It was a major headline in the U.S. cannabis industry on March 15: The state of Michigan shut down 40 marijuana businesses, and regulatory officials planned to close “hundreds more” in the days ahead. By March 22, officials confirmed that at least 200 businesses had been issued the letter. 

The state is targeting “establishments that stayed open past the Feb. 15 deadline in which you needed to have turned in an application to the state of Michigan,” according to David Harns, spokesperson for Michigan’s Department of Licensing and Regulatory Affairs (LARA). Harns’ office is not disclosing which businesses received this letter; Cannabis Dispensary has filed a FOIA request for the names of businesses issued a cease-and-desist. (We expect to hear back by April 10.)

Harns confirms: “We anticipate ending up in the hundreds [of businesses] when it’s all said and done.”

See a copy of the cease-and-desist letter here.

Michigan LARA cease-and-desist letter for marijuana businesses, March 2018 by sandydocs on Scribd

Businesses that applied for state licensure can operate on a temporary basis if they have local authorization to do so. The Medical Marijuana Licensing Board planned to discuss license applicants and the cease-and-desist actions during a March 22 meeting. Actual dispensary licenses are expected to be awarded in April.

The state clampdown comes after years of inconsistent oversight of medical marijuana cultivation and distribution in Michigan.

In 2008, the Michigan Medical Marijuana Initiative was approved by a 63-37 margin statewide. The initiative allowed qualified patients and caregivers to grow marijuana for personal possession and use. Matthew Abel, executive director of Michigan NORML and an attorney at Cannabis Counsel, P.L.C., says that the initiative language was written in such a way that a court could have ruled to allow legal retail sales at permitted dispensaries in Michigan, but that order never came.

“By 2013, it was pretty clear that there was no commercial framework,” Abel says.

Home-grow proliferated in the state until 2016, when the legislature passed the Medical Marihuana Facilities Licensing Act (note the spelling, unique to Michigan state policy). That law created a legal structure to regulate a formal medical marijuana marketplace. In December 2017, the state began accepting license applications from growers, manufacturers, distributors and retailers.

Michigan has not set a cap on the number of licenses it will issue, although local municipalities may set their own caps if they so choose.

Abel also serves on the board of directors of MI Legalize, which is pursuing a ballot initiative to “regulate marijuana like alcohol.” The group submitted 362,102 signatures to the Secretary of State.

“The opportunity to challenge the signatures has passed, so unless there’s some other legal challenge we’re likely to have that [on the November ballot],” Abel says.

The MI Legalize campaign’s ballot issue would create a “state-regulated system of licensed marijuana businesses that will cultivate, process, test, and sell marijuana and marijuana-infused products to adults 21 and older. [The] proposal also enacts an excise tax on marijuana at the retail level in addition to the standard state sales tax.”

If voters approve the measure, Michigan would be the first state in the Midwest and the Great Lakes region to legalize adult-use cannabis. However, considering Michigan's polarized electoral districts, it remains to be seen how municipalities across the state embrace the issue—to say nothing of the impending medical marijuana market.

“It’s a good opportunity now for municipalities to do some economic development,” Abel says. “But we have a very conservative legislature, so they’ve had to have been dragged kicking and screaming, really, to bring forward a regulated market. … We’ve had a lot of pushback for years in the implementation of the Michigan Medical Marijuana Act. As highly regulated as it is, I’m pleased we’re finally at least at this point.”

The state offers five license categories: cultivation, processing, testing, secure transport and retail (dispensary ownership). A $6,000 application fee is due with the 48-page application. From there, specific license types come with their own equity requirements ($300,000, with a quarter of that on-hand in liquid cash, for a 1,000-plant cultivation license, for instance).

Vertical integration is allowed for businesses that wish to go that route, but the transportation of product between a cultivation facility a dispensary must be handled by a licensed third party.

“It’s unfortunate that there’s this secure transport license required that in my view adds a level of bureaucracy and expense that otherwise wouldn’t be necessary,” Abel says. “But it is what it is, and the legalization proposal will change that.” Secure transport and testing lab licenses cannot be paired with any other license, such as cultivation, processing or retail. (Abel notes that business operators may, however, hold cultivation, processing and retail licenses simultaneously under the current framework.)

This week, LARA published a list of more than 70 communities in Michigan that had passed ordinances to allow medical marijuana businesses to operate under the 2016 law.

“I think what it’s going to do is develop enclaves of friendly territories where a smart community will allow dispensaries in a neighborhood they want to be redeveloped,” Abel says.

Among licensed marijuana businesses, Ann Arbor is a particularly active jurisdiction. The city boasts 13 temporary dispensary licenses as of the Feb. 15 application deadline, mostly clustered along main streets near the University of Michigan.

"I'm very optimistic that this industry is going to result in a lot of good new jobs and tax revenue, and most importantly, services to patients," Council Member Anne Bannister told mlive.com in December. "I think through the hospital and the medical advances that are being done, doors are opening for a lot of patients to receive better care through this industry, and I think Ann Arbor is wise to open up and welcome these groups with the 600 feet [required between each permitted dispensary location]." 

In Lansing, the state capital, zero medical marijuana businesses have been granted a local permit. (The city has denied 18 applications.) 

According to Cannabiz Media, 169 medical marijuana businesses statewide applied for a license by the Feb. 15 deadline. As far as the businesses that received cease-and-desist letters, they’re still allowed to pursue the formal license application process in Michigan. “Those businesses that stayed open and did not apply by Feb. 15: That will be looked at as an impediment to their licensure,” Harns says. “It’s not an automatic disqualifier, but it is a negative point on their application.”

Top photo courtesy of Adobe Stock

This article originally appeared in the February 2018 issue of Cannabis Dispensary. To subscribe, click here.

Moratorium is a scary word for cannabis business owners. When a city or county enforces a ban on cannabis cultivation or sales (or both), it can swiftly put an end to existing businesses and halt industry expansion, even in state-legal markets. But what if a business owner could work around a moratorium to achieve his goals? Todd Theiss, the co-owner of Redbarn Dispensary in Douglas County, Ore., ventured to find out.

As a veteran of the real estate industry with an established presence in the county, Theiss was looking in 2014 to diversify his business portfolio. He owned a quarter-acre property at the edge of Tri-City’s border on Old North Pacific Highway, just off Interstate 5. (Theiss’ wife, Serena, operates a farmers market vegetable stand there.) Logistically, it was perfect for a retail storefront thanks to its easy access from the freeway and lots of room for potential expansion. It also met the Oregon Liquor Control Commission’s (OLCC) requirements for a cannabis business. But Tri-City’s temporary ban on dispensaries presented a major roadblock.

However, Myrtle Creek, the neighboring city, had opted in to host cannabis businesses. Theiss, well-versed in zoning laws from his real estate background, knew just what to do. He petitioned Myrtle Creek to voluntarily annex his property from Tri-City in late 2014. Theiss’ plan was to rezone the property for commercial use to make it a viable fit for a medical and recreational dispensary with a Myrtle Creek address.

“It was difficult,” Theiss says. “We had to go through several public comment periods where all the neighbors got to weigh in if they chose to.” According to Theiss, community members came forward to express their support, but the project in Myrtle Creek’s small, agricultural and conservative town was still met with some opposition.

To read the full article in Cannabis Dispensary's February 2018 issue, click here. 

Top photo courtesy of Redbarn Dispensary

NEW YORK (MARCH 21) — Curaleaf New York and Columbia Care today announced that Curaleaf will assume operations at Columbia Care’s medical marijuana dispensary in Plattsburgh. The dispensary, which is located at 345 Cornelia Street, provides patients in Clinton, Franklin and Essex counties with access to pharmaceutical-quality products and counseling. Columbia Care will open a new medical marijuana dispensary in downtown Brooklyn.

“Patients in the North Country rely on this site, and we are pleased we can continue to ensure patients have access to these important treatments that help manage painful and chronic conditions,” said Michelle Bodner, President of PalliaTech NY, which will operate the dispensary under the brand name Curaleaf New York. “We are excited to join the Plattsburgh community and look forward to providing a warm, comforting atmosphere for patients and helping those in Clinton and surrounding counties with our high-quality medical cannabis products.”

“Columbia Care is grateful to have had the opportunity to serve North Country patients for the last two years. Clinton County and the City of Plattsburgh have been incredible partners in helping support our mission and ensuring patients received the care and access they require,” said Nicholas Vita, CEO of Columbia Care. “We thank our patients, participating practitioners, elected officials, law enforcement and the community at large for the opportunity to serve the region. We have every confidence that patients will continue to be served well by Curaleaf.”

At the Plattsburgh dispensary, Curaleaf will continue to offer a wide-range of pharmaceutical-quality medical marijuana products to ensure patients can find the best treatment for their needs. Columbia Care will transition its operations at the Cornelia Street dispensary on April 5, 2018, and Curaleaf will begin operating in the coming days to prevent any lapse in the availability of medical marijuana for North Country patients. Both companies are working closely with the Department of Health and state officials to ensure continuity of operations and support for patients.

The dispensary occupies 3,964 square feet and is located on one of Plattsburgh’s main commercial corridors. It is conveniently located off of New York’s I-87, providing access for patients from surrounding communities. The location serves patients in the northeast area of the state.

Curaleaf will be making available to its North Country patients many of Columbia Care products including its recently introduced extended-release, pharmaceutical-quality medical marijuana tablets. 

COLUMBIA, S.C. — The Senate Medical Affairs Subcommittee amended and approved a medical marijuana bill on Wednesday, sending it to the full Senate Medical Affairs Committee for consideration. The vote followed a gathering of patients and advocates from around South Carolina at the State House on Tuesday urging lawmakers to allow similar legislation to move forward. The South Carolina Compassionate Care Act, known as S 212 in the Senate, would allow seriously ill patients to have access to a regulated medical marijuana system, as they do in 29 other states and the District of Columbia.

“The subcommittee’s vote has given thousands of patients and their families hope that the legislature has not forgotten them, and that relief may be in sight,” said Janel Ralph, executive director of Compassionate South Carolina, whose eight-year-old daughter has a rare seizure disorder.  

Advancement of the bill is welcome news to patients in South Carolina, who have supported the measure since it was introduced in January 2017. The subcommittee made a number of changes, including a clear ban on smoking medical cannabis and more specific requirements for physicians, along with greater involvement of law enforcement in oversight of those licensed to conduct business in the program. Under the amended bill, South Carolina would have one of the most carefully regulated programs in the country.  

Today’s developments were welcome news for many, including Jeff Moore, former executive director of the South Carolina Sheriffs' Association. “After returning home from war traumatized, my son found that only medical cannabis helped him regain the life taken from him by these horrifying experiences,” said Moore, whose adult son treats PTSD legally with medical cannabis in Michigan. “We are all grateful for the work of this committee, and I hope this bill will help bring patients like my son back home,” Moore continued.

The South Carolina Compassionate Care Act, introduced last year by Sen. Tom Davis and Rep. Peter McCoy, would allow patients with certain debilitating conditions to access medical cannabis if their doctors recommend it. The Department of Health and Environmental Control would regulate and license medical cannabis cultivation centers, processing facilities, dispensaries, and independent testing laboratories. The department would also issue registration cards to qualifying patients and their caregivers.

Despite the progress made by the legislation in the Senate, advocates are concerned the bill will not move far enough through the legislature to get a floor vote in both chambers before the session ends. With a crossover deadline fast approaching, the House version of the bill, H 3521, did not get the hearing many patients hoped for in the House Medical, Military, Public and Municipal Affairs Committee yesterday.

According to an October 2016 Winthrop Poll, 78% of South Carolina residents approve of making cannabis legal for medical purposes.