Who’s financing the burgeoning medical marijuana business in Lansing?
Who knows? Not the public, at least.
Citing state law, city government is refusing to release the identities of the financial backers behind medical marijuana facility license applicants. The City Attorney’s Office rejected the request by City Pulse under the Freedom of Information Act. Assistant City Attorney Amanda O’Boyle cited the Michigan Medical Marijuana Facilities Licensing Act, which states that the information on municipal license applications is exempt from disclosure under FOIA.
O’Boyle said Tuesday the city “cannot” provide such information.
But state Sen. Rick Jones, who chairs the Judiciary Committee and backed the legislation, said it is a “soft exemption,” meaning a municipality may disclose the information if it wished.
“They can, if they want, provide it,” said Jennifer Dukarski, an attorney for the Michigan Press Association. She said he law would otherwise say “must” exempt.
Said O’Boyle: “I disagree with their interpretation.”
Meanwhile, Lansing Mayor Andy Schor said Tuesday he favors releasing the information and will look into the feasibility of providing it.
Why does it matter? Craig Mauger, executive director of the Michigan Campaign Finance Network, said it will be difficult to ensure licenses will not simply be granted to those with the most political clout.
“We are completely reliant on state bureaucrats and people who are involved in these applications to police themselves,” Mauger said. “The transparency systems don’t exist, and essentially what happens is governments are telling the public, ‘Trust us that this is going to be taken seriously, that there aren’t conflicts.’” For nearly all of the 138 license applicants listed on the City Clerk’s website as of Monday, the only information given is the LLC that applied, the address for the planned facility, and the name the applicant intends to do business as.
City Clerk Chris Swope stood behind the decision not to disclose. He said that “it would be a lot of work to put it together.” He also expressed concern about whether applicants assumed they would be granted confidentiality because the law exempts disclosure.
The true owner of a business can be obscured by organizing under an LLC format. Unless provided voluntarily, businesses need not disclose “members,” or business owners and investors.
Mauger said the steps the new state law, passed in 2016, took to prevent conflicts of interest were rendered moot by the exemption, which could obscure whether those who lobbied for the bill stood to benefit financially from the licensing process.
Mauger, who said he was passionate about the issue of transparency in the medical marijuana licensing process, said that there was an intense lobbying campaign to craft the law in a manner favorable to “big-money” applicants.
Among other provisions that would appear to benefit big businesses, an allowance of license “stacking” — that is, the ability of applicants to obtain multiple grow licenses for the same location — and a requirement of up to $500,000 in assets were included in the state’s emergency rules under the new law..
Mauger concedes that exempting some sensitive information like security plans or proprietary information listed in business plans is appropriate. Yet he said he hoped to see municipalities opt to redact that sensitive information, rather than denying the public access to the information as a whole.
“There are ways to compromise with people seeking these documents, to say, ‘Well, what are you looking for and how can we provide information while also being sensitive to the needs “of an applicant?’” Mauger said.
He noted that in prior work for his organization, he had been able to obtain applicant information from Webberville, a village about 25 miles west of Lansing whose medical marijuana ordinance makes no mention of the exemption clause.
“They provided the business’s application, information on the business’s plan, who was involved with the business,” Mauger said. “We were able to access that information because Webberville provided it.”
Lansing’s refusal to release applicant information appears to stem from a concern over safety. In previous interviews, city attorney Jim Smiertka indicated the city was worried about facilities’ being targeted for robberies and other crimes.
Jones, who spent three decades in law enforcement, said there was a “real concern” about protecting medical marijuana patients from violence.
Although he had no direct hand in crafting the legislation, he said he saw the logic behind exempting detailed applicant information from the public eye.
“It made sense to be very protective of a business that deals in all cash and has a medical product that could be sold on the black market,” Jones said.
Lansing City Council President Carol Wood disagreed with this rationale. She pointed out that the facility applicants’ addresses were already publicly accessible online, and in the case of certain provisioning centers, some businesses were actively operating.
That information is “already available and being published by the city,” Wood said. “I’m not sure how this would prevent crime.”
Wood said that the exemption on releasing information prevented anyone from knowing whether license applicants had provided political contributions to city officials, something she believes “the public has a right to know.”
“With the scarce amount of information that’s available other than an address and a location, we have no idea who these entities are,” Wood said. “The only thing we have to bank on is the integrity of the people that are issuing the licenses.”