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FRIDAY, Oct. 5 — Eleventh-hour litigation from Attorney General Bill Schuette’s office is likely to ensure that every dispensary in Lansing — along with hundreds across the state — will close before the end of the month.
Attorney Denise Pollicella, with Cannabis Attorneys of Michigan, on Thursday filed a lawsuit aimed at a recently adjusted set of emergency rules guiding the medical marijuana industry. The rules — which would close every unlicensed dispensary by Oct. 31 — were overly rushed and unfair to entrepreneurs statewide, she said.
Michigan Court of Appeals Judge Stephen Borrello initially sided with Policella, and planned to sign an order granting an extension that would have directed the Department of Licensing and Regulatory Affairs to again extend the deadline to Dec. 15, Pollicella said. But last-minute motions from Schuette’s office stalled the deal.
“We’re moving as fast as humanly possible but the state is still penalizing these businesses,” Policella said. “The state suffers no penalty. There is nobody at the state harmed by setting a Dec. 15 deadline. There’s just no justification for the new rule other than penalizing businesses, penalizing applicants and penalizing patients.”
Officials at LARA earlier this week promulgated a fourth set of emergency rules after Borello — spurred by another previous complaint from Policella — declared the prior rules to be unfair to provisioning centers who were essentially split into two separate classes, with nearly 100 dispensaries required to close by Dec. 15.
The latest rule set provided for more uniformed treatment, but drastically curbed the window for entrepreneurs to get a license or face closure. Only 19 dispensaries statewide have received a license, but officials at LARA contended plenty of shops would have time to get approved ahead of an Oct. 18 licensing meeting.
“The whole concept this entire time was to make a transition into a licensing framework,” said LARA spokesman David Harns. “These new rules basically treat all applicants the same and splits the difference. There will also be enough time to have another, robust group of applicants approved before that deadline.”
The state’s Medical Marihuana Licensing Board meets once more before Oct. 31. Harns couldn’t estimate how many provisioning centers could be approved ahead of that date but suggested it would be enough to continue overall market expansion and provide continued access to medicinal bud for thousands of patients statewide.
Harns said the agenda wouldn’t be finalized until the day before the meeting, giving businesses more than two weeks to file their paperwork and receive an operating license. But Policella said most businesses — including her clients — wouldn’t have enough time. At least one more round of license approvals would be needed, she said.
And Borello agreed, she said. But that was only before Schuette’s office decided to get involved.
“After the judge initially gave a favorable ruling, we learned that the Attorney General’s office had just filed a series of motions challenging the Cannabis Attorney of Michigan’s position,” said Roberta King, a spokeswoman for Policella’s firm, noting Borello decided instead to hold off on the temporary reprieve.
A “lengthy” conference call between both parties followed and a resolution has yet to be reached, Policella said. The rules for — at least for now — remain consistent: Get licensed or close up shop by Oct. 31. And because of Schuette’s interference, Policella doesn’t have much hope that she’ll find continued success in the courtroom.
“Even if we lose this, we gave everyone an extra breath,” Policella said. “If dispensaries didn’t take advantage of that and get off their booties to make sure their applications were filed, I can’t guarantee we can keep this thing alive. Everyone has until Oct. 31 and they should not count on that deadline being extended.”
Policella said her office is still “duking it out” with Schuette on the “worst rollercoaster ride ever.” But she cautioned businesses that won’t make it on the Oct. 18 agenda to stop ordering more product or risk having it destroyed by November. It would be a travesty to see entrepreneurs take an unnecessary business risk, she added.
And in Lansing, it appears that none of the remaining nine dispensaries will find a spot on that list.
“When that came out, it was a drop-dead date for everyone,” said Lansing City Attorney Jim Smiertka. “You need a local license before you can get a state license. That only gave 30 days to get a license and with all of these applications, it was going to be difficult to get it done here — let alone to get them into the state process.”
City Clerk Chris Swope is essentially prohibited from granting approval to any of the 27 pending dispensaries within city limits until each of the ongoing appeals have finished. Officials have urged the City Council to expand the limit on dispensaries but until then, successful appeals need to have space in the limited market.
Swope called the Oct. 31 deadline “problematic” and suggested state officials should reconsider the mandate.
“I’m not sure why they went in this direction but it wasn’t helpful,” Swope said, noting the rules added a sense of urgency within the local approval process. “I wish the state would go in the direction of understanding that this is a long process for them as well as municipalities. I just don’t understand the logic behind that direction.”
Both Smiertka and Swope agreed with the conclusion: It’s incredibly unlikely, if not logistically impossible, for a Lansing-based provisioning center to streamline through the licensing process by Oct. 31. Local attorney and applicant Jeffrey Hank said the only solution would be to dole out a batch of local licenses — and quickly.
“There are some licensees in Lansing that have the potential to receive a license by that date,” Hank added. “It could work. Otherwise, Lansing really could go down to zero. The city really can’t allow that to happen. We’d have absolutely no patient access within the city of Lansing and that’s a problem for everyone.”
Policella said Schuette’s office has requested a hearing on the matter. She respects Borello’s decision to hold off on an immediate ruling until the case can be further hashed out in a courtroom but also sympathizes with would-be dispensaries. Calls placed to the Attorney General’s office were not immediately returned for this story.
Visit lansingcitypulse.com for continued coverage and updates as they become available.