the manner of the original appointment.

 

(4) Each member of the board shall be reimbursed for all

 

actual and necessary expenses and disbursements incurred in

 

carrying out official duties.

 

(5) A board member shall not hold any other public office for

 

which he or she receives compensation other than necessary travel

 

or other incidental expenses.


(6) A person who is not of good moral character or who has

 

been indicted for, charged with, or convicted of, pled guilty or

 

nolo contendere to, or forfeited bail concerning any felony or a

 

misdemeanor involving a controlled substance violation, theft,

 

dishonesty, or fraud under the laws of this state, any other state,

 

or the United States or a local ordinance in any state involving a

 

controlled substance violation, dishonesty, theft, or fraud that

 

substantially corresponds to a misdemeanor in that state is not

 

eligible to serve on the board.

 

(7) The governor may remove any member of the board for

 

neglect of duty, misfeasance, malfeasance, nonfeasance, or any

 

other just cause.

 

(8) The department in conjunction with the board shall employ

 

an executive director and other personnel as necessary to assist

 

the board in carrying out its duties. The executive director shall

 

devote his or her full time to the duties of the office and shall

 

not hold any other office or employment.

 

(9) The board shall not appoint or employ an individual if any

 

of the following circumstances exist:

 

(a) During the 3 years immediately preceding appointment or

 

employment, the individual held any direct or indirect interest in,

 

or was employed by, a person who is licensed to operate under this

 

act or under a corresponding license in another jurisdiction or a

 

person with an application for an operating license pending before

 

the board or in any other jurisdiction. The board shall not employ

 

an individual who has a direct or indirect interest in a licensee

 

or a marihuana facility.


(b) The individual or his or her spouse, parent, child,

 

child's spouse, sibling, or spouse of a sibling has an application

 

for a license pending before the board or is a member of the board

 

of directors of, or an individual financially interested in, any

 

licensee or marihuana facility.

 

(10) Each member of the board, the executive director, and

 

each key employee as determined by the department shall file with

 

the governor a financial disclosure statement listing all assets

 

and liabilities, property and business interests, and sources of

 

income of the member, executive director, and key employee and his

 

or her spouse, if any, affirming that the member, executive

 

director, and key employee are in compliance with subsection (9)(a)

 

and (b). The financial disclosure statement shall be made under

 

oath and filed at the time of employment and annually thereafter.

 

(11) Each employee of the board shall file with the board a

 

financial disclosure statement listing all assets and liabilities,

 

property and business interests, and sources of income of the

 

employee and his or her spouse. This subsection does not apply to

 

the executive director or a key employee.

 

(12) A member of the board, executive director, or key

 

employee shall not hold any direct or indirect interest in, be

 

employed by, or enter into a contract for services with an

 

applicant, a board licensee, or a marihuana facility for a period

 

of 4 years after the date his or her employment or membership on

 

the board terminates. The department in consultation with the board

 

shall define the term "direct or indirect interest" by rule.

 

(13) For 2 years after the date his or her employment with the


board is terminated, an employee of the board shall not acquire any

 

direct or indirect interest in, be employed by, or enter into a

 

contract for services with any applicant, licensee, or marihuana

 

facility.

 

(14) For 2 years after the termination of his or her office or

 

employment with the board, a board member or an individual employed

 

by the board shall not represent any person or party other than

 

this state before or against the board.

 

(15) A business entity in which a former board member or

 

employee or agent has an interest, or any partner, officer, or

 

employee of the business entity, shall not make any appearance or

 

represent a party that the former member, employee, or agent is

 

prohibited from appearing for or representing. As used in this

 

subsection, "business entity" means a corporation, limited

 

liability company, partnership, limited liability partnership,

 

association, trust, or other form of legal entity.

 

Sec. 302. The board has general responsibility for

 

implementing this act. The board has the powers and duties

 

specified in this act and all other powers necessary and proper to

 

fully and effectively implement and administer this act for the

 

purpose of licensing, regulating, and enforcing the licensing and

 

regulation system established under this act for marihuana growth,

 

processing, testing, and transporting. The board is subject to the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328. The board's duties include all of the following:

 

(a) Granting or denying each application for a state operating

 

license within a reasonable time.


(b) Deciding all license applications in reasonable order.

 

(c) Conducting its public meetings in compliance with the open

 

meetings act, 1976 PA 267, MCL 15.231 to 15.246.

 

(d) Consulting with the department in promulgating rules and

 

emergency rules as necessary to implement, administer, and enforce

 

this act. The board shall not promulgate a rule establishing a

 

limit on the number or type of marihuana facility licenses that may

 

be granted.

 

(e) Implementing and collecting the application fee described

 

in section 401 and, in conjunction with the department of treasury,

 

the tax described in section 601 and regulatory assessment

 

described in section 603.

 

(f) Providing for the levy and collection of fines for a

 

violation of this act or rules.

 

(g) Providing oversight of a marihuana facility through the

 

board's inspectors, agents, and auditors and through the state

 

police or attorney general for the purpose of certifying the

 

revenue, receiving complaints from the public, or conducting

 

investigations into the operation of the marihuana facility as the

 

board considers necessary and proper to ensure compliance with this

 

act and rules and to protect and promote the overall safety,

 

security, and integrity of the operation of a marihuana facility.

 

(h) Providing oversight of marihuana facilities to ensure that

 

marihuana-infused products meet health and safety standards that

 

protect the public to a degree comparable to state and federal

 

standards applicable to similar food and drugs.

 

(i) Reviewing and ruling on any complaint by a licensee


regarding any investigative procedures of this state that are

 

believed to be unnecessarily disruptive of marihuana facility

 

operations. The need to inspect and investigate is presumed at all

 

times. The board may delegate authority to hear, review, or rule on

 

licensee complaints to a subcommittee of the board. To prevail on

 

the complaint, a licensee must establish by a preponderance of the

 

evidence that the procedures unreasonably disrupted its marihuana

 

facility operations.

 

(j) Holding at least 2 public meetings each year. Upon 72

 

hours' written notice to each member, the chairperson or any 2

 

board members may call a special meeting. Three members of the

 

board constitute a quorum, including when making determinations on

 

an application for a license. Three votes are required in support

 

of final determinations of the board on applications for licenses

 

and all other licensing determinations, except that 4 votes are

 

required in support of a determination to suspend or revoke a

 

license. The board shall keep a complete and accurate record of all

 

of its meetings and hearings. Upon order of the board, 1 of the

 

board members or a hearing officer designated by the board may

 

conduct any hearing provided for under this act or by rules and may

 

recommend findings and decisions to the board. The board member or

 

hearing officer conducting the hearing has all powers and rights

 

regarding the conduct of hearings granted to the board under this

 

act. The record made at the time of the hearing shall be reviewed

 

by the board or a majority of the board, and the findings and

 

decision of the majority of the board are the order of the board in

 

the case.


(k) Maintaining records that are separate and distinct from

 

the records of any other state board. The records shall be made

 

available for public inspection subject to the limitations of this

 

act and shall accurately reflect all board proceedings.

 

(l) Reviewing the patterns of marihuana transfers by the

 

licensees under this act as recorded in a statewide database

 

established for use in administering and enforcing this act and

 

making recommendations to the governor and the legislature in a

 

written annual report to the governor and the legislature and

 

additional reports that the governor requests. The annual report

 

shall be submitted by April 15 of each year and shall include the

 

report required under section 702, a statement of receipts and

 

disbursements by the board, the actions taken by the board, and any

 

additional information and recommendations that the board considers

 

appropriate or that the governor requests.

 

(m) Except as otherwise provided in this act, all information,

 

records, interviews, reports, statements, memoranda, or other data

 

supplied to or used by the board are subject to the freedom of

 

information act, 1976 PA 442, MCL 15.231 to 15.246, except for the

 

following:

 

(i) Unless presented during a public hearing or requested by

 

the licensee or applicant who is the sole subject of the data, all

 

of the information, records, interviews, reports, statements,

 

memoranda, or other data supplied to, created by, or used by the

 

board related to background investigation of applicants or

 

licensees and to trade secrets, internal controls, and security

 

measures of the licensees or applicants.


(ii) All information, records, interviews, reports,

 

statements, memoranda, or other data supplied to or used by the

 

board that have been received from another jurisdiction or local,

 

state, or federal agency under a promise of confidentiality or if

 

the release of the information is otherwise barred by the statutes,

 

rules, or regulations of that jurisdiction or agency or by an

 

intergovernmental agreement.

 

(iii) All information in the statewide monitoring system.

 

Sec. 303. (1) The board has jurisdiction over the operation of

 

all marihuana facilities. The board has all powers necessary and

 

proper to fully and effectively oversee the operation of marihuana

 

facilities, including the authority to do all of the following:

 

(a) Investigate applicants for state operating licenses,

 

determine the eligibility for licenses, and grant licenses to

 

applicants in accordance with this act and the rules.

 

(b) Investigate all individuals employed by marihuana

 

facilities.

 

(c) At any time, through its investigators, agents, auditors,

 

or the state police, without a warrant and without notice to the

 

licensee, enter the premises, offices, facilities, or other places

 

of business of a licensee, if evidence of compliance or

 

noncompliance with this act or rules is likely to be found and

 

consistent with constitutional limitations, for the following

 

purposes:

 

(i) To inspect and examine all premises of marihuana

 

facilities.

 

(ii) To inspect, examine, and audit relevant records of the


licensee and, if the licensee fails to cooperate with an

 

investigation, impound, seize, assume physical control of, or

 

summarily remove from the premises all books, ledgers, documents,

 

writings, photocopies, correspondence, records, and videotapes,

 

including electronically stored records, money receptacles, or

 

equipment in which the records are stored.

 

(iii) To inspect the person, and inspect or examine personal

 

effects present in a marihuana facility, of any holder of a state

 

operating license while that person is present in a marihuana

 

facility.

 

(iv) To investigate alleged violations of this act or rules.

 

(d) Investigate alleged violations of this act or rules and

 

take appropriate disciplinary action against a licensee.

 

(e) Consult with the department in adopting rules to establish

 

appropriate standards for marihuana facilities and associated

 

equipment.

 

(f) Require all relevant records of licensees, including

 

financial or other statements, to be kept on the premises

 

authorized for operation of the marihuana facility of the licensee

 

or in the manner prescribed by the board.

 

(g) Require that each licensee of a marihuana facility submit

 

to the board a list of the stockholders or other persons having a

 

1% or greater beneficial interest in the facility in addition to

 

any other information the board considers necessary to effectively

 

administer this act and rules, orders, and final decisions made

 

under this act.

 

(h) Eject, or exclude or authorize the ejection or exclusion


of, an individual from a marihuana facility if the individual

 

violates this act, rules, or final orders of the board. However,

 

the propriety of the ejection or exclusion is subject to a

 

subsequent hearing by the board.

 

(i) Conduct periodic audits of marihuana facilities licensed

 

under this act.

 

(j) Consult with the department as to appropriate minimum

 

levels of insurance for licensees in addition to the minimum

 

established under section 408 for liability insurance.

 

(k) Delegate the execution of any of its powers that are not

 

specifically and exclusively reserved to the board under this act

 

for the purpose of administering and enforcing this act and rules.

 

(l) Take disciplinary action as the board considers

 

appropriate to prevent practices that violate this act and rules.

 

(m) Review a licensee if that licensee is under review or the

 

subject of discipline by a regulatory body in any other

 

jurisdiction for a violation of a controlled substance or marihuana

 

law or regulation in that jurisdiction.

 

(n) Take any other reasonable or appropriate action to enforce

 

this act and rules.

 

(2) The board may seek and shall receive the cooperation and

 

assistance of the department of state police in conducting

 

background investigations of applicants and in fulfilling its

 

responsibilities under this act. The department of state police may

 

recover its costs of cooperation under this subsection.

 

Sec. 305. (1) By January 31 of each year, each member of the

 

board shall prepare and file with the governor's office and the


board a disclosure form in which the member does all of the

 

following:

 

(a) Affirms that the member or the member's spouse, parent,

 

child, or child's spouse is not a member of the board of directors

 

of, financially interested in, or employed by a licensee or

 

applicant.

 

(b) Affirms that the member continues to meet any other

 

criteria for board membership under this act or the rules

 

promulgated by the board.

 

(c) Discloses any legal or beneficial interests in any real

 

property that is or that may be directly or indirectly involved

 

with operations authorized by this act.

 

(d) Discloses any other information as may be required to

 

ensure that the integrity of the board and its work is maintained.

 

(2) By January 31 of each year, each employee of the board

 

shall prepare and file with the board an employee disclosure form

 

in which the employee does all of the following:

 

(a) Affirms the absence of financial interests prohibited by

 

this act.

 

(b) Discloses any legal or beneficial interests in any real

 

property that is or that may be directly or indirectly involved

 

with operations authorized by this act.

 

(c) Discloses whether the employee or the employee's spouse,

 

parent, child, or child's spouse is financially interested in or

 

employed by a licensee or an applicant for a license under this

 

act.

 

(d) Discloses such other matters as may be required to ensure


that the integrity of the board and its work is maintained.

 

(3) A member, employee, or agent of the board who becomes

 

aware that the member, employee, or agent of the board or his or

 

her spouse, parent, or child is a member of the board of directors

 

of, financially interested in, or employed by a licensee or an

 

applicant shall immediately provide detailed written notice thereof

 

to the chairperson.

 

(4) A member, employee, or agent of the board who within the

 

previous 10 years has been indicted for, charged with, or convicted

 

of, pled guilty or nolo contendere to, or forfeited bail concerning

 

a misdemeanor involving controlled substances, dishonesty, theft,

 

or fraud or a local ordinance in any state involving controlled

 

substances, dishonesty, theft, or fraud that substantially

 

corresponds to a misdemeanor in that state, or a felony under

 

Michigan law, the laws of any other state, or the laws of the

 

United States or any other jurisdiction shall immediately provide

 

detailed written notice of the conviction or charge to the

 

chairperson.

 

(5) Any member, employee, or agent of the board who is

 

negotiating for, or acquires by any means, any interest in any

 

person who is a licensee or an applicant, or any person affiliated

 

with such a person, shall immediately provide written notice of the

 

details of the interest to the chairperson. The member, employee,

 

or agent of the board shall not act on behalf of the board with

 

respect to that person.

 

(6) A member, employee, or agent of the board shall not enter

 

into any negotiations for employment with any person or affiliate


of any person who is a licensee or an applicant and shall

 

immediately provide written notice of the details of any such

 

negotiations or discussions in progress to the chairperson. The

 

member, employee, or agent of the board shall not take action on

 

behalf of the board with respect to that person.

 

(7) Any member, employee, or agent of the board who receives

 

an invitation, written or oral, to initiate a discussion concerning

 

employment or the possibility of employment with a person or

 

affiliate of a person who is a licensee or an applicant shall

 

immediately report that he or she received the invitation to the

 

chairperson. The member, employee, or agent of the board shall not

 

take action on behalf of the board with respect to the person.

 

(8) A licensee or applicant shall not knowingly initiate a

 

negotiation for or discussion of employment with a member,

 

employee, or agent of the board. A licensee or applicant who

 

initiates a negotiation or discussion about employment shall

 

immediately provide written notice of the details of the

 

negotiation or discussion to the chairperson as soon as he or she

 

becomes aware that the negotiation or discussion has been initiated

 

with a member, employee, or agent of the board.

 

(9) A member, employee, or agent of the board, or former

 

member, employee, or agent of the board, shall not disseminate or

 

otherwise disclose any material or information in the possession of

 

the board that the board considers confidential unless specifically

 

authorized to do so by the chairperson or the board.

 

(10) A member, employee, or agent of the board or a parent,

 

spouse, sibling, spouse of a sibling, child, or spouse of a child


of a member, employee, or agent of the board shall not accept any

 

gift, gratuity, compensation, travel, lodging, or anything of

 

value, directly or indirectly, from any licensee or any applicant

 

or affiliate or representative of a licensee or applicant, unless

 

the acceptance conforms to a written policy or directive that is

 

issued by the chairperson or the board. Any member, employee, or

 

agent of the board who is offered or receives any gift, gratuity,

 

compensation, travel, lodging, or anything of value, directly or

 

indirectly, from any licensee or any applicant or affiliate or

 

representative of an applicant or licensee shall immediately

 

provide written notification of the details to the chairperson.

 

(11) A licensee or applicant, or an affiliate or

 

representative of an applicant or licensee, shall not, directly or

 

indirectly, give or offer to give any gift, gratuity, compensation,

 

travel, lodging, or anything of value to any member, employee, or

 

agent of the board that the member, employee, or agent of the board

 

is prohibited from accepting under subsection (10).

 

(12) A member, employee, or agent of the board shall not

 

engage in any conduct that constitutes a conflict of interest and

 

shall immediately advise the chairperson in writing of the details

 

of any incident or circumstances that would present the existence

 

of a conflict of interest with respect to performing board-related

 

work or duties.

 

(13) A member, employee, or agent of the board who is

 

approached and offered a bribe as described in section 118 of the

 

Michigan penal code, 1931 PA 328, MCL 750.118, or this act shall

 

immediately provide written account of the details of the incident


to the chairperson and to a law enforcement officer of a law

 

enforcement agency having jurisdiction.

 

(14) A member, employee, or agent of the board shall disclose

 

his or her past involvement with any marihuana enterprise in the

 

past 5 years and shall not engage in political activity or

 

politically related activity during the duration of his or her

 

appointment or employment.

 

(15) A former member, employee, or agent of the board may

 

appear before the board as a fact witness about matters or actions

 

handled by the member, employee, or agent during his or her tenure

 

as a member, employee, or agent of the board. The member, employee,

 

or agent of the board shall not receive compensation for such an

 

appearance other than a standard witness fee and reimbursement for

 

travel expenses as established by statute or court rule.

 

(16) A licensee or applicant or any affiliate or

 

representative of an applicant or licensee shall not engage in ex

 

parte communications with a member of the board. A member of the

 

board shall not engage in any ex parte communications with a

 

licensee or an applicant or with any affiliate or representative of

 

an applicant or licensee.

 

(17) Any board member, licensee, or applicant or affiliate or

 

representative of a board member, licensee, or applicant who

 

receives any ex parte communication in violation of subsection

 

(16), or who is aware of an attempted communication in violation of

 

subsection (16), shall immediately report details of the

 

communication or attempted communication in writing to the

 

chairperson.


(18) Any member of the board who receives an ex parte

 

communication in an attempt to influence that member's official

 

action shall disclose the source and content of the communication

 

to the chairperson. The chairperson may investigate or initiate an

 

investigation of the matter with the assistance of the attorney

 

general and state police to determine if the communication violates

 

subsection (16) or subsection (17) or other state law. The

 

disclosure under this section and the investigation are

 

confidential. Following an investigation, the chairperson shall

 

advise the governor or the board, or both, of the results of the

 

investigation and may recommend action as the chairperson considers

 

appropriate. If the chairperson receives such an ex parte

 

communication, he or she shall report the communication to the

 

governor's office for appropriate action.

 

(19) A new or current employee or agent of the board shall

 

obtain written permission from the executive director before

 

continuing outside employment held at the time the employee begins

 

to work for the board. Permission shall be denied, or permission

 

previously granted shall be revoked, if the executive director

 

considers the nature of the work to create a possible conflict of

 

interest or if it would otherwise interfere with the duties of the

 

employee or agent for the board.

 

(20) An employee or agent of the board granted permission for

 

outside employment shall not conduct any business or perform any

 

activities, including solicitation, related to outside employment

 

on premises used by the board or during the employee's working

 

hours for the board.


(21) The chairperson shall report any action he or she has

 

taken or proposes to take under this section with respect to an

 

employee or agent or former employee or former agent to the board

 

at the next meeting of the board. The board may direct the

 

executive director to take additional or different action.

 

(22) A member, employee, or agent of the board shall not enter

 

into any personal transaction involving marihuana with a licensee

 

or applicant, other than transactions for personal consumption.

 

(23) If a licensee or applicant, or an affiliate or

 

representative of a licensee or applicant, violates this section,

 

the board may deny a license application, revoke or suspend a

 

license, or take other disciplinary action as provided in section

 

407.

 

(24) Violation of this section by a member of the board may

 

result in disqualification or constitute cause for removal under

 

section 301(7) or other disciplinary action as recommended by the

 

board to the governor.

 

(25) A violation of this section by an employee or agent of

 

the board need not result in termination of employment if the board

 

determines that the conduct involved does not violate the purpose

 

of this act. However, all of the following apply:

 

(a) If, after being offered employment or beginning employment

 

with the board, the employee or agent intentionally acquires a

 

financial interest in a licensee or an applicant, or an affiliate

 

or representative of a licensee or applicant, the offer or

 

employment with the board shall be terminated.

 

(b) If a financial interest in a licensee or an applicant, or


an affiliate or representative of a licensee or applicant, is

 

acquired by an employee or agent that has been offered employment

 

with the board, an employee of the board, or the employee's or

 

agent's spouse, parent, or child, through no intentional action of

 

the employee or agent, the individual shall have up to 30 days to

 

divest or terminate the financial interest. Employment may be

 

terminated if the interest has not been divested after 30 days.

 

(c) Employment shall be terminated if the employee or agent is

 

a spouse, parent, child, or spouse of a child of a board member.

 

(26) Violation of this section does not create a civil cause

 

of action.

 

(27) As used in this section:

 

(a) "Outside employment", in addition to employment by a third

 

party, includes, but is not limited to, the following:

 

(i) Operation of a proprietorship.

 

(ii) Participation in a partnership or group business

 

enterprise.

 

(iii) Performance as a director or corporate officer of any

 

for-profit or nonprofit corporation or banking or credit

 

institution.

 

(iv) Performance as a manager of a limited liability company.

 

(b) "Political activity" or "politically related activity"

 

includes all of the following:

 

(i) Using his or her official authority or influence for the

 

purpose of interfering with or affecting the result of an election.

 

(ii) Knowingly soliciting, accepting, or receiving a political

 

contribution from any person.


(iii) Running for the nomination or as a candidate for

 

election to a partisan political office.

 

(iv) Knowingly soliciting or discouraging the participation in

 

any political activity of any person who is either of the

 

following:

 

(A) Applying for any compensation, grant, contract, ruling,

 

license, permit, or certificate pending before the board.

 

(B) The subject of or a participant in an ongoing audit,

 

investigation, or enforcement action being carried out by the

 

board.

 

Sec. 401. (1) Beginning 360 days after the effective date of

 

this act, a person may apply to the board for state operating

 

licenses in the categories of class A, B, or C grower; processor;

 

provisioning center; secure transporter; and safety compliance

 

facility as provided in this act. The application shall be made

 

under oath on a form provided by the board and shall contain

 

information as prescribed by the board, including, but not limited

 

to, all of the following:

 

(a) The name, business address, business telephone number,

 

social security number, and, if applicable, federal tax

 

identification number of the applicant.

 

(b) The identity of every person having any ownership interest

 

in the applicant with respect to which the license is sought. If

 

the disclosed entity is a trust, the application shall disclose the

 

names and addresses of the beneficiaries; if a corporation, the

 

names and addresses of all shareholders, officers, and directors;

 

if a partnership or limited liability partnership, the names and


addresses of all partners; if a limited partnership or limited

 

liability limited partnership, the names of all partners, both

 

general and limited; or if a limited liability company, the names

 

and addresses of all members and managers.

 

(c) An identification of any business that is directly or

 

indirectly involved in the growing, processing, testing,

 

transporting, or sale of marihuana, including, if applicable, the

 

state of incorporation or registration, in which an applicant or,

 

if the applicant is an individual, the applicant's spouse, parent,

 

or child has any equity interest. If an applicant is a corporation,

 

partnership, or other business entity, the applicant shall identify

 

any other corporation, partnership, or other business entity that

 

is directly or indirectly involved in the growing, processing,

 

testing, transporting, or sale of marihuana in which it has any

 

equity interest, including, if applicable, the state of

 

incorporation or registration. An applicant may comply with this

 

subdivision by filing a copy of the applicant's registration with

 

the Securities and Exchange Commission if the registration contains

 

the information required by this subdivision.

 

(d) Whether an applicant has been indicted for, charged with,

 

arrested for, or convicted of, pled guilty or nolo contendere to,

 

forfeited bail concerning any criminal offense under the laws of

 

any jurisdiction, either felony or controlled-substance-related

 

misdemeanor, not including traffic violations, regardless of

 

whether the offense has been reversed on appeal or otherwise,

 

including the date, the name and location of the court, arresting

 

agency, and prosecuting agency, the case caption, the docket


number, the offense, the disposition, and the location and length

 

of incarceration.

 

(e) Whether an applicant has ever applied for or has been

 

granted any commercial license or certificate issued by a licensing

 

authority in this state or any other jurisdiction that has been

 

denied, restricted, suspended, revoked, or not renewed and a

 

statement describing the facts and circumstances concerning the

 

application, denial, restriction, suspension, revocation, or

 

nonrenewal, including the licensing authority, the date each action

 

was taken, and the reason for each action.

 

(f) Whether an applicant has filed, or been served with, a

 

complaint or other notice filed with any public body, regarding the

 

delinquency in the payment of, or a dispute over the filings

 

concerning the payment of, any tax required under federal, state,

 

or local law, including the amount, type of tax, taxing agency, and

 

time periods involved.

 

(g) A statement listing the names and titles of all public

 

officials or officers of any unit of government, and the spouses,

 

parents, and children of those public officials or officers, who,

 

directly or indirectly, own any financial interest in, have any

 

beneficial interest in, are the creditors of or hold any debt

 

instrument issued by, or hold or have any interest in any

 

contractual or service relationship with an applicant. As used in

 

this subdivision, public official or officer does not include a

 

person who would have to be listed solely because of his or her

 

state or federal military service.

 

(h) A description of the type of marihuana facility;


anticipated or actual number of employees; and projected or actual

 

gross receipts.

 

(i) Financial information in the manner and form prescribed by

 

the board.

 

(j) A paper copy or electronic posting website reference for

 

the ordinance or zoning restriction that the municipality adopted

 

to authorize or restrict operation of 1 or more marihuana

 

facilities in the municipality.

 

(k) A copy of the notice informing the municipality by

 

registered mail that the applicant has applied for a license under

 

this act. The applicant shall also certify that it has delivered

 

the notice to the municipality or will do so by 10 days after the

 

date the applicant submits the application for a license to the

 

board.

 

(l) Any other information the department requires by rule.

 

(2) The board shall use information provided on the

 

application as a basis to conduct a thorough background

 

investigation on the applicant. A false application is cause for

 

the board to deny a license. The board shall not consider an

 

incomplete application but shall, within a reasonable time, return

 

the application to the applicant with notification of the

 

deficiency and instructions for submitting a corrected application.

 

Information the board obtains from the background investigation is

 

exempt from disclosure under the freedom of information act, 1976

 

PA 442, MCL 15.231 to 15.246.

 

(3) An applicant must provide written consent to the

 

inspections, examinations, searches, and seizures provided for in


section 303(1)(c)(i) to (iv) and to disclosure to the board and its

 

agents of otherwise confidential records, including tax records

 

held by any federal, state, or local agency, or credit bureau or

 

financial institution, while applying for or holding a license.

 

Information the board receives under this subsection is exempt from

 

disclosure under the freedom of information act, 1976 PA 442, MCL

 

15.231 to 15.246.

 

(4) An applicant must certify that the applicant does not have

 

an interest in any other state operating license that is prohibited

 

under this act.

 

(5) A nonrefundable application fee must be paid at the time

 

of filing to defray the costs associated with the background

 

investigation conducted by the board. The department in

 

consultation with the board shall set the amount of the application

 

fee for each category and class of license by rule. If the costs of

 

the investigation and processing the application exceed the

 

application fee, the applicant shall pay the additional amount to

 

the board. All information, records, interviews, reports,

 

statements, memoranda, or other data supplied to or used by the

 

board in the course of its review or investigation of an

 

application for a license under this act shall be disclosed only in

 

accordance with this act. The information, records, interviews,

 

reports, statements, memoranda, or other data are not admissible as

 

evidence or discoverable in any action of any kind in any court or

 

before any tribunal, board, agency, or person, except for any

 

action considered necessary by the board.

 

(6) By 10 days after the date the applicant submits an


application to the board, the applicant shall notify the

 

municipality by registered mail that it has applied for a license

 

under this act.

 

Sec. 402. (1) The board shall issue a license to an applicant

 

who submits a complete application and pays both the nonrefundable

 

application fee required under section 401(5) and the regulatory

 

assessment established by the board for the first year of

 

operation, if the board determines that the applicant is qualified

 

to receive a license under this act.

 

(2) An applicant is ineligible to receive a license if any of

 

the following circumstances exist:

 

(a) The applicant has been convicted of or released from

 

incarceration for a felony under the laws of this state, any other

 

state, or the United States within the past 10 years or has been

 

convicted of a controlled substance-related felony within the past

 

10 years.

 

(b) Within the past 5 years the applicant has been convicted

 

of a misdemeanor involving a controlled substance, theft,

 

dishonesty, or fraud in any state or been found responsible for

 

violating a local ordinance in any state involving a controlled

 

substance, dishonesty, theft, or fraud that substantially

 

corresponds to a misdemeanor in that state.

 

(c) The applicant has knowingly submitted an application for a

 

license under this act that contains false information.

 

(d) The applicant is a member of the board.

 

(e) The applicant fails to demonstrate the applicant's ability

 

to maintain adequate premises liability and casualty insurance for


its proposed marihuana facility.

 

(f) The applicant holds an elective office of a governmental

 

unit of this state, another state, or the federal government; is a

 

member of or employed by a regulatory body of a governmental unit

 

in this state, another state, or the federal government; or is

 

employed by a governmental unit of this state. This subdivision

 

does not apply to an elected officer of or employee of a federally

 

recognized Indian tribe or to an elected precinct delegate.

 

(g) The applicant, if an individual, has been a resident of

 

this state for less than a continuous 2-year period immediately

 

preceding the date of filing the application. The requirements in

 

this subdivision do not apply after June 30, 2020.

 

(h) The board determines that the applicant is not in

 

compliance with section 205(1).

 

(i) The applicant fails to meet other criteria established by

 

rule.

 

(3) In determining whether to grant a license to an applicant,

 

the board may also consider all of the following:

 

(a) The integrity, moral character, and reputation; personal

 

and business probity; financial ability and experience; and

 

responsibility or means to operate or maintain a marihuana facility

 

of the applicant and of any other person that meets either of the

 

following:

 

(i) Controls, directly or indirectly, the applicant.

 

(ii) Is controlled, directly or indirectly, by the applicant

 

or by a person who controls, directly or indirectly, the applicant.

 

(b) The financial ability of the applicant to purchase and


maintain adequate liability and casualty insurance.

 

(c) The sources and total amount of the applicant's

 

capitalization to operate and maintain the proposed marihuana

 

facility.

 

(d) Whether the applicant has been indicted for, charged with,

 

arrested for, or convicted of, pled guilty or nolo contendere to,

 

forfeited bail concerning, or had expunged any relevant criminal

 

offense under the laws of any jurisdiction, either felony or

 

misdemeanor, not including traffic violations, regardless of

 

whether the offense has been expunged, pardoned, or reversed on

 

appeal or otherwise.

 

(e) Whether the applicant has filed, or had filed against it,

 

a proceeding for bankruptcy within the past 7 years.

 

(f) Whether the applicant has been served with a complaint or

 

other notice filed with any public body regarding payment of any

 

tax required under federal, state, or local law that has been

 

delinquent for 1 or more years.

 

(g) Whether the applicant has a history of noncompliance with

 

any regulatory requirements in this state or any other

 

jurisdiction.

 

(h) Whether at the time of application the applicant is a

 

defendant in litigation involving its business practices.

 

(i) Whether the applicant meets other standards in rules

 

applicable to the license category.

 

(4) Each applicant shall submit with its application, on forms

 

provided by the board, a passport quality photograph and shall

 

ensure that 1 set of fingerprints is submitted to the department of


state police for each person having any ownership interest in the

 

marihuana facility and each person who is an officer, director, or

 

managerial employee of the applicant, in order for the department

 

of state police to conduct a criminal history check on each person

 

and to forward each person's fingerprints to the Federal Bureau of

 

Investigation for a national criminal history check. The applicant

 

shall submit with its application each person's written consent to

 

the criminal history check described in this section and the

 

submission of each person's fingerprints to, and the inclusion of

 

each person's fingerprints in, the state and federal database

 

systems described in subsection (7).

 

(5) The fingerprints required under subsection (4) may be

 

taken by a law enforcement agency or any other person determined by

 

the department of state police to be qualified to take

 

fingerprints. The applicant shall submit a fingerprint processing

 

fee to the department in an amount required under section 3 of 1935

 

PA 120, MCL 28.273, and any costs imposed by the Federal Bureau of

 

Investigation.

 

(6) The department of state police shall conduct a criminal

 

history check on each person described in subsection (4) and shall

 

request the Federal Bureau of Investigation to make a determination

 

of the existence of any national criminal history pertaining to

 

each person. The department of state police shall provide the board

 

with a written report containing the criminal history record

 

information of each person who was the subject of the criminal

 

history check conducted under this section.

 

(7) All of the following apply concerning fingerprints


submitted to the department of state police under this section:

 

(a) The department of state police shall store and retain all

 

fingerprints submitted under this section in an automated

 

fingerprint identification system database that searches against

 

latent fingerprints, and provides for an automatic notification if

 

and when a subsequent fingerprint is submitted into the system that

 

matches a set of fingerprints previously submitted under this

 

section or if and when the criminal history of an individual whose

 

fingerprints are retained in the system is updated. Upon receiving

 

a notification, the department of state police shall immediately

 

notify the board. Information in the database maintained under this

 

subsection is confidential, is not subject to disclosure under the

 

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, and

 

shall not be disclosed to any person except for purposes of this

 

act or for law enforcement purposes.

 

(b) The department of state police shall forward all

 

fingerprints submitted to it under this section to the Federal

 

Bureau of Investigation for submission of those fingerprints into

 

the FBI automatic notification system. This subdivision does not

 

apply until the department of state police is a participant in the

 

FBI automatic notification system. As used in this subdivision:

 

(i) "Automatic notification system" means a system that stores

 

and retains fingerprints, and that provides for an automatic

 

notification to a participant if and when a fingerprint is

 

submitted into the system that matches an individual whose

 

fingerprints are retained in the system or if and when the criminal

 

history of an individual whose fingerprints are retained in the


system is updated.

 

(ii) "FBI automatic notification system" means the automatic

 

notification system that is maintained by the Federal Bureau of

 

Investigation.

 

(8) The board shall review all applications for licenses and

 

shall inform each applicant of the board's decision.

 

(9) A license shall be issued for a 1-year period and is

 

renewable annually. Except as otherwise provided in this act, the

 

board shall renew a license if all of the following requirements

 

are met:

 

(a) The licensee applies to the board on a renewal form

 

provided by the board that requires information prescribed in

 

rules.

 

(b) The application is received by the board on or before the

 

expiration date of the current license.

 

(c) The licensee pays the regulatory assessment under section

 

603.

 

(d) The licensee meets the requirements of this act and any

 

other renewal requirements set forth in rules.

 

(10) The department shall notify the licensee by mail or

 

electronic mail at the last known address on file with the board

 

advising of the time, procedure, and regulatory assessment under

 

section 603. The failure of the licensee to receive notice under

 

this subsection does not relieve the licensee of the responsibility

 

for renewing the license.

 

(11) If a license renewal application is not submitted by the

 

license expiration date, the license may be renewed within 60 days


after its expiration date upon application, payment of the

 

regulatory assessment under section 603, and satisfaction of any

 

renewal requirement and late fee set forth in rules. The licensee

 

may continue to operate during the 60 days after the license

 

expiration date if the license is renewed by the end of the 60-day

 

period.

 

(12) License expiration does not terminate the board's

 

authority to impose sanctions on a licensee whose license has

 

expired.

 

(13) In its decision on an application for renewal, the board

 

shall consider any specific written input it receives from an

 

individual or entity within the local unit of government in which

 

the applicant for renewal is located.

 

(14) A licensee must consent in writing to inspections,

 

examinations, searches, and seizures that are permitted under this

 

act and must provide a handwriting exemplar, fingerprints,

 

photographs, and information as authorized in this act or by rules.

 

(15) An applicant or licensee has a continuing duty to provide

 

information requested by the board and to cooperate in any

 

investigation, inquiry, or hearing conducted by the board.

 

Sec. 403. If the board identifies a deficiency in an

 

application, the board shall provide the applicant with a

 

reasonable period of time to correct the deficiency.

 

Sec. 404. (1) The board shall issue a license only in the name

 

of the true party of interest.

 

(2) For the following true parties of interest, information

 

concerning the indicated individuals must be included in the


disclosures required of an applicant or licensee:

 

(a) For an individual or sole proprietorship: the proprietor

 

and spouse.

 

(b) For a partnership and limited liability partnership: all

 

partners and their spouses. For a limited partnership and limited

 

liability limited partnership: all general and limited partners and

 

their spouses. For a limited liability company: all members,

 

managers, and their spouses.

 

(c) For a privately held corporation: all corporate officers

 

or persons with equivalent titles and their spouses and all

 

stockholders and their spouses.

 

(d) For a publicly held corporation: all corporate officers or

 

persons with equivalent titles and their spouses.

 

(e) For a multilevel ownership enterprise: any entity or

 

person that receives or has the right to receive a percentage of

 

the gross or net profit from the enterprise during any full or

 

partial calendar or fiscal year.

 

(f) For a nonprofit corporation: all individuals and entities

 

with membership or shareholder rights in accordance with the

 

articles of incorporation or the bylaws and their spouses.

 

(3) For purposes of this section, "true party of interest"

 

does not mean:

 

(a) A person or entity receiving reasonable payment for rent

 

on a fixed basis under a bona fide lease or rental obligation,

 

unless the lessor or property manager exercises control over or

 

participates in the management of the business.

 

(b) A person who receives a bonus as an employee if the


employee is on a fixed wage or salary and the bonus is not more

 

than 25% of the employee's prebonus annual compensation or if the

 

bonus is based on a written incentive/bonus program that is not out

 

of the ordinary for the services rendered.

 

Sec. 405. Subject to the laws of this state, before hiring a

 

prospective employee, the holder of a license shall conduct a

 

background check of the prospective employee. If the background

 

check indicates a pending charge or conviction within the past 10

 

years for a controlled substance-related felony, a licensee shall

 

not hire the prospective employee without written permission of the

 

board.

 

Sec. 406. Each license is exclusive to the licensee, and a

 

licensee or any other person must apply for and receive the board's

 

approval before a license is transferred, sold, or purchased. The

 

attempted transfer, sale, or other conveyance of an interest of

 

more than 1% in a license without prior board approval is grounds

 

for suspension or revocation of the license or for other sanction

 

considered appropriate by the board.

 

Sec. 407. (1) If an applicant or licensee fails to comply with

 

this act or rules, if a licensee fails to comply with the marihuana

 

tracking act, if a licensee no longer meets the eligibility

 

requirements for a license under this act, or if an applicant or

 

licensee fails to provide information the board requests to assist

 

in any investigation, inquiry, or board hearing, the board may

 

deny, suspend, revoke, or restrict a license. The board may

 

suspend, revoke, or restrict a license and require the removal of a

 

licensee or an employee of a licensee for a violation of this act,


rules, the marihuana tracking act, or any ordinance adopted under

 

section 205. The board may impose civil fines of up to $5,000.00

 

against an individual and up to $10,000.00 or an amount equal to

 

the daily gross receipts, whichever is greater, against a licensee

 

for each violation of this act, rules, or an order of the board.

 

Assessment of a civil fine under this subsection is not a bar to

 

the investigation, arrest, charging, or prosecution of an

 

individual for any other violation of this act and is not grounds

 

to suppress evidence in any criminal prosecution that arises under

 

this act or any other law of this state.

 

(2) The board shall comply with the administrative procedures

 

act of 1969, 1969 PA 306, MCL 24.201 to 24.328, when denying,

 

revoking, suspending, or restricting a license or imposing a fine.

 

The board may suspend a license without notice or hearing upon a

 

determination that the safety or health of patrons or employees is

 

jeopardized by continuing a marihuana facility's operation. If the

 

board suspends a license under this subsection without notice or

 

hearing, a prompt postsuspension hearing must be held to determine

 

if the suspension should remain in effect. The suspension may

 

remain in effect until the board determines that the cause for

 

suspension has been abated. The board may revoke the license or

 

approve a transfer or sale of the license upon a determination that

 

the licensee has not made satisfactory progress toward abating the

 

hazard.

 

(3) After denying an application for a license, the board

 

shall, upon request, provide a public investigative hearing at

 

which the applicant is given the opportunity to present testimony


and evidence to establish its suitability for a license. Other

 

testimony and evidence may be presented at the hearing, but the

 

board's decision must be based on the whole record before the board

 

and is not limited to testimony and evidence submitted at the

 

public investigative hearing.

 

(4) Except for license applicants who may be granted a hearing

 

at the discretion of the board under subsection (3), any party

 

aggrieved by an action of the board suspending, revoking,

 

restricting, or refusing to renew a license, or imposing a fine,

 

shall be given a hearing before the board upon request. A request

 

for a hearing must be made to the board in writing within 21 days

 

after service of notice of the action of the board. Notice of the

 

action of the board must be served either by personal delivery or

 

by certified mail, postage prepaid, to the aggrieved party. Notice

 

served by certified mail is considered complete on the business day

 

following the date of the mailing.

 

(5) The board may conduct investigative and contested case

 

hearings; issue subpoenas for the attendance of witnesses; issue

 

subpoenas duces tecum for the production of books, ledgers,

 

records, memoranda, electronically retrievable data, and other

 

pertinent documents; and administer oaths and affirmations to

 

witnesses as appropriate to exercise and discharge the powers and

 

duties of the board under this act. The executive director or his

 

or her designee may issue subpoenas and administer oaths and

 

affirmations to witnesses.

 

Sec. 408. (1) Before the board grants or renews any license

 

under this act, the licensee or applicant shall file with the


department proof 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. The proof of financial responsibility may be in the

 

form of cash, unencumbered securities, a liability insurance

 

policy, or a constant value bond executed by a surety company

 

authorized to do business in this state. As used in this section:

 

(a) "Adulterated marihuana" means 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.

 

(b) "Bodily injury" does not include expected or intended

 

effect or long-term adverse effect of smoking, ingestion, or

 

consumption of marihuana or marihuana-infused product.

 

(2) An insured licensee shall not cancel liability insurance

 

required under this section unless the licensee complies with both

 

of the following:

 

(a) Gives 30 days' prior written notice to the department.

 

(b) Procures new proof of financial responsibility required

 

under this section and delivers that proof to the department within

 

30 days after giving the department the notice under subdivision

 

(a).

 

Sec. 409. A state operating license is a revocable privilege

 

granted by this state and is not a property right. Granting a

 

license does not create or vest any right, title, franchise, or

 

other property interest. Each license is exclusive to the licensee,


and a licensee or any other person must apply for and receive the

 

board's and municipality's approval before a license is

 

transferred, sold, or purchased. A licensee or any other person

 

shall not lease, pledge, or borrow or loan money against a license.

 

The attempted transfer, sale, or other conveyance of an interest in

 

a license without prior board approval is grounds for suspension or

 

revocation of the license or for other sanction considered

 

appropriate by the board.

 

Sec. 501. (1) A grower license authorizes the grower to grow

 

not more than the following number of marihuana plants under the

 

indicated license class for each license the grower holds in that

 

class:

 

(a) Class A 500 marihuana plants.

 

(b) Class B 1,000 marihuana plants.

 

(c) Class C 1,500 marihuana plants.

 

(2) Except as otherwise provided in this subsection, a grower

 

license authorizes sale of marihuana plants to a grower only by

 

means of a secure transporter. A grower license authorizes the sale

 

or transfer of seeds, seedlings, or tissue cultures to a grower

 

from another grower without using a secure transporter.

 

(3) A grower license authorizes a grower to transfer marihuana

 

without using a secure transporter to a processor or provisioning

 

center if both of the following are met:

 

(a) The processor or provisioning center occupies the same

 

location as the grower and the marihuana is transferred using only

 

private real property without accessing public roadways.

 

(b) The grower enters each transfer into the statewide


monitoring system.

 

(4) A grower license authorizes sale of marihuana, other than

 

seeds, seedlings, tissue cultures, and cuttings, to a processor or

 

provisioning center.

 

(5) Except as otherwise provided in subsections (2) and (3)

 

and section 505, a grower license authorizes the grower to transfer

 

marihuana only by means of a secure transporter.

 

(6) To be eligible for a grower license, the applicant and

 

each investor in the grower must not have an interest in a secure

 

transporter or safety compliance facility.

 

(7) A grower shall enter all transactions, current inventory,

 

and other information into the statewide monitoring system as

 

required in this act, rules, and the marihuana tracking act.

 

(8) A grower license does not authorize the grower to operate

 

in an area unless the area is zoned for industrial or agricultural

 

uses or is unzoned and otherwise meets the requirements established

 

in section 205(1).

 

Sec. 502. (1) A processor license authorizes purchase of

 

marihuana only from a grower and sale of marihuana-infused products

 

or marihuana only to a provisioning center or another processor.

 

(2) Except as otherwise provided in section 505 and this

 

subsection, a processor license authorizes the processor to

 

transfer marihuana only by means of a secure transporter. A

 

processor license authorizes a processor to transfer marihuana

 

without using a secure transporter to a grower or provisioning

 

center if both of the following are met:

 

(a) The grower or provisioning center occupies the same


location as the processor and the marihuana is transferred using

 

only private real property without accessing public roadways.

 

(b) The processor enters each transfer into the statewide

 

monitoring system.

 

(3) To be eligible for a processor license, the applicant and

 

each investor in the processor must not have an interest in a

 

secure transporter or safety compliance facility.

 

(4) A processor shall enter all transactions, current

 

inventory, and other information into the statewide monitoring

 

system as required in this act, rules, and the marihuana tracking

 

act.

 

Sec. 503. (1) A secure transporter license authorizes the

 

licensee to store and transport marihuana and money associated with

 

the purchase or sale of marihuana between marihuana facilities for

 

a fee upon request of a person with legal custody of that marihuana

 

or money. If a secure transporter has its primary place of business

 

in a municipality that has adopted an ordinance under section 205

 

authorizing that marihuana facility, the secure transporter may

 

travel through any municipality.

 

(2) To be eligible for a secure transporter license, the

 

applicant and each investor with an interest in the secure

 

transporter must not have an interest in a grower, processor,

 

provisioning center, or safety compliance facility.

 

(3) A secure transporter shall enter all transactions, current

 

inventory, and other information into the statewide monitoring

 

system as required in this act, rules, and the marihuana tracking

 

act.


(4) A secure transporter shall comply with all of the

 

following:

 

(a) Each driver transporting marihuana must have a chauffeur's

 

license issued by this state.

 

(b) Each employee who has custody of marihuana or money that

 

is related to a marihuana transaction shall not have been convicted

 

of or released from incarceration for a felony under the laws of

 

this state, any other state, or the United States within the past 5

 

years or have been convicted of a misdemeanor involving a

 

controlled substance within the past 5 years.

 

(c) Each vehicle must be operated with a 2-person crew with at

 

least 1 individual remaining with the vehicle at all times during

 

the transportation of marihuana.

 

(d) A route plan and manifest must be entered into the

 

statewide monitoring system, and a copy must be carried in the

 

transporting vehicle and presented to a law enforcement officer

 

upon request.

 

(e) The marihuana must be transported in 1 or more sealed

 

containers and not be accessible while in transit.

 

(f) A secure transporting vehicle must not bear markings or

 

other indication that it is carrying marihuana or a marihuana-

 

infused product.

 

(5) A secure transporter is subject to administrative

 

inspection by a law enforcement officer at any point during the

 

transportation of marihuana to determine compliance with this act.

 

Sec. 504. (1) A provisioning center license authorizes the

 

purchase or transfer of marihuana only from a grower or processor


and sale or transfer to only an individual 21 years of age or

 

older. Except as otherwise provided in section 505 and this

 

subsection, all transfers of marihuana to a provisioning center

 

from a separate marihuana facility must be by means of a secure

 

transporter. A transfer of marihuana to a provisioning center from

 

a marihuana facility that occupies the same location as the

 

provisioning center does not require a secure transporter if the

 

marihuana is transferred to the provisioning center using only

 

private real property without accessing public roadways.

 

(2) A provisioning center license authorizes the provisioning

 

center to transfer marihuana to or from a safety compliance

 

facility for testing by means of a secure transporter or as

 

provided in section 505.

 

(3) To be eligible for a provisioning center license, the

 

applicant and each investor in the provisioning center must not

 

have an interest in a secure transporter or safety compliance

 

facility.

 

(4) A provisioning center shall comply with all of the

 

following:

 

(a) Sell or transfer marihuana only after it has been tested

 

and bears the label required for retail sale.

 

(b) Enter all transactions, current inventory, and other

 

information into the statewide monitoring system as required in

 

this act, rules, and the marihuana tracking act.

 

(c) Before selling or transferring marihuana, inquire of the

 

statewide monitoring system to determine whether the sale or

 

transfer will exceed the purchasing limit established by the board


under this act.

 

(d) Not allow the sale, consumption, or use of alcohol or

 

tobacco products on the premises.

 

Sec. 505. (1) A safety compliance facility license authorizes

 

the safety compliance facility to do all of the following without

 

using a secure transporter:

 

(a) Take marihuana from, test marihuana for, and return

 

marihuana to only a marihuana facility.

 

(b) Collect a random sample of marihuana at the marihuana

 

facility of a grower, processor, or provisioning center for

 

testing.

 

(2) A safety compliance facility must be accredited by an

 

entity approved by the board by 1 year after the date the license

 

is issued or have previously provided drug testing services to this

 

state or this state's court system and be a vendor in good standing

 

in regard to those services. The board may grant a variance from

 

this requirement upon a finding that the variance is necessary to

 

protect and preserve the public health, safety, or welfare.

 

(3) To be eligible for a safety compliance facility license,

 

the applicant and each investor with any interest in the safety

 

compliance facility must not have an interest in a grower, secure

 

transporter, processor, or provisioning center.

 

(4) A safety compliance facility shall comply with all of the

 

following:

 

(a) Perform tests to certify that marihuana is reasonably free

 

of chemical residues such as fungicides and insecticides.

 

(b) Use validated test methods to determine


tetrahydrocannabinol, tetrahydrocannabinol acid, cannabidiol, and

 

cannabidiol acid levels.

 

(c) Perform tests that determine whether marihuana complies

 

with the standards the board establishes for microbial and

 

mycotoxin contents.

 

(d) Perform other tests necessary to determine compliance with

 

any other good manufacturing practices as prescribed in rules.

 

(e) Enter all transactions, current inventory, and other

 

information into the statewide monitoring system as required in

 

this act, rules, and the marihuana tracking act.

 

(f) Have a secured laboratory space that cannot be accessed by

 

the general public.

 

(g) Retain and employ at least 1 staff member with a relevant

 

advanced degree in a medical or laboratory science.

 

Sec. 601. (1) A tax is imposed on each provisioning center at

 

the rate of 3% of the provisioning center's gross retail receipts.

 

By 30 days after the end of the calendar quarter, a provisioning

 

center shall remit the tax for the preceding calendar quarter to

 

the department of treasury accompanied by a form prescribed by the

 

department of treasury that shows the gross quarterly retail income

 

of the provisioning center and the amount of tax due, and shall

 

submit a copy of the form to the department.

 

(2) The taxes imposed under this section shall be administered

 

by the department of treasury in accordance with 1941 PA 122, MCL

 

205.1 to 205.31, and this act. In case of conflict between the

 

provisions of 1941 PA 122, MCL 205.1 to 205.31, and this act, the

 

provisions of this act prevail.


Sec. 602. (1) The marihuana excise fund is created in the

 

state treasury.

 

(2) Except for the application fee under section 401, the

 

regulatory assessment under section 603, and any local fees, all

 

money collected under section 601 and all other fees, fines, and

 

charges, imposed under this act must be deposited in the marihuana

 

excise fund. The state treasurer shall direct the investment of the

 

fund. The state treasurer shall credit to the fund interest and

 

earnings from fund investments.

 

(3) Money in the marihuana excise fund at the close of the

 

fiscal year remains in the fund and does not lapse to the general

 

fund.

 

(4) The state treasurer is the administrator of the marihuana

 

excise fund for auditing purposes.

 

(5) The money in the marihuana excise fund must be allocated,

 

upon appropriation, as follows:

 

(a) 25% to municipalities in which a marihuana facility is

 

located, allocated in proportion to the number of marihuana

 

facilities within the municipality.

 

(b) 30% to counties in which a marihuana facility is located,

 

allocated in proportion to the number of marihuana facilities

 

within the county.

 

(c) 5% to counties in which a marihuana facility is located,

 

allocated in proportion to the number of marihuana facilities

 

within the county. Money allocated under this subdivision must be

 

used exclusively to support the county sheriffs and must be in

 

addition to and not in replacement of any other funding received by


the county sheriffs.

 

(d) 30% to this state for the following:

 

(i) Until September 30, 2019, for deposit in the general fund

 

of the state treasury.

 

(ii) Beginning October 1, 2019, for deposit in the first

 

responder presumed coverage fund created in section 405 of the

 

worker's disability compensation act of 1969, 1969 PA 317, MCL

 

418.405.

 

(e) 5% to the Michigan commission on law enforcement standards

 

for training local law enforcement officers.

 

(f) 5% to the department of state police.

 

Sec. 603. (1) A regulatory assessment is imposed on certain

 

licensees as provided in this section. All of the following shall

 

be included in establishing the total amount of the regulatory

 

assessment established under this section:

 

(a) The department's costs to implement, administer, and

 

enforce this act, except for the costs to process and investigate

 

applications for licenses supported with the application fee

 

described in section 401.

 

(b) Expenses of marihuana-related legal services provided to

 

the department by the department of attorney general.

 

(c) Expenses of marihuana-related services provided to the

 

department by the department of state police.

 

(d) Expenses of marihuana-related services provided by the

 

department of treasury.

 

(e) $500,000.00 to be allocated to the department for

 

expenditures of the department for licensing substance use disorder


programs.

 

(f) An amount equal to 5% of the sum of the amounts provided

 

for under subdivisions (a) to (d) to be allocated to the department

 

of health and human services for substance-abuse-related

 

expenditures including, but not limited to, substance use disorder

 

prevention, education, and treatment programs.

 

(g) Expenses related to the standardized field sobriety tests

 

administered in enforcing the Michigan vehicle code, 1949 PA 300,

 

MCL 257.1 to 257.923.

 

(h) An amount sufficient to provide for the administrative

 

costs of the Michigan commission on law enforcement standards.

 

(2) The regulatory assessment is in addition to the

 

application fee described in section 401, the tax described in

 

section 601, and any local licensing fees.

 

(3) The regulatory assessment shall be collected annually from

 

licensed growers, processors, provisioning centers, and secure

 

transporters. The regulatory assessment for a class A grower

 

license shall not exceed $10,000.00.

 

(4) Beginning in the first year marihuana facilities are

 

authorized to operate in this state, and annually thereafter, the

 

department, in consultation with the board, shall establish the

 

total regulatory assessment at an amount that is estimated to be

 

sufficient to cover the actual costs and support the expenditures

 

listed in subsection (1).

 

(5) On or before the date the licensee begins operating and

 

annually thereafter, each grower, processor, provisioning center,

 

and secure transporter shall pay to the state treasurer an amount


determined by the department to reasonably reflect the licensee's

 

share of the total regulatory assessment established under

 

subsection (4).

 

Sec. 604. (1) The marihuana regulation fund is created in the

 

state treasury.

 

(2) The application fee collected under section 401 and the

 

regulatory assessment collected under section 603 shall be

 

deposited in the marihuana regulation fund. The state treasurer

 

shall direct the investment of the fund. The state treasurer shall

 

credit to the fund interest and earnings from fund investments.

 

(3) Money in the marihuana regulation fund at the close of the

 

fiscal year shall remain in the fund and shall not lapse to the

 

general fund.

 

(4) The department shall be the administrator of the marihuana

 

regulation fund for auditing purposes.

 

(5) Except as provided in section 603(1)(d) and (e), the

 

department shall expend money from the marihuana regulation fund,

 

upon appropriation, only for implementing, administering, and

 

enforcing this act.

 

Sec. 701. By 30 days after the end of each state fiscal year,

 

each licensee shall transmit to the board and to the municipality

 

financial statements of the licensee's total operations. The

 

financial statements shall be reviewed by a certified public

 

accountant in a manner and form prescribed by the board. The

 

certified public accountant must be licensed in this state under

 

article 7 of the occupational code, 1980 PA 299, MCL 339.720 to

 

339.736. The compensation for the certified public accountant shall


be paid directly by the licensee to the certified public

 

accountant.

 

Sec. 702. The board shall submit with the annual report to the

 

governor under section 302(k) and to the chairs of the legislative

 

committees that govern issues related to marihuana facilities a

 

report covering the previous year. The report shall include an

 

account of the board actions, its financial position, results of

 

operation under this act, and any recommendations for legislation

 

that the board considers advisable.

 

Sec. 801. (1) The marihuana advisory panel is created within

 

the department.

 

(2) The marihuana advisory panel consists of 17 members,

 

including the director of state police or his or her designee, the

 

director of this state's department of health and human services or

 

his or her designee, the director of the department or his or her

 

designee, the attorney general or his or her designee, the director

 

of the department of agriculture and rural development or his or

 

her designee, and the following members appointed by the governor:

 

(a) One representative of the industry from the growers

 

category.

 

(b) One representative of the industry from the processors

 

category.

 

(c) One representative of the industry from the provisioning

 

centers category.

 

(d) One representative of the industry from the safety

 

compliance facilities category.

 

(e) One representative of townships.


(f) One representative of cities and villages.

 

(g) One representative of counties.

 

(h) One representative of sheriffs.

 

(i) One representative of local police.

 

(j) One representative of the industry from the secure

 

transporter category.

 

(3) The governor shall appoint the first members of the panel

 

by March 1, 2019. The members appointed to the panel shall serve at

 

the pleasure of the governor and shall serve for terms of 3 years

 

or until a successor is appointed, whichever is later.

 

(4) If a vacancy occurs on the advisory panel, the governor

 

shall make an appointment for the unexpired term in the same manner

 

as the original appointment.

 

(5) The director of the department or his or her designee

 

shall call the first meeting of the panel within 1 month after the

 

advisory panel is appointed. At the first meeting, the panel shall

 

elect from among its members a chairperson and any other officers

 

it considers necessary or appropriate. After the first meeting, the

 

panel shall meet at least 2 times each year, or more frequently at

 

the call of the chairperson.

 

(6) A majority of the members of the panel constitute a quorum

 

for the transaction of business. A majority of the members present

 

and serving are required for official action of the panel.

 

(7) The business that the panel performs must be conducted at

 

a public meeting held in compliance with the open meetings act,

 

1976 PA 267, MCL 15.261 to 15.275.

 

(8) A writing prepared, owned, used, in the possession of, or


retained by the panel in the performance of an official function is

 

subject to the freedom of information act, 1976 PA 442, MCL 15.231

 

to 15.246.

 

(9) Members of the panel shall serve without compensation.

 

However, members of the panel may be reimbursed for their actual

 

and necessary expenses incurred in the performance of their

 

official duties as members of the panel.

 

(10) The panel may make recommendations to the board

 

concerning promulgation of rules and, as requested by the board or

 

the department, the administration, implementation, and enforcement

 

of this act and the marihuana tracking act.

 

(11) State departments and agencies shall cooperate with the

 

panel and, upon request, provide it with meeting space and other

 

necessary resources to assist it in the performance of its duties.

 

Enacting section 1. Sections 6, 7, 8, 9, 10, 11, 12, 13, 14,

 

and 16 of the Michigan Regulation and Taxation of Marihuana Act,

 

2018 IL 1, MCL 333.28106, 333.28107, 333.28108, 333.28109,

 

333.28110, 333.28111, 333.28112, 333.28113, 333.28114, and

 

333.28116, are repealed.