HOUSE BILL No. 4877 September 17, 2015, Introduced by Reps. Irwin, Singh, Robinson, Hovey-Wright, Chang, Hoadley and Sarah Roberts and referred to the Committee on Judiciary. A bill to decriminalize and regulate marihuana cultivation, production, testing, sale, possession, and use for nonmedical purposes; to provide for licensing of certain marihuana facilities and stores; to authorize collection of fees; to impose an excise tax on marihuana transfers by a marihuana cultivation facility; to provide for the powers and duties of certain state and local governmental officers and agencies; to authorize local units of government to adopt limited regulation of marihuana facilities and stores; and to require the promulgation of rules. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: Sec. 1. (1) This act shall be known and may be cited as the "marihuana legalization and regulation act". (2) The cultivation, processing, testing, possession, and use of marihuana for nonmedical purposes are decriminalized and





regulated under the this act for use by individuals 21 years of age or older in the manner provided in this act. Sec. 2. As used in this act, and unless the context otherwise requires: (a) "Consumer" means an individual 21 years of age or older who purchases marihuana or marihuana products for personal use by himself or herself or another individual 21 years of age or older, but not for resale. (b) "Department" means the department of licensing and regulatory affairs. (c) "Industrial hemp" means a plant of the genus Cannabis and any part of that plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis. (d) "License" means an exemption from arrest, prosecution, forfeiture, or penalty in any manner by this state or local authority for conduct identified in this act. (e) "Locality" means a county, city, village, or township. (f) "Marihuana" means any part of the plant of the genus Cannabis whether growing or not, its seeds, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or its resin, including marihuana concentrate. Marihuana does not include industrial hemp, the fiber produced from the stalks of the plant, oil or cake made from the seeds of the plant, sterilized seed of the plant that is incapable of germination. The weight of any other ingredient combined with marihuana to prepare topical or oral





administrations, food, drink, or other products is not included when determining the weight of marihuana. (g) "Marihuana cultivation facility" means an entity licensed to cultivate, prepare, or package and sell marihuana to marihuana distributors, retail marihuana stores, marihuana product manufacturing facilities, or other marihuana cultivation facilities, but not to consumers. (h) "Marihuana distributor" means an entity licensed to purchase marihuana from a marihuana cultivation facility, to purchase marihuana and marihuana products from a marihuana product manufacturing facility, and to sell marihuana and marihuana products to a retail marihuana store. (i) "Marihuana establishment" means a marihuana cultivation facility, a marihuana testing facility, a marihuana product manufacturing facility, a marihuana distributor, or a retail marihuana store. (j) "Marihuana product manufacturing facility" means an entity licensed to purchase marihuana; manufacture, prepare, and package marihuana products; and sell marihuana and marihuana products to other marihuana product manufacturing facilities, to marihuana distributors, and to retail marihuana stores, but not to consumers. (k) "Marihuana products" means products containing concentrated marihuana and products that are composed of marihuana and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures. (l) "Marihuana testing facility" means an entity licensed to analyze and certify the safety and potency of marihuana.





(m) "Medical marihuana act" means the Michigan medical marihuana act, 2008 IL 1, MCL 333.26421 to 333.26430, and any other law of this state regulating marihuana for medical use. (n) "Medical marihuana center" means an entity licensed by a state agency to sell marihuana and marihuana products for use as provided in the medical marihuana act. (o) "Retail marihuana store" means an entity licensed to purchase marihuana from marihuana cultivation facilities and marihuana and marihuana products from marihuana distributors or marihuana product manufacturing facilities and to sell marihuana and marihuana products to consumers. (p) "Unreasonably impracticable" means that the measures necessary to comply with the regulations require such a high risk or investment of money, time, or any other resource or asset that a reasonably prudent businessperson would not engage in the operation of a marihuana establishment. Sec. 3. Notwithstanding any other law, the following acts performed by an individual 21 years of age or older without remuneration are not unlawful, are not an offense under the law of this state or any locality within this state, are not grounds for seizing or forfeiting property, and are not grounds for arrest, prosecution, or penalty in any manner: (a) Possessing, using, displaying, purchasing, or transporting marihuana accessories or 1 ounce or less of marihuana. (b) Possessing, growing, processing, or transporting 12 or fewer marihuana plants that exceed 12 inches in either height or diameter and possessing the marihuana derived from those plants on





the premises where the plants are grown. This subdivision applies only if the plants are grown in an enclosed, locked space and not openly or publicly displayed. (c) Transferring 1 ounce or less of marihuana to an individual who is 21 years of age or older. (d) Consuming marihuana, if the consumption is not conducted openly and publicly or in a manner that endangers others. (e) Possessing, growing, receiving, or transferring marihuana seed stock or any number of immature plants less than 12 inches in height and diameter that do not have buds or flowers. (f) Assisting another individual who is 21 years of age or older in any of the acts described in subdivisions (a) to (e). Sec. 4. (1) Notwithstanding any other provision of law, the following acts performed by persons 21 years of age or older in accordance with this act are not unlawful, are not an offense under the law of this state or any locality within this state, are not grounds for seizing or forfeiting property, and are not grounds for arrest, prosecution, or penalty in any manner: (a) Manufacturing, possessing, or purchasing marihuana accessories or selling marihuana accessories to an individual who is 21 years of age or older. (b) Possessing, displaying, or transporting marihuana or marihuana products; purchasing marihuana from a marihuana cultivation facility; purchasing marihuana or marihuana products from a marihuana product manufacturing facility; or selling marihuana or marihuana products to consumers, if the person conducting the activity under this subdivision has obtained a





current, valid license to operate a retail marihuana store or as a marihuana distributor or is acting in his or her capacity as an owner, employee, or agent of a licensed retail marihuana store or marihuana distributor. (c) Cultivating, harvesting, processing, packaging, transporting, displaying, or possessing marihuana; delivering or transferring marihuana to a marihuana testing facility; selling marihuana to another marihuana cultivation facility, a marihuana product manufacturing facility, a marihuana distributor, or a retail marihuana store; or purchasing marihuana from another marihuana cultivation facility, if the person conducting any activity under this subdivision has obtained a current, valid license to operate a marihuana cultivation facility or is acting in his or her capacity as an owner, employee, or agent of a licensed marihuana cultivation facility. (d) Packaging, processing, transporting, manufacturing, displaying, or possessing marihuana or marihuana products; delivering or transferring marihuana or marihuana products to a marihuana testing facility; selling marihuana or marihuana products to a marihuana distributor, a retail marihuana store, or another marihuana product manufacturing facility or a marihuana distributor; purchasing marihuana from a marihuana cultivation facility; or purchasing marihuana or marihuana products from another marihuana product manufacturing facility, if the person conducting any activity under this subdivision has obtained a current, valid license to operate a marihuana product manufacturing facility or is acting in his or her capacity as an owner, employee,





or agent of a licensed marihuana product manufacturing facility. (e) Possessing, cultivating, processing, repackaging, storing, transporting, displaying, transferring or delivering marihuana or marihuana products if the person has obtained a current, valid license to operate a marihuana testing facility or is acting in his or her capacity as an owner, employee, or agent of a licensed marihuana testing facility. (f) Leasing or otherwise allowing the use of property owned, occupied, or controlled by any person, corporation, or other entity for any of the activities conducted lawfully in accordance with subdivisions (a) to (e). (2) To ensure the most secure, reliable, and accountable system for producing and distributing marihuana and marihuana products in accordance with this act, the department shall use the following criteria as primary considerations in any competitive application by applicants for a license under this act: (a) Prior experience producing or distributing marihuana or marihuana products under this act in the locality in which the applicant seeks to operate a marihuana establishment. (b) Consistent compliance with this act and relevant state law and administrative rules during the experience described in subdivision (a). (3) The department shall not require a consumer to provide a retail marihuana store with personal information other than government-issued identification to determine the consumer's age and shall not require a retail marihuana store to acquire or record personal information about consumers other than information





typically acquired in a financial transaction conducted at a retail liquor store. Sec. 5. Marihuana sold or otherwise transferred by a marihuana cultivation facility to a marihuana product manufacturing facility, a marihuana distributor, or a retail marihuana store is subject to an excise tax. The excise tax rate is 5% in 2017 and increases by 1% each successive January 1 until it reaches 10%. The department of treasury shall establish procedures for collecting the excise tax. After depositing into the general fund an amount equal to the department's necessary administrative costs that exceed the amount collected in license application fees, 40% of the balance of the proceeds of the excise tax shall be deposited in the school aid fund to be used exclusively for early childhood education, 40% shall be deposited in the Michigan transportation fund, and 20% shall be allocated to the department of health and human services to be used exclusively for substance abuse treatment programs. Marihuana intended for sale at medical marihuana centers is exempt from the excise tax under this section. Sec. 6. A locality may adopt an ordinance that does not conflict with this act or administrative rules implementing this act. The ordinance may govern the time, place, manner, and number of marihuana establishments. The ordinance shall designate a violation of the ordinance as a municipal civil infraction and provide a civil fine for that violation. A locality may prohibit the operation of marihuana cultivation facilities, marihuana product manufacturing facilities, marihuana testing facilities, or retail marihuana stores by ordinance or an initiated or referred





measure. An initiated or referred measure to prohibit the operation of marihuana cultivation facilities, marihuana product manufacturing facilities, marihuana testing facilities, or retail marihuana stores must be submitted to the voters at a general election. Sec. 7. Each application for a new annual license to operate a marihuana establishment or annual license renewal shall be submitted to the department. The department shall do all of the following: (a) Begin accepting and processing applications on January 1, 2017. (b) Immediately upon receipt, forward a copy of the application to the locality in which the applicant desires to operate the marihuana establishment. The application fee shall be deposited into the state treasury, and upon appropriation, 1/2 of the fee shall be paid to the locality in which the establishment will be located. (c) Issue an annual license to the applicant between 45 and 90 days after receipt of an application unless the department finds the applicant is not in compliance with rules adopted under section 10 or the department is notified by the relevant locality that the applicant is not in compliance with an ordinance or initiated measure adopted under section 6 and in effect at the time of application. If a locality has enacted a numerical limit on the number of marihuana establishments and a greater number of applicants seek licenses, the department shall solicit and consider input from the locality as to the locality's preference or





preferences for licensure. (d) If the department makes a finding of noncompliance or otherwise does not issue a license under subdivision (c), promptly notify the applicant in writing of the specific reason for failure to issue the license. Sec. 8. (1) This act does not require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marihuana in the workplace or prohibit an employer from adopting a policy restricting employee use of marihuana. (2) This act does not authorize driving or operating under the influence of marihuana or driving while impaired by marihuana or supersede or restrict state law related to driving under the influence of marihuana or driving while impaired by marihuana. (3) This act does not authorize the transfer of marihuana or marihuana accessories, with or without remuneration, to an individual under the age of 21 or allow an individual under the age of 21 to purchase, possess, use, transport, grow, or consume marihuana. (4) This act does not prohibit a person, employer, school, hospital, detention facility, corporation, or any other entity that occupies, owns, or controls private property from prohibiting or otherwise regulating the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marihuana on or in that private property. Sec. 9. This act does not do any of the following: (a) Limit any privileges or rights of a medical marihuana





patient, primary caregiver, or licensed entity as provided in the medical marihuana act. (b) Authorize a medical marihuana center to distribute marihuana to a person who is not permitted to receive that distribution under the medical marihuana act. (c) Authorize a medical marihuana center to purchase marihuana or marihuana products in a manner or from a source not authorized under the medical marihuana act. (d) Authorize any medical marihuana center operating under the medical marihuana act to operate on the same premises as a retail marihuana store. (e) Discharge a state department, agency, board, or commission from any statutory and constitutional duty to regulate medical marihuana under the medical marihuana act. Sec. 10. Not later than January 1, 2017, the department shall adopt rules necessary to implement this act under the administrative procedure act of 1969, 1969 PA 306, MCL 24.201 to 301.328. The rules shall not prohibit the operation of marihuana establishments, either expressly or through regulations that are unreasonably impracticable. The rules shall include: (a) Procedures for issuing, renewing, suspending, and revoking a license to operate a marihuana establishment. (b) A schedule of application, licensing, and renewal fees. An original application fee shall not exceed $5,000.00, and a renewal application fee shall not exceed $500.00, adjusted annually by the department for inflation, unless the department determines that a greater fee is necessary to carry out its responsibilities under



