Dec. 6 2018 09:52 AM

Lansing defends regulations amid multiple lawsuits


    For Tom Mayes Lansing’s medical marijuana licensing process is a live-action “nightmare.”

    Mayes, 37, has owned and operated Greenwave Provisioning Center for more than two years. It occupied one of potdom’s most prominent locations in Lansing, at the intersection of Oakland Avenue and Cedar Street. The bustling shop was known for its wide selection, professional service and potent bud. Mayes said his staff did everything by the books. The parking lot was usually crowded.

    But as of last month, the dispensary is no longer in business. Mayes’ 200 to 300 daily customers have been forced to look elsewhere for their medicine after city officials denied Greenwave’s license and ordered it closed.

    “It’s a nightmare for us and our former employees,” Mayes said. “This whole process is just horrible in terms of the ramifications of being denied.”

    But Mayes has not quit. He filed a lawsuit against Lansing City Clerk Chris Swope last month after city officials ordered Greenwave to close its doors.

    The litigation marks at least the fifth in a protracted series of court battles the city has faced since it enacted a controversial regulatory scheme geared to license the creme of the marijuana crop.

    As 10 dispensaries in Lansing receive the first batch of conditional licenses from the city, litigation continues over which shops will eventually have a chance to nab the remaining licenses allowed under city ordinances.

    The City Council allows for 25 dispensaries within city limits. Ten licenses were issued last week. Ten more this year have yet to be doled out. Five more dispensaries are set to be licensed in another round of applications next year. And City Clerk Chris Swope said lawsuits, at this point, are “inevitable.”

    Greenwave, until its abrupt closure last month, had sold medical marijuana since 2016. It came as a shock to Mayes when the state’s Medical Marihuana Licensing Board denied his bid for prequalification, a preliminary step to eventually earning a state operating license. And state officials also didn’t offer much of an explanation.

    Regulations regarding “personal and business probity” and “financial ability” to operate a medical marijuana facility were referenced by state officials, as was the “total amount of capitalization” needed to run the shop. Mayes denies the charges and has since filed for an investigative hearing that could overturn the decision.

    But closer to home, city officials effectively ensured the business will remain closed while that appeal continues.

    A notice from the city of Lansing arrived for Mayes the day after the state denied his license. The city was no longer considering Greenwave for local licensure because the state had turned it down for prequalification. Appeal or no appeal, Swope wanted the dispensary to close its doors immediately, court records indicate.

    Mayes quickly filed for court-ordered relief.

    His attorneys — who couldn’t be reached — argued Greenwave still had an “ample opportunity” to receive a license from the state on appeal. Forcing the shop to close would cause irreparable harm for the business and require Mayes to liquidate more than $100,000 in products, records state.

    “Besides losing money, we were serving at least 200 patients a day and I had 20 people employed,” Mayes said. “That’s what really hurts the most. Obviously, we’ll lose that customer loyalty and the retention will go way down. It’s impacting our business right now but it could hurt any potential for future business as well.”

    Swope said failure to obtain a state license serves as grounds for denial but declined to elaborate further, citing the pending litigation. Deputy City Attorney Heather Sumner said she plans to ask a judge to dismiss Mayes’ case and contended city ordinances specifically allow for Swope to deny licenses on the basis of state decisions.

    The portion of the ordinance she referenced, however, is only applicable to license revocation. Greenwave had yet to receive a license. Mayes contends the city prematurely denied his licensing bid and stood nothing to gain from forcing his shop to close. Both Swope and Sumner declined to elaborate further in response.

    A hearing is scheduled for next month as the case continues in 30th Circuit Court.

    “We took over a location that had been vacant for years. I’ve lived here my entire life,” Mayes added. “I don’t want to fight with anyone right now and push the wrong buttons, but once these appeals are exhausted, and if they do wind up having us close our doors, the gloves are coming off. This whole process has been horrible.”

    Meanwhile, two other lawsuits filed against the city of Lansing also aim to ensure that would-be dispensaries have an adequate chance to earn one of the 10 remaining firstround licenses. Huron Wellness Solutions and Superior Wellness Solutions both filed a relatively similar pair of lawsuits against the city earlier this year.

    Court records indicate their applications were filed in February and denied in March for an “inadequate” waste disposal plan. The businesses filed revised plans days later but was again denied in May after appealing the decision to the city’s Medical Marihuana Commission. And their attorneys think the city made a mistake.

    The decision not to overturn the denial was “not supported by competent, material and substantial evidence on the whole record,” according to the complaint. Sumner said the case will continue once the city has a chance to file a response to the lawsuit later this month. Calls to attorneys involved in that case were not returned.

    Seman Consulting Services also filed suit against the city earlier this year, but the case was dismissed in October. Attorney Jim Kelly argued Swope relied on a “whimsical” scoring methodology to deny a license to Green Crush, a would-be provisioning center along Pennsylvania Avenue that is currently pursuing a licensing appeal.

    A judge had ruled the complaint as premature until Green Crush’s appeal had been exhausted.

    Let Lansing Vote, a local marijuana advocacy group, also waged a legal battle for nearly a year against the city to challenge its medical marijuana ordinance before it abruptly withdrew its lawsuit in July without explanation. Sumner couldn’t think of any other lawsuits filed against the city over marijuana regulation.

    Kelly maintained the city is putting itself and its taxpayers in a “terrible position” through its process to regulate medical marijuana and suggested his lawsuit could again return once Green Crush’s appeal had run its course. A request for legal costs incurred by the city during these cases was not made available by Tuesday afternoon.

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

    kyle@lansingcitypulse.com