Michigan awarded its first medical marijuana licenses Thursday, launching what is expected to become a $700-million industry in the state.
But the business owners won’t be able to operate for at least another month.
Licenses were granted for four large grow operations in Chesaning, a dispensary and processor in Ann Arbor and a secure transport company out of Lansing.
But no testing facility licenses were granted, so the actual marijuana and the products produced from the weed can’t yet be tested or sold.
It was the latest delay in what has become a series of impediments to the state’s medical marijuana business. The Legislature passed laws in December 2016 to tax and regulate the market, but getting the rules in place and licenses awarded has been a tedious and slow process.
“We’re excited that we’ve actually approved the first license, so we can move forward,” said Andrew Brisbo, director of the state’s Bureau of Medical Marijuana Regulation.
“We continue to work with the few (testing labs) who are close in the process to try and get them licensed as well. We’re aware of the fact that not having a licensed lab presents a challenge for the other types of facilities so we’ll work with them closely on how to proceed,” he added. “I think we’ll have a few up at the August meeting for consideration by the board.”
Brisbo reminded dispensaries that receive a license that “any product that you have on hand can’t be sold until it’s tested. … It’s going to be a challenge to move from temporary operating facility to a fully operational facility.”
The companies that got the first licenses also have to pay a regulatory assessment of $48,000 per license before they can begin operating. That money is used to pay for the state bureau that regulates the medical marijuana industry.
The first four licenses went to VB Chesaning, a mid-Michigan company that applied for four Class C grow licenses, which allows them to grow up to 1,500 plants for each license.
Two more licenses were awarded to Cannarbor and Arbor Kitchen, an Ann Arbor-based dispensary and processor and the final license went to Capital Transport, a Lansing-based secure transporter.
“I know the state is working diligently to get two labs pre-qualified and licensed. But the transition from emergency rules to the MMFLA (Medical Marijuana Facilities Licensing Act) has been difficult,” said Cannarbor and Arbor Kitchen owner James Daly. “It’s been a long and diligent process, but I’m very excited.”
The owners have a third company — Arbor Farm — that is awaiting a license to grow marijuana to supply the dispensary and processing center.
A license for Medicinal Solutions Compassionate Care, an Adrian dispensary, was denied and another license for Stateline Wellness Center of Morenci was tabled by the Michigan Medical Marijuana Licensing Board.
In addition to the licenses awarded, 16 businesses were given preliminary approval by the board and will still have to get approval from their local communities before they are awarded a final license, and five license applications up for preliminary approval were denied.
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Among those that were pre-qualifed was Green Peak Innovations, which has plans for 12 large grow facilities, one processor and 19 dispensaries.
“Our team is a diverse group of professionals united behind one simple goal: to create a premium seed-to-store operation in Michigan that patients can trust to consistently supply the highest quality medical cannabis products,” GPI CEO Jeff Radway said in a statement.
The company is building its headquarters and production facilities on 25 acres in Harvest Park, a cannabis industrial park in Windsor Township, south of Lansing, and is expected to complete those by later this summer. The company also has secured properties for several dispensaries that will open later this year once they get final approval for licenses.
Tim Shumer, managing partner of Lelantos, a secure transport company in Rochester, also was pre-qualified to get a license and hopes to get final approval next month.
“We have a lot to do before we’re licensed to be actually operational,” he said, noting that his company will be moving both product and cash for medical marijuana businesses. “If we’re on the agenda in August, we’ll be up and running by Sept. 1.”
Most of the denials were for undisclosed arrests, which wouldn’t necessarily disqualify the person for a license, but the lack of disclosure led to the applications being denied.
Don Bailey, a retired state police trooper and licensing board member, frequently voted against the applicants because of what he called moral or integrity issues, including a woman who didn’t disclose an arrest from 1969 in which marijuana-related charges against her were dismissed.
On another applicant, a Jackson man who was requesting growing, processing and dispensary licenses, Bailey said, “He’s stellar in his business dealings, but my concern is … that he’s going to be an absentee owner of this business and he has a relative who will be involved in running it day-to-day.”
Other board members said they couldn’t make that assumption from the information they received and approved the pre-qualification.
Bailey also worried that some businesses seemed to be anticipating the passage of a ballot proposal in November that would legalize marijuana for adult recreational use. Several had advertised their participation in cannabis competitions, which generally are for fully legal marijuana. But in Michigan, those competitions have been limited to medical marijuana businesses.
“We have medical in Michigan, we don’t have recreational yet,” Bailey said. “That’s a real problem for communities and public safety.”
The applicants were approved, mostly on 4-1 votes, with Bailey dissenting.
The board has received 594 applications for medical marijuana businesses and so far has considered applications for 54 licenses. Forty of those have been given preliminary approval and 14 have been denied. The licensing board meets again on Aug. 9.
Kathleen Gray covers marijuana issues for the Detroit Free Press. Contact her: 313-223-4430, firstname.lastname@example.org or on Twitter @michpoligal.