by Scott McClallen
The agency that regulates the marijuana market in Michigan has clarified rules to sell product legally to adult residents, making it easier for small businesses to enter the market.
Michigan’s Marijuana Regulatory Agency said it plans to accept business applications through Nov. 1 and are required to begin approving businesses by Dec. 6.
Michigan Gov. Gretchen Whitmer established the MRA to regulate medical and recreational marijuana in the state and to implement a fair and effective market for Michigan residents.
The MRA set no capital minimums for the adult-use market after several citizens complained that small businesses don’t have enough startup capital to compete with corporate companies.
Medical marijuana licensees previously had to prove they had $200,000 to $500,0000 in assets, with one-fourth liquidity.
The new laws give new license types for temporary events, micro-businesses, and social-use facilities.
“The race to be the first to get applications submitted and approved has now officially begun,” said Josh Hovey, spokesman for the Michigan Cannabis Industry Association. “Every business in the state that is looking at this industry … they’re putting on their running shoes.”
There’s no legal way for the general public to purchase cannabis without a medical marijuana card until recreational sales begin in 2020.
Adult-use applications will be expedited for those who already have medical marijuana licenses.
Buying and selling marijuana is still illegal until Jan. 1, but by law, Michigan adult residents can “gift” up to 2.5 oz. or 15 grams of concentrate for free to another Michigan adult.
Entrepreneurs that run businesses that sell expensive products (say, a $100 hat, or $50 chocolate) can also offer a “free” marijuana gift.
But John Fraser, associate attorney at Grewal Law P.L.L.C, told The Center Square that business owners operating through this grey area could find themselves facing a felony marijuana delivery charge and up to four years in prison, depending on the quantity of the “gift”.
“Some businesses try to run a business in a way that you buy some token item, and the weed is just a free gift,” Fraser said. “I personally think that’s a bogus transaction and I suspect those doing business that way could find themselves facing criminal charges.”
Companies can deliver marijuana if the buyer is a registered medical marijuana cardholder and lives at a designated consumption establishment.
Driving under the influence, public consumption, and buying or selling marijuana can still get individuals fined or arrested.
Michigan adults can grow up to 12 marijuana plants per household, but the plants should be secured indoors, or outside in a locked enclosure that is not easily visible from public areas.
Growing in rental properties is subject to landlord approval.
Consuming in a vehicle is a civil infraction, and driving while under the influence could be considered a DUI charge if proven that the driver was impaired.
No roadside test can indicate how high someone is because marijuana can stay in one’s system for up to 90 days contingent upon use and body fat percentage.
All business applicants also must submit social equity plans to promote participation in communities most impacted by past marijuana laws.
Andrew Brisbo, MRA executive director, said the group plans to give stakeholders four months for businesses to get licenses and build inventory for recreational marijuana sales in 2020.
“Giving local municipalities, other state agencies, and potential business owners enough time to plan and prepare will allow for a successful rollout of the new adult-use marijuana law, Brisbo said.
The state has created an “excess growth” license that allows growers to exceed their allotment to fill a marijuana shortage.
MRA has already processed more than 180,000 applications for medical marijuana cards and cleared a backlog of 800 marijuana facility license applications over the past year.
Michigan is the first state in the Midwest to legalize recreational marijuana and is the 11th in the U.S.
– – –
Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.