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Lansing’s medical marijuana growers are taking advantage of state rules allowing them to apply for multiple licenses, as nearly half of the applicants thus far have done.
Under the city ordinance that regulates medical marijuana facilities, there is no cap on the number of licenses that can be distributed to non-dispensary businesses. As of Feb.
5, there were 40 applications for a grower license, according to City Clerk Chris Swope. Only 21 of those were registered to unique applicants.
When the emergency rules regarding medical marijuana licensing were released by the Department of Licensing and Regulatory Affairs (LARA) in December, they included a provision allowing potential licensees to “stack” grower licenses. The policy allows licensees to obtain multiple Class C grow licenses, which permit the cultivation of 1,500 plants per license in a single location.
PG Manufacturing, LLC accounts for onefifth of the total growing license applications.
The corporation has applied for licenses at eight separate suites, all located at the site of the former Pro Bowl bowling alley on North Martin Luther King Jr. Boulevard.
The corporation, if approved for all eight licenses, would be eligible to grow up to 12,000 plants.
PG Manufacturing is registered to Jared Rapp, a lawyer from Bloomfield Hills. The number listed in state records forward callers to RGI Brands, a Michigan liquor importer.
According to a 2008 report from Metromode, a metro Detroit publication, Rapp started RGI Brands with a childhood friend for the purpose of importing a French vodka. Rapp could not be reached for comment as to whether RGI Brands was at all involved with PG Manufacturing.
DQ Manufacturing, LLC and Superior Growth, LLC applied for the second-most licenses, with four each.
DQ Manufacturing is registered to James Barr, president and founder of Strata Business Services in Lansing. Barr has started medical marijuana businesses in Colorado, Illinois and Michigan, according to his website.
The corporation has applied for four licenses to operate at 2110 S. Washington, across the street from the Department of Veteran Affairs Outpatient Clinic. Barr could not immediately be reached for contact by phone or through email.
Other applicants that have applied for multiple grower licenses include Apex Ultra Worldwide, LLC, which also applied for a provisioning center license, and Jartnick Consulting LLC, which also applied for a processor license.
Apex applied for three licenses, all at 2101 W. Willow St., near DeLuca’s Restaurant. Jartnick applied for one grow license at 914 E. Gier St., the former Myers Printing building, and another at 1322 Rensen St.
The awarding of all other license types will not come until the licensing process for provisioning centers is complete, according to Swope.
“Provisioning centers are being reviewed first because a second scoring review must be completed before conditional licenses are approved,” Swope said in a release.
In anticipation of the license distribution, the market values of properties in industrial zones -- where medical marijuana facilities can operate -- have increased, according to Chris Kretschmer of Team One Realty.
Team One Realty owns the building at 1206 E. Oakland, where Bill and Charlie’s Automotive has been located since 1970. In November 2017, Team One bought the property for $1.1 million, which was more than five times the previous selling price of $210,000 in March 2016.
CBRE Martin released data for the second part of 2017 that supports Kretchsmer’s assertion. Industrial property vacancies have dropped from 8 percent to 5.8 percent over the last year, “due in large part to the removal of large blocks of vacancies via property sales and options to accommodate the growing medical marijuana industry,” the real estate firm wrote.
Team One has been working with Greg Days, the repair shop’s owner, to come to an agreement on extending his lease. Kretschmer said Bill and Charlie’s has been offered options including a month-to-month lease, discounted rent for downsizing, and a rate increase over what the auto shop has paying previously.
“We’re not looking to squeeze anybody out of their livelihood,” Kretschmer said. “We’re looking to work with people.”
Although Lansing will have no jurisdiction over its licensing process, the Lansing Board of Water and Light (BWL) is awaiting the rollout of a medical marijuana mega-facility in Windsor Township.
The Harvest Park development, located off Creyts Road, bills itself as the largest medical marijuana development east of the Mississippi River. Sixty-two acres to the east of Creyts Road have already sold out, while plots are for sale in another 67-acre area to the west, set to open in mid-2018.
The development is set to become the BWL’s second-largest customer, behind only General Motors. Despite the large amount of energy that the Harvest Park complex will require, there are no concerns at the BWL about potentially overloading the grid, according to representative Amy Adamy.
“The BWL must serve all commercial customers who can legally operate within its service territory,” Adamy said in an email. “We do not anticipate any adverse impacts of serving growers.”
There are plans to place a substation on the grounds of the development, ensuring no downtime from loss of power, according to Harvest Park.
A 2012 study published in the journal Energy Policy found that it takes about 13,000 kilowatt hours (kWh) a year to operate a 128-square-foot grow area.
For comparison, the average energy consumption for residential BWL customers is about 7,000 kWh, although Adamy said the company did not have data on the average home size.
Jody Washington, the 1st Ward council member who voted against the licensing ordinance, said that given the energy requirements, she would favor placing a limit on the amount of grow operations within the city.
However, Washington’s concerns are not limited to energy consumption; she said she has been wholly opposed to the ordinance, from introduction to implementation.
“There was no public input, there was no council input, there was nothing,” Washington said. “It was just brought to us at the last minute and rammed through, so I voted against it.”
The city continues to review applications and take action against unlicensed facilities, all while mired in a lawsuit brought against it by Let Lansing Vote seeking to repeal the ordinance.
Jarren Osmar, legal liaison for Let Lansing Vote, said that while provisioning centers have a special interest in the case given the limited licenses they are vying for, he gets a sense that growers -- as well as the other non-provisioning center applicants -- would be satisfied if the ordinance remained in place.
“Because the other four licenses were granted unlimited access to the market, they’re very happy with the status quo,” Osmar said. “The provisioning centers are really the ones that are being monopolized by big money.”