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HB 5040

Relating to the financial administration of the Oregon Watershed Enhancement Board; and declaring an emergency.

2025 Regular Session

Establishes Michigan licensing, testing, labeling, and enforcement rules for processing consumable hemp products, overseen by the Cannabis Regulatory Agency.

Chapter 528, (2025 Laws): Effective date July 17, 2025.
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Bill Summary · HB 5040

Summary — HB 5040 (House Introduced Bill, 2025)

Purpose

HB 5040 (the "Industrial Hemp Processing Act") creates a comprehensive state licensing and regulatory framework for processing, producing, marketing, brokering, supplying seed for, and wholesaling industrial hemp and “consumable hemp products” in Michigan. It establishes licensing requirements, testing and labeling obligations, fee collection, enforcement mechanisms, and a dedicated fund for administrative activities. The bill also repeals 2014 PA 547 (MCL 286.841–286.859) and is tied to HB 5041–5043 (2025).

Key definitions (selected)

  • Consumable hemp product: edible, beverage, infused liquid, or similar product containing a non‑intoxicating cannabinoid intended for human or animal consumption or inhalation. Such products are explicitly not treated as “food” under Michigan’s food law for purposes of this act.
  • Converted cannabinoid: a cannabinoid created from another cannabinoid by chemical reaction. The bill excludes from this definition cannabinoids produced only by decarboxylation via heat/light (no chemical reagents or catalysts and no other chemical change).
  • Nonintoxicating, potentially intoxicating, and intoxicating cannabinoids: categories defined in the bill (see sections referenced).
  • Key participant: individuals with direct/indirect financial interest or executive managerial control in an applicant or licensee (e.g., proprietors, partners, CEOs, CFOs).

Licensing and application process

  • Processing consumable hemp products requires a state license issued by the Cannabis Regulatory Agency.
  • Applications must be submitted on agency forms and include applicant identity (name, DOB, contact, SSN for individuals; EIN and key participant details for entities), plus addresses/legal descriptions of processing sites.
  • Licenses are valid for one year (Dec 1 – Nov 30). Initial licenses expire on Nov 30 of the year issued.
  • Renewals: applications due by Nov 30. A 60‑day grace period follows Nov 30 during which renewal is permitted with a $250 late fee (paid into the consumable hemp product fund). Failure to renew within the grace period voids the license.
  • Licenses are nontransferable and nonrefundable. Applicant information is exempt from disclosure under Michigan’s FOIA.

Operational limits and requirements

  • Processing facilities cannot be dwellings; licensed locations must be within Michigan.
  • The agency must promulgate rules for sampling, testing, labeling, and other operational standards (the bill text establishes these mandates though not all details are shown in the excerpt).
  • The bill restricts use of chemically converted cannabinoids (except permitted decarboxylation), indicating regulatory control over synthetic or chemically altered cannabinoids used in consumable products.

Enforcement, fees, and fund

  • The act authorizes civil sanctions and penalties for prohibited acts and noncompliance (specific penalties referenced in other sections).
  • The bill creates a consumable hemp product fund for deposit of fees and penalties (section 407 referenced). Other fees are set under section 405 (specific fee schedule not in excerpt).
  • The agency must approve or deny applications within a reasonable time and may deny for incompleteness, applicants under 18, locations that are dwellings or out‑of‑state, false statements, unpaid fines/fees, or unwillingness to comply with rules.

Who is affected

  • Businesses and individuals who produce, process, infuse, blend, extract, or otherwise prepare consumable hemp products in Michigan.
  • Key participants and executives of entities engaged in those activities.
  • Cannabis Regulatory Agency (administration, rulemaking, enforcement).
  • Indirectly, consumers and retailers of consumable hemp products via testing and labeling requirements.

Procedure & current status (from bill record)

  • Filed: March 13, 2025 (record shows); Introduced and read first time: September 24, 2025 by Rep. Donavan McKinney.
  • Referred to Committee on Regulatory Reform (also has prior referral entries to Transportation and Joint Committee on Housing in record).
  • The bill text electronically reproduced 09/24/2025.

Note: The summary above reflects the provisions shown in the House Introduced text excerpt. Some sections (fee schedule, full testing/labeling rules, civil penalty amounts) are referenced but not fully provided in the excerpt.

Compiled from official sources — confirm details with the bill’s official record.

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