SENATE BILL NO. 597

October 02, 2025, Introduced by Senators SINGH and MOSS and referred to Committee on Regulatory Affairs.

"Michigan Regulation and Taxation of Marihuana Act,"

by amending sections 7, 8, 9, and 9a (MCL 333.27957, 333.27958, 333.27959, and 333.27959a), sections 7 and 8 as amended by 2023 PA 166 and section 9a as added by 2020 PA 208, and by adding section 9b.

the people of the state of michigan enact:

Sec. 7. (1) The cannabis regulatory agency is responsible for implementing this act and has the powers and duties necessary to control the commercial production and distribution of marihuana. The cannabis regulatory agency shall do all of the following:

(a) Promulgate rules pursuant to section 8 that are necessary to implement, administer, and enforce this act.

(b) Grant Subject to section 9b, grant or deny each application for licensure and investigate each applicant to determine eligibility for licensure, including conducting a background investigation on each person holding an ownership interest in the applicant.

(c) Ensure that marihuana establishments comply with this act and the rules promulgated under this act by doing all of the following:

(i) Performing investigations of compliance and regular inspections of marihuana establishments.

(ii) Taking appropriate disciplinary action against a licensee, including prescribing civil fines for violations of this act or the rules promulgated under this act and suspending, restricting, or revoking a state license.

(d) Hold at least 4 public meetings each calendar year for the purpose of hearing complaints and receiving the views of the public with respect to administration of this act.

(e) Collect fees for licensure and fines for violations of this act or the rules promulgated under this act.

(f) Deposit all fees collected for licensure into the marihuana regulation fund established under section 14 and remit all fines collected for deposit into the general fund.

(g) Submit an annual report to the governor covering the immediately preceding year that includes all of the following:

(i) The number of state licenses of each class issued.

(ii) Demographic information of licensees.

(iii) A description of enforcement and disciplinary actions taken against licensees.

(iv) A statement of revenues and expenses of the cannabis regulatory agency related to the implementation, administration, and enforcement of this act.

(h) Employ personnel as necessary to adequately perform its duties.

(2) The cannabis regulatory agency may do either of the following:

(a) Enter into an agreement with an advisor or consultant as necessary to adequately perform its duties under this act.

(b) Enter into an agreement with an Indian tribe regarding marihuana-related regulatory issues that involve the interests of this state and the Indian tribe, including, but not limited to, issues related to the commercial growing, processing, sale, testing, transportation, and possession of marihuana.

(3) A person who has a pecuniary interest, directly or indirectly, in a marihuana establishment or tribal marihuana business may not be an employee, advisor, or consultant involved in the implementation, administration, or enforcement of this act. An employee, advisor, or consultant of the cannabis regulatory agency is not personally liable for any action at law for damages sustained by a person because of an action performed or done in the performance of the employee's, advisor's, or consultant's duties in the implementation, administration, or enforcement of this act.

(4) The department of state police shall cooperate and assist the cannabis regulatory agency in performing the cannabis regulatory agency's duties under this act, including, but not limited to, conducting background investigations of applicants.

Sec. 8. (1) The cannabis regulatory agency shall promulgate rules to implement and administer this act that include all of the following:

(a) Procedures for issuing a state license pursuant to section 9 and for renewing, suspending, and revoking a state license.

(b) A schedule of fees in amounts not more than necessary to pay for implementation, administration, and enforcement costs of this act and that relate to the size of each licensee or the volume of business conducted by the licensee.

(c) Qualifications for licensure that are directly and demonstrably related to the operation of a marihuana establishment. However, a prior conviction solely for a marihuana-related offense must not disqualify an individual or otherwise affect eligibility for licensure, unless the offense involved distribution of a controlled substance to a minor.

(d) Requirements and standards for safe cultivation, processing, and distribution of marihuana by marihuana establishments, including health standards to ensure the safe preparation of marihuana-infused products and prohibitions on pesticides that are not safe for use on marihuana.

(e) Testing, packaging, and labeling standards, procedures, and requirements for marihuana, including, but not limited to, all of the following:

(i) A maximum THC level for marihuana-infused products.

(ii) A requirement that a representative sample of marihuana be tested by a marihuana safety compliance facility.

(iii) A requirement that the amount of marihuana or marihuana concentrate contained within a marihuana-infused product be specified on the product label.

(iv) A requirement that all marihuana sold through marihuana retailers and marihuana microbusinesses include on the exterior of the marihuana packaging the following warning printed in clearly legible type and surrounded by a continuous heavy line:

WARNING: USE BY PREGNANT OR BREASTFEEDING WOMEN, OR BY

WOMEN PLANNING TO BECOME PREGNANT, MAY RESULT IN FETAL

INJURY, PRETERM BIRTH, LOW BIRTH WEIGHT, OR DEVELOPMENTAL

PROBLEMS FOR THE CHILD.

(f) Security requirements, including lighting, physical security, and alarm requirements, and requirements for securely transporting marihuana between marihuana establishments. The requirements described in this subdivision must not prohibit cultivation of marihuana outdoors or in greenhouses.

(g) Record keeping requirements for marihuana establishments and monitoring requirements to track the transfer of marihuana by licensees.

(h) Requirements for the operation of marihuana secure transporters to ensure that all marihuana establishments are properly serviced.

(i) Reasonable restrictions on advertising, marketing, and display of marihuana and marihuana establishments.

(j) A plan to promote and encourage participation in the marihuana industry by people from communities that have been disproportionately impacted by marihuana prohibition and enforcement and to positively impact those communities.

(k) Penalties for failure to comply with a rule promulgated pursuant to this section or for a violation of this act by a licensee, including civil fines and suspension, revocation, or restriction of a state license.

(l) Informational pamphlet standards for marihuana retailers and marihuana microbusinesses, including, but not limited to, a requirement to make available to every customer at the time of sale a pamphlet measuring 3.5 inches by 5 inches that includes safety information related to marihuana use by minors and the poison control hotline number.

(m) Procedures and standards for approving an appointee to operate a marihuana establishment under section 9a.

(n) A limit on the total amount of THC that a product described in section 3(f)(v)(A) may contain.

(2) The cannabis regulatory agency may promulgate rules to do any of the following:

(a) Provide for the issuance of additional types or classes of state licenses to operate marihuana-related businesses, including licenses that authorize any of the following:

(i) Limited cultivation, processing, transportation, delivery, storage, sale, or purchase of marihuana.

(ii) Consumption of marihuana within designated areas.

(iii) Consumption of marihuana at special events in limited areas and for a limited time.

(iv) Cultivation for purposes of propagation.

(v) Facilitation of scientific research or education.

(b) Regulate the cultivation, processing, distribution, and sale of industrial hemp.

(c) Exclude from the definition of THC in section 3 a tetrahydrocannabinol if, after the cannabis regulatory agency makes findings with respect to each of the following factors, the cannabis regulatory agency determines that the tetrahydrocannabinol does not have a potential for abuse:

(i) The actual or relative potential for abuse of the tetrahydrocannabinol.

(ii) The scientific evidence of the tetrahydrocannabinol's pharmacological effect, if known.

(iii) The state of current scientific knowledge regarding the tetrahydrocannabinol.

(iv) The history and current pattern of abuse of the tetrahydrocannabinol.

(v) The scope, duration, and significance of abuse of the tetrahydrocannabinol.

(vi) The tetrahydrocannabinol's risk to the public health.

(vii) The potential of the tetrahydrocannabinol to produce psychic or physiological dependence liability.

(3) The cannabis regulatory agency shall not promulgate a rule that is unreasonably impracticable or that does any of the following:

(a) Establishes Except as otherwise required to implement section 9b, establishes a limit on the number of any type of state license that may be granted.

(b) Requires a customer to provide a marihuana retailer with identifying information other than identification to determine the customer's age or requires the marihuana retailer to acquire or record personal information about customers other than information typically required in a retail transaction.

(c) Prohibits a marihuana establishment from operating at a shared location of a marihuana facility operating pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801, or prohibits a marihuana grower, marihuana processor, or marihuana retailer from operating within a single facility.

(4) A rule promulgated under this act must be promulgated pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Sec. 9. (1) 1. Each An application for a state license must be submitted to the department. cannabis regulatory agency. Upon receipt of a complete application and application fee, the department cannabis regulatory agency shall, forward subject to section 9b, do all of the following:

(a) Forward a copy of the application to the municipality in which the marihuana establishment is to will be located. , determine

(b) Determine whether the applicant and the premises qualify for the state license and comply with this act. , and issue

(c) Issue the appropriate state license or send the applicant a notice of rejection setting forth that states the specific reasons why the department cannabis regulatory agency did not approve the state license application. within 90 days.

(2) 2. The department Subject to section 9b, the cannabis regulatory agency shall issue the following state license types: marihuana

(a) Marihuana retailer. ; marihuana

(b) Marihuana safety compliance facility. ; marihuana

(d) Marihuana processor. ; marihuana

(e) Marihuana microbusiness. ; class

(f) Class A marihuana grower authorizing that authorizes the cultivation of not more than 100 marihuana plants. ; class

(g) Class B marihuana grower authorizing that authorizes the cultivation of not more than 500 marihuana plants. ; and class

(h) Class C marihuana grower authorizing that authorizes the cultivation of not more than 2,000 marihuana plants.

(3) 3. Except as otherwise provided in this section and subject to section 9b, the department cannabis regulatory agency shall approve a an application for a state license application and issue a state license to the applicant if all of the following conditions are met:

(a) All of the following apply to the applicant: has

(i) The applicant has submitted an application in compliance accordance with the rules promulgated by the department, cannabis regulatory agency under this act.

(ii) The applicant is in compliance with this act and the rules promulgated by the cannabis regulatory agency under this act. , and has

(iii) The applicant has paid the required application fee. ;

(b) the The municipality in which the applicant's proposed marihuana establishment will be located does not notify the department cannabis regulatory agency that the applicant's proposed marihuana establishment is not in compliance with an ordinance consistent with section 6 of this act and that is in effect at the time of application. ;

(c) the The property where the applicant's proposed marihuana establishment is to will be located is not within an either of the following:

(i) An area zoned exclusively for residential use. and is not within

(ii) 1,000 feet of a pre-existing public or private school providing that provides education in kindergarten or any of grades 1 through to 12, unless a the municipality in which the applicant's proposed marihuana establishment will be located adopts an ordinance that reduces this distance requirement. ;

(d) no Approval of the application will not result in a person who holds an ownership interest in the marihuana establishment applicant holding any of the following:

(i) (1) will hold an An ownership interest in both a marihuana safety compliance facility or in a marihuana secure transporter and in a marihuana grower, a marihuana processor, a marihuana retailer, or a marihuana microbusiness. ;

(ii) An ownership interest in a marihuana secure transporter and in a marihuana grower, marihuana processor, marihuana retailer, or marihuana microbusiness.

(iii) (2) will hold an An ownership interest in both a marihuana microbusiness and in a marihuana grower, a marihuana processor, a marihuana retailer, a marihuana safety compliance facility, or a marihuana secure transporter. ; and

(iv) (3) will hold an An ownership interest in more than 5 marihuana growers or in more than 1 marihuana microbusiness, except that the department may approve a license application from a person who holds an ownership interest in more than 5 marihuana growers or more than 1 marihuana microbusiness if, unless the cannabis regulatory agency, after January 1, 2023, the department promulgates a rule authorizing an individual that authorizes a person to hold an ownership interest in more than 5 marihuana growers or in more than 1 marihuana microbusiness.

(4) 4. If a municipality limits the number of marihuana establishments that may be licensed in the municipality pursuant to under section 6 of this act and if that limit prevents the department cannabis regulatory agency from issuing a state license to all applicants who meet the requirements of subsection 3 of this section, (3), the municipality shall decide, among competing applications by a competitive process intended to select applicants who are best suited to operate in compliance with this act within the municipality.

(5) 5. All A state licenses are license is effective for 1 year , unless the department cannabis regulatory agency issues the state license for a longer term. A The cannabis regulatory agency shall renew a state license is renewed upon receipt of a complete renewal application and a renewal fee from any marihuana establishment a licensee in good standing.

6. The department shall begin accepting applications for marihuana establishments within 12 months after the effective date of this act. Except as otherwise provided in this section, for 24 months after the department begins to receive applications for marihuana establishments, the department may only accept applications for licensure: for a class A marihuana grower or for a marihuana microbusiness, from persons who are residents of Michigan; for a marihuana retailer, marihuana processor, class B marihuana grower, class C marihuana grower, or a marihuana secure transporter, from persons holding a state operating license pursuant to the medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to 333.27801; and for a marihuana safety compliance facility, from any applicant. One year after the department begins to accept applications pursuant to this section, the department shall begin accepting applications from any applicant if the department determines that additional state licenses are necessary to minimize the illegal market for marihuana in this state, to efficiently meet the demand for marihuana, or to provide for reasonable access to marihuana in rural areas.

(6) 7. Information obtained from an applicant related to licensure under this act is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

Sec. 9a. (1) The marijuana cannabis regulatory agency may approve the operation of a marihuana establishment by any of the following:

(a) A court-appointed personal representative, guardian, or conservator of an individual who holds a state license or has an interest in a person that holds a state license.

(b) A court-appointed receiver or trustee.

(2) If an individual approved to operate a marihuana establishment under subsection (1) receives notice from the marijuana cannabis regulatory agency that the marihuana establishment the individual is operating is in violation of this act or the rules promulgated under this act, the individual shall notify the court that appointed the individual of the notice of violation within not later than 2 days after receiving the individual receives the notice of violation.

Sec. 9b. (1) Except as otherwise provided in subsection (2), beginning on January 1, 2026, the cannabis regulatory agency shall not issue a marihuana retailer license if doing so would, within the municipality where the proposed marihuana retailer will be located, result in there being more than 1 marihuana retailer for every 5,000 residents of the municipality.

(2) Subsection (1) does not apply to any of the following:

(a) The renewal of a marihuana retailer license under section 9(5).

(b) A marihuana retailer license that is transferred to another person in accordance with this act and the rules promulgated under this act, regardless of whether the other person is required to submit an application to obtain the marihuana retailer license or is issued a new marihuana retailer license as a result of the transfer.

(3) If an applicant's proposed location of a marihuana retailer is located within a resort district, the applicant may apply for an exemption under this section. The cannabis regulatory agency shall create an application and application process for use under this subsection. The cannabis regulatory agency may approve an application for an exemption at the cannabis regulatory agency's discretion.