Sept. 13 2018 09:04 AM

State regulators dispute recent legal analysis from city


    THURSDAY, SEPT. 13 — Every remaining medical marijuana dispensary within the city of Lansing could be forced to close Saturday as continued licensing delays grind the industry to an unexpected halt.


    An internal memorandum quietly released by the Lansing City Attorney’s Office on Wednesday claimed that none of the applicants for medical marijuana dispensaries fit the state criteria to continue operations past Saturday. And officials at the Lansing Police Department will meet tomorrow to discuss enforcement plans.


    Officials at the state Department of Licensing and Regulatory Affairs, however, disagreed with the city's legal analysis, creating additional questions in an industry already mired with complexities and uncertainties. But still, City Attorney Jim Smiertka remains confident that Lansing won’t have any operating dispensaries past Saturday.


    “It’s our interpretation that you had to have that local approval by June 15,” Smiertka said, emphasizing enforcement plans are not yet solidified. “No provisioning centers have received local approval yet. Under our interpretation of the rules, anyone who operates past Saturday would be doing so in violation of those rules.”


    The memorandum asserted that none of the applicants will be eligible to operate under an expanded set of emergency rules the Michigan Medical Marihuana Licensing Board announced earlier this week. The extension was designed to enable business for applicants who had applied for a license but had not yet received approval from the state.


    Because ongoing appeals have prevented City Clerk Chris Swope from approving dispensaries, he didn’t sign the related paperwork for their operational amnesty. The documentation — referred to as Attestation I — indicates to the state that Lansing opted into the system and has signed off on the operation of a proposed dispensary.


    “Because no Attestation I forms have been completed for provisioning enters, none of these applicants in the city of Lansing will be permitted to operate past the Sept. 15 deadline,” according to the memorandum. “Operation past this deadline will be considered an impediment to licensure with the state of Michigan.”


    But a LARA spokesman insisted that completed Attestation I forms are not required for dispensaries to push their applications forward.


    It’s unclear exactly how many businesses met the criteria under the new rules; LARA shields the release of those details until applications can go before the licensing board.


    “Applicants that did not have their Attestation I can still turn in the Step 2 part of their application without it,” explained LARA spokesman David Harns. “Many applicants across the state had, in fact, done that by the June 15 deadline and therefore are eligible to remain open after the Sept. 15 deadline passes.”


    Harns previously estimated 98 dispensaries statewide will be asked to cease and desist operations by next week.


    The emergency rules, as written, require a completed application to have been submitted by June 15 to qualify for extended business operations through Dec. 15. One section — Rule No. 6 — mandates that completed applications are to include a signed attestation form from the clerk charged with their local regulation.


    “This rule came out and it necessitated us to tell Council about our interpretation of the rules. If LARA has some other process and we’re not aware of it, that’s LARA’s issue,” Smiertka added. “This came out of the blue. It was a surprise to us. We wanted to get this out to everyone in the city.”


    The city’s ordinance on medical marijuana caps the number of local dispensaries at 25. The ordinance allows Swope to grant 20 license this year and five more next year. Swope received 82 applications for dispensaries.


    Twenty-seven are still pending; Another 55 have been denied. Swope said nearly every business he turned down has filed a formal appeal to reverse the decision.


    Those appeals — should they succeed — would be essentially meaningless if the initial 20 slots for dispensaries were already filled in the meantime. As a result, no provisioning centers have been granted a license while the appeals go on. Swope said it could take months to complete the process that started last November.


    “We are working through this methodically,” Swope explained to the City Council members Wednesday. “We’re trying to get through this, but it’s much more complicated than I think anyone has ever imagined.”


    Chief Deputy City Attorney Joe Abood confirmed: No licenses will be approved until the appeals are finished.


    “We feel that we have to get this right,” Swope added. “We’re inventing a whole new regulatory infrastructure. We’re building it from the ground up.


    “This is the first time. And we’re doing it with 150 applicants,” he added, referring to applications for all marijuana-related businesses, not just dispensaries.


    The announcement startled some in attendance at Wednesday’s meeting, including some city councilmembers who claimed the recent memorandum had arrived only minutes before the committee meeting began. Abood couldn’t answer questions on the topic; He then said he hadn’t have the time to thoroughly digest the report.


    Local medical marijuana advocate Jeffrey Hank also questioned the validity of the city attorney’s reasoning and suggested some dispensaries could possibly remain open. Lansing Police Department spokesman Robert Merritt said a final course of enforcement action has not yet been decided ahead of Friday’s meeting on the topic.


    Smiertka said his staff will meet with state officials to discuss the next steps. No formal enforcement action will be taken until everyone involved can meet and find a common understanding of the emergency rules.


    But Smiertka is confident in the conclusion: Patients looking for medicine will soon have to look beyond Lansing.


    Visit lansingcitypulse.com for previous and continued coverage on local and state medical marijuana regulation.