Judge approves injunction against closing medical marijuana businesses

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The state’s efforts to shut down nearly 100 medical marijuana dispensaries across the state until the businesses are approved for a license hit a speed bump Thursday when a state Court of Claims judge approved an injunction against the closures.

Judge Stephen Borrello granted a request for an injunction filed by attorney Denise Pollicella of Howell on behalf of the Montrowe dispensary. She said that new emergency rules by the state Bureau of Medical Marijuana Regulation that extend a closure deadline from Sept. 15 to Dec. 15 are unconstitutional because the rules treated different categories of medical marijuana businesses differently.

Pollicella said she tried to work with the state "and explain the position that they were putting responsible applicants in."

"It put them in an impossible situation,” she said. When that didn't work, she filed the request for an injunction with the Court of Claims on Thursday afternoon and got a ruling from Borrello 90 minutes later.

"The Michigan Department of Licensing and Regulatory Affairs is immediately enjoined and restrained from treating temporarily operating medical marijuana businesses differently ... and that Defendant extend the June 15, 2018, deadline to Dec. 15, 2018, for all temporarily operating facilities," Borrello wrote.

Under the emergency rules announced on Tuesday, about 108 medical marijuana dispensaries that have been operating while they’re waiting for the Medical Marijuana Licensing Board to consider their application for a license will get to stay open until Dec. 15.

These are the dispensaries where owners got their initial applications in by Feb. 15,  got approval from the communities where they are operating and submitted the second step of the application process by June 15.

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Another 98 dispensaries that submitted initial applications by Feb. 15 and may have been operating, but didn’t submit the second step of the application in a timely manner, were slated to get cease and desist orders next week and shut down. If they had continued operating, the owners risked not being able to get a license at all.

“Some of the businesses are in municipalities where ordinances or zoning rules weren’t in place by June 15,” Pollicella said. “I don’t think there was malicious intent for not getting their full application in by June 15.”

The impact would have been greater in some communities, such as Lansing and Flint, where local approvals weren’t available until after June 15. Lansing Mayor Andy Schor wrote Gov. Rick Snyder on Thursday, urging him to tweak the emergency rules to treat all the operating dispensaries equally.

“Many temporarily operating businesses throughout our communities and the State will be forced to shutter, leaving many employees jobless and many medical marijuana patients without reliable access to the substance that provides them palliative relief from their debilitating medical conditions,” he wrote.

State regulators hadn’t seen the court order as of late Thursday and declined to comment.

The new Dec. 15 deadline is the third time the department has extended the deadline for dispensaries to get a license or shut down. While Andrew Brisbo, director of the Bureau of Medical Marijuana Regulation, was adamant last month that the deadline wasn’t going to be pushed again, the department relented after hearing from a group of lawmakers, officials in Ann Arbor and Lansing, and several organizations that were worried about losing access to medical marijuana if many of the dispensaries around the state had to close.

The rules came as the state is trying to transition from the medical marijuana market that was born after voters legalized weed for medical use in 2008 to an industry that is regulated and taxed by the state. The old market was made up of caregivers who could grow up to 12 plants for each of five patients as well as themselves. There was little, if any, oversight of the caregiver-model of medical marijuana.

The new regulated market is much more expensive for business owners and creates five classes of licenses for growers, processors, testing facilities, transporters and dispensaries. Once licensed, the owners have to come up with a $48,000 regulatory assessment to the state, pay city fees, get their products tested under a more stringent set of state guidelines, and pay a 3% tax on the gross receipts of the dispensary as well as the 6% sales tax.

As of Monday, the state had approved licenses for 37 applicants including seven growers, four processors, 19 dispensaries, three secure transporters and four testing facilities. Of those 37 licenses, 10 of the businesses are up and running. The state has received 702 applications and, in addition to the licenses approved, 72 applicants have been given preliminary approval for a license.

Pollicella said the extension of the deadline to Dec. 15 for businesses to get a license or shut down is reasonable.

“December gives us ample time,” she said. “This process is already rigorous enough and anyone who isn’t serious about getting a license won’t get one. Don’t drive the responsible owners out of business, those who are being diligent.”

A Flint dispensary owner, who didn’t want to give his name for fear of retaliation from the state licensing board, still is waiting for final approval from the city before completing both steps of his application. He was getting ready to shut down, lay off his four employees and get rid of the inventory in his store when he heard the news of the injunction.

“We’ve got patients that we were telling that we had to close down and everybody was freaking out,” he said. “There are 14 dispensaries here and all but one was going to have to shut down. It would be crazy to have to make everybody in Flint have to drive down to Detroit to get their product. So this is great news.”

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