Dispensaries face Oct. 31 shutdown; ‘dropped ball’ delays reform efforts

A last-ditch effort to dole out licenses to local dispensaries was made even more futile after the City Clerk’s Office “dropped the ball” on recommendations to adjust Lansing’s ordinance on medical marijuana.

The city’s Medical Marihuana Commission met late last month to urge the City Council to expand the ordinance-mandated cap on the number of dispensaries within the city. The goal: Approve at least a handful of local provisioning centers so they can at least have a shot at nabbing a state license before the end of the month.

But a flustered Deputy City Clerk Brian Jackson said he “dropped the ball” and forgot to put the time-sensitive recommendations on the City Council’s agenda for its meeting on Monday. That advice will now have to wait until the Council’s next meeting, Oct. 22 — only 10 days before all local dispensaries are pegged for closure.

Unless city officials decide to overhaul the ordinance in the next few weeks or another set of emergency rules is again issued by the state Department of Licensing and Regulatory Affairs, Lansing won’t be home to a single dispensary by the end of the month regardless.

City Clerk Chris Swope contended the missteps won’t make much of a difference.

“We have given all of the information to the Council members and the mayor,” Swope said. “They have all the information. I’ve consulted with Council leadership and this really will have no impact on the process at all.”

In Lansing, 27 dispensaries are listed as “pending” for a chance at one of 20 available dispensary licenses. Another 32 have appealed Swope’s decision to deny their licenses, totaling 59. And they need both state and local approval to stay open.

Only nine remain operational, according to a recent City Pulse analysis. All of those shops need state-issued operating licenses by Oct. 31 or they’ll need to close, according to a recently adjusted set of emergency rules guiding the industry. But the ongoing appeals have essentially frozen the local market.

A judge’s order essentially prohibits Swope from issuing licenses until each appealing dispensary applicant has had a chance to work through the process. The pending applications, in the meantime, cannot be approved because entrepreneurs will still need to fit into the local market if their denials are eventually overturned.

Swope has repeatedly emphasized that the regulatory structure is more “complex” than ever imagined.

Medical Marihuana commissioners advised the City Council to revise the limit to ensure medical bud remains available for local residents long past the Oct. 31 deadline. The five-member panel asked the Council to consider expanding the dispensary cap to a population-based, one provisioning center for every 3,000 residents.

For context, U.S. Census figures would peg that number at 38 dispensaries in the city of Lansing, whose population was 116,020 in 2016. Ann Arbor, with about 4,500 more residents, capped its number at 28. Detroit, which is nearly six times bigger than Lansing, set its limit at 75 potential dispensaries.

The breathing room would provide a workaround to the stalled appeals process, allowing Swope to approve dispensaries while ensuring space remains for those who have filed appeals. The commission also suggested allowing every successful appeal to find a space in the market regardless of the ordinance-induced limitation.

If the recommendations were to be approved, the dispensary limit could ultimately climb as high as 57 provisioning centers.

It’s unclear if City Council would approve an amendment to the ordinance but, because of Jackson’s missteps, they won’t be able to entertain the concept until weeks after the commission had intended.

“That one was my fault,” Jackson said before the City Council meeting on Monday.

Officials at LARA — following a legal tussle that garnered attention from Attorney General Bill Schuette —opted earlier this week to schedule an additional Medical Marihuana Licensing Board meeting ahead of the Oct. 31 deadline. Additional batches of state licenses are now set be doled out on Oct. 18 and Oct. 29.

But Lansing dispensaries won’t be included in the mix. City officials — even before delivering the recommendations was botched by Swope’s office — said the chances of getting shops eligible for state licensure by Oct. 31 were inconceivably slim. City Attorney Jim Smiertka previously labeled it as a “drop-dead date for everyone.”

Swope said the looming deadline was problematic and previously suggested state officials should reconsider the mandate. But, according to a spokesperson for LARA, there are no plans to adjust that deadline. Unlicensed dispensaries that operate past Oct. 31 could receive a referral to the Michigan State Police, he said.

The state, so far, has approved licenses for 19 provisioning centers. About 80 percent of medical marijuana cardholders live in a county that is within 30 miles of a licensed dispensary. And 94 percent live in a county that is within 60 miles. An additional “robust” number is expected to be approved later this month, officials said.

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