GOVERNOR WHITMER ABOLISHES THE MARIJUANA LICENSING BOARD
In her second major executive action in her brief term regarding marijuana regulation in Michigan, Governor Gretchen Whitmer signed Executive Order 2019-7 which abolished the Medical Marijuana Licensing Board, established the Marijuana Regulatory Agency and transferring the regulation of industrial hemp to the Department of Agriculture. These actions are heralded by the marijuana industry in Michigan as it will increase the speed of the facility licensing application process and which will develop the entire industry at a faster pace. Further, “This executive order will eliminate inefficiencies that have made it difficult to meet the needs of Michigan’s medical marijuana patients,” Whitmer said. The change becomes effective on April 30, 2019. There will be a final two licensing board meetings in March and April.
As support for this action, the Executive Order cites the necessity to avoid further licensing delays and better coordinate varying sources of authority for the enforcement of the state marijuana laws in order for there to be effective and efficient administration by one dedicated state agency, the Marijuana Regulatory Agency (MRA).
Medical Marijuana Licensing Board Failures
In May of 2017 a five-member politically appointed board with recommendations for those serving coming from former Senate Majority Leader Arlan Meekhof, R-Grand Haven, former Speaker of the House Tom Leonard, R-Dewitt and Gov. Rick Snyder. Almost immediately it was seen as a negative force for the industry. Former house speaker Rick Johnson was a registered lobbyist when he took the appointment in May of 2017 which raised concerns about whether he would personally gain from his appointment. Donald Bailey was a retired sergeant of the Michigan State Police. He was the most consistent board member in voting to deny applicants. It was widely believed that he was against marijuana licensing which is absurd for a board member to be against the very thing he is supposed to be regulating.
Many of the board’s decisions were without evidentiary support. Some have been based upon speculation and undocumented evidence.
Authority for Change
The board was statutorily created by the Michigan Marijuana Facilities Licensing Act (MMFLA) but the Michigan Constitution, which is a supreme body of law, authorizes executive reorganization. Pursuant to Article 5 of the Michigan Constitution The executive branch (the Governor) can make changes to the executive branch as necessary for the efficient administration of its duties. Many believed that because the Board was created by statute that it could not be removed except by legislative action (three fourth’s majority because it was a ballot initiative). Historical precedence proved otherwise as this action was sanctioned by the Attorney General, Dana Nessel. It remains to be seen if it will be challenged but many believe it will not.
Duties of the Marijuana Regulatory Agency (MRA)
The MRA has now assumed the power of the Board including the right to:
- grant or deny licenses
- promulgating administrative rules
- provide for the levy and collection of fines for violations of the act
- provide oversight of licensed marijuana facilities
- review and rule upon any complaints made by a licensee regarding investigative procedures
- review the patterns of marijuana transfers to make recommendations to the governor and legislature in an annual report which shall be submitted by April 15th each year
The executive order transferred the regulatory authority of all four of our marijuana statutes inching the Medical Marijuana Act, MMFLA, MTA, and the MRTMA. There will be appointed one executive director (most likely Andrew Brisbow). The only marijuana issue it is not regulating is industrial hemp which has been transferred to the Michigan Department of Agriculture. The MRA has been ordered to conduct four public hearings per year to hear comment from the public.
Department of Agriculture will regulate Industrial Hemp
The Michigan Regulation and Taxation of Marijana Act permitted LARA to regulate the production, distribution, and commerce of industrial hemp. The Executive Order has now reorganized and given the Department of Agriculture and Rural Development (DOA) oversight of industrial hemp. This is a welcome change for the hemp industry because LARA would presumably have had stricter oversight consistent with current cannabis laws. It is believed that the DOA will administer the hemp program more liberally and consistent with recently enacterd Michigan and Federal laws regarding industrial hemp.
What does this mean for current and past applicants?
For current applicants everything is the same but now there MRA will be making the decisions. There will be a more streamlined process, there will not be an agenda to wait for, they are not going to have to go through the board, this is especially important for membership changes, change of ownership and management personnel change requests.
This action will not effect those whom have been denied in the past nor will it effect pending appeals. It will be interesting to see how many people seek to delay their licensing adjudication until after April 30th.
What is next?
This has to be approved by the legislature but it is widely believed the legislature has already approved these changes. The current board is scheduled to create a report for the Governor and legislature due on April 15th on the current status of the program. That will be interesting to see if they actually complete that report or pass it off to MRA. As far as the Governor’s next move regarding marijuana, the logical thought is that there will be an extension of the March 31, 2019 deadline for temporary operators to get licensed. Of course the industry is also waiting for action to be taken on prior marijuana conditions and those currently serving sentences.