HB-6380, As Passed Senate, December 21, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 6380

A bill to amend 2016 PA 281, entitled

"Medical marihuana facilities licensing act,"

by amending the title and sections 102, 206, 502, and 505 (MCL

333.27102, 333.27206, 333.27502, and 333.27505), as amended by 2018

PA 10.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

An act to license and regulate medical marihuana growers,

processors, provisioning centers, secure transporters, and safety

compliance facilities; to allow certain licensees to process, test,

or sell industrial hemp; to provide for the powers and duties of

certain state and local governmental officers and entities; to

create a medical marihuana licensing board; to provide for

interaction with the statewide monitoring system for commercial

marihuana transactions; to create an advisory panel; to provide

immunity from prosecution for marihuana-related offenses for

persons engaging in certain activities in compliance with this act;

to prescribe civil fines and sanctions and provide remedies; to

provide for forfeiture of contraband; to provide for taxes, fees,

and assessments; and to require the promulgation of rules.

Sec. 102. As used in this act:

(a) "Advisory panel" or "panel" means the marihuana advisory

panel created in section 801.

(b) "Affiliate" means any person that controls, is controlled

by, or is under common control with; is in a partnership or joint

venture relationship with; or is a co-shareholder of a corporation,

a co-member of a limited liability company, or a co-partner in a

limited liability partnership with a licensee or applicant.

operating license. With respect to disclosures in an application,

or for purposes of ineligibility for a license under section 402,

the term applicant includes an officer, director, and managerial

employee of the applicant and a person who holds any direct or

indirect ownership interest in the applicant.

(d) "Board" means the medical marihuana licensing board

created in section 301.

(e) "Cutting" means a section of a lead stem or root stock

that is used for vegetative asexual propagation.

(f) "Department" means the department of licensing and

regulatory affairs.

(g) "Grower" means a licensee that is a commercial entity

located in this state that cultivates, dries, trims, or cures and

packages marihuana for sale to a processor, provisioning center, or

another grower.

(h) "Industrial hemp" means that term as defined in section

7106 of the public health code, 1978 PA 368, MCL 333.7106.

(i) "Industrial hemp research and development act" means the

industrial hemp research and development act, 2014 PA 547.

(j) ~~(h)~~ "Licensee" means a person holding a state operating

license.

(k) ~~(i)~~ "Marihuana" means that term as defined in section 7106

of the public health code, 1978 PA 368, MCL 333.7106.

(l) ~~(j)~~ "Marihuana facility" means a location at which a

licensee is licensed to operate under this act.

(m) ~~(k)~~ "Marihuana plant" means any plant of the species

Cannabis sativa L. Marihuana plant does not include industrial

hemp.

(n) (l) "Marihuana-infused product" means a topical

formulation, tincture, beverage, edible substance, or similar

product containing any usable marihuana that is intended for human

consumption in a manner other than smoke inhalation. Marihuana-

infused product is not considered a food for purposes of the food

law, 2000 PA 92, MCL 289.1101 to 289.8111.

(o) ~~(m)~~ "Marihuana tracking act" means the marihuana tracking

act, 2016 PA 282, MCL 333.27901 to 333.27904.

(p) ~~(n)~~ "Michigan medical marihuana act" means the Michigan

medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430.

(q) ~~(o)~~ "Municipality" means a city, township, or village.

(r) ~~(p)~~ "Paraphernalia" means any equipment, product, or

material of any kind that is designed for or used in growing,

cultivating, producing, manufacturing, compounding, converting,

storing, processing, preparing, transporting, injecting, smoking,

ingesting, inhaling, or otherwise introducing into the human body,

marihuana.

(s) ~~(q)~~ "Person" means an individual, corporation, limited

liability company, partnership, limited partnership, limited

liability partnership, limited liability limited partnership,

trust, or other legal entity.

(t) ~~(r)~~ "Plant" means any living organism that produces its

own food through photosynthesis and has observable root formation

or is in growth material.

(u) ~~(s)~~ "Processor" means a licensee that is a commercial

entity located in this state that purchases marihuana from a grower

and that extracts resin from the marihuana or creates a marihuana-

infused product for sale and transfer in packaged form to a

provisioning center or another processor.

(v) ~~(t)~~ "Provisioning center" means a licensee that is a

commercial entity located in this state that purchases marihuana

from a grower or processor and sells, supplies, or provides

marihuana to registered qualifying patients, directly or through

the patients' registered primary caregivers. Provisioning center

includes any commercial property where marihuana is sold at retail

to registered qualifying patients or registered primary caregivers.

A noncommercial location used by a primary caregiver to assist a

qualifying patient connected to the caregiver through the

department's marihuana registration process in accordance with the

Michigan medical marihuana act is not a provisioning center for

purposes of this act.

(w) ~~(u)~~ "Registered primary caregiver" means a primary

caregiver who has been issued a current registry identification

card under the Michigan medical marihuana act.

(x) ~~(v)~~ "Registered qualifying patient" means a qualifying

patient who has been issued a current registry identification card

under the Michigan medical marihuana act or a visiting qualifying

patient as that term is defined in section 3 of the Michigan

medical marihuana act, MCL 333.26423.

(y) ~~(w)~~ "Registry identification card" means that term as

defined in section 3 of the Michigan medical marihuana act, MCL

333.26423.

(z) ~~(x)~~ "Rules" means rules promulgated under the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, by the department in consultation with the board to

implement this act.

(aa) ~~(y)~~ "Safety compliance facility" means a licensee that is

a commercial entity that takes marihuana from a marihuana facility

or receives marihuana from a registered primary caregiver, tests

the marihuana for contaminants and for tetrahydrocannabinol and

other cannabinoids, returns the test results, and may return the

marihuana to the marihuana facility.

(bb) ~~(z)~~ "Secure transporter" means a licensee that is a

commercial entity located in this state that stores marihuana and

transports marihuana between marihuana facilities for a fee.

(cc) ~~(aa)~~ "Seed" means the fertilized, ungerminated, matured

ovule, containing an embryo or rudimentary plant, of a marihuana

plant that is flowering.

(dd) ~~(bb)~~ "Seedling" means a marihuana plant that has

germinated and has not flowered and is not harvestable.

(ee) ~~(cc)~~ "State operating license" or, unless the context

requires a different meaning, "license" means a license that is

issued under this act that allows the licensee to operate as 1 of

the following, specified in the license:

(i) A grower.

(ii) A processor.

(iii) A secure transporter.

(iv) A provisioning center.

(v) A safety compliance facility.

(ff) ~~(dd)~~ "Statewide monitoring system" or, unless the context

requires a different meaning, "system" means an internet-based,

statewide database established, implemented, and maintained by the

department under the marihuana tracking act, that is available to

licensees, law enforcement agencies, and authorized state

departments and agencies on a 24-hour basis for all of the

following:

(i) Verifying registry identification cards.

(ii) Tracking marihuana transfer and transportation by

licensees, including transferee, date, quantity, and price.

(iii) Verifying in commercially reasonable time that a

transfer will not exceed the limit that the patient or caregiver is

authorized to receive under section 4 of the Michigan medical

marihuana act, MCL 333.26424.

(gg) ~~(ee)~~ "Tissue culture" means a marihuana plant cell,

cutting, tissue, or organ, that is kept under a sterile condition

on a nutrient culture medium of known composition and that does not

have visible root formation. A tissue culture is not a marihuana

plant for purposes of a grower.

(hh) ~~(ff)~~ "Usable marihuana" means the dried leaves, flowers,

plant resin, or extract of the marihuana plant, but does not

include the seeds, stalks, and roots of the plant.

Sec. 206. The department, in consultation with the board,

shall promulgate rules and emergency rules as necessary to

implement, administer, and enforce this act. The rules must ensure

the safety, security, and integrity of the operation of marihuana

facilities, and must include rules to do the following:

(a) Set appropriate standards for marihuana facilities and

associated equipment.

(b) Subject to section 408, establish minimum levels of

insurance that licensees must maintain.

license to ensure the health, safety, and security of the public

and the integrity of marihuana facility operations.

(d) Establish qualifications and restrictions for persons

participating in or involved with operating marihuana facilities.

(e) Establish testing standards, procedures, and requirements

for marihuana sold through provisioning centers.

(f) Provide for the levy and collection of fines for a

violation of this act or rules.

(g) Prescribe use of the statewide monitoring system to track

all marihuana transfers, as provided in the marihuana tracking act

and this act, and provide for a funding mechanism to support the

system.

(h) Establish quality control standards, procedures, and

requirements for marihuana facilities.

(i) Establish chain of custody standards, procedures, and

requirements for marihuana facilities.

(j) Establish standards, procedures, and requirements for

waste product disposal and storage by marihuana facilities.

(k) Establish chemical storage standards, procedures, and

requirements for marihuana facilities.

(l) Establish standards, procedures, and requirements for

securely and safely transporting marihuana between marihuana

facilities.

(m) Establish standards, procedures, and requirements for the

storage of marihuana by marihuana facilities.

(n) Establish labeling and packaging standards, procedures,

and requirements for marihuana sold or transferred through

provisioning centers, including a prohibition on labeling or

packaging that is intended to appeal to or has the effect of

appealing to minors.

(o) Establish daily and monthly purchasing limits at

provisioning centers for registered qualifying patients and

registered primary caregivers to ensure compliance with the

Michigan medical marihuana act.

(p) Establish marketing and advertising restrictions for

marihuana products and marihuana facilities.

(q) Establish maximum tetrahydrocannabinol levels for

marihuana-infused products sold or transferred through provisioning

centers.

(r) Establish health standards to ensure the safe preparation

of products containing marihuana that are intended for human

consumption in a manner other than smoke inhalation.

(s) Establish restrictions on edible marihuana-infused

products to prohibit shapes that would appeal to minors.

(t) Establish standards, procedures, and requirements for the

sale of industrial hemp from a provisioning center to a registered

qualified patient. The rules promulgated under this subdivision

must be promulgated before March 1, 2019.

Sec. 502. (1) A processor license authorizes purchase of

marihuana only from a grower and sale of marihuana-infused products

or marihuana only to a provisioning center or another processor.

(2) Except as otherwise provided in section 505 and this

subsection, a processor license authorizes the processor to

transfer marihuana only by means of a secure transporter. A

processor license authorizes a processor to transfer marihuana

without using a secure transporter to a grower or provisioning

center if both of the following are met:

(a) The grower or provisioning center occupies the same

location as the processor and the marihuana is transferred using

only private real property without accessing public roadways.

(b) The processor enters each transfer into the statewide

monitoring system.

(3) To be eligible for a processor license, the applicant and

each investor in the processor must not have an interest in a

secure transporter or safety compliance facility.

(4) Until December 31, 2018, for a period of 30 days after the

issuance of a processor license and in accord with rules, a

processor may transfer any of the following that are lawfully

possessed by an individual formerly registered as a primary

caregiver who is an active employee of the processor:

(a) Marihuana plants.

(b) Usable marihuana.

(5) A processor shall comply with all of the following:

(a) Until December 31, 2021, have, or have as an active

employee an individual who has, a minimum of 2 years' experience as

a registered primary caregiver.

(b) While holding a license as a processor, not be a

registered primary caregiver and not employ an individual who is

simultaneously a registered primary caregiver.

information into the statewide monitoring system as required in

this act, rules, and the marihuana tracking act.

(6) This act does not prohibit a processor from handling,

processing, marketing, or brokering, as those terms are defined in

section 2 of the industrial hemp research and development act, MCL

286.842, industrial hemp.

Sec. 505. (1) In addition to transfer and testing authorized

in section 203, a safety compliance facility license authorizes the

safety compliance facility to do all of the following without using

a secure transporter:

(a) Take marihuana from, test marihuana for, and return

marihuana to only a marihuana facility.

(b) Collect a random sample of marihuana at the marihuana

facility of a grower, processor, or provisioning center for

testing.

(2) A safety compliance facility must be accredited by an

entity approved by the board by 1 year after the date the license

is issued or have previously provided drug testing services to this

state or this state's court system and be a vendor in good standing

in regard to those services. The board may grant a variance from

this requirement upon a finding that the variance is necessary to

protect and preserve the public health, safety, or welfare.

(3) To be eligible for a safety compliance facility license,

the applicant and each investor with any interest in the safety

compliance facility must not have an interest in a grower, secure

transporter, processor, or provisioning center.

(4) A safety compliance facility shall comply with all of the

following:

(a) Perform tests to certify that marihuana is reasonably free

of chemical residues such as fungicides and insecticides.

(b) Use validated test methods to determine

tetrahydrocannabinol, tetrahydrocannabinol acid, cannabidiol, and

cannabidiol acid levels.

with the standards the board establishes for microbial and

mycotoxin contents.

(d) Perform other tests necessary to determine compliance with

any other good manufacturing practices as prescribed in rules.

(e) Enter all transactions, current inventory, and other

information into the statewide monitoring system as required in

this act, rules, and the marihuana tracking act.

(f) Have a secured laboratory space that cannot be accessed by

the general public.

(g) Retain and employ at least 1 staff member with a relevant

advanced degree in a medical or laboratory science.

(5) This act does not prohibit a safety compliance facility

from taking or receiving industrial hemp for testing purposes and

testing the industrial hemp pursuant to the industrial hemp

research and development act.

Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.

Enacting section 2. This amendatory act does not take effect

unless House Bill No. 6330 of the 99th Legislature is enacted into

law.