On Tuesday Nov. 6th, Michigan passed PROPOSAL 1-The Proposal to Regulate Cannabis Like Alcohol. Voters decided to legalize marijuana for adult recreational use Tuesday by a comfortable 56-44 percent margin, making Michigan the first state in the Midwest to go Recreational as well as Medicinal. This opens up a HUGE opportunity for Cannabis Entreprenuers….
FYI, in case you didn’t already know, Cannabis is already legal in Michigan for medicinal use, as a result of a 2008 ballot proposal that passed with 63-percent support.
The ballot title was as follows:
Proposal 18-1. A proposed initiated law to authorize and legalize possession, use and cultivation of marijuana products by individuals who are at least 21 years of age and older, and commercial sales of marijuana through state-licensed retailers.
What this proposal does:
Allow individuals 21 and older to purchase, possess and use marijuana and marijuana-infused edibles, and grow up to 12 marijuana plants for personal consumption.
Impose a 10-ounce limit for marijuana kept at residences and require amounts over 2.5 ounces be secured in locked containers.
Create a state licensing system for marijuana businesses and allow municipalities to ban or restrict them.
Permit retail sales of marijuana and edibles subject to a 10% tax, dedicated to implementation costs, clinical trials, schools, roads, and municipalities where marijuana businesses are located.
Change several current violations from crimes to civil infractions.
Key Takeaways of the New Law
The recreational proposal:
Allows individuals age 21 and older to purchase, possess and use marijuana and marijuana-infused edibles and grow up to 12 marijuana plants for personal consumption.
Imposes a 10-ounce limit for marijuana kept at residences and require that amounts over 2.5 ounces be secured in locked containers.
Creates a state licensing system for marijuana businesses, including growers, processors, transporters and retailers (which is already largely in place due to Act 281 being passed in 2017.).
Authorizes municipalities to ban or restrict marijuana businesses.
Permits commercial sales of cannabis and cannabis-infused edibles through state-licensed retailers, subject to a new 10-percent tax that will be going for schools,roads and municipalities where the cannabis businesses are located.
Proposal 1 prohibits LARA (Michigan’s Licensing and Regulatory Agency) from establishing rules that would:
limit the number of licenses that can be granted;
require customers to provide retailers with identifying information other than age or with personal information other than that needed to make a transaction;
prohibit marijuana establishments from operating at a shared location of a medical marijuana facility;
prohibit marijuana growers, marijuana processors, or marijuana retailers from operating within a single facility; and
be deemed unreasonably impracticable.
Municipalities (Cities, Villages, and/or Townships) are authorized to ban or limit Cannabis establishments within their boundaries. Cannabis Businesses cannot reside in an area zoned for residential use or within at least 1,000 feet of a public or private school unless a local government adopts an ordinance reducing the distance requirement.
Proposal 1 also legalized the cultivation, processing, distribution, and sale of industrial hemp. The initiative defined industrial hemp as a plant of the genus Cannabis with a delta-9 tetrahydrocannabinol concentration not exceeding 0.3 percent.
Proposal 1 required the revenue from the 10 percent excise tax (on top of the 6% State Sales Tax) to be placed in a Marihuana Regulation Fund. The revenue was to first be used to fund the initiative's implementation, administration, and enforcement and, for at least two years or until 2022, provide $20 million each year to one or more USDA-approved clinical trials researching the effectiveness of marijuana for treating medical conditions of U.S. armed services veterans and preventing veteran suicide. The initiative dedicated the remaining revenue as follows:
(a) 15 percent to municipalities with a marijuana retail store or a microbusiness;
(b) 15 percent to counties with a marijuana retail store or a microbusiness;
(c) 35 percent to the school aid fund to be used for K-12 education; and
(d) 35 percent to the state transportation fund for the repair and maintenance of roads and bridges.
Licenses and establishments
Proposal 1 authorized the regulatory department to license the following types of establishments:
Marijuana retailer: a person licensed to obtain marijuana from marijuana establishments and sell marijuana.
Marijuana safety compliance facility: a person licensed to test marijuana and certify marijuana for potency and the presence of contaminants.
Marijuana secure transporter: a person licensed to obtain marijuana from marijuana establishments in order to transport it to other marijuana establishments.
Marijuana processor: a person licensed to obtain marijuana from marijuana establishments, process and package the marijuana, and sell it to marijuana establishments.
Marijuana microbusiness: a person licensed to cultivate not more than 150 plants, process and package marijuana, and sell marijuana.
Class A marijuana grower: a person licensed to cultivate no more than 100 marijuana plants and sell the marijuana to marijuana establishments.
Class B marijuana grower: a person licensed to cultivate no more than 500 marijuana plants and sell the marijuana to marijuana establishments.
Class C marijuana grower: a person licensed to cultivate no more than 2,000 marijuana plants and sell the marijuana to marijuana establishments.
The regulatory department was made responsible for deciding testing, packaging, and labeling standards for marijuana.
Smoking in Public
There is no public consumption and no driving under the influence and there will be no commercial sales until businesses are licensed and approved.
Landlords can still prohibit smoking and growing plants on their properties.
Employment, and Drug Tests
Employers can still do pre-employment and random drug tests on employees and maintain zero tolerance policies for their employees. Employers can refuse to hire, fire or discipline employees who test positive for marijuana.
Growing in Your Home
Under the proposal, marijuana plants cannot be visible from a public place "without the use of binoculars, aircraft, or other optical aids or outside of an enclosed area equipped with locks or other functioning security devices that restrict access to the area."
When Does the New Go into Effect
Supposedly, by or around December 6th. But Cannabis won’t be commercially available for sale until probably early 2020, due to the state’s need to put regulations in place and issue licenses for recreational sales.
The REAL GOOD NEWS… Adults will no longer be arrested for simple possession and use of marijuana.
LARA has up to a year to develop the rules and regulations that will govern the recreational marijuana industry in the state before it begins accepting applications for recreational licenses.
Shelly Edgerton of LARA states "We intend to offer more details regarding the commercial production and distribution of marijuana for adult use after the Michigan Board of Canvassers certifies the election results."
The state has started to create the infrastructure to begin regulating the medical marijuana industry already, due to the fact that Legislature passed bills to oversee and tax medical weed in 2016.
Apparently, the state began granting medical marijuana licenses to businesses this summer and licensed medical pot businesses will have first dibs on recreational licenses for the first two years after full legalization.
Ways the Law Could Be Changed?
FYI, the Legislature can amend the proposal, but it will take a three-fourths vote to make any changes to a proposal that is passed by the electorate. Some changes that could possibly occur:
Tweak the section that allows for people to grow up to 12 plants in their homes for personal use.
Opt in and opt out requirements for Municipalities
Some think the 10-percent excise tax, on top of the 6-percent sales tax, is too low and would like to boost that tax. The tax in Michigan's ballot proposal would be one of the lowest of the 10 states that have now legalized marijuana for recreational use.
As well, this week, Attorney General Jeff Sessions was ousted from his position by Mr. Trump himself. Anyone even remotely interested in the Cannabis Industry knows full well that Mr. Sessions was a STAUNCH opponent of the Cannabis Industry.
So with Jeff Sessions out of office, and 10 States now fully recreational, Michigan being the first one on the Midwest, one begs to ask the question….
Could Michigan Be the Tipping Point For Federal Legalization?
Even if that isn’t the case, the doors of Michigan have swung wide open for Cultivating Cannabis Business Growth (Pun intended, of course).
New Leaf Cannabis Consulting is a Full Service Cannabis Business Licensing, Management, and Funding Consultancy Agency. We provide Business Plans, Financials, Licensing Submission, Operations Manuals, Blueprint Assistance and Management, Branding and Packaging Design and Much More.