Feb. 15 2019 09:30 AM

City clerk updates criteria for local licenses

FRIDAY, Feb. 15 — The next round of medical marijuana dispensaries to be licensed in Lansing will be held to higher standards as officials look to give preference to those who can make a larger cash investment in the city.


City Clerk Chris Swope said he will give “even more” consideration to dispensaries that promise to create high wage jobs and offer health insurance and other benefits. Additionally, the updated scoring criteria aim to create a wider buffer zone between downtown pot shops.


Swope is charged with vetting applications and awarding licenses. So far, he has conditionally approved 14. Few are open for business; Only two have been fully licensed by state regulators. The city ordinance regulating dispensaries allow for a total of 25.


Swope said the changes are in response to licensing hiccups in the first round of applications. The city has faced multiple lawsuits, slowing the process while denied applicants appeal.


“There is always knowledge to be gained the first time you go through any process,” Swope added in a release. “In this case, we were able to use that knowledge to make changes which should provide maximum benefit to our city and speed up the review process, while still working within the parameters set by the ordinance.”


But why are there so few dispensaries actually open in Lansing? Most approved shops are still vacant storefronts. Only two have yet to be approved by the state. The rest are unable to operate past March 31 under state rules. And more shops can’t join the budding industry until appeals are finished to clear up space in the local market.


City ordinance limited the number of dispensaries to 20 in the first round and five more in a second.

The second phase of applications won’t likely begin for a few months, Swope suggested. But patient access remains a priority — as well as fair wages and “bringing an influx of longterm investment to Lansing,” he said.


As a result, an already controversial 100-point scoring rubric for dispensary applications will be amended.


Additional weight will be given to business plans that include higher wages, more employee benefits and solid financial stability for longer-term operations. Further, to prevent “clustering” on certain blocks, the distance between shops will be given more emphasis, Swope said.


“We’ve heard from folks that don’t necessarily want these businesses close to their homes.”


Within the same 100-point possible score, eight points will be awarded to applicants that have been pre-qualified for a state license. The goal: unkink the regulatory system and get local shops up and running. The enhanced standards should also make it easier to name the most qualified applicants, Swope said.


“The goal is to have 25 operating provisioning centers which will provide the best service to their patients, operate safely in our neighborhoods, employ Lansing residents at a fair wage and provide an increased tax base for improving services across the city, bringing a benefit to all our residents,” Swope said.


Additional dispensary applications aren’t yet being accepted. Swope said that could still take months while officials sort through a lengthy list of appeals from the initial round of applications. Other facilities — like growing operations and processing plants — are instead accepted and approved on an ongoing basis.


To date, 116 of 175 applications have been approved across the industry in Lansing, generating more than $700,000 in fees for the city in the process. Swope anticipates those revenues to ultimately be a wash for the city, given the lengthy amount of time and effort that has already gone into the first-round selection process.


State rules will eventually dispensaries operating without a license to close. And those licensed will need to shift their supply from caregivers to state-licensed growers and processors. With only three licensed growers in the city, Swope envisioned more “growing pains” for local pot shops in the coming months.


State regulators still allow for those caregiver transactions — but only until March 31. At that point, shops across the state will again be required to do business with a limited number of licensed growers and processors. And Swope spots a supply shortage on the horizon, even after the state extended the deadline earlier this year.


“That’s what’s bothering me the most: We’ve issued approvals for over 50 grow operations and very few of those have gone through the state approval process,” Swope added. “We’re going to end up with a supply issue because we still haven’t transitioned into a fully licensed system. I think we’ll have another series of growing pains.”