There has been a lot of positive movement in government and regulations around adult-use marijuana in the past couple of weeks. First the Marijuana Regulatory Agency released emergency rules for recreational adult-use marijuana. A couple of weeks later MRA officials released a social-equity plan as called for by Prop. 1, which legalized adult-use marijuana in Michigan last year. In between those events, state Sen. Jeff Irwin, D-Ann Arbor, introduced legislation to expunge the records of those convicted of possession and use offenses; two days later state Rep. Isaac Robinson, D-Detroit, announced a similar but further-reaching plan for the House.
Taken as a group, these actions represent a huge step forward for the state bureaucracy and its administration of the marijuana industry. It removes some of the pressure created by the inaction of the Snyder administration and its distrustful approach to anything having to do with marijuana.
The new, welcoming attitude represents a change of profound proportions. For instance, it used to be that anyone with a marijuana conviction was disqualified from being in the medical marijuana business. The adult-use rules are the opposite. Not only can a person with a conviction be the owner of a marijuana retail store, the state is willing to give the person with the conviction a 25 percent break on license fees because of it.
Let's say you want to have a marijuana retail store in Detroit; the state fee for a license is $25,000. You're in the right place, so you get 25 percent off. If you have a marijuana-related conviction, you get another 25 percent off. Your $25,000 fee has just been cut in half to $12,500. Then there's another 10 percent if you've been a caregiver for two years from 2008 to 2017. That brings the cost of a store license down to $10,000.
A leg up instead of a put-down. That's a new attitude. Of course, none of that includes the property acquisition and equipment costs, and all the other things one needs to run a store.
In addition, the MRA adult-use emergency rules took away the capitalization requirements that are required to have a medical marijuana business. Medical marijuana businesses have to maintain $200,000 to $500,000, depending on the type of license. Adult-use businesses don't have to do that.
Medical marijuana businesses do get a break in the adult-use world. For at least the first year, starting Nov. 1, the MRA is accepting adult-use applications only from businesses that already hold medical marijuana licenses in the categories that have equal counterparts, such as provisioning centers. There are license types that are new, such as microbusiness and marijuana event organizer, for which the state will accept applications.
A leg up instead of a put-down. That’s a new attitude.
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Even though the costs for adult-use marijuana are lower than medical marijuana, there are even bigger breaks for residents of the 19 communities designated as qualifying for the social-equity program.
The social-equity provisions bear some consideration on this point. If your business is in one of the designated communities qualifying for social equity (like, say, Detroit), then state resources are available to help you sort through a lot of the application, as well as legal and compliance details.
If you've been a resident of that community for the past five years, there is a 25 percent reduction. There is another 25 percent reduction if the majority owner has been a resident for five years and has a marijuana-related conviction. There is an additional 10 percent discount if the majority owner has been a resident the past five years and was a caregiver for at least two years between 2008 and 2017.
All that seems a come-hither enticement for folks who've been on the fringes of the medical marijuana business and possibly on the fringe of the black market. Caregivers have been the main producers of medical marijuana this past decade. But when the state medical marijuana licensing system was set up, they were treated with suspicion and disdain that has pushed them close to the illegal marketplace.
"I think overall my hope is that the implementation of the regulatory program as we've laid it out will help us combat the black market," says MRA Director Andrew Brisbo. "The opportunities for licensure in this space and how we structured the fees and the application processes and the eligibility criteria in terms of barriers for entry is going to provide an opportunity for a wider scope of applicant, and I think that will be beneficial toward taking down the black market."
The next piece of all this is expunging records for folks with convictions on their records. In many states, expunging records has come along with legalization. Irwin's proposed bill would expunge the records of people with up to two misdemeanors and one felony on their records. Robinson says his plan will go further and clear all marijuana felonies. The bottom line is that this was expected to come next after Prop. 1 was passed.
Communities that qualify for the social-equity program are on the list because they have suffered more marijuana convictions than others and have high poverty levels. That's a refreshing change of perspective. The next stage is for people in Detroit and elsewhere to take up the challenge. MRA officials say they will be meeting with potential applicants in social-equity cities during August.
Maybe we can make this marijuana thing work for the community. It's a huge turnaround from the way things used to work.
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