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Michigan Passes New Industrial Hemp Law, Sets Up Statutory Conflict

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 Passes New Industrial Hemp Law, Sets Up Statutory Conflict

On the last day of the legislative session, the Michigan Legislature passed House Bills 6330, 6331, and 6380 to create the Industrial Hemp Research and Development Act (IHRDA). If signed by the Governor, IHRDA will require the registration of industrial hemp growers and processors as a prerequisite to grow or sell industrial hemp. Oversight authority is given to the Michigan Department of Agriculture and Rural Development (MDARD). To register, growers and processors would be required to submit basic identification information—including the identities of owners holding more than 10% equity in the applicant—and the location of their business. An annual application fee is also required: $100 for growers and $1,350 for processors. Applications may be denied for such reasons as the applicant demonstrating an unwillingness to comply with regulations or making false statements to MDARD. Failure to comply with the IHRDA may result in suspension or revocation of a registration, destruction of product, or a fine; allowing the taking of a falsified sample is a felony. IHRDA is set to take effect on January 15, 2019.

However, as discussed in our previous post, it is unclear whether the system created by IHRDA will actually be functional in light of the voter-initiated Michigan Regulation and Taxation of Marihuana Act (MRTMA), MCL 333.27951 et seq. MRTMA already authorized industrial hemp production subject to a grant of rulemaking authority to Michigan’s Department of Licensing and Regulatory Affairs. While the IHRDA bills passed with enough support to satisfy the three-fourths supermajority necessary to amend MRTMA, the final version of IHRDA does not specifically amend or address MRTMA’s preemption provisions. See MCL 333.27954(5) (“All other laws inconsistent with [MRTMA] do not apply to conduct that is permitted by [MRTMA].”); MCL 333.27960(1)(i) (“Notwithstanding any other law or provision of [MRTMA] . . . possessing, cultivating, processing, obtaining, transferring, or transporting industrial hemp” is not unlawful). Consequently, it is unclear whether MRTMA preempts IHRDA or whether IHRDA trumps MRTMA. Check back with Dykema’s Cannabis Law Blog as the State—and the industry—work to figure this out.