Aug. 31 2017 09:38 AM

Regulation anxiety
Pot dispensaries nervous as state, city laws take final shape

The medical marijuana industry in Lansing is on edge.

The City Council is close to voting on an ordinance that would reduce the number of dispensaries to 25 overall, with 15 licenses to be approved in the first year and 10 more in the next. And the city has already ordered six to close because they violated a moratorium on new ones. A City Pulse survey last spring found there were about 60 dispensaries operating here.

As the state prepares to follow new regulatory legislation that takes effect in December, a commission appointed by the governor is considering shutting down all dispensaries as illegal and preventing operators from getting state licenses.

“It’s frustrating,” said Robin Schneider, legislative liaison for the National Patients Rights Association. “They’re torn between leaving the patients in pain without access to medicine and staying open and keeping people employed.”

That anxiety was echoed at an Aug. 21 meeting of the state Medical Marijuana Licensing Board. One member, Retired Michigan State Police Sgt. Donald Bailey, proposed shuttering all dispensaries and preventing their owners from obtaining licenses on the grounds they are operating illegal businesses. Under the Bailey proposal, all facilities would have to shut down by Sept. 15. The board’s chairman,Rick Johnson, endorsed Bailey’s motion, but it was tabled while the board sought an opinion from state Attorney General Bill Schuette on the board’s authority to do so.

The Bailey proposal will be considered at noon Sept. 12 at Eagle Eye Golf Course in Bath Township when the board reconvenes.

Schneider called the proposal “mean.” State Sen. Rick Jones, a Republican from Grand Ledge who chairs the Senate Judiciary Committee and pushed through the new licensing laws, said he supports closing them. That support, however, comes with the caution that patients need to be able to stock up on medications before any such shutdown.

City Councilwoman Jody Washington is “leaning” toward supporting the shutdown until the state hands out licenses.

“It’s getting to be too much,” she said.

“They are all illegal, so why should they be rewarded? I just don’t get it.”

The city has stepped up enforcement of a May 2016 moratorium meant to prevent new dispensaries from opening until a licensing ordinance can be adopted.

A document prepared by Jim Smiertka, Lansing’s city attorney, and provided to the Council on Monday shows that since June, the city has investigated 16 facilities for violating the moratorium. Of those, six have had to close, eight were deemed OK and two are still being examined.

Even as city officials crack down, the Council continues to wrestle with crafting a licensing ordinance that will satisfy both medical marijuana advocates and neighborhood leaders. It’s a fine line, but Schneider said the Council appeared to be moving closer to a proper balance.

“I think when you land in the middle, neither side is going to be happy,” she said.

“That’s where this is. It’s right in the middle.”

She praised a draft discussed by the Council on Monday night that changed some of the buffer requirements for dispensaries from previous versions. That draft would shake loose more retail spaces for dispensaries.

However, Councilwoman Carol Wood has proposed amending the draft to include previous restrictions. The biggest difference is how city officials measure distances. In the current draft, a dispensary could be 500 feet or more from playground equipment. Wood wants the distance measured from property line to property line.

C i t y Council’s Committee of the Whole will hold a special meeting at 5 p.m. Sept. 7 to review W o o d ’ s proposed amendments as well as a new draft submitted Monday night by Councilwoman Judi Brown Clarke.

Under the new state law taking effect in December, municipalities may cap the number of dispensaries and use zoning to limit where they can locate. In fact, it leaves those decisions entirely to local governments, which can ban them altogether.

A 25-dispensary cap is troublesome to some on Council. Washington said she would rather see it capped at 20 and evenly distributed throughout the city’s four wards.

Council President Patricia Spitzley said she would rather “let the market take care of it.”

‘Neither side is going to be happy. It’s right in the middle.’

- Robin Schneider, patients’ rights advocate, on Lansing’s proposed ordinace

Spitzley also expressed concern about a provision in the draft ordinance requiring applicants to show they have $100,000 in net assets. The city does not require such a showing for any other business. However, state law will require applicants to prove they have the resources to run the business.

“I am not sure how that can be done,” she said, particularly in light of the ongoing issues with federally backed banks and credit unions refusing to handle marijuana-related business dollars. That is because marijuana remains illegal on the federal level.

She said it may be time for the cannabis community to rally together and create their own banking facility that doesn’t have federal backing.

Because the businesses don’t have access to traditional banking operations, they often have a lot of cash on hand. That’s an attractive target for thieves.

To address potential security concerns, the Lansing ordinance would require that whenever the facility was open it would have to have a security guard on duty. No other business in Lansing has such a requirement.

“I don’t think that’s necessary,” said Jones, a former sheriff of Eaton County. “I think what’s important is that there is a real security system in place. I have been to dispensaries where you have to show your ID just to enter, then you have to be buzzed into another room where the marijuana is. I have been to others where they don’t check the ID and the marijuana is right there in the open being guarded by some guy with a shotgun. That doesn’t make sense.”