The laws and regulations that referee Michigan's nascent marijuana industry are complicated. It's a new industry with billions of dollars of potential business activity, but also with great risk.

Since 2016, Andrew Brisbo has overseen the development of those rules. First in 2016, leading the state's effort to establish and regulate a successful medical marijuana industry. Then, following the passage of adult-use recreational marijuana by voters in November 2018, Brisbo set forth to ensure the state devours marijuana's elusive black market and replaces it with an effective, well-regulated legal industry.

In May, Gov. Gretchen Whitmer signed an executive order to create a unified agency, the Marijuana Regulatory Agency, with Brisbo as its leader.

Earlier this month, the agency issued emergency rules to outline how the new adult-use market will function, as well as the license application and how the state's medical and recreational industries will interact. Brisbo vows the new rules provide regulators and interested businesses ample time to prepare for when the state will begin accepting recreational business applications on Nov. 1.

Crain's senior reporter Dustin Walsh chatted with Brisbo over the phone last week as the regulator was attending a marijuana regulators' event in Alaska.

Crain's: You've issued the emergency rules and appear to be moving forward with the regulatory framework. How do you think the rollout is going thus far?

Brisbo: We are still on schedule. We're getting a lot of feedback from stakeholders and we've heard overwhelming positive feedback about the rules. We really tried to mirror what we did on the medical side so everyone knew what to expect, as we anticipate many of the businesses on the medical side will seek licensure on the adult-use side. Our social equity program (which is designed to provide assistance for starting a marijuana business to residents negatively impacted by marijuana laws), I'm really proud of what our team has done: Do the things that are impactful to people in this state. What we did is really try to pull out some of the challenging issues from those trying to achieve licensure, capitalization, reducing the paperwork that needs to be submitted, etc. We're overall pleased with where we are now. We believe we've given municipalities enough time and applicants enough time before we start taking applications in November.

What have you learned from the mistakes that occurred during the medical rollout?

I don't know if I'd call them mistakes, but the challenging aspects. We heard from a lot of people that wanted to operate a small business that the barrier to entry was too high. In the medical area, there were certain disqualifiers, such as the rules around those with marijuana convictions.

The requirement for capitalization also made it challenging for many. So we set out to provide clarity on what those qualifiers were, but also understanding the capital requirements were a barrier. (Creating the medical regulatory framework) was the first time we've done this in the state. We put out the rules just a couple of weeks before we started accepting applications. So now we're putting out the rules (for adult-use recreational) several months before we accept applications. People who want to pursue licensure have a lot of time to know what the regulatory framework is going to look like. When we get to the point of taking applications, everyone is going to be prepared on how they want to approach it.

Despite recreational legalization in several states, the black market remains strong. How are you combating that to ensure a successful legal market?

The black market still persists. The success of the regulated market should decrease the black market. But we need to create a regulatory environment that allows businesses to get into the market quickly and be successful — to create a price point (for marijuana) that makes (the legal market) more desirable. We continue to work with our law enforcement partners, to be a resource for them, so they can work to get the black market businesses out of the market. I think a lot of this is about educating everyone on what the legal environment looks like, especially local elected officials and law enforement. Convince them that taking action against the black market is not anti-marijuana, but pro-regulated market. Tamping down the black market is not disrespecting the will of the voters, but making good on their will that a well-regulated market is successful.

On that note, we've seen many municipalities in other states opt out, leaving consumers to either travel considerable distances to secure marijuana or rely on the available black market. This seems to exacerbate the black market problem, no?

Anything that allows the black market to flourish concerns me. Providing access is key to a successful legal market, but there are multiple methods for providing access. We respect the will of communities to prevent a brick and mortar store in their jurisdiction, so we have regulated delivery service to allow access to those that don't live near a retail establishment. Once we have a successful program, those communities on the fence will see this regulated market is flourishing and that will provide them a sense of comfort to participate and thus improve access. It's incremental. We're trying to replace a black market that's been in place for 100 years and that doesn't happen overnight. We're starting hear conversations that people have a good understanding of the regulatory environment. That's continuing to move in the right direction and we play a critical role in getting that information out so we can have a successful and well-regulated industry.

The black market also feeds on the hodgepodge of states that have legal weed and those that don't — operators can sell for higher prices in states that don't have legal access. Do you think federal legalization would solve many problems for state regulators?

I think it's just a change. Easier? Harder? That can be interpreted a lot of different ways. There's no guide for how to approach the evolution of the industry across the country. I think depending on how (federal legalization) is approached, it can have impacts on how we administer our programs. The economics of the black market are shifting as more states are coming on board with medical and adult-use programs. That eliminates some of the black market. But no matter what happens you have to be careful your state does not become a black market supplier for other states, which is why we're working closely with our law enforcement partners.

CBD oil (cannabidiol, designed to provide medical benefits without getting "high") is everywhere. I see it's now even sold at my local Kroger store. Are you surprised by its availability?

It's hard for me to be surprised by anything anymore. CBD is a hot commodity. It's popping up everywhere, but there isn't a clear direction on what can and can't be done in that space. In the lack of regulatory guidelines, people will fill in that vacuum. And they have. We're working with the agriculture department ... about how that's being regulated. It's a challenge when the industry gets way out ahead of regulation, because then you're trying to pull everyone back in while trying to be respectful of the operators who have invested in the space. A lot of this is still undefined. There's also the public heath concern. As a regulator, we're here to ensure the safety of the public. We just want to see clarity on the regulatory environment on CBD in the future.

Across the U.S., businesses have largely maintained a zero-tolerance policy on marijuana despite legalization. But they are definitely assessing their drug-testing policies. Do you see attitudes changing as the industry normalizes?

I think you'll see an evolution in a couple of ways. Those industries where there's not a direct safety concern, they are already starting to look at their drug-testing policies. They can have whatever policy they want, the law dictates that. But when you're looking at people where safety is a concern, that's harder to change. One of the concerns is measuring whether someone has used marijuana in accordance with the law outside of the workplace versus whether they are impaired. That presents a challenge. Many companies have continued their zero-tolerance policies because there's nothing reliable to measure impairment versus someone using the product lawfully. The science (on testing) needs to catch up so employers have a better resource to help inform their policies. I do think that's critical.

Let's fast-forward to next year, when licenses are being issued and the industry is finally taking off under your framework. How would you define success?

A successful rollout is grounded in clarity. We don't advocate for communities to take a certain approach. So as long as we provide the information so they can decide how to participate and we provide quick and clear licensure, that's successful. It's really about creating an environment where the industry flourishes and where we see the black market is diminished because of that success. We also have to be prepared to continue to evolve with the industry. We built in flexibility so we can do just that. Private industry always moves ahead more quickly than government responds, so our ability to adapt will also dictate our success.