FOR IMMEDIATE RELEASE
June 11, 2018
LAPEER, Mich. – Cannabusiness is a complex animal, especially in Michigan right now. As it stands, Michigan has one of the largest medical marijuana programs in the nation – second only to California in terms of patient numbers. And, considering that Gov. Rick Snyder signed regulatory legislation nearly two years ago, with the state yet to license a single medical marijuana business, many are wondering what’s holding up the Medical Marihuana Licensing Board in awarding licenses.
The current predicament perfectly illustrates and underlines the cloudy and convoluted system in which would-be entrepreneurs are finding themselves mired. The answer, however, isn’t a simple one. Medical marijuana license applications are sizeable and are reportedly taking quite a bit longer than expected to vet by state regulators.
A proposal to legalize marijuana for adult recreational use will be on the statewide ballot on Nov. 6. That proposal would leave it up to the state Department of Licensing and Regulation to handle the licensing of marijuana businesses. The department does the processing and background checks for medical marijuana businesses, but it’s up to a politically appointed board to award those licenses.
Further complicating the process is the looming June 15 deadline, at which point more than 200 businesses — mostly dispensaries — are supposedly going to be ordered to be shut down. The businesses, in the meantime, have been operating under emergency rules and are awaiting their license applications to be approved by the state.
Housed within the Department of Licensing and Regulatory Affairs, the five-member Michigan Medical Marihuana Licensing Board was created to implement the system of licensing and regulation established under the act for marihuana growth, processing, testing, transporting and provisioning.
The Board consists of five members who are residents of the state, not more than three of whom are members of the same political party. Currently, there are three Republican members. The governor is tasked with appointing the members and naming the chair. Rick Johnson (R) is the current chair of the board.
This is not to say that people aren’t still trying to get licensed, as more than 400 applications have been submitted for pre-approval. Now, with the bottleneck of applications and paperwork reaching a breaking point, Michigan’s medical marijuana regulators have scheduled two more meetings to clear up the gridlock. However, the meeting scheduled for today, Monday, June 11, has been inexplicably canceled. Many believe that the agenda of the Republican board members is unjustly being employed to slow the process of approving businesses and dispensaries.
The cancellation came after one board member said they couldn’t make the meeting and another said they would have a difficult time making it there in time. David Harns, spokesman for the state Department of Licensing and Regulation, wouldn’t reveal which members weren’t able to attend.
The board was set to award licenses to four applicants that represent four large marijuana growing operations, a secure transport company, a dispensary in Ann Arbor and a processor. They also were supposed to consider pre-qualifying 10 applicants for a variety of medical marijuana businesses.
“The Board of Medical Marijuana Review is supposed to objectively review applicants and not put their personal beliefs regarding marijuana into making these decisions,” said Lapeer-based attorney and marijuana activist Bernard Jocuns. “Board member (Donald) Bailey attempted to implement his own bias in trying to close existing medical marijuana dispensaries and provisioning centers, despite the fact that the board does not have that authority. The board has been arguably dragging its feet in reviewing submitted applications. At the current rate, it will take several years to get these businesses vetted and licensed. It’s arbitrary and capricious, and the board is ambivalent in their actions, taking much longer than necessary because they don’t understand the business. Governor Snyder should be doing more to get these businesses licensed and operational.”
Andrew Brisbo, director of the Bureau of Medical Marijuana Regulation, says he hopes the first licenses will be awarded within the next six weeks, but many professionals and experts are skeptical.
“We have started inspecting facilities,” Brisbo said, noting that most are provisioning centers that have been operating under emergency rules. “There are more of these than anything else.”
The challenge, according to board members, has been scouring the folders and boxes full of documents that are required for a single medical marijuana business. For one of the applicants, which is a business entity that wants growing, processing and dispensary licenses, there are 39 people associated with the business, Brisbo said, all of whom have to provide financial records, criminal background information, even social media accounts.
“And that’s just step one of the application,” Brisbo said. “Then we have the facility review piece.”
However, many are saying that the process should not be taking this long, regardless of the extent of the documents – particularly because the board has the power to appoint hearing panels and recruit assistance in reviewing applications and documents from individuals outside of the board. According to Sec. 303 of The Medical Marihuana Facilities Licensing Act 281 of 2016, “the board may seek and shall receive the cooperation and assistance of the department of state police in conducting background investigations of applicants and in fulfilling its responsibilities under this act.”
Many business owners and investors are growing impatient, putting pressure on the board to expedite their current, ineffective and protracted process.
Also complicating the pace of license approval is the relatively small number of communities — about 80 — that have approved ordinances that will allow medical marijuana businesses in their towns. Without local approval, businesses can’t get a state license. Left in a lurch are businesses that have invested a considerable amount of money in land, buildings and equipment with the hopes of getting a state license.
“We’re talking a lot of money at stake. When you’re not operational, it doesn’t mean that the rent doesn’t come due,” said Alex Leonowicz, an attorney who heads up the cannabis practice at the Royal Oak law firm Howard & Howard. “Without revenue coming in, you’re putting commercial facilities in a tight squeeze.”
Michael Stein, a Bloomfield Hills attorney with cannabis clients, said he’s getting multiple calls a week from his clients, impatient with the state’s pace of reviewing their applications.
“The calls I get now are, ‘How do I get my application to the top of the pile?’” he said. “I have some clients calling me every other day and I just keep telling them they’ve got to be patient.”
The state has received 459 applications from businesses that don’t have approval yet from a local community and who want to get prequalified for a license. Another 175 applicants — 66 growers, 25 processors, 74 dispensaries, six transporters and four testing facilities — have submitted applications that include local approval.
The state is reviewing the applications on a first-come, first-served basis since they began accepting applications on Dec. 15. So far, the Medical Marijuana Licensing Board has given preliminary approval for nine medical marijuana businesses, but those businesses still need to get local approval before they can get a license.
Also hurting are medical marijuana patients, who have been relying on the dispensaries that are still operating in a kind of limbo until June 15. There are 283,832 medical marijuana card holders in Michigan as of Tuesday and 43,087 registered caregivers, who can grow up to a total of 72 plants for five patients.
“Everybody is concerned. What are patients going to do on June 15?” said Barton Morris, a Royal Oak attorney who represents cannabis clients.
“The Legislature should change the law and do away with the board altogether,” said Matthew Abel, a lawyer and executive director of the Michigan chapter of the National Organization for the Reform of Marijuana Laws, or NORML.
The next scheduled meeting for the licensing board is set for July 12.