7.5Licensure Requirements

A person who manufactures, distributes, prescribes, or dispenses a controlled substance must be licensed to engage in that activity. MCL 333.7303(1). Proper licensure under MCL 333.7303(1) permits a person to “possess, manufacture, distribute, prescribe, dispense, or conduct research with those substances to the extent authorized by its license and in conformity with the other provisions of [Article 7 of the PHC].” MCL 333.7303(2).¹

“A license issued under [Article 7 of the PHC] to manufacture, distribute, prescribe, or dispense pharmaceutical-grade cannabis and the conduct of the licensee is subject to the additional requirements of [A]rticle 8[ of the PHC].” MCL 333.7303(3).²

A.Exceptions to Licensure Requirements

Certain unlicensed persons may lawfully possess controlled substances or prescription forms under specific circumstances:

•An agent or employee of a licensed manufacturer, distributor, prescriber, or dispenser of a controlled substance need not be licensed if the person is acting within the usual course of his or her business or employment. MCL 333.7303(4)(a).

•A common or contract carrier or warehouse, or an employee of the carrier or warehouse, whose possession of a controlled substance or prescription form falls within the usual course of his or her business or employment need not be licensed. MCL 333.7303(4)(b).

•An ultimate user or agent whose possession of a controlled substance or prescription form is pursuant to a practitioner’s lawful order or whose possession of a schedule 5 substance is lawful need not be licensed. MCL 333.7303(4)(c).

B.Exemption or Waiver of Licensure Requirements

The licensure requirement is waived for persons in the following circumstances:

“(a) An officer or employee of the [D]rug [E]nforcement [A]gency [(DEA)] while engaged in the course of official duties.

(b) An officer of the United States [C]ustoms [S]ervice while engaged in the course of official duties.

(c) An officer or employee of the United States [F]ood and [D]rug [A]dministration [(FDA)] while engaged in the course of the person’s official duties.

(d) A federal officer who is lawfully engaged in the enforcement of a federal law relating to controlled substances, drugs, or customs and who is authorized to possess controlled substances in the course of that person’s official duties.

(e) An officer or employee of this state or a political subdivision or agency of this state who is engaged in the enforcement of a state or local law relating to controlled substances and who is authorized to possess controlled substances in the course of that person’s official duties.” MCL 333.7304(1).

C.Scope of Exemption or Waiver

An official for whom the licensure requirement is waived is authorized to handle controlled substances in a limited number of situations:

•An exchange between two exempted officials in the course of each individual’s official duties. An official exempted under MCL 333.7304, when acting in the course of the individual’s official duties, may possess and transfer a controlled substance to any other exempted official also acting in the course of that person’s official duties. MCL 333.7304(2).

•When an exempted official acquires the substance during an inspection or investigation. An official exempted under MCL 333.7304 may acquire a controlled substance during an administrative inspection or investigation or during a criminal investigation involving the individual from whom the official acquired the controlled substance. MCL 333.7304(3).

•When an exempted official in the course of official duties distributes the substance during an investigation. A law enforcement officer exempted under MCL 333.7304, when acting in the course of that officer’s official duties, may distribute a controlled substance to another person “as a means to detect criminal activity or to conduct a criminal investigation.” MCL 333.7304(4).

See also MCL 333.7531(3) (providing that no liability under Article 7 of the PHC attaches to an authorized state, county, or local officer engaged in the lawful performance of that officer’s duties).

1.Reverse Buys

The conduct authorized by MCL 333.7304(4) includes providing small samples of a controlled substance to individuals involved in setting up a “reverse buy.” People v Connolly, 232 Mich App 425, 431-432 (1998) (holding that “a law enforcement officer may distribute controlled substances to another person as a means of detecting criminal activity[]” and citing MCL 333.7304).

2.Who Constitutes an Officer Acting in the Course of Official Duties

In People v Jones (Alan), 203 Mich App 384, 387-388 (1994), the defendant argued that he was authorized to possess and distribute cocaine under MCL 333.7304(1)(e) because he was a paid confidential police informant and the delivery of cocaine was performed in the course of his official duties. The Court of Appeals found that the defendant failed to contend he was an officer or an employee of the police acting in the course of his official duties, and that his testimony did not support such a claim. Jones (Alan), 203 Mich App at 388. The Court further noted that even assuming the defendant was acting as an informant, a paid confidential informant is “at best, an agent and not entitled to the protection afforded by [MCL 333.7304] to governmental employees performing official duties.” Jones (Alan), 203 Mich App at 388.

In his concurring opinion, Judge Connor stated that he “would hold that, as used in MCL 333.7304 . . ., the term ‘employee’ includes paid police informants.” Jones (Alan), 203 Mich App at 391 (Connor, J., concurring). Accordingly, a paid police informant would be authorized by law to transfer a controlled substance when doing so in the course of his or her duties as an informant. Id. However, Judge Connor agreed that the record did not support the defendant’s claim that he was a police informant. Id.