Sept. 14 2018 07:57 AM

Local dispensaries to continue business — for now


FRIDAY, SEPT. 14 — Local medical marijuana dispensaries originally pegged to close by the weekend will receive at least a temporary reprieve following a state judge’s order that allows them to remain in business.


Michigan Court of Claims Judge Stephen Borello yesterday evening approved an injunction against a recently extended set of state emergency rules, essentially forcing the Michigan Department of Licensing and Regulatory Affairs to allow unlicensed medical marijuana dispensaries to remain in operation through at least Dec. 15.


The order prohibits LARA from “treating temporarily operating medical marihuana businesses differently based on whether the business filed a Step 2 application more than 90 days in the past” and provides added clarity for local entrepreneurs who earlier this week were advised they would soon need to close their doors.


“We’ve received a copy of Judge Borello’s order and we’re reviewing it,” said LARA spokesman David Harns.


The recent ruling stems from a lawsuit filed yesterday by attorney Denise Pollicella, of Howell, on behalf of a dispensary registered as Montrowe LLC. The complaint argued that the recently extended rules — which outlined which dispensaries were able to remain open past Saturday — was unfair to her client and others.


Pollicella argued that because the rules outlined inconsistent treatment between different categories of marijuana businesses, they were unconstitutional and posed the potential for “irreparable harm” if Montrowe would have been forced to shutter, like the emergency rules had mandated. Closure would have been an “impossible task,” she said.


The complaint outlined how the dispensary would have needed to quickly offload about 150 pounds of dry marijuana, 800 grams of marijuana concentrate and hundreds of edible products totaling to more than $500,000. Possession after Sept. 15 could have also netted a number of felony charges, the complaint states.


“Plaintiff will be forced to close its business, which has been operating and serving patients in the Jackson area for nearly four months, and face loss of income, loss of consumer confidence, market share, loss of goodwill and loss of business reputation,” according to Pollicella’s complaint. “Plaintiff has no adequate remedy at law.”

Acting only hours after the complaint was filed, Borello agreed with Pollicella and intervened with a court order.


And the decision — because it also extends to every dispensary statewide — provided some temporary relief for a dwindling number of Lansing-based businesses that earlier this week were advised by the City Attorney’s Office that they would also need to close over the weekend. That portion of the rules, for now, remains suspended.


City officials and the Lansing Police Department planned to meet today to discuss enforcement plans with the understanding that the new emergency rules would have prevented local dispensaries from continuing operation beyond this week. LARA officials disagreed with the city’s interpretation but, for now, the issue is a moot one.

Calls to the City Attorney’s Office for additional clarification were not immediately returned.


The rules — if left unchanged through the end of the year — would still force unlicensed dispensaries to close by Dec. 15. City Clerk Chris Swope previously suggested that all local dispensaries would need to close by then regardless. He labeled it a “nearly impossible” but required task to first sort through a list of outstanding appeals.


The original rules, as written, required 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.


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 Medical Marihuana Licensing Board. Harns — before the recent court ruling — estimated that 98 dispensaries would’ve been asked to cease and desist operations by Saturday.


City officials maintained that because Swope hadn’t offered local approval to any dispensaries, no local businesses would have been eligible to operate past Sept. 15. A city ordinance caps the number of local dispensaries at 25, and dozens of ongoing appeals have largely frozen the rolling approval process.


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 still take months to complete the process that started last November.


City Attorney Jim Smiertka previously said no formal enforcement action will be taken until everyone involved can meet and find a common understanding of the emergency rules. The judge’s ruling only added another moving part to an increasingly complex regulatory scheme that for months has been filled with uncertainties.


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