Michigan

Equity Project State Briefing

Social Equity

Social Equity Definition / Criteria

  • i. Previous Cannabis Conviction:
  • ii. Income:
  • iii. State Residency:
  • iv. Qualifying Neighborhood / Municipal Residency:

Michigan offers a Social Equity Program, which is designed to encourage participation in the marijuana industry by people who live in the 19 Michigan communities which have been disproportionately impacted by marijuana prohibition and enforcement.

 

To qualify for Michigan’s social equity program individuals must meet one of the following criteria

  1. Residency in a disproportionately impacted community for at least 5 cumulative years within the past 10 years.
  2. Conviction of a marijuanarelated offense.
  3. Registration as a primary caregiver under the Michigan Medical Marihuana Act (MMMA) for at least 2 years between 2008 and 2017.

Source:

Mich. Comp. Laws Serv. § 333.27958. Rules; limitations
Michigan Marijuana Regulatory Agency "Social Equity Program qualifying criteria". Retrieved January 5, 2022

Social Equity Provisions

The Michigan Marijuana Regulatory Agency (MRA) provides educational sessions regarding the Social Equity Program and the application and licensure process. The MRA’s social equity representatives will be available to assist individuals with completing the social equity application during the educational sessions.

The MRA’s social equity representatives will provide the following services:

  • Answer questions regarding the adult-use application and licensing process
  • Provide one-on-one assistance with completing the licensure application
  • Compile educational resources relevant to the marijuana industry and help coordinate applicants’ use of the resources
  • Identify resources at other state agencies and in the private sector (attorneys, accountants, etc.) that qualifying applicants can utilize to answer questions

The MRA will make resources available to disproportionately impacted communities and individuals who qualify for participation in the Social Equity Program.

The MRA has partnered with other State agencies who offer services that are relevant to individuals or businesses participating in the adult-use marijuana industry. These include, but are not limited to, the following:

  • Treasury – understanding tax requirements and making tax payments
  • EGLE – understanding and complying with relevant environmental laws
  • Bureau of Fire Services – understanding pre-licensure inspections
  • Wage & Hour – worker compensation, wage requirement/benefits, employee benefits
  • Corporations, Securities & Commercial Licensing – business registration
  • DHHS – Safe use of marijuana products and compliance with the Smoke Free Air Law
  • MIOSHA – safety and health education training

The MRA has partnered with medical facility licensees and individuals from the private sector to provide educational presentations to – and act as resources for – applicants who qualify for the Social Equity Program. This includes, but is not limited to the following:

  • Educational presentations by medical facility licensees on how their marijuana businesses are operated
  • Potential mentorships with medical facility licensees who enter the Adult – Use market
  • Educational presentations and consultations with certified public accountants who service the marijuana industry
  • Educational presentations and consultations with attorneys who service the marijuana industry

Source:

Michigan Marijuana Regulatory Agency Social Equity Program Infographic. Retrieved January 5, 2022

License Priorities and Set Asides

  • License Priorities / Set Asides:
No

Michigan does not offer social equity applicants licensing priority nor does the state reserve a specific percentage or type of license for social equity operators.

Fee Waivers and Reductions

  • Fee Waivers / Reductions:
Yes

Participating in the Social Equity Program allows qualifying applicants whose marijuana establishments will be located in disproportionately impacted communities to benefit from a reduction of up to 75% off the application fee, the initial license fee, and future renewal fees as follows:

  1. Residency in a disproportionately impacted community for at least five cumulative years within the past 10 years: 25% fee reduction.
  2. Conviction of a marijuana-related offense. Misdemeanor convictions: 25% fee reduction. Felony convictions: 40% fee reduction
  3. An additional 10% reduction if the individual(s) holding majority ownership have been a resident of one of the 19  disproportionately impacted communities for the past five years  AND were registered as primary caregivers for at least two years between 2008 and 2017.

Eligible social equity participants who plan to operate a marijuana establishment outside of a disproportionately impacted community will receive a fee reduction for only 2 years following adult-use licensure.

Source:

Michigan Marijuana Regulatory Agency Social Equity Program Infographic. Retrieved January 5, 2022

Other Financial Support for Social Equity Applicants and Licensees

Michigan currently does not currently appropriate any specific funding to support its social equity program.

Other Licensing Provisions

License Caps

  • License Caps:
No

Michigan’s adult use sector does not have licensing caps. The state allows for local jurisdictions to opt out of participating in the adult use sector, however, there is a medical  carve out which allows adult use licenses to co-locate with preexisting medical licenses even in places where adult use is banned.

Source:

Mich. Comp. Laws Serv. § 333.27958. Subsection (3)(a)
Mich. Comp. Laws Serv. § 333.27956.

Application Selection Process

  • Selection System:
Merit

Michigan distributes adult-use cannabis licenses based on merit.

Source:

Mich. Admin. Code R. 420.6. State license under the Michigan regulation and taxation of marihuana act; issuance; qualifications; ineligibility

Felony Disqualification on Ownership

  • Ownership Exclusion for Felony Convictions:
Yes
  • Exemption for Cannabis Offenses:
Yes

Michigan’s adult use framework disqualifies applicants for cannabis licensure on the basis of certain conviction. While Michigan applicants must disclose their criminal history to the state, 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.

Source:

Mich. Comp. Laws Serv. § 333.27958. Rules; limitations. Subsection c
Mich. Admin. Code R. 420.4. Application requirements; financial and criminal background. Subsection 5

Employee Criminal Records

  • Conviction Restrictions for Employees:
Yes
  • Exemption for Cannabis Offenses:
Yes

In Michigan’s adult use sector, past convictions can hinder an employee’s chances of working within the industry.  Before hiring a prospective employee, an adult use cannabis license holder (employer) must conduct a background check of the prospective employee. If the background check indicates a pending charge or conviction within the past 10 years for a controlled substance-related felony, a licensee shall not hire the prospective employee without written permission of the Board. However, a prior conviction solely for a marihuana-related offense must not disqualify an individual, unless the offense involved distribution of a controlled substance to a minor.

Source:

Mich. Comp. Laws Serv. § 333.27405. Background check
Mich. Comp. Laws Serv. § 333.27958. Rules; limitations. Subsection 1c

Availability of Expungements

  • Expungements:
Yes, Not Automatic

Michigan offers record cleaning for eligible cannabis convictions however the process is not automatic. Individuals can ask the court to expunge certain felony convictions 7 years after sentence completion and certain misdemeanors after 5 years. Beginning in 2020 a person convicted of a misdemeanor marijuana offense, which is now legal, may apply to expunge the conviction immediately. (They do not have to wait the 5 year cleansing period) Beginning in 2023, under SB 4980 individuals convicted of certain misdemeanors may have their conviction automatically expunged after seven years. Individuals convicted of certain felonies may have their conviction automatically expunged after 10 years.

Source:

Mich. Comp. Laws § 780.621e. Application to set aside misdemeanor marihuana offenses; requirements; rebuttable presumption; order; "misdemeanor marihuana offense" defined
Mich. Comp. Laws § 780.621d. Application and procedures for setting aside felonies and serious misdemeanor convictions