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Proposed New Michigan Cannabis Rules III: Operations, Testing, and Infused Products

Cannabis Law Blog

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Proposed New Michigan Cannabis Rules III: Operations, Testing, and Infused Products

On Monday, September 27, Michigan’s Marijuana Regulatory Agency will hold a public hearing on draft administrative rules updating all of the State’s current cannabis-related rules other than for hemp. The deadline to provide written public comments is that Monday at 5 p.m. 

In a six-part series, Dykema will outline the substantive proposed changes in each of 10 draft rule sets and then will conclude with coverage of next week’s hearing. So far, we have covered the proposed changes to the Marihuana Licenses and Marihuana Licensees rule sets. Today, we cover the rule sets for Marihuana Operations (Rules 420.201 to 420.215), Sampling and Testing (Rules 420.301 to 420.308), and Marihuana Infused Products (Rules 420.401 to 420.405). Rules without substantive changes are not included.

Marihuana Operations

  • R 420.201 Definitions. A definition would be added for “source documentation” which means “an original document that contains the details of a marihuana business transaction.”
  • R 420.203 Marihuana licenses; licensees; operations; general. There would now be an added requirement that licensees “maintain accurate and comprehensive financial records for each license that clearly documents the licensee’s income and expenses.” Financial records that a licensee must maintain would include: (A) cash logs; (B) sales records; (C) purchases of inventory; (D) invoices; (E) receipts; (F) deposit slips; (G) cancelled checks; (H) employee compensation records; and (I) tax records. Bulk transactions would need to be traceable to the individual transactions.
  • R 420.204 Operation at same location. There would now be an accommodation for newly proposed new R 420.214a, which would permit internal analytical testing space to be utilized by co-located licensees.
  • R 420.206 Marihuana business; general requirements.
    • Marihuana sales locations would be able to designate areas for contactless or limited contact transactions. In a change that will be warmly welcomed by the industry and by patients, the ban on drive-throughs would be eliminated.
    • All ingredients containing cannabinoids, whether naturally occurring or synthesized, would need to be sourced from an entity that is licensed by a governmental authority and the ingredients entered into METRC.
    • When combining more than one form of marijuana or marijuana product into a single product, each form would be required to have first passed testing.
  • R 420.206a Standard operating procedures. The newly proposed rule would require all licensees to have up-to-date written standard operating procedures to cover all facets of the operations, available to MRA upon request. The rule does not identify the specific processes for which SOP’s would be required and there is no description about the level of detail that an SOP would have to contain. The rule also would provide that SOP’s must comply with “any guidance issued” by MRA, which means MRA is likely to set the parameters of the requirements by Advisory Bulletin. (This, despite the fact that recent Michigan caselaw has invalidated “guidance” masquerading as rules that must be followed, finding such guidance avoids public input and violates the Administrative Procedures Act.)    
  • R 420.207 Marihuana delivery; limited circumstances. There would be a minor proposed change to require delivery logs be maintained for a minimum period of one year.
  • R 420.207a Contactless and limited contact transactions. This newly proposed rule would permit sales locations to designate an area for contactless or limited contact transactions—unless prohibited by their municipality. This rule would also set standards for these types of transactions by allowing online orders, mandating that transactions take place during normal business hours, requiring anti-theft policies and procedures, and requiring the use of opaque bags.
  • R 420.208 Building and fire safety. A minor proposed change would confirm that temporary marihuana events are now also subject to BFS plan review.
  • R 420.212 Storage of marihuana product. There would be a slight change to indicate that chemicals or solvents must be stored “with a closed lid” in locked storage areas.
  • R 420.214a Internal analytical testing. This new rule would permit a Grower or Processor to designate a separately partitioned area for internal analytical testing of marijuana or marijuana products. Importantly, this rule would permit a co-located Grower and Processor to utilize the same space for this purpose, provided that only product from one licensee could be in the space at one time. All product that has undergone internal analytical testing would need to be tracked in METRC and disposed of after testing.
  • R 420.214b Adverse reactions. Relocated from Rule 420.14, this rule would require a licensee to notify the MRA within one business day of any adverse reactions to product sold or transferred by the licensee.
  • R 420.214c Product returns. This new rule would permit sales locations to accept returns of product that caused an adverse reaction or was determined to be defective. Such product would need to be tracked in METRC and destroyed; it could not be re-sold or re-packaged. The customer who purchased the product must be the one who returns the product, and it could not be returned by a delivery driver. An adult-use retailer would also be authorized to return for destruction any expired products to the processor.

Marihuana Sampling and Testing

  • R 420.303 Batch; identification and testing.
    • This rule would require cultivators to identify immature plant batches with a single batch name, a change from a “single plant tag.”
    • Cultivators would need to destroy individual plant tags immediately upon harvesting, and combining harvest batches would be expressly forbidden.
    • The rule concerning transfers to a processor without first being tested by a safety compliance facility would be clarified and only allow transfers of fresh frozen marijuana to be produced into live resin or extract. These transfers would be limited to one harvest batch per package, although a cultivator may seek approval for multiple harvest batches for a single transfer. A processor would be allowed to transfer a fresh frozen package received under this rule to another processor without first testing, so long as the processor received MRA approval and the product was intended to be produced into live resin or concentrate.
    • The labeling requirements for processors and sales locations in this rule would be moved to their own rule, R 420.303a.
  • R 420.304 Sampling; testing. The rule would provide that a licensee cannot interfere with or prevent a safety compliance facility complying with regulatory requirements for sample collection.
  • R 420.305 Testing; laboratory requirements.
    • Labs would be prohibited from adulterating or attempting to manipulate the potency by re-introducing trichomes that were removed during the grinding and homogenization process. Labs would also be required to test flower for potency in a way that is representative of how the product will be used by the end consumer and would be prohibited from re-introducing kief during the homogenization process.
    • Foreign matter inspection requirement would now explicitly include reference to powdery mildew, organic, and nonorganic material.
    • Microbial screening would include an optimized incubation period for all non-molecular automated systems methods and all plating-based methods used to report quantitative total yeast and mold results.
    • Mycotoxin screening would be required for MMFLA and MRTMA products based on the MRA’s list of required mycotoxins to be tested.
    • Total THC tests would include tests for Delta 7, Delta 8, Delta 9, Delta 10, Delta 11 THC, and THC-A.
    • Labs would be explicitly prohibited from “cherry picking” or manipulating samples in any way that would decrease or mask the amount of contaminant in a product.
    • Labs would be required to have a policy or procedure in place for handling potentially hazardous contaminants that may be encountered during routine testing.
    • Labs would be required to notify MRA upon finding levels of a contaminant that could be injurious to human health or if the product is found to contain Salmonella spp. or Shiga toxin producing E. coli (STEC).
  • R 420.305a Validations. This new rule would require all laboratory validation testing to be submitted to the MRA (it is now) and provide standards for validation protocols of laboratory testing and equipment.
  • R 420.305b Quality assurance and quality control. This new rule would require laboratories to have a procedure for monitoring the validity of test results, conducted on an ongoing basis and reviewed by the laboratory manager. The rule would set guidelines for laboratories to meet these quality assurance standards and require the laboratory to produce a written quality assurance manual addressing laboratory organization and responsibilities, field sampling procedures, instrument and equipment maintenance and calibration procedures, data validation, and an error log.
  • R 420.306 Testing marihuana product after failed initial safety testing and remediation. The rule would now provide that product that failed testing for Aspergillus is ineligible for remediation.
  • R 420.307 Research and development testing.
    • The rule would clarify that punitive action against licensees for R&D testing is prohibited only when R&D testing is permitted.
    • Marijuana that has undergone R&D testing would be ineligible to be transferred as fresh frozen.
    • R&D testing would be prohibited after compliance testing has been completed.

Marihuana Infused and Edible Products

  • R 420.401 – The definition of “Final package” would be been changed to “Final form” and the proposed change would clarify that the final form for concentrate that will be vaped means the concentrate in the e-cigarette or vaping device.
  • R 420.403 Requirements and restrictions on marihuana-infused products; edible marihuana product.
    • The name of marijuana products would be required to be “an appropriately descriptive phrase that accurately describes the basic nature of the product.”
    • Would specify that ingredients include “component ingredients.”
    • Would require that the date of production be included on the label.
    • Would delete the requirement that licensees be compliant with “Current Good Manufacturing Practice in Manufacturing, Packaging, or Holding Human Food” portion of 21 CFR part 110 with respect to edible products.
    • In addition to the formulation records, a licensee would need to keep documentation to demonstrate that products are shelf stable and records of test results for all ingredients used.
    • An employee “in charge” would need to be certified as a Food Protection Manager, instead of simply requiring that a processor have some employee so certified.
    • The safe preparation standards would be modified to strike the “FDA food safety modernization act” and replace that standard with “Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventative Controls for Human Food, 21 CFR part 117.”
    • The edible packaging and shape restrictions would be re-worked slightly. All of the existing restrictions would largely remain but be broken apart into new sections. The restrictions would also be expanded to prohibit edibles that can be easily confused with commercially “available food product,” which marks a change from “candy.” A similar restriction would be added to prohibit packaging of edibles in a package “that bears the image, likeness, or contains the characteristics of commercially available food products.”
    • The proposed changes would make clear that expired products must be destroyed. There would also be additional guidance for licensees for determining expiration dates on their products. In determining an appropriate expiration date, a licensee would need to consider: (1) the quality and characteristics of the edible, (2) packaging of the edible, and (3) the customary conditions of the edible from production to sale.

Check back tomorrow for coverage of additional proposed rules.