Marijuana Licensing

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FY25 Budget Recommendation – elimination of monthly Metrc subscription fee

LANSING, MI – February 16, 2024: Cannabis Regulatory Agency (CRA) Executive Director Brian Hanna applauded Governor Gretchen Whitmer’s Fiscal Year (FY) 2025 Executive Budget Recommendation, which includes additional support for the agency’s initiatives.

This year’s budget is balanced, fiscally responsible, does not raise taxes on Michiganders, and contains support for key CRA initiatives, including:

  • Eliminating the monthly subscription fees that licensees currently pay to access the statewide monitoring system
  • Increased support to combat illicit activity in the cannabis market
  • Improved enforcement efforts and workload management within the Licensing Division
  • Reducing wait times for fire safety inspections

“We are excited to continue moving forward with support for our key initiatives, which stakeholders have indicated are important for a thriving and growing cannabis market,” said Hanna. “By removing the burden and cost of the monthly subscription to the statewide monitoring system, the CRA is investing in the stability and long-term success of the legal market. Increased support for combating illicit activity, improving enforcement efforts, and increasing safety with fire inspections will help us continue to support our state’s licensed businesses.”

“We applaud Governor Whitmer for putting forward a comprehensive budget for our program that will address a number of urgent requests from our members,” said Robin Schneider, executive director of the Michigan Cannabis Industry Association (MiCIA). “The budget contains several important allocations that will increase safety, reduce businesses’ regulatory costs, and increase profitability for law abiding operators by increasing enforcement against illicit activity in our market. As we work toward the continued improvement of our industry, we appreciate the Michigan Cannabis Regulatory Agency’s willingness to listen to our concerns and take action to address them.”

CRA Issues $212,000 Fine and 30-Day Suspension of Vassar Licensee

January 25, 2024 – Today, the Cannabis Regulatory Agency (CRA) issued a $212,000 fine and a 30-day suspension of 664 Vassar, LLC, dba Premier Provisioning Center #2, located at 664 State Rd., Vassar, Michigan 48768.

664 Vassar, LLC’s license shall be suspended from Saturday, February 3, 2024 through Sunday, March 3, 2024.

On April 21, 2022, the CRA visited 664 Vassar, LLC to conduct a compliance check and found the following at its facility:

  • Several clear totes containing expired marijuana products including distillate carts, medicated syrup, gummies, and chocolates stored in the “bathroom area” located upstairs in the northern most east backroom. This product was not under video surveillance.
  • 15 separate strains of individually bagged untagged flower in a large black garbage bag located in the upstairs central storage area. This product was not under video surveillance.
  • Untagged “House wax” in individual 1-gram jars and 1-ounce sheets. This product was not under video surveillance.
  • Approximately 38 jars of house wax on the sales floor and several sheets of house wax on the sales floor. Both products, although in different forms, contained the same statewide monitoring system (Metrc) tag number.
  • Chemicals – specifically, Round Up pesticide – stored on the landing area leading to the upstairs where marijuana product is stored.
  • Several hundred small, 1-gram jars of caregiver “house wax,” a marijuana product, stored in cardboard boxes.
  • Untagged medicated syrup called ‘Chill Medicated,” a marijuana product.

On April 22, 2022, the CRA requested video surveillance footage from all camera views for the past 30 days. 664 Vassar, LLC provided the requested footage on May 10, 2022 but the video footage would not play completely and did not show how the abovementioned products entered the facility. 664 Vassar, LLC was unable to provide a working copy of 30 days of video surveillance footage as requested by the CRA.

Further details can be found in the related formal complaints and consent orders:

Adult-Use Consent Order and Stipulation

Adult-Use Amended First Superseding Formal Complaint

Medical Consent Order and Stipulation

Medical First Superseding Formal Complaint

664 Vassar, LLC must comply with the following within 40 days:

  • Provide updated standard operating procedures (SOPs) for the following: the statewide monitoring system (Metrc), sales and transfers of marijuana and marijuana product, video surveillance system, storage of marijuana and marijuana products, and storage of chemicals and solvents. 664 Vassar, LLC must correct any deficiencies identified by the CRA within 30 days of receipt of the deficiency notice unless agreed upon by the CRA in writing.
  • 664 Vassar, LLC must train all managers and employees on the updated SOPs, and provide a document, signed by a manager, with the names and positions of all managers and employees trained, dates of completion for each; and provide a written training agenda, and copies of all training materials.

664 Vassar, LLC must comply with the following terms within 160 days:

  • 664 Vassar, LLC must schedule a date to destroy all of the untagged marijuana and marijuana product at issue in paragraph 6.b. in the amended first superseding formal complaint in the presence of a CRA staff member and provide video surveillance proof demonstrating compliant destruction.
  • 664 Vassar, LLC must conduct an inventory audit and provide a report to the CRA demonstrating that its physical inventory matches inventory in Metrc and explaining any discrepancies.

CRA Administrative Rules Correction: National Poison Control Hotline phone number UPDATE

An error in the Cannabis Regulatory Agency’s administrative rules has been corrected.

Old/incorrect:

• 504(4) “National Poison Control Center Hotline 1-800-222-1212,”

New/correct:

• 504(4) “National Poison Control Center Hotline 1-800-222-1222,”

CRA Adds Former Licensee to Michigan’s Marijuana Industry Exclusion List

December 14, 2023 – On November 14, 2023, the Cannabis Regulatory Agency issued a consent order and stipulation, resolving the formal complaint that had been issued on March 31, 2023, against the medical marijuana provisioning center license PC-000254 of Clark Street Investment Group Inc. dba The Reef, located at 6640 E. 8 Mile Road, Detroit, Michigan 48234.

Clark Street Investment Group Inc. dba The Reef and Anthony Czuchra are permanently prohibited from applying for or otherwise seeking any new marijuana business license in the State of Michigan; exercising managerial control over a such a business; or otherwise meeting the criteria to be deemed an applicant, supplemental applicant, or otherwise subject to a background investigation of any such business.

In addition, Clark Street Investment Group Inc. dba The Reef and Mr. Czuchra are permanently prohibited from obtaining any new ownership interest in a licensed marijuana business in the State of Michigan. Mr. Czuchra is permanently prohibited from being employed or working in any capacity at a licensed marijuana business in the State of Michigan, including but not limited to, performing the functions of a regular or managerial employee, rendering any services as an independent contractor, or rendering any services via another party.

The following lapsed or closed licenses held by Clark Street Investment Group Inc. dba The Reef and Anthony Czuchra, will not be renewed, reinstated, reissued, or reactivated, limited or otherwise, at any future date: PC-000254, GR-C-0001040, GR-C-0001041, GR-C-0001021.

On October 13, 2022, the CRA received a complaint alleging Clark Street Investment Group Inc. dba The Reef was selling marijuana product to individuals without a medical marijuana card. On November 29th, CRA investigators made an unannounced site visit to the provisioning center.

The factual allegations are detailed in the formal complaint and resulted in 14 counts of violated administrative rules in the following categories:

  • Licensees may sell or transfer marijuana to a registered qualifying patient or registered primary caregiver only after it has been tested and bears the label required for retail sale.
  • Licensees must accurately identify, enter, and track all transactions, current inventory, and other information into the statewide monitoring system as required.
  • Licensees must not have marijuana products that are not identified and recorded in the statewide monitoring system, nor without a batch number or identification tag or label.
  • Marijuana product that is to be destroyed or is considered waste must be rendered into an unusable and unrecognizable form.
  • Licensees must securely lock the marijuana business.
  • Licensees must ensure the video surveillance system records any areas where marijuana products are weighed, packed, stored, loaded, and unloaded for transportation, prepared, or moved within the marijuana business.
  • Marijuana products sold or transferred must be clearly labeled with the tracking identification numbers assigned by the statewide monitoring system affixed, tagged, or labeled and recorded, and any other information required. Before a marijuana product is sold or transferred, the container, bag, or product holding the marijuana product must be sealed and labeled with all of the required information.
  • Licensees may not advertise a marijuana product in a way that is deceptive, false, or misleading, or make any deceptive, false, or misleading assertions or statements on any marijuana product, sign, or document provided.
  • Licensees must ensure that employees handle marijuana product in compliance with Current Good Manufacturing Practice, Hazard Analysis, and Risk Based Preventative Controls for Human Food, 21 CFR part 1107.
  • Consumption of food and beverages by employees or visitors is prohibited where marijuana product is stored, processed, or packaged or where hazardous materials are used, handled, or stored.

Clark Street Investment Group Inc. dba The Reef and Anthony Czuchra have been added to Michigan’s marijuana industry exclusion lists, which are available online and include individuals excluded from participating in the licensed marijuana industry in Michigan.

Licensees must screen prospective employees, supplemental applicants, and owners against the exclusion list as they are prohibited from employing excluded individuals or allowing them to be supplemental applicants on a license.

Metrc: Accurate Tracking Tips from CRA

December 1, 2023:  To further assist licensees achieve compliance through accurate tracking, the Cannabis Regulatory Agency is providing guidance for a couple of issues found during compliance audits.

Notice to Cultivators, Producers and Sales Locations Re: Packaging Pre-rolls as Count-Based Products

If an item is pre-weighed and sold by the unit, the Metrc item category should be a count-based item. If an item is weighed just prior to sale, a weight-based category should be used.

Packages of raw pre-rolls should be created as Shake/Trim (prepackaged).

If the weight of a single pre-roll is 1 gram and the package is sold individually, then the unit weight should be 1 gram.

If the 1 gram pre-roll is sold in 5 packs, then the unit weight should be 5 grams.

It is important to check the unit weight of all items created before distribution to ensure it is accurate. Inaccurate unit weights can appear as oversales. For example: if the unit weight for a 1 gram pre-roll is inaccurately entered as 1oz, every time a sales location sells the 1 gram pre-roll the transaction amount will show 1oz. If a customer buys three 1 gram pre-rolls, the transaction will exceed the allowable limit of 2.5oz.

Notice to Sales Locations Re: Transaction Limit for Concentrate Products

Adult-use consumers may not purchase more than 15 grams of concentrate in a single transaction, which includes any combination of the following: inhalable compound concentrates (infused pre-rolls, moonrocks), concentrates (shatter, live resin) and vape carts.

The CRA will be auditing sales transactions in Metrc. Any retailers found to sell more than 15 grams of concentrate in a single transaction to adult-use consumers are in violation of R 420.506(3) and are at risk for disciplinary action.

Questions regarding the categorization and packaging of products in Metrc can be sent to CRA-Compliance@michigan.gov.

Questions regarding purchasing and transaction limits can be sent to CRA-Enforcement@michigan.gov.

CRA Summarily Suspends the Processing Licenses of Michigan Investments 10 in Pinconning

Today, the Cannabis Regulatory Agency (CRA) summarily suspended the medical and adult-use marijuana processor licenses of Michigan Investments 10, Inc., located at 772 E. Pinconning Rd., Pinconning, Michigan. The CRA determined that the safety or health of patrons or employees is jeopardized by Michigan Investments 10’s continued operation and that the public health, safety, or welfare requires emergency action.

Michigan Investments 10 currently holds a medical processor license (PR-000165) under the Medical Marihuana Facilities Licensing Act (MMFLA), and an adult-use marijuana processor license (AU-P-000171) under the Michigan Regulation and Taxation of Marihuana Act (MRTMA). Following an investigation, the CRA determined that both businesses violated numerous administrative rules under the MRTMA and MMFLA.

The CRA discovered the alleged violations after the agency conducted onsite inspections and reviews of statewide monitoring system (Metrc) data. The CRA’s investigation revealed that the businesses incorrectly entered data in Metrc, failed to properly track large quantities of product in Metrc, had product that was missing Metrc tags and could not be traced to the legal market, and could not physically locate numerous products that were in their Metrc inventory.

The CRA’s complaints also allege that Michigan Investments 10 failed to follow proper sampling and testing procedures. Specifically, the CRA alleges that the businesses failed to produce proper quantities of product for sampling to be tested and failed to properly enter test results into Metrc. Further, product that was tested at different stages showed inconsistent results. The manager of the adult-use business admitted the business used product that failed testing to “circumvent testing” requirements.

While on-site, CRA agents observed that the businesses did not have properly locked and secured doors and that video surveillance was not fully functioning or located in the correct areas. Additionally, the CRA determined that the businesses were not properly monitoring waste areas and failed to provide standard operating procedures for waste upon request.

Further details can be found in formal complaints the CRA issued today against the adult-use license and the medical license.

The CRA also issued a public health and safety bulletin regarding the affected marijuana products in conjunction with the formal complaints and summary suspension orders. The affected products are marketed under the brand “Muha Meds” and consist of vape cartridges, infused pre-rolls, and gummies.

Cannabis Regulatory Agency Announces Programs to Support Michigan’s Veterans

In order to further support Michigan’s armed services veterans, the Cannabis Regulatory Agency (CRA) announced today two new programs aimed at serving Michigan’s veteran population.

Task Force 1620 – a program that recognizes CRA licensees that have programming set up for safe and affordable cannabis access for veterans – and the Veteran Recognition Program – which will recognize veteran-owned cannabis businesses in Michigan – will help the CRA provide support to veterans who call Michigan home.

“This is personal to me,” said CRA Executive Director Brian Hanna, who served as a captain in the US Army Reserve from 2006 through 2012 and earned the Bronze Star Medal and the Combat Action Badge for his 2010-2011 deployment to Afghanistan. “I understand the struggles that my fellow veteran brothers and sisters go through after returning to civilian life. Many veterans have told me that cannabis helps their PTSD symptoms and allows them to work and live without having to rely on powerful, addictive painkillers. These new programs will assist Michigan’s veterans by connecting them with cannabis retailers who are willing to assist.”

“As a disabled veteran, I commend the CRA’s commitment to Michigan’s veterans,” said Anton Harb Jr., an Iraq combat veteran and founder of the Veteran Access Program in Michigan. “Support for veterans was a key component of the ballot proposal when Michigan voters legalized cannabis in 2018, and I’m proud to see our state leading the country, once again, by providing these programs to our veterans.”

Task Force 1620

Licensees who have implemented a veteran access program that offers cannabis to veterans at a 75-100% discounted rate are eligible to participate in the CRA’s new Task Force 1620 program.

Retailers in Task Force 1620 will have complete flexibility regarding the details of their veteran access program and may set their own parameters on all aspects, including:

  • The max amount donated/given per veteran
  • What percentage of disability qualifies a veteran for their program
  • What amount per week/month will be donated
  • The number of veterans in their program

Licensees who are approved to participate in Task Force 1620 will have their business information and veteran access program published on the CRA webpage. They will also receive a seal to display at their facility.

The Task Force 1620 program is available to businesses licensed under the Medical Marijuana Facility Licensing Act (MMFLA) and the Michigan Regulation and Taxation of Marijuana Act (MRTMA). To participate in Task Force 1620, a licensee’s business does not need to be majority-owned by a veteran.

To be a part of Task Force 1620, businesses should apply on the CRA website. Questions regarding the Task Force 1620 program should be emailed to CRA-SocialEquity@michigan.gov.

Veteran Recognition Program

The CRA’s new Veteran Recognition Program (VRP) will recognize those CRA-licensed businesses which are majority-owned by veterans of the US armed forces. When a business is approved to be part of the VRP, it will receive a recognition letter and seal from the CRA. The ownership structure provided to licensing during the application/amendment process will be used to determine the percentage of veteran ownership. Approved licensees will have their business name and license number listed on the CRA’s website.

This program is available to businesses licensed under the Medical Marijuana Facility Licensing Act (MMFLA) and the Michigan Regulation and Taxation of Marijuana Act (MRTMA).

To apply to be a part of the Veteran Recognition Program, businesses should apply on the CRA website. Questions regarding the Veteran Recognition Program should be emailed to CRA-SocialEquity@michigan.gov.

MI Social Equity Program – MMMP Caregiver Discount Eligibility Update from CRA

The Cannabis Regulatory Agency (CRA) has announced an update to the caregiver criteria portion of the Social Equity Program which will allow caregivers an expanded opportunity to qualify for the fee reduction while also bringing it into alignment with the retention and disposal schedule established by the Michigan Medical Marijuana Program.

As per the new criteria, beginning October 1, 2023, an individual must have at least two years of caregiver experience – as a registered primary caregiver under the Michigan Medical Marihuana Act – in the last five years to qualify for the 10% caregiver fee reduction.

Participants in the Social Equity Program who are already receiving the 10% caregiver fee reduction will continue to be eligible for the fee reduction as long as their Social Equity eligibility status continues to be renewed. These changes will only affect those who are seeking the fee reduction for the first time.

For questions regarding the Social Equity Program, please email CRA-SocialEquity@michigan.gov or contact the CRA’s social equity team by phone at 517-284-8599.

Ex-House Speaker Rick Johnson sentenced to 55 months in federal prison for taking bribes

This story was reprinted with permission from Crain’s Detroit and written by David Eggert.

Former Michigan House Speaker Rick Johnson was sentenced to 55 months in federal prison Thursday for taking at least $110,200 worth of bribes, including lobbyist-funded sex with a prostitute, while he chaired the state’s nascent medical marijuana licensing board.

Johnson, 70, of LeRoy, Michigan, helped the bribe payers — a Detroit-area businessman and two Lansing-based lobbyists — by assisting their companies and clients through the process, providing confidential information about the five-member board’s work and that of other applicants, and ultimately voting to approve the applications. In return, he accepted no fewer than 38 cash payments between June 2017 and February 2019, a $20,000 “loan,” $2,000 worth of sex with a woman in the adult entertainment industry and two trips on private jets to meet with Canadian investors in a company seeking licensure. The flights were valued at $8,200.

U.S. District Judge Jane Beckering sentenced Johnson in Grand Rapids, two weeks after she sentenced 71-year-old John Dawood Dalaly of West Bloomfield to 28 months. Johnson, Dalaly and lobbyists Vincent Brown of Royal Oak and Brian Pierce of Midland pleaded guilty in April and agreed to cooperate as part of deals. That suggested more people could be charged, though no one else has been to date.

Johnson “corrupted the process for the state’s issuance of licenses for businesses to operate in a new and lucrative industry,” prosecutors wrote in a court filing this month in which they asked for a sentence of at least six years and a $110,200 fine.

“Those who were denied a license by the (Medical Marijuana Licensing Board) now may wonder whether they had a fair and equal opportunity to compete in the industry. Law-abiding qualified applicants who did not have the ultimate insider ‘on the take’ may have struggled with understanding and navigating what became a tedious and lengthy application and approval process,” assistant U.S. attorneys Christopher O’Connor and Clay Stiffler wrote. “At the very least, although the government has no evidence that Johnson’s receipt of bribe payments prevented other qualified applicants from ultimately obtain licenses, Johnson’s crime has significantly damaged the trust that law-abiding citizens placed in his work as MMLB Chair and in state government.”

Johnson’s lawyer, Nicholas Dondzila, had recommended leniency, urging the judge to take into account factors such as his “substantial and material assistance” to investigators, others’ support for him, his public service and lack of a prior criminal history.

Johnson, a Republican, was House speaker from 2001 through 2004 before being term-limited. He was a partner in a multi-client firm in Lansing with Democratic former House Speaker Lou Dodak — Dodak Johnson & Associates — and was named to the newly created licensing board in 2017 by then-Gov. Rick Snyder after dropping his lobbying registration.

The appointment was controversial because Johnson had worked on the legislation to regulate medical marijuana but claimed he had no paying clients. He also had been negotiating the sale of his stake in the firm to Pierce, a marijuana industry lobbyist who had worked on the bills as a legislative staffer, before later selling it to Dodak, according to the Detroit Free Press.

Pierce and Brown will be sentenced Oct. 18.

Michigan Cannabis Sales Set a Monthly Record in June 2023

Michigan cannabis sales rose 6.0% in June from the longer May to a record $260.8 million. On a per-day basis, sales grew 8.8%. The growth of 39.2% from a year ago was up from the 31.9% level last month:

The Michigan Cannabis Regulatory Agency breaks out sales by medical and adult-use, with medical sales falling 69.1% from a year ago to $6.6 million, down 5.8% sequentially, and adult-use sales expanding 53.2% year-over-year to $254.2 million, up 6.4% sequentially:

The state breaks out sales by category and provides pricing detail by category, for both medical and adult-use:

MEDICAL/MMFLA CANNABIS SALES

ADULT USE CANNABIS SALES

As supply continues to expand, flower pricing for adult-use has seen a dramatic decline. In May, the average price of $1428 per pound fell sequentially, losing 1.5% and falling 27.1% from a year ago:

Michigan cannabis sales expanded 82.1% in 2021 to $1.79 billion and were up 27.9% in 2022 at $2.29 billion. So far in 2023, sales have grown 38.5% compared to the first six months of 2022. The program should continue to expand ahead as supply becomes more available and as distribution expands.