8.14Scope of Michigan Regulation and Taxation of Marihuana Act (MRTMA)

Effective December 6, 2018, Initiated Law 1 of 2018, MCL 333.27951 et seq., created the Michigan Regulation and Taxation of Marihuana Act (MRTMA), the purpose of which “is to make marihuana legal under state and local law for adults 21 years of age or older, to make industrial hemp legal under state and local law, and to control the commercial production and distribution of marihuana under a system that licenses, regulates, and taxes the businesses involved.” MCL 333.27952.

Laws inconsistent with the MRTMA do not apply to conduct that is permitted by the MRTMA. MCL 333.27954(5).

A.Conduct Not Authorized

The MRTMA does not authorize:

“(a) operating, navigating, or being in physical control of any motor vehicle, aircraft, snowmobile, off-road recreational vehicle, or motorboat while under the influence of marihuana;

(b) transfer of marihuana or marihuana accessories to a person under the age of 21;

(c) any person under the age of 21 to possess, consume, purchase or otherwise obtain, cultivate, process, transport, or sell marihuana;

(d) separation of plant resin by butane extraction or another method that utilizes a substance with a flashpoint below 100 degrees Fahrenheit in any public place, motor vehicle, or within the curtilage of any residential structure;

(e) consuming marihuana in a public place or smoking marihuana where prohibited by the person who owns, occupies, or manages the property, except for purposes of this subdivision a public place does not include an area designated for consumption within a municipality that has authorized consumption in designated areas that are not accessible to persons under 21 years of age;

(f) cultivating marihuana plants if the plants are visible from a public place without the use of binoculars, aircraft, or other optical aids or outside of an enclosed area equipped with locks or other functioning security devices that restrict access to the area;

(g) consuming marihuana while operating, navigating, or being in physical control of any motor vehicle, aircraft, snowmobile, off-road recreational vehicle, or motorboat, or smoking marihuana within the passenger area of a vehicle upon a public way;

(h) possessing marihuana accessories or possessing or consuming marihuana on the grounds of a public or private school where children attend classes in preschool programs, kindergarten programs, or grades 1 through 12, in a school bus, or on the grounds of any correctional facility; or

(i) Possessing more than 2.5 ounces of marihuana within a person’s place of residence unless the excess marihuana is stored in a container or area equipped with locks or other functioning security devices that restrict access to the contents of the container or area.” MCL 333.27954(1).

“[W]hile MCL 333.27954(1) identifies certain conduct that the MRTMA expressly ‘does not authorize,’ it does not follow that the MRTMA authorizes any and all conduct that is not expressly identified as ‘not authorize[d].’” People v Perry, 338 Mich App 363, 375 n 7 (2021) (second alteration in original).

“Although the MRTMA provides that individuals cannot be directly penalized for recreational marijuana use, the law specifically prohibits the operat[ion] . . . of any motor vehicle . . . while under the influence of marihuana[.]” People v Lopez-Hernandez, ___ Mich App ___, ___ (2024), citing MCL 333.27954(1)(a) (alterations in original). “Nothing in the MRTMA suggests that it was intended to supersede the Michigan Vehicle Code (MVC), MCL 257.1 et seq., particularly not those portions of the MVC designed to protect the health and safety of the public.” Lopez-Hernandez, ___ Mich App at ___. See also Perry, 338 Mich App at 377-379, which discusses the MVC in the context of the MMMA and the MRTMA.

Public Place. Because the MRTMA does not permit “consuming marihuana in a public place,” MCL 333.27954(1)(e), the Court noted (in dicta) that the MRTMA would not apply to the defendant, who “used marijuana in his truck on a public street[.]” People v Anthony, 327 Mich App 24, 45 n 11 (2019), rev’d in part on other grounds by People v Duff, __ Mich __, __ (2024).

Minors and Visibly Intoxicated Individuals. Sale or transfer of marijuana to minors or visibly intoxicated individuals is not authorized. MCL 333.27961a(1). An individual who suffers damage or personal injury by a minor or visibly intoxicated person has a cause of action against the person who sold or transferred the marijuana under certain circumstances. MCL 333.27961a(2). See Section 8.16 for a detailed discussion.

Article 7 of the Public Health Code. “[T]he MRTMA does not prevent a person accused of possession with intent to deliver between 5 and 45 kilograms of marijuana from being prosecuted under MCL 333.7401(2)(d)(ii) [Article 7 of the Public Health Code].” People v Soto, ___ Mich App ___, ___ (2024). See Section 8.14(E) and Section 8.15(C) for a detailed discussion of the Kejbou and Soto opinions and the relationship between the MRTMA and the Public Health Code.

B.Conduct Authorized

“Notwithstanding any other law or provision of [the MRTMA], and except as otherwise provided in [MCL 333.27954], the following acts by a person 21 years of age or older are not unlawful, are not an offense, are not grounds for seizing or forfeiting property, are not grounds for arrest, prosecution, or penalty in any manner, are not grounds for search or inspection, and are not grounds to deny any other right or privilege:

(a) except as permitted by subdivision (b), possessing, using or consuming, internally possessing, purchasing, transporting, or processing 2.5 ounces or less of marihuana, except that not more than 15 grams of marihuana may be in the form of marihuana concentrate;

(b) within the person’s residence, possessing, storing, and processing not more than 10 ounces of marihuana and any marihuana produced by marihuana plants cultivated on the premises and cultivating not more than 12 marihuana plants for personal use, provided that no more than 12 marihuana plants are possessed, cultivated, or processed on the premises at once;

(c) assisting another person who is 21 years of age or older in any of the acts described in this section; and

(d) giving away or otherwise transferring without remuneration up to 2.5 ounces of marihuana, except that not more than 15 grams of marihuana may be in the form of marihuana concentrate, to a person 21 years of age or older, as long as the transfer is not advertised or promoted to the public.” MCL 333.27955(1).

“Notwithstanding any other law or provision of this act, except as otherwise provided in [MCL 333.27954], the use, manufacture, possession, and purchase of marihuana accessories by a person 21 years of age or older and the distribution or sale of marihuana accessories to a person 21 years of age or older is authorized, is not unlawful, is not an offense, is not grounds for seizing or forfeiting property, is not grounds for arrest, prosecution, or penalty in any manner, and is not grounds to deny any other right or privilege.” MCL 333.27955(2).

“A person shall not be denied custody of or visitation with a minor for conduct that is permitted by this act, unless the person’s behavior is such that it creates an unreasonable danger to the minor that can be clearly articulated and substantiated.” MCL 333.27955(3). See also In re Ott, 344 Mich App 723, 742 (2022) (holding that the MRTMA applies to child protective proceedings and that the “automatic suspension of parenting time for a positive drug screen for THC absent any examination of and determination under [various statutory provisions including MCL 333.27955(3)] is invalid”). Specifically, the Court held that “for purposes of the MMMA and the MRTMA, respondent’s use of marijuana did not justify the denial of her parenting time with [the minor child] unless the court determined that she did not act in accordance with the MMMA or the MRTMA, or unless the court determined that as a result of her marijuana use, it created an unreasonable danger to [the minor child] that was clearly articulated and substantiated.” Id. at 743.

Further, MCL 333.27960(1) specifies that several specific acts carried out by marihuana growers, processors, transporters, retailers, safety compliance facilities, microbusinesses, and tribal marijuana businesses, or agents of any of these, “are not unlawful, are not an offense, are not grounds for seizing or forfeiting property, are not grounds for arrest, prosecution, or penalty in any manner, are not grounds for search or inspection except as authorized by this act, and are not grounds to deny any other right or privilege[.]”

“A person acting as an agent of a marihuana retailer who sells or otherwise transfers marihuana or marihuana accessories to a person who is younger than 21 years of age is not subject to arrest, prosecution, forfeiture of property, disciplinary action by a professional licensing board, denial of any right or privilege, or penalty in any manner, if the person reasonably verified that the recipient appeared to be 21 years of age or older by means of government-issued photographic identification containing a date of birth, and the person complied with any rules promulgated pursuant to this act.” MCL 333.27960(2).

“It is the public policy of this state that contracts related to the operation of marihuana establishments or tribal marihuana businesses be enforceable.” MCL 333.27960(3).

C.Medical Marijuana Not Limited

The MRTMA “does not limit any privileges, rights, immunities, or defenses of a person as provided in the [MMMA], the [MMFLA], or any other law of this state allowing for or regulating marihuana for medical use.” MCL 333.27954(2).

D.Limitation of Marijuana Use

1.Employers

Although it is lawful to employ a person “who engages in marihuana-related activities allowed under [the MRTMA],” MCL 333.27960(1)(i), the MRTMA “does not require an employer to permit or accommodate conduct otherwise allowed by [the MRTMA] in any workplace or on the employer’s property,” MCL 333.27954(3).

The MRTMA “does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marihuana.” MCL 333.27954(3).

The MRTMA “does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person’s violation of a workplace drug policy or because that person was working while under the influence of marihuana.” MCL 333.27954(3).

2.Property Owners, Occupiers, and/or Managers

Although it is lawful to “leas[e] or otherwise allow[] the use of property owned, occupied, or managed for activities allowed under [the MRTMA],” MCL 333.27960(1)(h), the MRTMA “allows a person to prohibit or otherwise regulate the consumption, cultivation, distribution, processing, sale, or display of marihuana and marihuana accessories on property the person owns, occupies, or manages,” MCL 333.27954(4). However, “a lease agreement may not prohibit a tenant from lawfully possessing and consuming marihuana by means other than smoking.” MCL 333.27954(4).

3.Municipalities

“Except as provided in [MCL 333.27954], a municipality may completely prohibit or limit the number of marihuana establishments within its boundaries.” MCL 333.27956(1).

“A municipality may adopt other ordinances that are not unreasonably impracticable and do not conflict with this act or with any rule promulgated pursuant to this act and that:

(a) establish reasonable restrictions on public signs related to marihuana establishments;

(b) regulate the time, place, and manner of operation of marihuana establishments and of the production, manufacture, sale, or display of marihuana accessories;

(c) authorize the sale of marihuana for consumption in designated areas that are not accessible to persons under 21 years of age, or at special events in limited areas and for a limited time; and

(d) designate a violation of the ordinance and provide for a penalty for that violation by a marihuana establishment, provided that such violation is a civil infraction and such penalty is a civil fine of not more than $500.” MCL 333.27956(2).

“A municipality may adopt an ordinance requiring a marihuana establishment with a physical location within the municipality to obtain a municipal license, but may not impose qualifications for licensure that conflict with this act or rules promulgated by the [Cannabis Regulatory Agency¹].” MCL 333.27956(3). An annual fee of not more than $5,000 may be charged. MCL 333.27956(4).

MCL 333.27956 permits “a municipality to adopt an ordinance so long as it (1) is not unreasonably impracticable, (2) does not directly conflict with the MRTMA or promulgated rules, and (3) regulates the time, place, and manner of operation of a marijuana establishment.” Yellow Tail Ventures, Inc v Berkley, 344 Mich App 689, 697, 702-703 (2022) (rejecting the plaintiff’s argument that the municipality’s scoring criteria for evaluating marijuana establishment licenses violated the MRTMA because it considered “factors that were not relevant to the operation of a marijuana establishment”—”including green infrastructure, sustainability, aesthetics, and economic goals”—because these criteria “fit neatly within a reasonable understanding of the MRTMA’s ‘time, place, and manner’ provision,” and further, the criteria fall within the process permitted by MCL 333.27959(4)).

“A municipality may not adopt an ordinance that restricts the transportation of marihuana through the municipality or prohibits a marihuana grower, a marihuana processor, and a marihuana retailer from operating within a single facility or from operating at a location shared with a marihuana facility operating pursuant to the [MMFLA].” MCL 333.27956(5).

School-Buffer Requirement. “Conflict preemption applies if [a city] ordinance is in direct conflict with the state statutory scheme.” Exclusive Capital Partners, LLC v City of Royal Oak, ___ Mich App ___, ___ (2024) (cleaned up). “[T]he MRTMA prohibits any marijuana establishment from being located within 1,000 feet of an existing public or private school providing education for kindergarten through 12th grade, ‘unless a municipality adopts an ordinance that reduces this distance requirement[.]’” Id. at ___, quoting MCL 333.27959(3)(c) (second alteration in original). In this case, plaintiff (an applicant for a retail license under MRTMA and the city ordinance) argued that defendant (the City of Royal Oak) “violated the MRTMA [when it awarded a retail license to another license applicant] because MCL 333.27956(3) prohibits municipalities from imposing licensure requirements that conflict with the act, MCL 333.27959(3)(c) requires a school-zone buffer of 1,000 feet unless a municipality has adopted an ordinance that reduces this distance, and [defendant] has adopted no such ordinance.” Exclusive Capital Partners, ___ Mich App at ___. “Reading MCL 333.27956(3) and MCL 333.27959(3)(c) together . . . [reveals] two critical points: (1) the MRTMA does not require a municipality to adopt the [1,000-foot] buffer requirement as a qualification for municipal licensure because MCL 333.27956(3), by its plain language, requires it for state, not municipal, licenses, and (2) an ordinance reducing the buffer zone, as qualification for municipal licensure, would not conflict with the act because MCL 333.27959(3)(c) indicates that a municipality may adopt an ordinance reducing that buffer zone.” Exclusive Capital Partners, ___ Mich App at ___ (emphases added). Here, defendant adopted an ordinance that provides “‘[n]o Marihuana Establishment shall be permitted within a 1,000-foot radius of any school.’” Exclusive Capital Partners, ___ Mich App at ___, quoting Royal Oak Ordinances, § 435-5(A)(5)(a) (alteration in original). “[T]his [ordinance] is an operational requirement, not an application or licensing consideration.” Exclusive Capital Partners, ___ Mich App at ___. “This means that an entity . . . might succeed in applying for a retail license, but be poised to violate the operational provisions of the ordinance” if the proposed site is within 1,000 feet of a school. Id. at ___. “Because [defendant] adopted an ordinance allowing reduction of the buffer zone consistent with [MCL 333.27956(3)] and MCL 333.27959(3)[c], [defendant’s] ordinances, on their face, do not conflict with the MRTMA.” Exclusive Capital Partners, ___ Mich App at ___. “A review of [defendant’s] licensing and zoning scheme, which allows a reduction of the buffer zone, reveals no inherent incompatibility between the then-existing licensing and zoning provisions and the MRTMA.” Id. at ___. “Because [defendant’s] ordinances do not conflict with MCL 333.27956(3) and MCL 333.27959(3)(c), [plaintiff] has failed to state a claim on which any relief can be granted.” Exclusive Capital Partners, ___ Mich App at ___.

Competitive-Process Mandate. MCL 333.27959(4) of the MRTMA “mandates that a municipality use a ‘competitive process’ to select among applicants if there are more applicants than available licenses[.]” Exclusive Capital Partners, ___ Mich App at ___. “Nothing in MCL 333.27956, the section authorizing a municipality to impose local regulations on recreational marijuana, restricts or delineates what type of criteria may be used in formulating a ‘competitive process.’” Exclusive Capital Partners, ___ Mich App at___, quoting MCL 333.27959(4). “The only relevant direction is that any pertinent ordinance must not be ‘unreasonably impracticable’ or ‘conflict’ with the MRTMA.” Exclusive Capital Partners, ___ Mich App at___, quoting MCL 333.27956(2).   In this case, plaintiff “argue[d] that the marijuana ordinance conflicts with the MRTMA’s competitive-process mandate on its face and that [defendant’s] application violated the MRTMA’s competitive-process mandate.” Exclusive Capital Partners, ___ Mich App at ___. “Regarding the facial challenge, [plaintiff] argue[d] that the ordinance conflicted with MRTMA’s competitive-process mandate because the selection process was inherently noncompetitive.” Id. at ___. However, “[a]lthough [defendant] used [a] series of yes-or-no factors and did not use a numerical scoring system, there were still meaningful ways to distinguish the applicants, thus satisfying the ‘competitive’ requirement within the meaning of MCL 333.27959(4).” Exclusive Capital Partners, ___ Mich App at ___. “MCL 333.27959(4) dictates that the process adopted must evaluate which applicants offer the most favorable terms, as compared to others, for the purpose of identifying which applicants are best suited to operate in compliance with the MRTMA.” Exclusive Capital Partners, ___ Mich App at ___. “Taken as a whole, the criteria serve as guideposts allowing a decision-maker to determine which applicants are most favorable for operating in compliance with the MRTMA, providing criteria an applicant may satisfy by varying degrees.” Id. at ___. “Because the criteria allow for meaningful distinctions between applicants, the criteria are necessarily competitive.” Id. at ___. Regarding the as-applied challenge, plaintiff argued that defendant’s “implementation of the competitive process ran afoul of both the MRTMA and [defendant’s] own marijuana ordinance, because the city manager admitted he did not understand his task to select applicants best suited to operate in compliance with the MRTMA and failed to rank or score the applicants, because the interpretation and application of the criteria were contrary to the text of the ordinance, and because some applicants were outright disqualified although the ordinance did not allow for disqualification.” Id. at ___. ”Ultimately, the city manager reviewed all the applications, considered each in relation to the competitive criteria of the marijuana ordinance, compared the applicants to one another, and independently ranked the applicants into three categories consisting of the two successful applicants, applicants put on standby, and applicants who were rejected.” Id. at ___. The Court concluded that summary disposition of plaintiff’s facial and as-applied challenges to defendant’s competitive-process procedure was proper because “[t]here [was] no genuine issue of material fact as to whether [defendant] violated either the MRTMA or its marijuana ordinance by implementing this competitive process.” Id. at ___.

4.Conditions of Probation

Pursuant to MCL 771.3(1)(a), “it is permissible to proscribe the use of marijuana as a condition of probation for nonmarijuana-related crimes.” People v Hess, ___ Mich App ___, ___ (2024). In this case, defendant pleaded guilty to retail fraud and was sentenced to serve 12 months’ probation. Id. at ___. “The order of probation prohibited defendant from using or possessing marijuana and required that she submit to drug screening for marijuana.” Id. at ___. After twice testing positive for marijuana and receiving two violations of probation, “defendant moved . . . to amend the terms of her probation to allow the use and possession of marijuana, . . . arguing that the condition of her probation that prohibited her use of marijuana violated the plain language of the MRTMA.” Id. at ___. “Defendant [sought] to extend [People v] Thue’s reasoning . . . raising the same argument as the defendant in [People v] Lopez-Hernandez,” contending “that because the MRTMA prohibits penalizing the use of marijuana in a manner compliant with the statute and it mirrors the language of the MMMA on the same subject, the probation condition prohibiting her use of recreational marijuana is unenforceable.” Id. at ___, citing People v Thue, 336 Mich App 35, 47 (2021); People v Lopez- Hernandez, ___ Mich App ___, ___ (2024). However, the Thue Court explained in dicta that “the MMMA was inapplicable to the recreational use of marijuana[.]” Hess, ___ Mich App at ___. “Lopez-Hernandez has turned the dicta of Thue into the binding precedent that the MRTMA does not automatically preclude a condition of probation that prohibits the use or possession of marijuana.” Hess, ___ Mich App at ___. Further, “MCL 771.3(1)(a) states that “[d]uring the term of . . . probation, the probationer shall not violate any criminal law of this state, the United States, or another state or any ordinance of any municipality in this state or another state.” Hess, ___ Mich App at ___. “Using recreational marijuana may be permissible in Michigan but it is still prohibited by federal law.” Id. at ___. Therefore, defendant “violated her lawfully imposed terms of probation.” Id. at ___.

E.Relationship to Article 7 of the Public Health Code

“[T]he MRTMA does not prevent a person accused of possession with intent to deliver between 5 and 45 kilograms of marijuana from being prosecuted under MCL 333.7401(2)(d)(ii) [Article 7 of the Public Health Code].” People v Soto, ___ Mich App ___, ___ (2024). “MCL 333.7401 provides that ‘a person shall not manufacture, create, deliver, or possess with intent to manufacture, create, or deliver a controlled substance, . . . ’” Soto, ___ Mich App at ___, quoting MCL 333.7401(1). A person who violates the statute involving between 5 and 45 kilograms of marijuana is guilty of a felony and may be sentenced to “imprisonment for not more than 7 years or a fine of not more than $500,000 or both.” Soto, ___ Mich App at ___, quoting MCL 333.7401(2)(d)(ii). Conversely, “[t]here is no counterpart for defendant’s alleged conduct in the MRTMA.” Soto, ___ Mich App at ___. Section 4 of the MRTMA sets forth conduct unauthorized by the Act, and provides that all other laws inconsistent with [the] act do not apply to conduct that is permitted by [the] act.” Soto, ___ Mich App at ___ (quotation marks and some brackets omitted). “Notably, although possession with intent to deliver marijuana is addressed in Subsections (1) and (2) [of Section 15 of the MRTMA], it is absent from the provision penalizing the possession, cultivation, or delivery without remuneration more than twice the amount of marijuana allowed by § 5 as a misdemeanor[.]” Soto, ___ Mich App at ___. However, “the conduct underlying defendant’s possession-with-intent-to-deliver-marijuana charge expressly implicates Article 7 of the Public Health Code, which . . . penalizes possession with the intent to deliver between 5 and 45 kilograms of marijuana as a felony.” Soto, ___ Mich App at ___, citing MCL 333.7401(2)(d)(ii). Consequently, “the MRTMA does not supersede Article 7 . . . with regard to the felony prosecution of persons who possess with the intent to deliver more than twice the amount of marijuana allowed by MCL 333.27955.” Soto, ___ Mich App at___.