Update II: We have been informed that METRC’s report to the state that 85% of licensees were in arrears was erroneous; METRC now reports that 11% of Michigan licensees are affected.

Update I: The CRA has had METRC agree to a 30-day pause before suspending any accounts. We will continue to monitor and report on updates as they unfold.

Related News: Michigan’s marijuana industry nearly shut down over new tracking system service provider fees

On February 27, 2023, Dykema’s Cannabis Industry Group was contacted by the Michigan Cannabis Regulatory Agency (“CRA”) about possible immediate suspensions of METRC user accounts. According to CRA, approximately 85% of all Michigan licensees may be impacted by these upcoming suspensions, so immediate action is critical.

All medical and adult-use marijuana licensees in Michigan are required to comply with the State of Michigan’s statewide monitoring system—METRC. METRC operates a seed-to-sale tracking software and accurate compliance and reporting in the software is mandatory by all licensees.

METRC’s terms of service and user license agreement permit METRC to terminate any licensee’s account for failure to comply with the terms of service or user license agreement. Included in METRC’s terms of service is a requirement that users pay a $40 monthly service fee, and that METRC service may be suspended if an account is three months or more in arrears. CRA has been informed by METRC that it intends to start suspending access to delinquent METRC accounts beginning Wednesday, March 1, 2023.

Obviously, if a licensee loses access to its METRC account, it will be unable to comply with its tracking requirements in the statewide monitoring system in violations of the Medical Marihuana Facilities Licensing Act, the Michigan Regulation and Taxation of Marihuana Act, and the rules promulgated by the CRA. These violations could result in severe and substantial penalties, including but not limited to suspension or revocation of an operator’s license or licenses. If a licensee’s METRC account is suspended, the licensee will need to suspend all operations until it can reinstate its METRC account access or else face potentially severe consequences from CRA. Given how many licensees may be affected, it could take significant time to have access reinstated.

As a result, it is critically important for all licensees to take immediate action to avoid suspension of their METRC accounts. We have heard reports of significant gaps in communications from METRC on this matter, including not invoicing companies. Consequently, it is highly likely that many companies are not even aware that their account is seriously in arrears. All licensees should contact METRC customer support immediately to ensure that they are current on all subscription fees (or other fees) owed to METRC and to ensure that their METRC accounts are in good standing. METRC support’s billing and account payable department can be reached by e-mail at [email protected]. Their listed customer service phone number is (877) 566-6506. All licensees should reach out to METRC immediately to ensure that their accounts are in good standing and that their access to METRC remains uninterrupted.

The Dykema Cannabis Industry Group will continue to monitor and provide updates on the situation. If you have any questions about this update, please contact Lance Boldrey, John Fraser, or your Dykema relationship attorney.