Sales or service?

Within two weeks after the state Courtof Appeals said on Aug. 23 that selling medical marijuana is illegal,the Greater Lansing Medical Marijuana Business Association held ameeting at the vacant Story Oldsmobile car dealership on Lansing’s eastside to try and figure out what to do next.

The association’s attorney had told dispensary owners to promptly close their doors. So they did.

According to accounts from twoassociation members, Detroit attorney Tom Lavigne walked into themeeting and advised the dispensary owners to stay open. He invited themto call him, Shekina Pena recounted. Pena is the owner of Your HealthyChoice Clinic at 628 E. Michigan Ave. in Lansing, a former dispensarythat now offers only physician services. 

“He showed up to tell people to stayopen and offered us his business card. He was trying to hijack themeeting,” Pena said Thursday.

Another association member, dispensaryowner Ryan Basore, who said he is “liquidating” equipment at the formerCapital City Caregivers on Michigan Avenue, said the association threwthe Detroit attorney out of the meeting; Pena said it wasn’t quite thatharsh.

“He wasn’t necessarily kicked out,” she said.

But this much is clear: Two ofMichigan’s most prominent law firms that specialize in medicalmarijuana are at odds with each other. One is advising its clients tokeep their dispensaries open, while the other is telling its clients toshut down.

Lavigne, who with Matt Abel operate afirm called Cannibis Counsel in offices in downtown Detroit, is tellingall 10 of their clients who are dispensary owners throughout the stateto stay open. And the clients are heeding their advice — one of whichis The Herbal Connection, 4314 S. Cedar St., in Lansing. Lavigne saidan association member had invited him. Once he stated his opinion thatnot all dispensaries should have to close down, he said he left beforethe association’s board voted on a motion asking him to leave.

Lavigne and Abel think there’s stilllife left in dispensaries, which is welcome news to patients who dependupon dispensaries for medicine.

“I think the death of dispensaries is highly exaggerated,” Abel said in an interview Friday.

Meanwhile, Lansing-based attorney MattNewburg, who with Lansing attorney Mary Chartier is representingdispensary owners Brandon McQueen and Matthew Taylor in appealing theruling to the state Supreme Court, is telling his clients just theopposite.

Abel’s theory is this: Dispensaries donot engage in sales. It’s a service industry, therefore someone behindthe counter at a dispensary is being compensated for all that goes intogrowing the plant — how difficult it is to obtain the strain, how longit takes to grow, equipment and any other costs that go into growingcannabis.

Lavigne, of Cannabis Counsel, cited page16 of the Court of Appeals ruling: “We hold that a person assists aregistered qualifying patient with ‘using or administering’ marihuanawhen the person assists the patient in preparing the marihuana to beconsumed in any of the various ways that marihuana is commonly consumedor by physically aiding the patient in consuming the marihuana.”

Basically, Abel said, a patient iscompensating for the costs of being able to use or have administeredcannabis from a dispensary. “Why did the Court of Appeals mention allthe various ways in which marijuana is commonly consumed if theyweren’t giving us a roadmap?” he asked. “Clearly this is a serviceindustry.”

Abel penned his thoughts in a guestcolumn in High Times Magazine last week. He wrote: “The Court held thatthe sale of marijuana is not allowed in Michigan, and so thedefendants’ business model was not permissible. But the good news isthat the court did not — contrary to widespread media reports — rulethat all dispensaries in Michigan are illegal and must close.

“In fact the Court left open the likelihood that transfers involving compensation for costs may be permitted.”

Newburg did not comment on Abel’stheory, but asked: “How do you get marijuana in the door?” In otherwords: What did dispensary owners who did not grow what they’re sellingobtain the marijuana? 

“I think the best thing is to closetheir business,” Newburg said. Meanwhile, he and Chartier are preppingfor a bigger stage: appealing the Court of Appeals ruling to the stateSupreme Court.

The Court of Appeals said in its Aug. 23 rulingthat Compassionate Apothecary in Mount Pleasant (whose owners, McQueenand Taylor, also have a store on Michigan Avenue in Lansing) was apublic nuisance, overturning a Mount Pleasant Circuit Court ruling. TheCourt of Appeals said in its 17-page ruling that the “medical use” ofcannabis does not include patient-to-patient “sales.” Under CA’sbusiness model, caregivers stored medical marijuana for their patientsat the business in lockers. If the amount in the locker is more thanwhat the patient needs, the business permits the sale of overages toother patients. CA would take 20 percent of the sale price, charge $5 amonth for membership and $50 a month for a locker. Approximately 345patients and caregivers are members of CA, the ruling says. 

Abel, of Cannabis Counsel, said theCourt of Appeals ruling only pertained to CA’s model — not alldispensaries. “(CA) was a bad business model.” He added that he is“comfortable with putting our business model on the table” in court.

Ingham County Prosecutor Stuart DunningsIII points to page 10 of the Court of Appeals ruling that says:“Specifically, in regard to this case, the MMMA [Michigan MedicalMarijuana Act] does not authorize marihuana dispensaries.” 

He said any “alternatives” presented inthe future — that dispensaries “transfer” medical marijuana or arebased on “donations” — “are going to be found to be wanton.”

Dunnings said he “maintained from thevery beginning” that dispensaries are illegal, even though at least twocities — Lansing and Ann Arbor — adopted ordinances to license suchbusinesses. He said the Court of Appeals ruling was “inevitable.”

“I think it’s unfortunate for people whoestablished these businesses in good faith — most of them, not all ofthem — and they’ve now been hit with having to close their businesses,”Dunnings said. “But I’ve said all along this (dispensaries are illegal)is the law.”

Open for business

It’s safe to say a large majority ofdispensaries closed after the Aug. 23 Court of Appeals ruling. But notall of them — at least three Lansing dispensaries are still open.

At The Herbal Connection, 4314 S. CedarSt., it was business as usual on Friday based on Abel’s and Lavigne’sadvice, according to a man who answered the phone. He identifiedhimself as the owner but only agreed to speak on the condition that hisname not be used. The dispensary’s website identified a man with thesame name as the owner.

“We’re here to fight for the patients,” he said, adding that all products are “grinded and pre-rolled before leaving the store.”

The same goes for HydroWorld on MartinLuther King Jr. Boulevard. HydroWorld owner Danny Trevino confirmed toCity Pulse last week that he would remain open for business sellingmedical marijuana and starter plants. Trevino said his shop on BarnesAvenue in Lansing and another in Jackson are open as well. He saidauthorities closed his shop in Mt. Pleasant — where CompassionateApothocary, the dispensary in the court ruling is as well — but that heintends to reopen it.

However, open dispensaries — at least inthe city — don’t square with City Attorney Brig Smith’s cease anddesist order he issued on Aug. 25. Smith said in an e-mail that“enforcement" will come "as warranted."  Smith’sletter reads, in part: "Because this ruling renders illegal theactivities occurring at most, if not all, medical marihuanaestablishments, my office has advised the City Clerk not to issue anylicenses for the operation of medical marihuana establishments at thistime. Without a license, you are operating illegally under local law....  Medical marihuanaestablishments that continue to engage in activities that do not complywith the Act will be subject to civil and criminal enforcement and toany penalties provided by law."

As for Lavigne’s and Abel’s legal opinion: "(I) generally do not find merit in his (Lavigne’s) argument," he wrote in an e-mail.

Elsewhere, two business owners from Ann Arbor said they would reopen.

Rob Bethke, owner of Ann Arbor HealthCollective and also one of Cannabis Counsel’s clients, said aftertemporarily shutting down, the collective is back open. Bethke didn’toffer specifics about how the collective’s model works, but said it’s a“closed network of patients and caregivers” with more than 2,000members.

Chuck Ream, who’s Med Mar in Ann Arborwas raided Aug. 25 by a southeast Michigan regional narcoticsenforcement team for reasons apparently unrelated to the Appeals Courtruling, said he will reopen his “collective.” Ream said “acquisitions”at Med Mar must occur between members, which he estimated to be atabout 900.

“I’m always worried (about being open),”he said. “But I’m willing to die for this struggle. At this point,we’re following the law.”

Ream said he is part of an effort to getthe Legislature to amend the Medical Marihuana Act to allow for “localcontrol legislation,” which would permit dispensaries on a localizedbasis like Lansing and Ann Arbor had already done prior to the ruling.“We want to find the right person, probably a Republican, to take itup,” Ream said. (See related story on this page.)

Pena, who said Friday that Your HealthyChoice in Lansing is still open but only as a health clinic withdoctors on hand, said Abel and Lavigne are leading a dangerous effortand are putting patients at risk.

“I don’t want patients to be lured” into dispensaries that may not be legal, Pena said.

(Pena ran into trouble on another frontwhen she was charged Friday under state election law after she offeredfree marijuana to patients who registered to vote. The offer wascoupled with endorsements of Lansing City Council candidates. Pena plednot guilty Monday in Lansing’s District Court to a misdemeanor count ofinfluencing voters with money or other valuable consideration.)

While some news reports since the courtruling said some local prosecutors, like Otsego County’s Kyle Legel,disagree with the court’s decision and may not prosecute cases, Newburgsaid the attorney general has the authority to do so. Schuette said ina statement following the Court of Appeals decision: “This ruling is ahuge victory for public safety and Michigan communities struggling withan invasion of pot shops near their schools, homes and churches.”

So is staying open courageous orfoolhardy? Are these businesses the tall, strong kid on the playground,or the puny one picking a fight with the stronger hand — like lawenforcement, the county prosecutor or even the attorney general forthat matter? Who’s to say law enforcement won’t go break down theirdoors after reading this, if they haven’t already?

The Herbal Connection’s owner, who spoke on the condition his name not be used, said it comes with the territory.

“There’s always that fear,” he said of getting shut down by the police. “What can we do? Somebody’s gotta fight for it.”

Abel, of Cannabis Counsel, sticks by hisadvice: “Let’s cut (patients) off so there’s no medicine at all. Isthat less riskier for them? I don’t think so.” He, too, said risk comeswith the territory of operating a dispensary. “Anyone who thinksthey’re gonna run one without risk is deluded.”

Dunnings, the Ingham County prosecutor,said anyone who’s opened is “going to find themselves in court one wayor the other. … They’re going to be liable to prosecution,” he said,adding that it’s up to the police to investigate dispensaries. “I don’tcontrol police departments.”