Where Can Michigan Marijuana Licensees Go?

When the state of Michigan enacted the Medical Marihuana Facilities Licensing Act (MMFLA), a unique power was granted to municipalities throughout the state to control the development of the medical marijuana industry. People involved in the drafting of the legislation indicate that the trade associations representing Michigan townships and cities eventually approved the MMFLA when the affirmative requirement for “opt-in” was inserted into the proposed bill before enactment. Let the local community determine the level of its involvement, the types of facilities each community will allow within its boundaries, and how many of each – an example of local legislative and governmental regulation.

As the legislation was pending the Governor’s signature, industry people thought that municipalities would rush to opt-in for the opportunity to gather potential riches as the industry began, developed, and grew.

All of those prognosticators were wrong.

As we’ve seen over the last 18 months since the MMFLA was enacted in September 2016, most municipalities have been reluctant to do much more than give lip service to the topic at commission and township board levels when proponents of the industry have approached the podium for public comment. At first, there were consultants, trade people, and lawyers attending municipal meetings with sophisticated slide shows and verbiage. We can speak from experience as we attended many such meetings. At the end of the day, it comes down to the representatives of the people in that particular municipality and their level of tolerance for this emerging industry.

In many minds, marijuana still evokes images and memories of Timothy Leary, San Francisco’s Haight Ashbury, Cheech & Chong, and revolution. Marijuana remains illegal under federal law and has been for 40 street scene from San Francisco, where medical marijuana licensees might not have troubleplus years. Our own Kent County Prosecuting Attorney attends municipal board meetings and sometimes tells the elected officials they could be in danger of being arrested for aiding and abetting if they pass an opt-in ordinance. The cultivation, transport, and sale of marijuana in the state of Michigan is illegal under state law except for the very specific defenses to prosecution allowed under the Michigan Medical Marihuana Act (MMMA) and the specifics for facility licensing of the MMFLA. Registered caregivers and patients and those who purvey product to them or for them are protected if in full and complete compliance with these two state laws. All others are at risk. For the most part, we have found that most municipal authorities are not prepared to embrace this new industry for their community even though there may be financial benefits due to increased property taxes and revenues in addition to the local provision of product to those in need. The zoning people refer to these situations as Not In My Backyard (NIMBY). “If those people want to get their medicine, they can go to the next municipality over, but NIMBY.”

Every day in our CannaLex business law practice potential Michigan marijuana licensees ask, “Where can I go to operate?”

some cannabis flower in a jar, many Michigan Medical Marijuana licensees are having a hard time finding a place to operateIt doesn’t matter whether the proposed applicant is a safety compliance laboratory, a grower, or a provisioning center. The municipality gets to choose if it wants any particular licensed facility within its boundaries and the numbers of each. Interestingly, some of the municipalities are choosing to allow all but the provisioning center. Presumably, those must not want the registered patients or caregivers coming into their community to make purchases. On the other hand, several municipalities have gone just the opposite direction and are allowing only provisioning centers but none of the other possible licensed facilities.

On December 15, 2017, LARA, the state licensing entity, began accepting applications for medical marijuana licensees under the MMFLA. They adopted a two-part filing system in order to streamline the application process as only a few municipalities had opted-in by then. Not a great deal has changed since then. The number of opt-in municipalities is slowly expanding. There are 1,773 municipalities in Michigan and LARA reported at its March 22, 2017, meeting that 72 municipalities have opted-in.

The horizon is not bleak though. Many municipalities are still working towards the opt-in status. The city of Battle Creek has recently worked hard at a very fine third-generation opt-in ordinance to allow the industry to work within its city confines. The city of Kalamazoo looks to be following suit, and we recently learned that the city of Manistee is on board. Cities see this new industry as an opportunity to utilize older industrial properties, to expand retail areas, and to attract business in much the same way that The Right Place in Grand Rapids envisions expansion opportunities for businesses in the Grand Rapids community.

Look for more municipalities to opt-in as they see the benefits others have received and the cannabis stigma evaporates.