Medical Marijuana mired in morass of regulation

GENESEE COUNTY — Medical marijuana may have been legalized in Michigan a decade ago, but local municipalities are mostly not onboard with state laws, thus keeping provisionary centers closed and out of the reach of many potential patients.

Currently those using medical marijuana are governed by the Medical Marijuana Act as approved by Michigan voters on Nov. 4, 2008 and governed by the Michigan Department of Licensing and Regulatory Affairs (LARA), which is charged with creating regulation to protect the public and assure the confidentiality of patients.

The licensing application process began Dec. 20, 2016 — but included an additional 360 days to enable the state to establish the licensing system required by the Act.

So far it has only established the “emergency rules” for businesses which are currently operating in municipalities which have opted into the state legislation. (,4601,7-154-78089_ 78090—,00. html).

Despite the voter-passed legislation, those hoping to open a provisioning center (they may not be called dispensaries, nor any of several other terms related to typical pharmacy practice) are stuck in limbo while the Michigan Medical Marijuana program hashes out the licensing system and additional operating rules.

License applications are not accepted unless the municipality in which it is located has adopted an ordinance authorizing that type of facility, or “opted in”.

According to David Harns, Public Information Officer for LARA, potential licensees are being delayed by an extensive application process, including extensive financial history checks, followed by a criminal background check.

Applicants past financial history could be complicated if they own a current operation because such operations are still, under federal law, illegal, and therefore must operate on a cash basis without access to financial institutions or the record keeping associated with typical banking.

If an applicant doesn’t disclose criminal history in the initial application and it is found later, that too will delay licensing. According to LARA documents, “Applicants often turn in over 1,000 pages of bank account statements and tax records. The result is a very lengthy, complex review to properly conduct these investigations.”

The Michigan Medical Marijuana Licensing Board has reviewed several applicants but approved none as of their May 31 meeting and had to extend the June deadline to Sept. 15 as the board is not able to meet in June.

However, Harns said they expect approval of at least some licensees no later than July 12.

Also according to Harns, the state collected $9.8 million in 2016 from medical marijuana card fees at $60 per card. Cards are renewed every two years. Without the card, marijuana is illegal to possess.

Revenue is expected to increase significantly when facilities are fully licensed. The state will collect a 3-percent excise tax on gross receipts, on top of the 6 percent sales tax.

Here’s how the marijuana tax revenue will be split up, according to a House Fiscal Agency analysis:

• 30 percent to the state.

• 25 percent to the cities that opt into the new licensing program and allow marijuana facilities.

• 30 to the counties where facilities are located.

• 5 percent the Sheriff’s offices in those counties.

• 5 percent to the state police.

• 5 percent to train local law enforcement officers.

The tax is expected to generate about $74 million, the House Fiscal Agency analysis shows: $24 million in pot taxes, plus $50 million from sales tax.

On June 6, in light of a proposal to legalize the general use of marijuana being placed on the November ballot, the Genesee County Board of Health passed a resolution opposing this measure citing health and societal risks associated with “the proposed legalization of marijuana for general use”.

So far in Genesee County, the only municipalities which have opted-in are Mt. Morris Township and the City of Burton.

Those who have opted out are Grand Blanc and Atlas Township, including the Village of Goodrich.

Flint Township’s decision on licensing medical marijuana facilities is on hold until after the November election when voters will be asked to legalize recreational marijuana use.

The township’s proposed facilities licensing ordinance was introduced in early March, but could not get beyond second readings at the board’s March 19, April 16 and May 7 meetings.

At the May meeting, the township board sent the ordinance to its Planning Commission for a review and recommendation. Last month, the Planning Commission decided to postpone its recommendation until the end of the year.

As it is currently written, the ordinance would authorize certain types of medical marijuana facilities in the township, provide restrictions to protect public health and safety, mitigate impact on surrounding properties and defray administrative and enforcement costs by assessing and annual, nonrefundable fee of up to $5,000.

It would not allow dispensaries (retail and recreational sales) or provisioning centers, as defined by state law. It would allow Class A, B and C growers, processors, safety compliance facilities and secure transporters.

Both the township board and planning commissioners balked at some of the language in the ordinance including whether it could limit the number of licenses issued which also was the subject of a pending lawsuit in southern Michigan.

Several township officials and planning commissioners already have voiced opposition to passing the ordinance, citing concerns about its impact on other business owners.

Randy Stewart, deputy supervisor and building director, recommended not passing the ordinance due to business impact and difficulty such facilities pose in law enforcement.

“It is one thing to pass an ordinance and another to enforce it,” Stewart has said on several occasions during discussion of the ordinance.

If legalization fails, then the planning commission will revisit the proposed township ordinance. Ultimately, the ordinance would establish rules for the operation of state-authorized medical marijuana businesses in the township. But the township board would also have the choice to “opt out” and not allow any of the businesses to locate here.

Officials in Davison and Davison Township are also waiting for the outcome of the legalization effort. Both municipalities have not opted-into the law.

“The (city) council chose not to take any action,” said Davison City Manager Andrea Schroeder. “There are too many unknowns.”

The move to opt-out forced the closure of at least two provisionary centers in Davison earlier this year.

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