Nov. 8 2018 10:20 AM

Temporary order bodes well for Friday’s court hearing


    The owners, employees and patients of the eight dispensaries still operating in Lansing are hoping that a Michigan Court of Claims judge sees things their way on Friday.

    And if his previous order is any indication, they have reason to be optimistic that they will not be shut down.

    The Lansing dispensaries are among more than 200 statewide that got a reprieve last week from a state order to shut down by Nov. 1 because they were operating without a license. But an eleventh-hour temporary restraining order issued Oct. 30 by Judge Stephen L. Borrello let them keep their doors open at least until Borrello hears arguments on Friday.

    His order last week suggested the state is likely to lose the case. The burden is now entirely on officials from the Michigan Department of Licensing and Regulatory Affairs, which imposed the deadline.

    And nobody from the state is talking. No formal response has been filed in court and a LARA spokesman declined comment. Calls placed to the Attorney General’s Office were also not returned for this story or those that preceded it.

    “Medical marijuana patients cannot have their medicine provided for them safely and accessibly with only a small handful of these businesses allowed to operate across the state,” explained attorney Joslin Monahan, noting only 37 dispensaries were initially pegged to escape the Oct. 31 deadline outlined by LARA. None of those were in Lansing, where the City Clerk’s Office has yet to license a single dispensary more than a year after the application process began.

    Monahan represents First Class Inc. The company — with ties to medical marijuana interests in Leoni Township in Jackson County — spurred Borrello’s recent decision. She argued any “sweeping shutdown” of applicants still stuck in the licensing process would be random and unfair to hundreds of patients statewide.

    Monahan just wants to ensure everyone has time to receive a fair shake from the state. And Borrello agreed.

    Of the 177 dispensary applications received by LARA, the Medical Marihuana Licensing Board has only reviewed 61 of them. Thirtyseven have been approved; another 24 have been denied. Monahan essentially wants to ensure the remaining 116 outstanding applicants are able to receive a decision before they’re forced to close.

    “It’s (LARA’s) burden on Friday to show the judge why he was wrong to issue the temporary restraining order,” Monahan explained. “The judge has broad discretion here. He can modify it, he can leave it in place or — of course — he can quash the order. We won’t know how this is going to go until we can get into the courtroom.”

    And for the nearly 300,000 registered medical marijuana patients statewide, concerns have grown over where they’ll eventually be able to find access to their medicine.

    LARA suggested over 80 percent of cardholders live in a county within 30 miles of a licensed provisioning center. Those statistics, however, vary by each jurisdiction.

    Dispensaries ultimately need licensing approval from both the state and their local municipalities to remain in business. State officials, accordingly, won’t grant licenses until cities give the go-ahead. And Lansing officials haven’t been able to issue a single license while dozens of business owners appeal their rejected applications.

    The state Medical Marihuana Licensing Board approved its most recent batch of licenses late last month, but Lansing was predictably absent from the list. City Clerk Chris Swope is essentially prohibited from granting approval to any dispensaries until each of the ongoing appeals have finished. It has created a regulatory stalemate — one caused to some extent by how long the clerk’s office took to review applications.

    Officials have urged the City Council to expand the previously established limit on dispensaries, but until then, successful appeals need to be able to find space in the limited market. Mayor Andy Schor said Lansing — under its current medical marijuana ordinance — simply didn’t have time to process the ongoing appeals by Oct. 31.

    Looking to escape the looming deadline, the city filed a similar lawsuit against the state shortly after First Class Inc. Schor said city attorneys will also remain involved in the upcoming hearing.

    The deadline “creates an absurd result whereby many temporarily operating facilities are forced to close, despite complying with all administrative requirements with which they can possibly comply,” according to the city’s complaint. The lawsuit also noted that local patients “will be essentially forced into the black market.”

    The complaint also contends the recent deadline “runs counter to the legislative intent” by reducing patient access and diminishing the immediate operation of local pot shops. The date was set without regard to the consequences, and LARA has established a recent history of sudden and drastic regulatory changes, it reads.

    Lansing could have also lost its regional footing in a lucrative statewide industry. Schor recognized that neighboring cities would have siphoned patient dollars that would have otherwise landed closer to home, but he was confident business would return to Lansing regardless of whether Borrello considered the recent complaints.

    Schor also said a previous Dec. 15 deadline would likely provide enough time for city officials to wrap up the appeals process and dole out its first batch of operating licenses. It’ll just take “a lot of work,” Schor said. And attorneys for First Class Inc. would like to postpone the deadline for as long as the licensing process continues.

    The city of Lansing will play “a part” in the arguments on Friday, Schor emphasized. Its previously separate complaint has since been consolidated with the case brought forward by First Class Inc.

    The parking lots outside local pot shops remained crowded in recent days as patients filled up, should their local dispensaries face closure. Sam Welch, assistant manager at Greenwave, previously said his store stopped ordering products. His fingers were crossed but he knew his job, at least temporarily, could have still been on the line.

    Greenwave, in addition to its inability to receive a state license by Halloween, was also unanimously denied last week for prequalification status — a requirement to eventually receiving a full-fledged operating license. Officials cited inadequate “personal and business probity” without further details. The business can appeal the decision.

    Calls to Greenwave for additional comment were not immediately returned, but the dispensary along Oakland Avenue and Larch Street could soon be caught in the crosshairs after state officials denied the preliminary licensing bid. LARA spokesman David Harns suggested Borrello’s order is the only mechanism that allows it to remain in business.

    “Obviously a lot of people are worried about where they’re going to get their stuff,” Welch said previously. “We’re worried too. We’re just hoping (LARA) can get this together soon so people can get their medicine in a timely manner. There are a lot of elderly people out there that just can’t make the drive to Detroit or Bay City.”

    Greenwave, under the previous but now rescinded rules, would have had 21 days to appeal and would also have been asked to cease operations in the meantime. The dispensary remained open on Monday, largely because Borrello had canned the rules that would have mandated its closure. Its future, for now, remains largely uncertain.

    State officials have only reviewed one other currently operating dispensary in Lansing. Besides Greenwave, Cannaiseur, which remains open on 3200 N. East St., received prequalification status on Oct. 18. Without a state operating license, however, it too could be forced to close if the prior rules are upheld.

    If the temporary restraining order is lifted, then unlicensed dispensaries — in addition to ceasing sales — will likely be asked to either destroy, sell or privately stash away their remaining product inventories. If it remains intact, then dispensaries will likely be able to continue business as usual until Borrello rules otherwise.

    Visit lansingcitypulse.com for continued coverage as the ongoing litigation continues at the Court of Claims.