Medical Marijuana Oversight Bill Becomes Law

Legislation to reform the background check requirements for medical marijuana facilities has been signed into law by Gov. Gretchen Whitmer.

The measure, now Public Act 3 of 2019, changes the applicant requirements in the Medical Marihuana Facilities Licensing Act to require those with “influence over the business” to go through the background check process. Owning more than a 10% stake in a company requires the standard vetting process while owning less than a 10% stake would be a more streamlined process.

Under a 2016 state law, anyone with any ownership stake – regardless of the percentage of involvement – in a medical marijuana business must go through a financial and criminal background check by the state to receive a license.

The new law also amends the definition of “applicant” for applications submitted on or after Jan. 1 to include managerial employees and their spouses.

“I want to thank the governor for signing this reform to provide additional clarity to the state’s medical marijuana law and improve the licensing process for everyone involved,” said state Sen. Michael D. MacDonald, R­Macomb Township. “State regulators will now be able to more effectively and efficiently provide necessary oversight of medical marijuana businesses. This will also better protect Michigan families and save taxpayer dollars.”

The changes to the Medical Marihuana Facilities Licensing Act now requires background checks on:

  • Managerial employees of the applicant
  • A person holding a direct or indirect ownership interest of more than 10%
  • For an individual or sole proprietorship – proprietor and spouse
  • For a partnership and limited liability partnership – all partners and spouses
  • For a limited partnership and limited liability partnership – all general and limited partners, all general and limited partners not including a limited partner holding a direct or indirect ownership interest of 10% or less and who doesn’t exercise control over or manage the partnership, and their spouses
  • For a limited liability company – all members and managers, not including a member holding a direct or indirect ownership interest of 10% or less and who doesn’t exercise control over or manage the company, and their spouses
  • For a privately held corporation – corporate officers or persons with equivalent titles and their spouses, directors and their spouses, stockholders, not including those holding a direct or indirect ownership interest of 10 percent or less, and their spouses
  • For a multilevel ownership enterprise – any entity or person that receives or has the right to receive annually more than 10% of the gross or net profit from the enterprise
  • For a nonprofit corporation – individuals and entities with membership or shareholder rights with accordance with the articles of incorporation or the bylaws, and their spouses

 

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