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Michigan Continues to Respond to Cannabis Industry Needs

Cannabis Law Blog

News and analysis focusing on the full spectrum of cannabis-related issues facing businesses, investors, financial institutions and all levels of government throughout the United States

Michigan Continues to Respond to Cannabis Industry Needs

Over the last week, as states continue to react to the COVID-19 crisis, we have reported on regulatory changes and “stay at home” orders in Michigan and Illinois, and their impacts on the cannabis industry. At Dykema’s COVID-19 Resource Center, we have compiled and are updating on a daily basis a Quick Reference Guide to State-Level Shelter-in-Place Orders and Essential Services Provisions.

In Michigan, recent Executive Orders of Michigan Governor Gretchen Whitmer and Advisory Bulletins from the Michigan Marijuana Regulatory Agency have led to a number of specific questions concerning cannabis operations, several of which we highlighted in our earlier reports. MRA executive leadership and staff have been working tirelessly to address these issues, and continue to be highly efficient and responsive while working remotely. Answers to a number of the industry’s most pressing questions were quickly addressed.

Processing of Licensing Applications

MRA continues to timely process license applications. We have seen no slow-down at all on this front, and have had multiple licenses received by clients in the last two weeks. MRA inspectors are performing inspections remotely via FaceTime. As previously promised by MRA, home delivery plans are being expeditiously reviewed and approved—the shortest time we have seen from submission to approval was approximately one hour.

Verification of Patient Status and Age

Recognizing that renewals of government ID cards may be delayed, yesterday MRA authorized marijuana retail operations to rely upon expired driver licenses or state identification cards. For medical marijuana patients and caregivers, retail operators may rely upon expired registry cards, as long as the card expired within the last 60 days.

Construction Activities: Marijuana Businesses as Employers of Critical Infrastructure Workers

Michigan’s “Stay at Home” order focuses more on the nature of employees’ work than the type of industry, and questions arose as to how marijuana businesses were being categorized given the Michigan Executive Order (EO) framework and MRA’s Advisory Bulletin announcing that all marijuana businesses could maintain operations. In numerous private communications, MRA leadership has confirmed that licensed marijuana businesses may continue construction activities, by designating their contractors in accordance with the Governor’s EO.

This is consistent with the Governor’s FAQ’s, which explain that, under the EO, “some limited forms of construction are possible, including construction to maintain and improve … public health infrastructure. … In addition, businesses may designate construction firms to provide necessary support to the work of the businesses’ critical infrastructure workers.”

MRA has noted that, in accordance with the EO, construction should take place only to the minimum extent necessary to meet the conditions in the FAQ. Construction workers, just like designated employees of marijuana licensees, must abide by the mitigation measures laid out in the EO. These include: (1) Restricting the number of workers present on premises to no more than is strictly necessary to perform the business’s functions; (2) Keeping workers at least six feet from one another to the maximum extent possible; (3) Increasing standards of facility cleaning and disinfection to limit worker and patron exposure to COVID-19, as well as adopting protocols to clean and disinfect in the event of a positive COVID-19 case in the workplace; (4) Adopting policies to prevent workers from entering the premises if they display respiratory symptoms or have had contact with a person who is known or suspected to have COVID-19; and (5) Any other social distancing practices and mitigation measures recommended by the Centers for Disease Control.

State Taxes

As previously reported, Michigan’s Department of Treasury is allowing for late payment of sales taxes that were due on March 20. The State has not yet made any adjustments to due dates for income tax filings of for payments of the marijuana excise tax imposed upon adult-use products.

Closing Facilities 

Despite the allowance for marijuana businesses to remain open, some have decided to close, particularly provisioning centers in locations that are not ideal for home delivery or curbside transactions. Michigan’s Medical Marihuana Facilities Licensing Act does not allow for provisioning centers to transfer product to other provisioning centers, or to return product to the grower or processor from which it was obtained. To this point, MRA has not provided any regulatory relief from these limitations. While the Governor’s EO permits employees to be retained for purposes of protecting inventory, MRA has not provided any specific guidance for what idled provisioning centers should do to secure products remaining on site. Licensees who are closing should notify MRA.

As the COVID-19 crisis and Michigan’s response to it continue to unfold, we certainly anticipate more actions by the MRA. Check back with Dykema’s Cannabis Law Blog and COVID-19 Resource Center for further updates.