March 29 2018 10:45 AM

Dispensary owners doubling down in anti-ordinance fight

A group of medical marijuana activists is launching a second front in its effort to derail Lansing’s new ordinance.

They are at work on mounting a drive to place separate issues on the ballot. One would seek to repeal the ordinance and the other would attempt to replace it with new language.

Meanwhile, the group, known as Let Lansing Vote, is continuing its lawsuit against Lansing City Clerk Chris Swope over his rejection of its petitions for a ballot initiative. That called for the City Council to rescind the ordinance it passed last year capping dispensaries at 25 or allow voters to approve or reject it. Ingham County Circuit Judge James Jamo has ruled against a motion by the city to dismiss the suit. The city plans to appeal the ruling to the state Court of Appeals.

In an interview Tuesday with City Pulse that will be available later this week on its website, Mayor Andy Schor said the city will not settle. “A lawsuit against the city to get a legislative decision to change — to me that’s not a settlement you can make,” he said.

“If they win” the suit, Schor said, “we will have have no marijuana ordinance whatsoever. We will have to shut everyone down.”

Asked why, he said, “I’m not interested in breaking the law.”

Reminded that his predecessor, Virg Bernero, allowed dispensaries to operate illegally, Schor said, “That was before there was a state law.” A state law took effect last year regulating dispensaries.

But they were still illegal before that because of court rulings, yet Bernero allowed them to stay open in Lansing, Schor was told.

“You’d have to ask him” why he did so, Schor said.

One of the leaders of Let Lansing Vote, Jarren Osmar, and City Councilwoman Kathie Dunbar are on the same wavelength on how the group should approach repealing and replacing the ordinance as two separate efforts. Let Lansing Vote has drafted the repeal language and a second group has submitted replacement language to the City Clerk’s Office for preliminary consideration.

Dunbar, who voted for the ordinance when it passed in September 2017, said it was commendable to see recent college graduates and younger residents fighting for their cause.

“A group of young people have made it their mission to take on the system, and they’re not losing,” Dunbar said.

Osmar said the new effort was motivated by concern over the city’s appeal of Jamo’s ruling.

“If they were to win, then city clerks across the state could throw away signatures at their discretion,” Osmar said. “Ballot petition signatures, initiatives, referendums, and anyone trying to run for office could get all of their signatures thrown away.”

Swope rejected petitions because, the city alleges, two circulators incorrectly filled out residency information about themselves, not because they lacked sufficient valid signatures. Without those two circulators’ petitions, Let Lansing Vote lacked just 45 valid signatures.

The two sides will be in court next week over a motion by the city to prevent Swope from being deposed.

Appearing before the Council on Monday, Osmar told Swope he “would be deposed.”

“They have to defend that and explain why a public official shouldn’t be allowed to be questioned,” Osmar said in an interview. “Our primary question is why did [Swope] invalidate the petitions.”

The group’s attorney, Bob Baldori, said the city was wasting taxpayers’ money on the appeal.

“They didn’t even do it in-house,” Baldori said. “They hired an expensive law firm in Detroit to appeal something that is frivolous.” The firm is Plunkett Cooney of Bloomfield Hills.

While the court fight goes on, the City Clerk’s Office continues to consider applications for dispensaries, grow operations and related businesses.

City officials say the city has spent hundreds of hours evaluating the applications, which they say justifies the $5,000 fee per application.

City Attorney Jim Smiertka said that in the process of drafting the ordinance, the city “grossly underestimated” the true cost of implementing it.

The city attorney said that 25 percent of his staff has been occupied by work around the medical marijuana ordinance, answering questions from lobbyists and applicants and working with Lansing police to take action against operations that have been denied licenses.

“The amount of work that we’re going through right now? Boxes and boxes of insurance policies and performance [reviews] and the enormous amount of questions we’ve been getting from applicants,” Smiertka said.

Schor said Tuesday that his proposed budget, which was submitted to the Council on Monday, includes one new position in the clerk’s office to handle applications and two more premise inspectors.

At even Smiertka’s original estimate of $6,000, given the 148 license applications the city received as of March 27, the city would be facing an $888,000 tab for the licensing process. Add in the maximum fee that the consulting firm IFC can charge for its assistance and the costs rapidly approach a cool $1 million.

This compares to the $740,000 the city has collected from those applicants. Lansing will only be able to pocket as much as $577,500, because rejected applicants will see half their application fee returned.

Smiertka said that the regular costs of doing business could not warrant a fee, so all of his estimates are for the added responsibilities the city will face under the licensing ordinance.

“We’re not talking about just the general costs of government — that’s how you distinguish what’s a valid fee supporting different expenses,” Smiertka said. “If there are activities that are directly related to the application, that’s the difference.”

That has to be the case, as a 1999 Michigan Supreme Court ruling against the city placed limits on what can be called a fee before it actually becomes a tax, which requires voter approval.

Smiertka said that he was “totally aware of the law” that said fees could not be used to generate revenue, as expected — he was the city’s attorney in that Supreme Court case.