Finding of Emergency

DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS

BUREAU OF MEDICAL MARIHUANA REGULATION

MEDICAL MARIHUANA FACILITIES LICENSING ACT

EMERGENCY RULES

Filed with the Secretary of State on May 30, 2018

These rules take effect upon filing with the Secretary of State and shall remain in effect for 6 months. (By authority conferred on the department of licensing and regulatory affairs by section 206 of 2016 PA 281, MCL 333.27206, enacting section 2 of Act 281 of 2016, by section 3 of 2016 PA 282, MCL 333.27903, and by section 6 of MCL 333.26426, 2008, Initiated Law 1.)

FINDING OF EMERGENCY

These rules are promulgated by the department of Licensing and Regulatory Affairs (department) to establish emergency rules for the purpose of implementing the Medical Marihuana Facilities Licensing Act (act), 2016 PA 281, MCL 333.27101 et seq., which took effect December 20, 2016 and was recently amended by 2018 PA 10. The act provides for a state regulatory structure to license and regulate medical marihuana growers, processors, provisioning centers, secure transporters, and safety compliance facilities that interacts with the statewide monitoring system for commercial marihuana transactions; establishes a medical marihuana licensing board (Board) created within the department and appointed by the governor; and prescribes civil fines and sanctions and provides remedies.

The act includes an enacting section specifying that the legislature found it necessary for the promulgation of emergency rules to preserve the public health, safety, or welfare for access to safe sources of marihuana for medical use and the immediate need for growers, processors, secure transporters, provisioning centers, and safety compliance facilities to operate under clear requirements. In addition, section 206 of the act requires the department, in consultation with the Board, to promulgate administrative rules and emergency rules as necessary to implement, administer, and enforce the act. Furthermore, section 206 specifies that the rules shall ensure the safety, security, and integrity of the operation of marihuana facilities.

To date, no administrative rules have been promulgated under the authority granted to the department, in consultation with the Board that has been created within the department. Specifically, there are no current administrative rules to ensure the safety, security, and integrity of the operation of marihuana facilities. Pursuant to section 401 of the act, beginning December 15, 2017, persons may apply to the Board created within the department for state operating licenses in the categories of class A, B, or C grower, processor, provisioning center, secure transporter, and safety compliance facility. The Board is required to review all applications for licensure, issue or deny issuance of a license, and inform each applicant of the Board’s decision. To date, no state operating licenses have been issued because the processing and review of applications requires attention and numerous hours of review. If issuance is denied, the Board is required, upon request, to provide a public investigative hearing. In addition, any party aggrieved by an action of the Board suspending, revoking, restricting, or refusing to renew a license, or imposing a fine, shall be given a hearing before the Board upon request. There are no administrative rules currently in place that will provide for the implementation of these requirements as specified in the act.

In addition, the act requires the promulgation of administrative rules to prescribe the use of the statewide monitoring system to track all marihuana transfers, as provided in the Marihuana Tracking Act, 2016 PA 282, MCL 333.27901 et seq. To date, these administrative rules have not been promulgated. The statewide monitoring system is used to track and inventory marihuana and is a key component to preserving the integrity of the operation of marihuana facilities, monitoring the industry, investigating, and supporting compliance with the act to promote the public health, safety, or welfare.

The lack of administrative rules to implement the act will have a detrimental effect on the necessity for access to a safe source of marihuana for medical use and the immediate need for growers, processors, secure transporters, provision centers, and safety compliance facilities to operate under clear requirements. Furthermore, the use of the statewide monitoring system to track all marihuana transfers is integral to the safety and compliance requirements of the act. Also, the act requires the promulgation of administrative rules to establish testing standards, procedures, and requirements for marihuana sold through provisioning centers. To date, there are no administrative rules in place to set the testing standards to ensure public health, safety or welfare. The emergency administrative rules are needed to enable the department, through its Bureau of Medical Marihuana Regulation, to implement the act to provide a safe environment for the state operating licensees and Michigan communities, as well as access to medical marihuana that has been tested for safety for sale to registered qualifying patients and registered primary caregivers.

If the complete process specified in the Administrative Procedures Act of 1969, 1969 PA 306, MCL 24.201 et seq. for the promulgation of rules were followed, the process would not be completed in time for the department to comply with the act’s requirements to process applications according to the timelines specified in the act, provide administrative hearing procedures, or implement the tracking requirements. Furthermore, the administrative rules would not be promulgated prior to the issuance of state operating licenses, thus causing uncertainty and financial hardship to individuals or businesses that plan to apply for commercial state operating licenses.

The department, in consultation with the Board, therefore, finds that the preservation of the public health, safety, and welfare requires the promulgation of emergency rules as provided in section 48 without following the notice and participation procedure required by sections 41 and 42 of 1969 PA 306, as amended, being MCL 24.241, and MCL 24.242 of the Michigan Compiled Laws.


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