Michigan Administrative Code › Department - Licensing and Regulatory Affairs › Marijuana Regulatoty Agency › MARIHUANA LICENSEES › Section R. 420.101 - Definitions

Current through Vol. 24-12, July 15, 2024
Rule 1.
(1) As used
				in these rules:
(a) "Acts" refers to the
				medical marihuana facilities licensing act, 2016 PA 281, MCL 333.27101 to
				333.27801, and the Michigan Regulation and Taxation of Marihuana Act, 2018 IL
				1, MCL 333.27951 to 333.27967, when applicable.
(b) "Agency" means the marijuana regulatory
				agency.
(c) "Another party" or
				"other party" means an individual or company with which a licensee contracts to
				use the individual's or company's intellectual property or to utilize
				management or other services provided by the individual or company.
(d) "Applicant" means a person who applies
				for a marihuana license, subject to paragraphs (i) and (ii) of this
				subdivision:
(i) For purposes of this
				definition, an applicant includes a managerial employee of the applicant, a
				person holding a direct or indirect ownership interest of more than 10% in the
				applicant, and the following for each type of applicant:
(A) For an individual or sole proprietorship:
				the proprietor and spouse.
(B) For
				a partnership and limited liability partnership: all partners and their
				spouses.
(C) For a limited
				partnership and limited liability limited partnership: all general and limited
				partners, not including a limited partner holding a direct or indirect
				ownership interest of 10% or less who does not exercise control over or
				participate in the management of the partnership, and their spouses.
(D) For a limited liability company: all
				members and managers, not including a member holding a direct or indirect
				ownership interest of 10% or less who does not exercise control over or
				participate in the management of the company, and their spouses.
(E) For a privately held corporation: all
				corporate officers or persons with equivalent titles and their spouses, all
				directors and their spouses, all stockholders, not including those holding a
				direct or indirect ownership interest of 10% or less, and their
				spouses.
(F) For a publicly held
				corporation: all corporate officers or persons with equivalent titles and their
				spouses, all directors and their spouses, all stockholders, not including those
				holding a direct or indirect ownership interest of 10% or less, and their
				spouses.
(G) For a multilevel
				ownership enterprise: any entity or person that receives or has the right to
				receive more than 10% of the gross or net profit from the enterprise during any
				full or partial calendar or fiscal year.
(H) For a nonprofit corporation: all
				individuals and entities with membership or shareholder rights in accordance
				with the articles of incorporation or the bylaws and their spouses.
(I) For a trust: trustees, any individual or
				body able to control and direct the affairs of the trust, and any beneficiary
				who receives or has the right to receive more than 10% of the gross or net
				profit of the trust during any full or partial calendar or fiscal year and
				their spouses.
(ii) For
				purposes of this definition, an applicant does not include:
(A) A person who provides financing to an
				applicant or licensee under a bona fide financing agreement at a reasonable
				interest rate unless the person exercises control over or participates in the
				management of the marihuana business.
(B) A franchisor who grants a franchise to an
				applicant, if the franchisor does not have the right to receive royalties based
				upon the sale of marihuana or marihuana-infused products by the applicant who
				is a franchisee. Nothing in this subrule shall be construed to preclude a
				franchisor from charging an applicant who is a franchisee a fixed fee. As used
				in this definition, the terms "franchise," "franchisor," and "franchisee" have
				the meanings set forth in section 2 of the franchise investment law, 1974 PA
				269, MCL 445.1502.
(C) A person
				receiving reasonable payment for rent on a fixed basis under a bona fide lease
				or rental obligation unless the person exercises control over or participates
				in the management of the marihuana business.
(D) A person receiving reasonable payment
				under a licensing agreement or contract approved by the agency concerning the
				licensing of intellectual property including, but not limited to, brands and
				recipes.
(E) A person who receives
				a percentage of profits as an employee if the employee does not meet the
				definition of "managerial employee" and the employee does not receive more than
				10% of the gross or net profit from the licensee during any full or partial
				calendar or fiscal year.
(F) A
				person who receives a bonus as an employee if the employee is on a fixed wage
				or salary and the bonus is not more than 25% of the employee's pre-bonus annual
				compensation or if the bonus is based upon a written incentive/bonus program
				that is not out of the ordinary for the services rendered.
(e) "Clone" means a replication of
				a single parent plant through vegetative propagation.
(f) "Common ownership" means 2 or more state
				licenses or 2 or more equivalent licenses held by 1 person under the Michigan
				Regulation and Taxation of Marihuana Act.
(g) "Employee" means a person performing work
				or service for compensation. "Employee" does not include individuals providing
				trade or professional services who are not normally engaged in the operation of
				a marihuana business.
(h) "Immature
				plant" means a nonflowering marihuana plant that is no taller than 8 inches
				from the growing or cultivating medium and no wider than 8 inches, produced
				from a cutting, clipping, tissue culture, or seedling, and that is in a growing
				or cultivating medium or in a growing or cultivating container.
(i) "Industrial hemp" means that term as
				defined in section 3 of the Michigan regulation and taxation of marihuana act,
				2018 IL 1, MCL 333.27953.
(j)
				"Industrial hemp research and development act" means the industrial hemp
				research and development act, 2014 PA 547, MCL 286.841 to 286.859.
(k) "Intellectual property" means all
				original data, findings, or other products of the mind or intellect commonly
				associated with claims, interests, and rights that are protected under trade
				secret, patent, trademark, copyright, or unfair competition law and includes
				brands or recipes.
(l) "Licensing
				agreement" means any understanding or contract concerning the licensing of
				intellectual property related to marihuana products between a licensee and
				another party.
(m) "Management
				agreement" means any understanding or contract between a licensee and another
				party for the provision of management or other services that would allow the
				other party to exercise control over or participate in the management of the
				licensee or to receive more than 10% of the gross or net profit from the
				licensee during any full or partial calendar or fiscal year. A management
				agreement does not include an agreement for the reasonable payment of rent on a
				fixed basis under a bona fide lease or rental obligation unless the person
				exercises control over or participates in the management of the marihuana
				business.
(n) "Managerial employee"
				means those employees who have the ability to control and direct the affairs of
				the marihuana business or have the ability to make policy concerning the
				marihuana business, or both.
(o)
				"Marihuana business" means a marihuana facility under the medical marihuana
				facilities licensing act, or a marihuana establishment under the Michigan
				Regulation and Taxation of Marihuana Act, or both.
(p) "Marihuana establishment" means a
				marihuana grower, marihuana safety compliance facility, marihuana processor,
				marihuana microbusiness, marihuana retailer, marihuana secure transporter, or
				any other type of marihuana-related business licensed by the agency under the
				Michigan Regulation and Taxation of Marihuana Act.
(q) "Marihuana facility" means a location at
				which a licensee is licensed to operate under the medical marihuana facilities
				licensing act.
(r) "Marihuana
				license" means a state operating license issued under the medical marihuana
				facilities licensing act, or a state license issued under the Michigan
				Regulation and Taxation of Marihuana Act, or both.
(s) "Marihuana product" means marihuana or a
				marihuana-infused product, or both, as those terms are defined in the
				applicable act unless otherwise provided for in these rules.
(t) "Mature plant" means a flowering or
				nonflowering marihuana plant that has taken root and is taller than 8 inches
				from the growing or cultivating medium or wider than 8 inches, produced from a
				cutting, clipping, tissue culture, or seedling, and that is in a growing or
				cultivating medium or in a growing or cultivating container.
(u) "Medical marihuana facilities licensing
				act" or "MMFLA" means the medical marihuana facilities licensing act, 2016 PA
				281, MCL 333.27101 to 333.27801.
(v) "Michigan Regulation and Taxation of
				Marihuana Act" or "MRTMA" means the Michigan Regulation and Taxation of
				Marihuana Act, 2018 IL 1, MCL 333.27951 to 333.27967.
(w) "Marihuana tracking act" means the
				marihuana tracking act, 2016 PA 282, MCL 333.27901 to 333.27904.
(x) "Parties" means a licensee and another
				party pursuant to a licensing or management agreement.
(y) "These rules" means the administrative
				rules promulgated by the agency under the authority of the medical marihuana
				facilities licensing act, the marihuana tracking act, the Michigan Regulation
				and Taxation of Marihuana Act, and Executive Reorganization Order No. 2019-2,
				MCL 333.27001.
(z) "Same location"
				means separate marihuana licenses that are issued to multiple marihuana
				businesses that are authorized to operate at a single property but with
				separate business suites, partitions, or addresses.