Since December 20, 2018, when the Federal Government officially legalized the production of industrial hemp, which is defined as the cannabis plant with less than .3% THC, our firm has been flooded with questions about obtaining licenses for growing and processing industrial hemp, and how that can be done in Michigan. At first, many people felt that, simply because the Federal government passed the Farm Bill, the State of Michigan’s laws regarding industrial hemp growing, processing and distribution were “pre-empted.” Such notions were not correct. However, the Michigan legislature also took actions, and has set the table for State licensing for industrial hemp growers, processors and testers. However, there are a number of rules and regulations that will apply, and which currently apply, to hemp production of which anyone in the industry must be aware.
Status of Hemp in Michigan
After passage of the Farm Bill, the State legislature in Michigan passed amendments to the law that was formerly known as the Industrial Hemp Research Act. The new act, now referred to as the Industrial Hemp Research and Development Act (IHRDA), permits for the growing of industrial hemp, the processing of industrial hemp and the testing of industrial hemp, through a plan and set of rules that must be established by the State. The State is in the process of creating a licensing scheme and setting out the entire plan for approval by the USDA. NO LICENSING WILL OCCUR UNTIL THE USDA APPROVES THE PLAN SET FORTH BY THE STATE OF MICHIGAN FOR APPROVAL.
The Michigan Department of Agriculture and Rural Development (MDARD) is the State Agency that is responsible for creating the licensing rules, and for producing the USDA compliance plan, which must be reviewed before the Federal Government will certify Michigan for the issuance of licenses. The Department has provided an update on its website, which you can view using this link: https://www.michigan.gov/mdard/0,4610,7-125-1569_74018—,00.html What is clear is that the Department has not finalized the Plan for submission to the USDA and that they have not produced even a set of emergency administrative rules that establish minimum licensing requirements.
Thus, while it will be legal in Michigan to grow, process and test hemp, there is a lot of work to be done before you can begin this work. The States do not move quickly, and the USDA has sixty (60) days after the Plan is submitted by the State to review and either approve, deny, or send back for revisions. The bottom line is, it may be May or June before we have anything final, which could substantially impact the possibility o a crop being planted in 2019. However, there are some important things to be aware of outside of the MDARD and their licensing rules.
Hemp in Michigan: Can Dos and Don’ts
If you review the link from the MDARD, they make clear that they are going to issue licenses for growing, processing and testing Industrial Hemp. The MDARD is not going to issue licenses for the sale of industrial hemp and/or industrial hemp processed goods. Such processed goods would include CBD and its derivative isolates. Why is this significant? Well, in December of 2018, when the legislature was busy passing State amendments to the Industrial Hemp Research Act, the Department of Licensing and Regulatory Affairs issued a clarifying letter, making clear that CBD and Industrial hemp were defined as medical marijuana for purposes of the Administrative Rules and Statutes related to the Medical Marijuana Facilities Licensing Act of 2016, and that only licensed provisioning centers, or licensed growers and processors would be permitted to enter this marketplace. The Department made clear that the sale of CBD by any person without a State-issued Provisioning Center license was illegal and would subject violators to sanctions available to the Department and the State.
Based on the information set out on the MDARD’s webpage, they are not going to issue a license for the sale of CBD and industrial hemp products in retail establishments. Rather, the Department appears to have made clear that they will allow for the brokering and marketing, as with other agricultural futures, but not retail sales. Those appear destined to remain the province of State-licensed Medical Marijuana Provisioning Centers.
The page does, however, make reference to the MMFLA (PA 281 of 2016) to make clear that persons who are granted a Processing license under the MMFLA will be set outside of the to-be-established licensing scheme for licensing/handling. Those operators who have a State-issued processing license for Medical Marijuana under the MMFLA will very likely be permitted to process Industrial Hemp and CBD without need of obtaining an additional MDARD license. While that has not been made official, that seems to be the clear suggestion of the MDARD publication.
The bottom line is simple: don’t do anything with Industrial Hemp in Michigan just yet, unless you have a license to grow, process, provision, test or transport under the MMFLA. If you have a State license under the MMFLA you can proceed with plans to grow Industrial Hemp, or process it or sell it, so long as you do so within the confines of the regulations associated with your license. The law on Industrial Hemp has become filled with disclarity for the short-term, but things will become effervescently clear in the coming months. Until then, you can check the MDARD’s website for updates, or, of course, follow us online for the latest breaking news on Instagram, Facebook and on our webpage.
If you are interested in the Industrial Hemp Market, please contact us for a consultation. We can start getting your plan together and begin preparations for submitting applications and necessary paperwork once the licensing scheme and requirements are released.