Nov. 8 2018 02:07 PM

Council members learn from licensing ‘headaches’ in Lansing


THURSDAY, NOV. 8 — At least a few pot shops could soon line the edges of East Lansing after its City Council collectively agreed to dip their toes into the lucrative waters of retail medical marijuana sales.


By a 5-0 vote, the Council agreed to permit dispensaries but effectively limit how many to four or five.


East Lansing officials hope to learn from the “headaches” the local licensing licensing process has created nearby in the capital city, Mayor Pro-Tem Erik Altmann said. East Lansing’s licensing structure creates a first-come, first-serve style application process and helps curb concerns surrounding discretionary selection.


Council members yesterday evening unanimously greenlighted a regulatory framework that could eventually allow four, or possibly five, medical marijuana dispensaries to set up shop around the edges of the city. The recent resolution, after Council deadlocked on the issue last week, represents a compromise, officials said.


“This is a controversial issue,” said Mayor Pro-Tem Erik Altmann. “If we wanted buy-in from the community, it was important to have buy-in from everyone on the council. I appreciated the willingness to rally around a single proposal but this version wasn’t something that any one, single person wanted and I think that’s a good thing.”


East Lansing previously opted into the Medical Marihuana Facilities Licensing Act but stopped short of allowing dispensaries within city limits. Regulations were already in place — though nobody has applied — for growing operations, processors, transporters and safety compliance facilities. Dispensaries were the last step.


The Council shot down an ordinance amendment last week, by 3-2 vote, that would’ve enabled the growth of the industry after council members failed to reach a consensus surrounding their regulation.


Aaron Stephens and Shanna Draheim found the proposed rules to be far too restrictive. Altmann wanted to tighten the regulatory leash.


But by this week, Altmann proposed several amendments that essentially watered down earlier proposals. Language that banned smokable products and required applicants to receive state pre-qualification before applying were eliminated from the final resolution.


“It’s important for something that is this big that we all came to some sort of compromise,” added Councilwoman Ruth Beier. “This way, if it all goes south, we’re all responsible. If it all goes well, like we’re hoping it will, then we’re all still on the same page. I think this version will be simple for everyone involved.”


The ordinance, as amended, establishes four designated zones in which dispensaries can open their doors. They’re designed to cover the outskirts of the city and are intentionally distanced from residential neighborhoods, Altmann said. The ultimate goal: make them as inconspicuous as legally possible.


One district runs south of Michigan Avenue and west of Brody Road. Another is bounded by Abbey and Coolidge roads, east of U.S. 127 and south of the Office Industrial Park. The third is bounded by Park Lake, Haslett and Merritt roads. The last is south of Grand River between Cedar Street and Hagadorn Road.


“The basic idea is that, in the worst case scenario, these places look a little seedy and we wouldn’t want to creep out the local homeowners,” Altmann said. “We don’t want to burden them with that. We don’t want to people to feel unhappy about living next to these things. We’ve never considered having them located downtown.”


Where Lansing caps the total number of dispensaries in the city at 25, East Lansing didn’t set a limit. A 1,000-foot distance requirement between would-be dispensaries will instead ensure that only one business will be able to fit into each designated overlay district. Altmann said capitalism will determine who will remain.


Businesses need only file a site plan with the city and receive a special land use permit to set up shop. There’s no controversial, point-based system to select the top-performing applicants. City Council will still hold discretion over which applicants are approved but Altmann hopes to escape lawsuits by heavily neutralizing the process.


The city of Lansing, on the other hand, has faced litigation from multiple entrepreneurs who believe they were unfairly eliminated from the selection process. The Lansing City Clerk’s Office has also been inundated with applications and needed an outside firm to evaluate a lengthy list of various operational criterion.


A bevy of ongoing appeals has also essentially frozen the expansion of the medical marijuana market in Lansing as officials look to reserve space for those who might eventually have their denied applications reversed. That broad discretion only invites legal trouble, Altmann said. And East Lansing hopes to stay out of the courtroom.


“This is a pilot program,” explained Mayor Mark Meadows. “We’re just taking a look at how this works in the community. If it’s functioning, we’ll have no problem reviewing it and looking at changing it in the future.”


Would-be dispensaries must have also filed an application with the state Department of Licensing and Regulatory Affairs. A previous draft suggested applicants should first receive prequalification status — a prerequisite to full-fledged state licensure — but it was nixed from the amendment shortly before its passage.


Altmann also spearheaded the effort to ban smokable products, allowing only for the sales of edibles, tinctures and skin creams but conceded to a desire for more widespread patient access. Draheim, for example, said she didn’t like the overarching idea of the City Council telling marijuana patients how to consume their medication.


Dispensaries must also keep their distance from school zones, lock away their products, minimize lingering odors, and only operate from commercial — not residential — property. The shops can also only sell marijuana between 8 a.m. and 9 p.m. and must donate 1 percent of their sales to a local nonprofit agency.


Entrepreneurs must also pay an annual, nonrefundable $5,000 fee to maintain their operations.


“This is an industry that has some baggage,” Altmann added. “We hope they won’t bring that baggage here but we can’t ignore that possibility and we have to be cautious. I think we’re willing to look at this again and we could expand it out if there aren’t any problems. Medical marijuana is a pretty fluid thing right now.”


Visit lansingcitypulse.com for continued coverage as the medical marijuana industry expands in East Lansing.