Sale of CBD Must Be Done in Compliance with the Michigan Medical Marihuana Act, and the Medical Marihuana Facilities Licensing Act.

On May 10, the Michigan Department of Licensing and Regulatory Affairs (LARA) and the Michigan Bureau of Medical Marihuana Regulation (BMMR) released an advisory bulletin clarifying the use and sale of cannabidiol (CBD) and industrial hemp in the state of Michigan. The advisory states: “The possession, purchase, or sale of marihuana or any marihuana product – including CBD – must be done in compliance with the MMMA [Michigan Medical Marihuana Act] and MMFLA [Medical Marihuana Facilities Licensing Act].”

Products Derived from Hemp

The advisory bulletin goes on to clarify the “transfer” of products derived from hemp: “Any possession or transfer of industrial hemp – or any product claimed to be ‘hemp’-related – must be done in compliance with Michigan’s Industrial Hemp Research Act.” The Industrial Hemp Research Act (IHRA) authorizes the growing and cultivating of industrial hemp for research purposes only. Passed in 2014, the IHRA authorizes the Department of Agriculture and Rural Development or colleges/universities in Michigan to grow and/or cultivate industrial hemp for purposes of research. The research must be conducted under an agricultural pilot program or other agricultural or academic research project.

The full text of the advisory bulletin can be found online HERE

What About Products Derived from Mature Stalks?

Under Michigan law, the definition of marihuana does not include the mature stalks of the plant. Whether a product made from said stalks would be exempt from this prohibition is not clear at this time.

Many manufacturers of CBD oil advertise that their product uses only mature stalks, sterile seeds, or other parts of the plant that fall outside the definition of marihuana. The U.S. Department of Justice’s Drug Enforcement Administration (DEA), however, seems dubious regarding such claims. In a Clarification of the New Drug Code (7350) for Marijuana Extract, DEA writes: “According to the scientific literature, cannabinoids are not found in the parts of the cannabis plant that are excluded from the CSA [Controlled Substances Act] definition of marijuana, except for trace amounts (typically, only parts per million) that may be found where small quantities of resin adhere to the surface of seeds and mature stalk. Thus, based on the scientific literature, it is not practical to produce extracts that contain more than trace amounts of cannabinoids using only the parts of the cannabis plant that are excluded from the CSA definition of marijuana, such as oil from the seeds. The industrial processes used to clean cannabis seeds and produce seed oil would likely further diminish any trace amounts of cannabinoids that end up in the finished product.”

DEA appears to be implying that CBD oil with any medicinal value cannot be manufactured from the parts of the marihuana plant that fall outside of the legal definition of marihuana. DEA does indicate in their “Clarification,” however, that: “[I]f a product, such as oil from cannabis seeds, consisted solely of parts of the cannabis plant excluded from the CSA definition of marijuana, such product would not be included in the new drug code (7350) or in the drug code for marijuana (7360), even if it contained trace amounts of cannabinoids.”

Conclusion

In closing, after this LARA clarification, we believe that selling CBD oil out of a chiropractic office carries a potentially large amount of legal risk. Look for more information in the June 2018 edition of the MAC eJournal.

This article is intended to be informational only and does not constitute legal advice regarding any specific matter or situation. Legal advice may be given only on the basis of specific facts relayed by a client to an attorney.

As you know, the MAC has been looking to create a solution to our members’ workers’ compensation needs. We have been exploring the possibility of developing our own self-insured workers’ compensation fund – MichiComp. This is still our long-term strategic goal, but in the meantime, we have partnered with full-service specialty insurer Mourer Foster and the Michigan workers’ compensation insurance experts at Retailers Insurance Company to create a member group safety dividend program for MAC members.

Workers’ Compensation policy holders through this program receive:

• Several payment options with no penalty for stretching out payments
• Employee liability limit of $2 million – much higher than the $500,000 industry standard
• EFT Guard, providing $100,000 protection if your business bank account is hacked, plus $2,500 of cyber extortion protection if your computer system is held for ransom
• Discounts for practices that install security measures and encourage healthy and safe work habits
• Membership in the Michigan Retailers Association, with full access to its valuable business service
• Automatic terrorism coverage

For more information, contact Wes Hoffrichter at the MAC at (517) 367-2225 or wes@chiromi.com.

To start the quote and application process, click the link below:

>> GET STARTED <<

Are There Penalties if an Employer Does Not Obtain Workers’ Compensation Insurance or Permission to be Self-Insured?

Yes. Under Michigan’s Workers Disability Compensation Act, there are severe penalties for the failure of an employer to provide workers’ compensation coverage. First of all, if a worker is injured, he/she may sue the employer for damages in civil court. If the employer was at fault for the injury, this could result in the payment of a great deal of money by the employer.

Secondly, the Workers’ Compensation Agency actively enforces the Workers’ Disability Compensation Act. It has the authority to petition the court and seek an order prohibiting the company from employing any persons in their business until such time as proper workers’ compensation insurance coverage is obtained.

Finally, the employer may be subject to a fine of $1,000, imprisonment for no less than 30 days nor more than 6 months, or both. And, each day for which the employer is uninsured is considered a separate offense, so they penalties could be immense.

MichiComp Strategic Partners