New Emergency Rules Lay Out Recreational Industry in Michigan

The people of Michigan are one step closer to the development of their recreational marijuana industry. Governor Gretchen Whitmer signed a set of emergency rules into effect on Wednesday that detail licensing applications and the difference between the state’s recreational and medicinal systems.

Voters approved a ballot measure authorizing the legalization of recreational marijuana last November. Licenses for the recreational industry are expected to be on offer in the state before year’s end. 

Key among the changes offered is the elimination of a requirement that medical marijuana entrepreneurs have between $150,000 and $500,000 in capital, a requirement that has proven prohibitive to many hoping to enter the industry. A three tier system will establish higher fees for larger businesses, instead of the flat rate for all companies that before stood at $66,000. Under the new rules, growers who plan to raise under 150 plants will be able to process and sell cannabis from the same address. 

Also among the regulations are provisions for the establishment of smoking lounges at special events and retailers, provided that such venues do not sell food and alcoholic beverages. This will open the door to legal Cannabis Cup-type contests, and cafe-like gathering spaces (sans other refreshments.)

That pleased business owner associations like the Michigan Cannabis Industry Association, whose spokesperson Josh Hovey told the Detroit Free Press; “We particularly like that there are no capitalization requirements, which should help make licenses more accessible to small-business owners, and there is a strong demand for on-site consumption and cannabis-friendly special events, so we also are thankful that there will be licensing available for businesses that cater to this need.”

Other rules included in the new package include the prioritization of recreational license applications for medical marijuana license holders, and the ability of growers and processors to offer free samples to employees. 

By the end of the month, the state’s Marijuana Regulatory Agency also plans on releasing information on its social equity plan, the government’s program to level the playing field for disadvantaged communities that have been disproportionately affected by cannabis prohibition. Also TBD are potency restrictions for recreational cannabis products.

Regulations will not take effect for months — and the expiration date on the emergency rules is in half a year — but the rules were released primarily so that local jurisdictions will be able to make an informed decision on whether they will be the site of recreational marijuana businesses. The director of the state’s Marijuana Regulatory Agency took a call with reporters to speak about these new rules.

“It provides clarity on the state’s approach on establishing the regulatory program and doing so in a way that is consistent as possible with the standards in the medical market that exist now,” said Andrew Brisbo. “And doing so in a way that provides adequate time for municipalities to evaluate what we put in the rules, and to make a determination on how the municipality wants to approach this new market before we start taking applications.”