New Legislation ‘Puffs’ up Background Checks for Medical Marijuana License Applicants

“When you confer a benefit on those worthy of it, you confer a favor on all.”

  Publilius Syrus

On July 18, 2017, Michigan Gov. Rick Snyder signed an amendment to the Medical Marihuana Facilities Licensing Act (MMFLA), enacted just last September. The MMFLA sets specific minimum qualifications for those worthy of receiving one of the licenses the MMFLA provides and what criteria applies in determining the issuance of licenses. The amendment greatly increases the intensity and scope of criminal background checks for those who capitalize and who are officers, directors or managerial employees of licensed operations.

The original section regarding eligibility for licenses under the MMFLA required background checks just to qualify to file for an application, ostensibly to weed out bad actors. Those deemed ineligible include anyone who under the following circumstances: has a felony conviction in Michigan or elsewhere in the last 10 years; has a misdemeanor conviction relating to controlled substances, theft, dishonesty or fraud in the last five years; has knowingly submitted false information for a license; is a member of the Medical Marihuana Licensing Board (Board); is unable to demonstrate required insurance for the proposed facility; those who hold elective office or are employed by a federal, state or local government; has not lived in Michigan for at least two years prior to applying for a license; or fails to qualify for any criteria developed by rule.

The Board also may consider other factors. For example, the Board may consider the “integrity, moral character, and reputation; personal and business probity; financial ability and experience; and responsibility or means to operate or maintain a marihuana facility” of the applicant or those who directly or indirectly control the applicant. Another consideration is the financial wherewithal of the applicant, including whether it is adequately capitalized, has filed bankruptcy, been involved in offenses of any criminal law (excluding traffic laws), tax delinquencies, non-compliance with other regulatory requirements and current litigation status.

The amendment to the MMFLA greatly expands the background check required of all applicants. Before, applicants needed to provide fingerprints. Now, however, applicants will undergo a significantly enhanced criminal background check:

• The applicant must submit for each person with an ownership interest or who are officers, directors or managerial employee a passport quality photograph, a set of fingerprints that will be submitted to the Michigan State Police and a consent form allowing a criminal background check.

• The fingerprints must be taken by a law enforcement agency (with a fee) or an entity determined by the Michigan State Police to be qualified to take fingerprints.

• The Michigan State Police will conduct a criminal background check that includes submitting the fingerprints to the Federal Bureau of Investigation.

• The Michigan State Police will provide all criminal background reports to the Board.

• All fingerprints will be stored and retained in a fingerprint identification system database.

Michigan medical cannabis applicant hopefuls continue to wait for the Board to issue regulations that will determine the regulatory landscape of medicinal cannabis. One can try to guess how those regulations may look by looking at other jurisdictions – as for Michigan, though, we won’t know until we know, maybe sometime in December. But we now know who will be deemed worthy of consideration, what factors will be considered in granting licenses and what information, including criminal background checks, is required.

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Saulius Mikalonis
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