Slow going for medical pot licenses

Record-Eagle/Tessa LightyTina Schuett applied for her medical marijuana license in October and just had her first contact from the Michigan Department of Licensing and Regulatory Affairs. Scheutt, a local business owner, wants to open a medical marijuana dispensary, but needs preapproval by the state before the city's license lottery in May.

TRAVERSE CITY — Blair Township resident Patrick Keating said he's a medical marijuana patient, at least when he can obtain some.

Using cannabis lets Keating take less medication to control his Parkinson's disease symptoms, he said. He gets the drug from downstate dispensaries when he can, and he likely would buy from a local dispensary — if and when one opens.

Keating hasn't been downstate for several months, he said. So he's back to using more of his medication and dealing with more side effects.

"It's the whole accessibility to medical (marijuana) options, and it's just not available to people who don't have — if I had a lot of money, I'm sure I could find someone real quick who could come over for a lot of money and even run downstate for me," he said. "But I can't afford that, so I struggle."

It could be some time before Keating has a local dispensary from which he can buy. It often takes months for medical marijuana businesses to get their license from the Michigan Licensing and Regulatory Affairs' Bureau of Marijuana Regulation.

LOCAL OPTION

Business owner Tina Schuett is trying to open a new dispensary in Traverse City. She applied three months ago and just recently heard back from LARA department handling it, she said.

"It makes me wonder how long it'll take them to go through the stacks of files I had to send them," she said.

Hers is among hundreds in the queue — 599 for prequalification as of Dec. 21, 2018, according to numbers from LARA Communications Manager David Harns.

Schuett still doesn't know when LARA's Medical Marihuana Licensing Board will consider whether to prequalify her application, she said. Timing is "life-or-death" for her business plan, as Schuett needs the board's approval for the first step before she can apply to the city's provisioning center license lottery — the deadline to enter is May 3.

THE WAITING

LARA can take up to six months to vet and approve an application, Harns said. The time range varies widely by case, and applicants can speed up the process by promptly responding to requests for more information.

The state agency's Medical Marihuana Bureau has added staff and streamlined parts of the application review process, Harns said. It's running more smoothly now than when state regulators took up the task eight months ago.

"As you might imagine, this is a completely new process to us. We didn't know exactly what to expect when we started, and as we have been working our way through it, we have made adjustments as we go," he said.

THE HAUL

Fifty-two dispensaries across Michigan have the state approvals they need — some are finalizing the licensing process, Harns said.

Humblebee Products in Frederic is the nearest business, LARA maps show — nearly a 50-mile drive from Traverse City. It was first licensed as a processor and on Sept. 10 it received its provisioning center license.

Maps show the next-closest provisioning centers are in Omer and Pinconning by Saginaw Bay, a 124-mile and 126-mile haul, respectively.

Michael Thue certifies medical cannabis patients through his business, Center for Compassion, he said. He often refers them to a network of local caregivers, including some who rent an office at his business. (His business received cease-and-desist orders from the state, but he's staying open and insists he's following the law.)

Each caregiver can provide the drug to up to five patients for the cost of growing it, whereas dispensaries can sell for a profit, as previously reported.

Thue recalled how one woman he certified was panicking because she hadn't received her card from the state — and she couldn't find a provider.

"She's freaking out, literally calling me and freaking out because she went through this process and there's nowhere to go, nowhere to gain access to her medication," he said.

LENGTHY PROCESS

Attorney Jennifer Domingue with Cannabis Legal Group said she's seen the entire process take up to a year from application to final approval. The legal group's attorneys guide prospective medical marijuana entrepreneurs through the state licensing process, acting as liaisons between LARA and their clients as regulators seek more information from the applicants.

Domingue said getting licensed by the state takes a while because the state requires vast amounts of information, sometimes tens of thousands of pages — the application itself is 47 pages.

LARA runs an extensive criminal and financial background check into the company's owners, management and their spouses, plus any investor receiving profits from the company, Domingue said. Regulators also look into applicants' civil litigation history, property ownership and whether they've been regulated by the state for other activities and how well they complied.

That's just for prequalification, Domingue said. The facility licensing process is next, during which the state looks into an applicant's business plan, facility layout, how they intend to comply with state laws and more.

Domingue said she's heard questions about how long it takes the Medical Marihuana Licensing Board to take up an applicant's case.

"The board only meets one or two times per month," she said. "They are taking more applications now but ... I've seen anywhere from 10 to maybe 50 applications in a single meeting, and right now the state has received over 900 applications that they're currently working through, so there's a serious backlog."

Harns said the bureau is handling licenses faster than they're coming in, and that more time between meetings means there are more ready for the board's consideration at each one.

TAKING HEAT

The Medical Marihuana Licensing Board is facing broad criticisms, and board member Donald Bailey said some of it is directed squarely at him — some are even making death threats on social media, he said.

Bailey, a former Michigan State Police sergeant, said he was present as a uniformed officer during several drug raids but took no investigative role in them. Some of the people caught up in those raids and subsequently convicted wrongfully blame Bailey for all of their legal woes, he said.

Bailey asserted the criticisms he's faced for his actions as a board member stem from resentment over those raids. He doesn't believe he's unfairly scrutinizing applicants, nor does he let his personal views on medical marijuana influence his decision-making, he said.

Board meeting minutes show Bailey is at times the lone board member out of five to oppose approving an applicant.

But Harns noted that the licensing board has unanimously approved dozens of applications, Bailey's "yes" vote included.

Bailey said his law-and-order viewpoint from his time as a police officer informs his decisions as a board member. He looks to whether an applicant has followed the law before to indicate whether they'll abide by medical marijuana business regulations going ahead.

"If the law says you need to do X, Y and Z, then let's just do that, and if you step out of bounds then there'll be a problem," he said.

LOCAL LICENSING

State law allows local leaders to choose whether businesses must prequalify with the state before applying for local approval, Traverse City Clerk Benjamin Marentette said.

Traverse City opted to require as much so that businesses seeking a city license already have been vetted to an extent, he said — the city has many more requirements of its own.

That requirement combined with a deadline to apply for a local approval creates a window for applicants, Domingue said. And Traverse City isn't the only municipality imposing such a window. Businesses that can't get the state's preapproval in time run the risk of missing that window.

A May 3 deadline for city provisioning center licenses should give applicants plenty of time to prequalify with the state, Marentette said — the city has no deadline to apply for other medical marijuana business license types.

Would-be applicants also got fair warning from city leaders as they went through the months-long process to create the city's medical cannabis business zoning and licensing rules, Marentette said. Commissioners repeatedly said applicants should apply to the state as soon as possible.

Local governments that require prequalification also put businesses at bigger risk if they apply for both steps of the state licensing process, Domingue said. The second step has many more requirements, including having a property secured. That creates a rush on a business' investment process, and they stand to lose more money if they're denied.

Acme Township is among the local governments that don't require prequalification for a local license — it issued medical marijuana business licenses in May, township Supervisor Jay Zollinger said. He hasn't heard of any license-holders receiving state approval.

PART OF THE JOB

Harns said LARA's Bureau of Marijuana Regulation is always open to more ideas to streamline the state licensing process. But they're also charged with doing a "deep dive" into each case to ensure unsavory characters aren't getting into the business.

"We don't want to just go quickly, we want to make sure we're doing what we've been tasked with doing, which is making sure that we weed out any folks who would not qualify for a license, no pun intended," he said.

That means it's status quo for medical marijuana patients like Keating until a local dispensary owner completes the lengthy licensing process.

"I'm doing the best I can, but ... medical marijuana has always been an alternative for me," Keating said. "It works in place of prescription medications and when it's not accessible, I just have to go back."

Medical marijuana business license applications

As of Dec. 21, 2018

Prequalification:

Total received: 902

Approved: 203

Denied: 101

Inactive: 51

Facilities Licenses:

Total received: 532

Approved: 91

Denied: 37

Inactive: 11

Source: David Harns, Michigan Licensing and Regulatory Affairs