On July 14, 2021, Senate Majority Leader Chuck Schumer introduced a discussion draft of the “Cannabis Administration and Opportunity Act”. The bill is authored and sponsored by Schumer, along with Senators Cory Booker and Ron Wyden. Though the bill is unlikely to become law in its current form, it is significant that the Senate Majority Leader and chairmen of the Finance Committee is sponsoring such a bill. The framework hints at what may eventually become law as some sort of federal decriminalization is inevitable. 

As the cannabis industry continues to expand, the regulation of all things marijuana continues to be a growing task for the State of Michigan. As a result, Michigan’s Marijuana Regulatory Agency (MRA) is hard pressed to keep up with the demand for information on its expanding policies. MRA licensed cannabis business owners as well as Michigan cannabis attorneys rely on this information from the MRA to ensure they are continuing to abide by the MMFLA and MRTMA. To better relay this valued information to licensees that need it, the MRA has begun posting the most frequently asked questions by both Michigan cannabis attorneys and business owners in the field. This review reflects the MRA’s latest update to its common business operation questions as of June 1, 2021.

Since the Marihuana Tax Act of 1937, which sought to stymie the entire hemp industry through excessive taxation in fear that industrial hemp would replace paper, industrial hemp has spent the past few decades as a restricted agricultural product. These tax restrictions were later superseded when the entire hemp plant was designated as a controlled substance under the Controlled Substance Act of 1970 (CSA). The CSA lumped industrial hemp together with consumable cannabis as a Schedule I drug with no medical use and a high potential for abuse, essentially killing the United State’s hemp industry for decades to come.  

As Michigan cannabis lawyers we’ve seen a lot of changes in the Michigan cannabis market and the rules governing the recreational market. This update will discuss two major updates for Michigan microbusinesses, the first being the licensing of the state’s second microbusiness, and the second being the proposed “Class A Microbusiness” license type, both of which are discussed in detail below.  

The U.S. House of Representatives may very well vote to decriminalize marijuana, as well as provide a historical overhaul of the federal government’s treatment of the drug. HR 3884, otherwise known as the Marijuana Opportunity, Reinvestment, and Expungement Act, or MORE Act, is a comprehensive reform bill that attempts to begin repairing the damage done by the failed “War on Drugs.” 

Before getting started, it it’s important to talk about what laws actually govern legal cannabis businesses in Michigan. There are three main marijuana laws—the Michigan Medical Marihuana Act, or “MMMA”; the Medical Marihuana Facilities Licensing Act, or “MMFLA”; and the Michigan Regulation and Taxation of Marihuana Act, or “MRTMA.” The MMMA authorizes “caregivers” to grow up to 12 plants per registered patient, for a maximum of 72 plants, but does not authorize the sale of marijuana except to the caregiver’s registered patients. The MMFLA, on the other hand, allow for the licensing of medical marijuana businesses and allows dispensaries to sell to any registered patient, including out-of-state patients in some cases. Finally, the MRTMA, or “adult-use” licensing law, allows for the licensing of recreational marijuana businesses and the sale of marijuana to anyone 21 years and older. 

As Michigan cannabis attorneys, we get asked almost every single day about adult-use (or recreational) marijuana by both business owners and consumers. Recreational marijuana in Michigan has been a continuously growing industry with more and more business owners eager to open their own marijuana establishment and more consumers ready to get their hands on some great Michigan cannabis products. 

In the Michigan legal cannabis market, as with other states, municipalities hold the keys to kingdom with respect to licensing specific cannabis properties. What that means is that it is up to the municipality to determine who can be licensed to operate a cannabis facility or establishment within their borders. While it remains common for municipalities to give preferences to local ownership within the context of a points-based or merit-based system, at least one municipality has taken this a step further and gave local residents the first shot at obtaining a license. This has had the effect of shutting out non-local companies from local marijuana licensing.  

For months Andrew Brisbo, the director of the MRA, has strongly hinted that changes were coming to the adult-use licensing process. As Michigan cannabis attorneys, Scott Roberts Law, anticipated that the adult-use market would be expanding, but without any official word there was nothing to do but wait. On October 6, 2020, the MRA has finally made an official announcement that they would be expanding the eligibility for adult-use licenses. Starting March 1, 2021, the MRA will begin accepting adult-use applications from anyone interested in throwing their hat in the ring. 

On April 8, 2020 the MRA released its latest bulletin regarding the phasing-out of caregiver product from the adult-use market. The bulletin specifically prohibited products “derived” from caregivers to enter the Adult-Use cannabis market. Throughout this year the MRA has been inching closer and closer to removing caregiver product from adult-use facilities all together. This bulletin, along with the new “phase” we have entered, places an immediate ban on caregiver produced or derived product from entering the adult-use market. 

Why did it take cannabis investors so long to learn this lesson? Well, on its face, it’s easy to be seduced by a strategy with the potential to produce 10x returns in a short time frame. Who doesn’t want to grow their company by an order of magnitude? I certainly would, and you probably do to. The problem with trying to “10x your company”, however, is that pursuing aggressive, non-organic growth is an expensive, and often risky, endeavor. Of course, pursuing growth and new “blue sky” opportunities is not necessarily a bad strategy. In many cases, it could be the best move your business will make. But pursuing aggressive growth, especially when fueled by acquisitions alone, can sometimes backfire. 

Like any new industry, the cannabis industry saw a flood of new entrants looking to make a quick buck off the next hot market. While a number of Michigan cannabis investors did make quite a bit of money in the short term, mostly through buying and selling cannabis real estate, most operators did not see the immediate financial windfall they had expected.

The fundamental difference between smoke and vapor lies in how the two substances are produced. For smoke to be produced, a substance must undergo combustion (usually incomplete combustion). On the other hand, a vapor is produced when a substance undergoes vaporization, which simply implies heating up a liquid until it turns into vapor. 

One of the big questions looming over the cannabis industry is what happens after federal legalization. As a cannabis business attorney, I am asked this constantly by concerned clients. Currently, each state has its own cannabis laws and rules which govern activity in the state. Similarly, each country has its own cannabis laws and rules, and importing and exporting cannabis from one country to another is virtually unheard of. The fact that each jurisdiction acts as its own silo, with no product coming in or coming out, and each subject to different regulations and testing requirements, creates barriers to entry that make it difficult for big cannabis companies to simply take over the industry.

There has been a lot written about the issues cannabis companies have with banking in the U.S. Most of these articles talk about cannabis growers and dispensaries having their bank accounts shut down one day without warning. I even wrote one a year or two ago, though a lot has happened in that time. Multiple Michigan banks now openly accept cannabis companies, though they are generally charged a hefty upfront fee as well as monthly maintenance and transaction fees. But that’s not what this article is about. This article looks at banking from the perspective of ancillary cannabis businesses.

As someone with strong connections to both dispensary owners as well as cannabis consumers, I often hear complaints about cannabis pricing in the current market. Consumers mistakenly believe that their MRTMA marijuana retailer, or in some causes their MMFLA provisioning center, is “ripping them off with these prices.” I can’t tell you how many times I’ve heard consumers complain that dispensaries are “greedy” because they are charging $60 for an eight of adult-use product, or selling ounces of premium medical flower for $300. 

The long awaited Deruiter decision was just announced by the Michigan Supreme Court, and the decision was yet another blow to Michigan caregivers operating under the MMMA. It had long been an open question of law whether municipalities had the ability to zone or otherwise utilize land use restrictions to prevent caregivers from operating in certain zoning. This question has now been answered. 

If you look back at the past decade, one topic that has come about increasingly in conversation is CBD oil. With the legalization of CBD and increasing evidence about its safety coming to light, more and more people are making CBD a part of their lifestyle. Today, the efficacy of CBD oil is not just limited to the locals, but it is also getting attention from the tourists who come looking for it. If you are a CBD seller, you would be wise not to ignore this little talked about market. Are you wondering why tourists love CBD oil? You will get your answer right here, read on to find out.    

Recreational and medicinal cannabis are still in high demand in Michigan, and dispensaries remain an essential business while many non-cannabis businesses have closed down. According to recent reports, medical marijuana sales remain strong through the COVID-19 pandemic, while recreational or “adult-use” sales have dipped a couple weeks into the state’s shutdown order. Despite consumer demand remaining strong, Michigan started to see its wholesale cannabis price drop this March. 

Do you see cannabis dispensaries opening up around you? Are you wondering what will be the future of these dispensaries? Cannabis has been in a grey area for far too long now. With legalization, the opening of cannabis dispensaries made both medical and “adult-use” marijuana easily accessible. These brick and mortar stores range from being regular retailers similar to your typical “head shop” to high-end establishments that resemble apple stores. Here is what you should know about the future of cannabis dispensaries.