The marijuana cash run is on, and an analysis of publicly available data on applicants shows that only 37 percent of the business applicants have a Lansing mailing address. Most of the applications are obscured by limited liability corporations, making it difficult to identify who the investors are behind the applications, or even if they are from instate.
Local dispensary owners expressed concern that deep-pocketed interests without Lansing ties will push them out. The scoring system the city will use does not give any preference to local ownership.
On Monday, Lansing City Clerk Chris Swope released a spreadsheet to City Pulse which included the type of license sought, the address for the marijuana operation and the address for the applicant. A preliminary analysis of the data showed:
• Fifteen applications were for medical marijuana grow operations. Twelve of those applicants were from entities out of the city.
• Three applications were for medical marijuana processing operations. All three applicants have a business address outside the city of Lansing.
• Eighty-six businesses applied for provisioning center licenses. Of those, 35 had Lansing business addresses.
Each license application was accompanied by a $5,000 licensing fee. If an applicant is not granted a license, half of that is returned. The application fees alone will result in a net gain of $545,000 for the city.
Swope will have to whittle the 86 provisioning center applications to 20 licensed facilities during this first application phase. Five more can be approved next fall.
There is no limit to the number of licenses that can be administered for any facility types other than provisioning centers, and as of Monday, the city will continue to accept applications for growers, processors, transporters, and safety compliance facilities. No applications were received for secure transporter or safety compliance facilities.
The rush came after nearly a month of inaction on the part of area marijuana entities. Friday marked the end of the city’s initial application period, which started on Nov. 16, yet as of last Wednesday afternoon, Swope’s office had still received zero applications.
Had no one applied by Friday’s deadline, all medical marijuana businesses within city limits would have been forced to shut down by the end of the year. All dispensaries would have been required to close in two days. Now, only businesses who did not apply will face these deadlines.
Mike Barron, marketing director of Got Meds dispensary, 3405 S. Cedar St, said he was worried about the impact the lack of Lansing-based applicants would have on the city’s medical marijuana industry.
Barron said he is concerned that deep-pocketed, out-of-state corporations will be able to secure licenses based on their financial potential alone, pushing out established Lansing businesses.
To comply with city requirements, it will cost at least $11,000 in city and state application fees. Applicants must also have $300,000 in liquid assets to operate a provisioning center in the state.
“I hope that the locals get a shake at it,” Barron said. “We’ve been here, we’ve been doing great for our community, and to not be here for financial reasons I think would be heartbreaking for the city.”
The scoring rubric that Swope’s office will be using to assign licenses is scored on 100 points. Job creation and financial stability account for 27 possible points; no consideration is given to an applicant’s ties to Lansing.
Barron also said he was worried larger businesses might be able to get away with declaring lofty, overstated job creation projections, given their financial resources.
“What if I wrote I was going to hire 1,000 people?” Barron said. “Does that give me more points? I’m really never going to unless we get that big.”
The 66 provisioning center applicants that will be denied licenses have the option of re-submitting their applications during the second licensing phase, during which the final five licenses will be distributed.
Meanwhile, incoming City Councilwoman Carol Wood, who is expected to be president, cited what she called a loophole in the new ordinance regarding delinquent property taxes.
She said nothing in the law prevents applicants from renting property on which back taxes are due. That matters, she said, because the city will have heightened costs for inspections on properties for which it may not be receiving tax revenue.
Swope confirmed that the ordinance does not prevent applicants from renting places with overdue taxes.
The city ordinance that authorized the licensing of marijuana businesses does not allow applicants who owe money to the city to receive licenses. City Attourney James Smierkta said, however, that Swope could waive that provision. Swope said he has not made a formal decision, but he said he has allowed applicants for other licenses to get cuaght up. Applicants apparently may rent fromlandlords who are delinquent on property taxes.
There were outstanding 2016-’17 property taxes for the addresses of buildings that 22 applicants want to rent.
Edgewood Wellness LLC, which is applying for a provisioning center license, listed its proposed operating address as 134 E. Edgewood Blvd. The owner of this property, JNNF LLC of Walled Lake, Michigan, owes nearly $100,000 in back taxes accrued since 2016. The amount owed on the Edgewood property was by far the largest balance of any delinquent property.
At least one delinquent property is owned by the same corporation applying for a license, disqualifying the entity from receiving one. 1517 Family Holdings LLC is applying for a provisioning center license at 3520 N. East St. That corporation owes $2,362.51 in taxes on the property from 2016, according to Ingham County records.
There are also two delinquent properties that have owners with business addresses that match addresses given on a licensing application. However, the listed business names are different. It is unclear whether the applicants are the same entities operating under different names.
Lansing Provisioning Center Inc. submitted a provisioning center application for the property at 6510 S. Cedar St., which is listed as the company’s business address, yet the address is also claimed by Fanta Anj LLC, according to county records. Fanta Anj owes a total of $24,825.49 in taxes on the property from 2016.
M & H LLC also submitted a provisioning center application for two suites at 925 E. Kalamazoo St., which M & H also lists as its business address. City records shows the property as being owned by Gedeon Brother LLC, a corporation operating from the same address. Gedeon Brother owes $10,638.47 to the city and Ingham County dating back to 2016.