The city of Ann Arbor has received 10 applications from businesses seeking to be licensed as medical marijuana dispensaries. Their locations are indicated with the green pushpins. In January, the licensing board will decide whether to made recommendations to the city council to award licenses. (Image links to dynamic Google Map)

At its Dec. 14 meeting, the board continued to review materials that had been submitted to determine completeness of other applications, and heard an argument from a business owner that his application should be considered as a pre-moratorium business.

The moratorium had been imposed by the Ann Arbor city council on Aug. 5, 2010 for 120 days – it prohibited the future use of property inside the city for cultivation facilities or dispensaries, and was extended several times in the course of the council’s consideration of the medical marijuana issue. That consideration culminated on June 20, 2011 in the enactment of zoning and licensing requirements for medical marijuana businesses.

Ann Arbor’s local laws require that businesses operate in conformance with the Michigan Medical Marijuana Act, which was enacted by statewide voter referendum in 2008. The city has explicitly required of applicants for dispensary licenses that they explain how their business conforms with the law, including an Aug. 23, 2011 court of appeals ruling that has been interpreted by many authorities to mean that no medical marijuana dispensaries are legal. [.pdf of the McQueen case ruling]. Based on remarks made at the Dec. 14 meeting, it appears that Ann Arbor’s city attorney is open to the possibility that dispensary business models may exist that do conform to the McQueen case ruling.

Recommendations by the board on the award of licenses, along with recommendations for any revisions to the ordinance, are due to be submitted to the city council by the end of January 2012.

The licensing board’s work comes even as some marijuana advocates have begun to recruit volunteers for an eventual petition drive that would seek an amendment to Michigan’s constitution to repeal the state’s general marijuana prohibition. If successful, such a constitutional amendment would appear to remove state-level legal hurdles to obtaining medical marijuana or operating a medical marijuana dispensary. However, the legal ability of federal agents to enforce federal drug laws would be unaffected by a change to Michigan’s constitution.

A sign-up sheet for people to indicate willingness to help with the petition campaign was passed around by audience members at the Dec. 14 licensing board meeting. To place the constitutional amendment on the Nov. 6, 2012 ballot, the beginning and end dates for the signature collection period (based on typical strategies used by petition initiatives and Michigan’s election law) translate to Jan. 12 and July 9, respectively. To qualify, 322,609 valid signatures would need to be collected.

The Jan. 12 petition start date comes a day after Michigan’s Supreme Court is scheduled to begin hearing arguments in two medical marijuana cases. One involves the growing of medical marijuana in an “enclosed, locked facility” (People v. King) and the other involves the timing of a physician’s recommendation that is needed to support a defense against prosecution (People v. Kolanek).

Summary of the Status of 10 Applications

By the time of the Dec. 14 medical marijuana licensing review board’s meeting, the city had received 10 applications. Three have foundered on zoning compliance issues, but two of those businesses have filed appeals with the city’s zoning board of appeals (ZBA). Of the other seven, five have been determined by the board to have been in business before the Aug. 5, 2010 moratorium was imposed, but the other two were not.

• Green Planet, 700 Tappan St. Status: ZBA appeal
• Treecity Health Collective, 1712 S. State St. Status: ZBA appeal
• Ann Arbor Health Collective, 2350 E. Stadium Blvd. Status: zoning issue, no appeal filed as of Dec. 31, 2011
• OM of Medicine, 112 S. Main St. Status: pending licensing board decision on recommendation
• People’s Choice, 2245 W. Liberty St. Status: pending licensing board decision on recommendation
• Greenbee Collective, 401 S. Maple St. Status: pending licensing board decision on recommendation (parking space requirements are problematic)
• Ann Arbor Wellness Collective, 321 E. Liberty St. Status: pending licensing board decision on recommendation
• MedMarx at Arborside, 1818 Packard St. Status: pending licensing board decision on recommendation
• Medical Grass Station, 325 W. Liberty St. Status: pending licensing board decision on recommendation as post-moratorium business
• PR Center, 3820 Varsity Dr. Status: pending licensing board decision on recommendation as post-moratorium business

The board discussed various pieces of additional information that had been submitted since their Nov. 30 meeting. That information included items ranging from contact information to statements about any felony convictions that people associated with a business might have. Not all the information has yet been submitted, but city planner Jill Thacher concluded that there were essentially five applications for which she’d been able to put together full staff reports.

The two dispensaries generating the most discussion were Greenbee Collective and the Medical Grass Station. For Greenbee, the issue related to adequacy of parking. For the Medical Grass Station, the issue related to its status as a pre- or post-moratorium business.

Parking Requirements

Greenbee Collective, located at 401 S. Maple, drew a question from city councilmember Sabra Briere (Ward 1) about parking space requirements. City planner Jill Thacher indicated that Greenbee wanted to work with two of the adjoining parcel owners to get the additional six spaces the business would need. Wendy Rampson, head of planning for the city, noted that what’s required to make that solution work would be to get a permanent easement – it would need to come from either Kroger or Top of the Lamp.

From the audience, local attorney Dennis Hayes ventured that Greenbee was only one of two units in the building. However, Rampson explained that parking requirements are a function of the entire building. Greenbee has 8 and needs 14, said Thacher. Briere noted that the requirement is for one off-street parking space for every 310 square feet of retail space.

Briere questioned whether the existing building currently has enough parking to comply with zoning. Thacher explained that parking is based on use, not zoning. Dispensaries are treated as retail space. Briere ventured that Greenbee’s application is not “ready for prime time.” Asked if Greenbee had an option to ask for a variance, Rampson and Thacher expressed skepticism: any such variance would be granted in perpetuity and no exceptions are supposed to be granted for existing non-conforming parking. Rampson indicated that Kroger does have excess parking, but board members expressed doubt that Kroger would grant a permanent easement. Rampson clarified that the relevant parking requirements are found in Chapter 59 of the city code.

Pre- or Post-Moratorium Applications

The status of a business in operation before the city council imposed a moratorium on Aug. 5, 2010, is important – because the application process timing is different for the two kinds of businesses (pre- and post-moratorium).

The board spent much of its Nov. 30 meeting discussing the merits of the documentation provided by different businesses to indicate that they were in operation before the moratorium. At the Dec. 14 meeting, that discussion focused mostly on the Medical Grass Station.

Pre- or Post-Moratorium: Medical Grass Station

The name of the Medical Grass Station, owned by Garth Bolgos, is a play on the former use of the building – a gas station at the corner of Second and Liberty streets. The city’s concern about the location as a possible marijuana dispensary was reflected during the city council’s deliberations in the spring and summer of 2011. At one point, the idea was floated to bump the size of the buffer around schools from 1,000 feet to 1,010 feet. The tweak would have ruled out the Grass Station’s location, because the corner of its parcel would have been nipped by the buffer around Bach Elementary School.

Images are extracted from the city of Ann Arbor's maps showing the buffer zones around schools, which are depicted as salmon-colored cross-hatching. The top image shows a 1,010-foot buffer. The bottom image shows the 1,000 buffer. The yellow-highlighting, added by The Chronicle, shows the parcel where a former gas station was located – and the current site of the Medical Grass Station. The salmon-colored cross-hatching is the buffer zone, originating at Bach Elementary School on Jefferson. (Image links to higher resolution file.)

At the licensing board’s Nov. 30 meeting, board members had concluded that the Medical Grass Station had not been in operation before the council imposed its Aug. 5, 2010 moratorium. But Bolgos, the property’s owner, addressed the licensing board during public commentary on Dec. 14, saying he wanted to rectify misconceptions about when the Grass Station went into business. He contended that he was in business at the location before the moratorium was imposed, and described the documentation to that effect, which he’d provided to the city.

It included a tax bill for the property and a letter from a patient who’d received marijuana from Bolgos at the location as early as January 2009, as well as a letter Bolgos had written to the mayor. Bolgos also pointed to an article that had appeared in the Ann Arbor Observer, which described his plans to open a medical marijuana dispensary business there. The article, “Medical Marijuana Center,” was written by John Rosevear, who is also a member of Ann Arbor’s medical marijuana licensing board.

Bolgos described to the board how he’d struck a deal to sell the old gas station, but it had fallen through. [The arrangement was contingent on the developer of the neighboring Liberty Lofts getting approval from Ann Arbor's historic district commission (HDC) to demolish two houses next to the gas station. The outcome of the HDC's decision was to grant permission to demolish the gas station but not the two houses, so the deal was not completed. For Chronicle coverage of HDC deliberations from early 2009, see "Demolition in Historic District" and "Historic Commission: No Approval for Demolition"]

During the board members’ deliberations on the Grass Station, they reviewed how they’d concluded at their Nov. 30 meeting that the Grass Station needed to be considered as a post-moratorium business. Board member Patricia O’Rorke noted that both the PR Center and the Grass Station had been determined to be post-moratorium applications.

Board member Sabra Briere noted that during public commentary, some uncertainty had been raised about the Grass Station. Board member Jim Kenyon indicated that the board’s previous conclusion about the Grass Station had been based on a lapse in continuity. O’Rorke, too, noted that the board had decided it was a new business.

Briere then responded to the arguments that Bolgos had brought forth during public commentary. The documentation provided addressed the desire of Bolgos to open a dispensary, not the fact that he’d opened one, she said. From the audience, Bolgos said he had treated patients at the location since 2009 – it doesn’t matter how big or small the business is, he said.

Garth Bolgos, owner of the Medical Grass Station at Second and Liberty.

Briere asked assistant city attorney Kristen Larcom if a park bench would become a dispensary if patient met their caregiver there to receive medical marijuana. Larcom stated that those were not the facts before the board – she asked if Briere’s question related to the Grass Station.

Board member Gene Ragland asked Bolgos: Did you have an interruption in the business? Bolgos told him, no – they had to move from a different Fourth and Washington location. But he met most of his patients at the gas station, he said.

The kind of documentation Bolgos had submitted was again recited: a copy of his caregiver card; a copy of a letter to the mayor saying he wanted to open a dispensary; The Ann Arbor Observer article describing how he wanted to open a dispensary; a delinquent tax notice saying he owns the property; and a letter from a patient stating she received care there.

Briere stated that the board had heard at the Nov. 30 meeting that there was a gap in service provided by the business – that the Fourth and Washington location had ceased operation. Larcom indicated that the location had been raided by LAWNET and shut down. It was not operating and there were convictions that came out of that raid, said Larcom.

Briere concluded that the board had heard evidence that there’d been a desire to open a dispensary, not evidence that one had opened at that location. Briere assured Bolgos that if the board considered his business as a post-moratorium business, it was just as fair. Ragland clarified that pre-moratorium businesses are in the queue first, but post-moratorium businesses are “still in the queue.”

Ordinance Revision Recommendations

Ragland’s assurance notwithstanding, being in the application queue as a post-moratorium business is not as advantageous as being in the queue as a pre-moratorium businesses. That’s because the number of licenses to be granted in the first year – which is the current review cycle – is tied to the number of applications received for pre-moratorium businesses.

Board members discussed the fact that they had the ability to make a recommendation to the city council on adjusting the number of licenses, as well as a number of other points.

Ordinance Revision Recommendations: Number of Licenses

The fact that a post-moratorium application likely stands a smaller chance of being recommended for a license is not explicitly stated in the city’s ordinance. But that conclusion results from the interplay between two parts of the law. First, pre-moratorium businesses had 60 days to apply after the effective date, while post-moratorium businesses had to wait until at least 75 days after the ordinance’s effective date, which was Aug. 22, 2011.

7:504(1)
Application Submission. A medical marijuana dispensary that commenced operation prior to passage of the moratorium by City Council on August 5, 2010, shall have until 60 days after the effective date of this chapter [Aug. 22, 2011] to submit an application for a new annual license. If the medical marijuana dispensary commenced operation prior to passage of the moratorium in a zoning district where its operation is not permitted under the zoning ordinance, the application shall be for a location in a zoning district where operation of a medical marijuana dispensary is permitted under the zoning ordinance. No other applications will be accepted by the City until 75 days after the effective date of this chapter.

But the number of licenses available is capped, based on the number of applications received in the first 60 days – i.e., from pre-moratorium businesses.

7:502(4)
The first year’s licenses shall be capped at a number 10% higher than the number of complete applications for licenses submitted to the City in the first 60 days after the effective date of this chapter, but not more than 20 medical marijuana dispensary licenses shall be issued in the first year. Any license terminated during the license year returns to the City for possible reissuance.

Assuming all the applications from pre-moratorium businesses result in a recommendation for a license, the number of post-moratorium applications that could receive license recommendations would be no more than 10% of the number of pre-moratorium applications. It appears the city has received seven applications from pre-moratorium businesses. So, at the Dec. 14 meeting of the board, Sabra Briere pointed out that if the board has accepted seven applications from pre-moratorium businesses, the additional 10% would allow the board to add up to one for a total of eight recommendations to be made to the council in January 2012.

Ann Arbor medical marijuana licensing board member Gene Ragland. In the background is board member John Rosevear.

What if there are five applicants for that one additional recommendation? asked Wendy Rampson, head of city planning. Briere indicated that the board would have to make a choice. There’s no guarantee that you get a license, even if you’ve jumped through all the hoops.

Briere went on to note that the board could also recommend in January that the number of licenses be changed. Responding to questions from board members about why the number of licenses had been capped at 20, Briere told them there’d been a lot of dickering about the exact number when the council deliberated on the issue.

City planner Jill Thacher raised the question of new dispensaries that wanted to apply for a license. Briere indicated that anyone who wants to apply for this first year’s application cycle should get their application submitted. Briere didn’t feel the board wanted to see new applications in January. Thacher indicated that she’d been putting people off. She said there were two dispensaries she’d told to hold off. Briere indicated that Thacher should tell those dispensaries that they need to get all their materials in. Briere noted those dispensaries didn’t need to address Section 7:504(2)(a) – proof of operation before the council established the moratorium on Aug. 5, 2010.

Gene Ragland wondered why receiving applications would not trigger the board to convene, instead of meeting to make recommendations once a year. Patricia O’Rorke echoed the sentiment, asking why someone would need to wait a year. Briere indicated that the city council [on which she serves, representing Ward 1] did not want to be confronted with the issue more than once a year. John Rosevear said he felt that once a year was appropriate, given the complexity of the situation.

Ordinance Revision Recommendations: Timing Issues

In the course of working its way through the applications for dispensary licenses, the board has identified some aspects of Ann Arbor’s ordinance that it’s found problematic. Identified at the Dec. 14 meeting were two passages that express different timing requirements for reapplication:

7:502(8) A license issued under this chapter shall expire 1 year after the date of issuance. To renew an existing license, the licensee shall submit an application in the same manner as is required to apply for a new license no sooner than 90 days before the expiration date an [sic] no later than 60 days before the expiration date.

Elsewhere, the timing requirement is given as 70 days, not 90 days:

7:504(3b) An application for renewal of an existing license shall be submitted no sooner than 10 weeks (70 days) before the existing license expires.

Board member Jim Kenyon indicated he preferred the 90-day condition.

Ordinance Revision Recommendations: Licensing Fee

Briere noted that the board would also need to recommend the amount of the licensing fee. Board members discussed the fact that the fee would need to cover the costs of administering the license. Assistant city attorney Kristen Larcom explained that building inspections would be separate from the license fee and the license application fee – the fee for licenses per se is a separate issue, she explained. While the application fee has to be limited to administrative costs, that’s not the case for license fees, she explained.

The cost of Ypsilanti’s medical marijuana dispensary license fee was briefly discussed. It’s $2,500 for the initial license and $1,100 for renewal.

Larcom indicated she was not sure what the city’s legal advice would be. Kenyon asked why there is a license fee at all. O’Rorke ventured that it’s because you pay for the privilege. Briere noted that one key difference between the medical marijuana dispensary licenses and liquor licenses is that dispensary licenses are not transferable. Kenyon indicated he would vote for a nominal amount.

Ordinance Revision Recommendations: Entry of Premises

O’Rorke questioned why a building inspector needed to be allowed to enter the premises:

7:506(7)
An authorized person shall consent to the entry into a medical marijuana dispensary by the Building Official and Zoning Inspectors for the purpose of inspection to determine compliance with this chapter pursuant to a notice posted in a conspicuous place on the premises 2 or more days before the date of the inspection or sent by first class mail to the address of the premises 4 or more calendar days before the date of the inspection.

Larcom pointed out that the city must provide notice to the facility. O’Rorke countered that the law says that building inspectors can come in. Larcom clarified that the law did not enable the city to break in to the facility. The dispensary can refuse. If the city wants to insist on entering the premises, the city would need to go to court to determine if there’s sufficient cause, Larcom explained.

Larcom felt it’s better to keep the language in there. O’Rorke wanted to avoid having a statement in the ordinance that allows consent to entry to determine compliance with the ordinance. Larcom responded to O’Rorke by indicating that it’s up to the board to make that recommendation. Briere noted that when the city council debated the ordinance, some councilmembers didn’t like the passage at all, and some wanted to make it even stronger.

Compliance with McQueen

On Aug. 23, 2011, two months after the enactment of Ann Arbor’s local legislation, a Michigan court of appeals ruled on the McQueen case in a way that has been interpreted by many authorities to mean that medical marijuana dispensaries are not legal. [.pdf of the McQueen case ruling]

By Sept. 30, the Ann Arbor city staff’s position had evolved to include a requirement that license applicants would need to provide a statement explaining how their business conformed with the Michigan Medical Marijuana Act, including the McQueen case, as part of an application for a zoning compliance permit. A zoning compliance permit is a requirement for a license. [.pdf of Sept. 30 letter]

The McQueen ruling found that one particular business model for dispensaries, that of Compassionate Apothecary, does not conform to the Michigan Medical Marijuana Act. And at the Dec. 14 meeting of the licensing board, Gene Ragland alluded to a representation made by the city attorney to the board about a particular vision of what would be a compliant business model, and the city attorney had described what he would consider legal. Sabra Briere agreed with Ragland’s characterization, but said the board could not assume that the city attorney’s view today would be the same.

Assistant city attorney Kristen Larcom noted that additional court opinions could be issued between now and the time the city attorney gives advice to the city council about whether to accept board recommendations to award licenses. In a subsequent phone interview, Wendy Rampson, head of planning for the city, indicated to The Chronicle that her understanding was that the city attorney’s office was open to the possibility that a dispensary business model can exist that complies with the McQueen ruling. However, no written set of criteria defining such a business model has been provided.

The advice provided to the city council by the city attorney will likely depend on the nature of the business model that applicants describe in the statements they’ve provided at the city’s request.

The statement provided by Cannabis Counsel, the attorney for MedMarx at Arborside, could be typical of the kind of argument that dispensaries will make. [.pdf of letter from Cannabis Counsel regarding Arborside's business model]

The Cannabis Counsel letter lays out why the court of appeals in the McQueen case found that the Compassionate Apothecary business model was not in compliance with the MMMA:  The problem was that Compassionate Apothecary did nothing to “assist” patients in administering or using marijuana, beyond exchanging marijuana for money. In contrast to Compassionate Apothecary, argues Cannabis Counsel, Arborside does assist patients in the manner described by the court – by assisting the patient “in preparing the marihuana to be consumed in any of the various ways that marihuana is commonly consumed.” Those ways include providing patients with “cleaned prepared de-stemmed cannabis including pre-rolled joints, medibles which have been inspected, tested, cleaned, grinded and rolled, or cooked in combination with foodstuff.”

The Cannabis Counsel letter also explicates how compliance with other aspects of the MMMA are met, including maintaining a sufficient number of caregivers on site to possess all the marijuana present there. Another point of emphasis of the letter is that no “sale” of marijuana takes place, and that money is given to a caregiver to compensate for costs associated with assisting a patient in the medical use of marijuana, which does not constitute a sale of a controlled substance under the MMMA.

Next Steps

The licensing board discussed its next meeting times in the context of its Jan. 31, 2012 deadline to make recommendations to the city council on license applications and ordinance revisions. The outcome of that discussion was to establish that they’d plan to meet again on Jan. 18, 2012. The zoning board of appeals will hear appeals on zoning issues from two of the businesses on Jan. 25. And the medical marijuana licensing board could possibly meet on Jan. 30 as well, if necessary.

Present: Patricia O’Rorke, James Kenyon, John Rosevear, Gene Ragland, Sabra Briere. Also: city planning manager Wendy Rampson, city planner Jill Thacher and assistant city attorney Kristen Larcom.

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The city council will again take up the issue of licenses for medical marijuana businesses at its Monday, March 21 meeting.

Councilmember Sabra Briere (Ward 1) raised her hand and waited to be acknowledged by the mayor before speaking at the March 7, 2011 council meeting. (Photos by the writer.)

The council had previously heavily amended the licensing proposal at its Jan. 3, 2011 meeting as well as at its Feb. 7 meeting. The amendments made on March 7 put the council possibly in a position to make any final amendments, and to take its initial vote on the licensing proposal at its March 21 meeting. [.pdf of medical marijuana licensing proposal after March 7 amendments – "clean" version] [.pdf showing amendments undertaken at the March 7 meeting – "marked up" version]

Also at the March 21 meeting, the council is expected to extend the moratorium on use of property within the city for medical marijuana businesses – first enacted at the council’s Aug. 5, 2010 meeting. The initial moratorium was supposed to last only 120 days, but was subsequently extended at the council’s Nov. 15, 2010 meeting for another 60 days, and again at its Feb. 7, 2011 meeting an additional 60 days, until March 31, 2011. The council wants to coordinate the second and final vote on a medical marijuana zoning ordinance, which it passed initially on Oct. 18, 2010, with the vote on the licensing ordinance.

An additional medical-marijuana-related item, postponed from the March 7 meeting until March 21, is a proposal to enact a clear non-disclosure policy for information that the city might gather from people who have registered with the state of Michigan as medical marijuana patients and caregivers under Michigan’s voter-approved Michigan Medical Marijuana Act.

Part 1 of the March 7, 2011 city council meeting report – which deals with the non-medical marijuana issues on the agenda – was previously published as a separate article.

Medical Marijuana: Public Commentary

While the council has now heard extensive public commentary on medical marijuana from multiple people at more than half a dozen meetings, that commentary does not constitute a formal public hearing, which is required before the council takes a second and final vote on any ordinance. The council took its initial vote on a medical marijuana zoning ordinance in October 2010, but has yet to take its first vote on a licensing ordinance.

Ray Gould identified himself as a local resident, and a registered medical marijuana patient. He said that he was in the process of opening a medical marijuana dispensary when the council passed its moratorium. He reminded the council of the high percentage of Ann Arbor residents who had voted in favor of the Michigan Medical Marijuana Act. He told the council that currently 15 states allow use of medical marijuana in some form, and that 12 more states are considering similar legislation.

Gould cautioned that if the licensing rules require dispensaries to keep a list of suppliers, it would put a damper on suppliers. He suggested that a limit of 15 on the total number of licenses to be granted by the city is not enough, given the number of patients from outlying areas who might travel to Ann Arbor to get access to medical marijuana. He suggested that 25-30 licenses would be a better number. He pointed out that the moratorium was originally supposed to be in place for just 120 days [4 months], and now it’s been in place for nearly 8 months.

Dennis Hayes remarked that he was back for the fourth or fifth time. He pointed to the legislative intent of the MMMA, which is to enhance the ability of patients to get access to medical marijuana. He told the council that there have been several new developments. Gov. Rick Snyder had signed an executive order that transfers the Bureau of Health Professions from the Department of Community Health to the new Department of Licensing and Regulatory Affairs. This would transfer responsibility for processing applications for registered caregivers and patients, Hayes said, and the state is already 40,000 applications behind, so he didn’t think that this would improve things. It would likely not take just four months but rather six months for applications to be approved, he feared.

Hayes went on to describe a recent Michigan Court of Appeals ruling where the dissenting judge in the 2-1 ruling had argued that the MMMA should be used as a “shield” and not as a “sword.” [The case involved a man who was growing medical marijuana in a dog kennel, surrounded by a locked six-foot fence. The two judges in the majority ruled that this did not meet the MMMA requirement that medical marijuana be kept in "a closet, room, or other enclosed area equipped with locks or other security devices that permit access only by registered primary caregiver or registered qualifying patient."]

Hayes said that while the licensing requirements being considered by the Ann Arbor city council did not constitute a single large sword, they were a set of smaller swords.

Chuck Ream – who addressed the council over a year ago on the topic of medical marijuana, and has frequently addressed the council over the last four months – told them there was not much more to say. It’s time to “gitter done,” he said. He asked how cultivation facilities actually helped patients – he feared they would contribute to getting Ann Arbor’s whole program busted. As far as record-keeping goes, he said there can’t be a permanent list of all suppliers kept by dispensaries. If they keep it for 30 days, he said, that is sufficient.

Ream said that in addressing the city council, encouraging them to do the right thing with respect to the licensing ordinance, he felt a bit like the birds in the story of Peter Rabbit who exhorted Peter to exert himself, and when he did, he set himself free.

Mike McLeod introduced himself on behalf of the Green Planet Patient Collective. He asked the council to reconsider the definition of “cultivation facility” – he was concerned that the current definition would apply to just a single plant grown outside someone’s home. He said that the collective believes the state law gives rights to patients and caregivers to grow plants without the requirement that they be put on a list. The city’s zoning ordinance would be sufficient, he said.

Matthew Abel introduced himself as an attorney with Cannabis Counsel in Detroit. He echoed what Hayes and Ream had to say about privacy and record-keeping. He said there’s concern due to the fact that the federal government has subpoenaed records and may continue to do so. He advises his medical marijuana clients to keep the minimum amount of records needed to maintain the business. With respect to cultivation facilities, he said that if they’re operated properly, they’re unlikely to draw interest from police.

Abel said he was mostly concerned about the number of licenses that would be available. He reported that he had a number of clients who were interested in doing business in Ann Arbor, but who were not doing so, because they had waited – they were being cautious to make sure they would have city approval before going forward. Now, he said, with the city council’s apparent intent to grant licenses to existing businesses on a priority basis, those who were cautious are being punished. He suggested doubling the number of dispensaries allowed. He also noted that existing businesses are concentrated mostly on the west side and suggested a system that allocates a certain number to each of the city’s five wards might work to spread things out geographically.

Medical Marijuana Non-Disclosure Policy

Before the council was a resolution that would articulate specifically that the city has a non-disclosure policy about information that might be collected in the course of processing medical marijuana licensing applications or enforcing zoning regulations. The resolution was brought forward by Sabra Briere (Ward 1). Its “Resolved” clauses read:

RESOLVED, That the following information, if provided to the City as part of the zoning and/or licensing process for medical marijuana caregivers, dispensaries or other providers, shall be protected against public disclosure in the course of the zoning and licensing process: the name, address and date of birth of any qualifying patient; the name, address and date of birth of a qualifying patient’s primary caregiver; the name, address and telephone number of a qualifying patient’s physician; any designation as to whether a qualifying patient or primary caregiver will be allowed under state law to possess marijuana plants for a qualifying patient’s medical use; and the names or other identifying information of persons to whom the Department of Community Health has issued registry identification cards; and

RESOLVED, That the foregoing information shall be exempted from disclosure in response to Freedom of Information Act requests on privacy grounds and/or based on the provisions of Michigan Medical Marihuana Act, unless those grounds for exemption are ruled invalid by a court.

The relatively brief council discussion – which came after more than two hours of deliberations on the medical marijuana licensing scheme – included Briere, city attorney Stephen Postema, Christopher Taylor (Ward 3) and Tony Derezsinski (Ward 2). Background for their conversation are privacy clauses in two different statutes: (1) the Michigan Freedom of Information Act (FOIA), and (2) the Michigan Medical Marijuana Act (MMMA).

In broad strokes, the FOIA says that public bodies must produce information upon request. But certain exemptions apply. The two FOIA exemptions relevant to the council’s discussion include one that allows a public body to withhold information that would represent an unwarranted intrusion on someone’s privacy, and another that allows a public body to withhold information, if an exemption is provided by some other statute [emphasis added]:

15.243 Exemptions from disclosure …
Sec. 13. (1) A public body may exempt from disclosure as a public record under this act any of the following:
(a) Information of a personal nature if public disclosure of the information would constitute a clearly unwarranted invasion of an individual’s privacy. …
(d) Records or information specifically described and exempted from disclosure by statute.

The operative verb is “may,” which means that while a public body can choose to withhold certain information, it is not required by the FOIA to withhold it. The attorney general’s outline of the FOIA statute affirms the withholding of information as optional: “A public body may (but is not required to) withhold from public disclosure certain categories of public records under the Freedom of Information Act.” The attorney general’s outline was last updated a decade ago, but the AG’s office confirmed for The Chronicle that the document is still accurate – in the intervening period, no changes have taken place in the statute or with case law.

The Michigan Medical Marijuana Act has an exemption on disclosure of certain patient and caregiver information, which means that the FOIA itself would allow, but not require, withholding of that information – both under Sec. 13. (1)(a) and Sec. 13. (1)(d). In fact, the MMMA specifically references the information as exempt under the FOIA. But the MMMA non-disclosure clause is not optional. Here’s the set of confidentiality rules in the MMMA [emphasis added]:

(h) The following confidentiality rules shall apply:

1. Applications and supporting information submitted by qualifying patients, including information regarding their primary caregivers and physicians, are confidential.
2. The department shall maintain a confidential list of the persons to whom the department has issued registry identification cards. Individual names and other identifying information on the list is confidential and is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
3. The department shall verify to law enforcement personnel whether a registry identification card is valid, without disclosing more information than is reasonably necessary to verify the authenticity of the registry identification card.
4. A person, including an employee or official of the department or another state agency or local unit of government, who discloses confidential information in violation of this act is guilty of a misdemeanor, punishable by imprisonment for not more than 6 months, or a fine of not more than $1,000.00, or both. Notwithstanding this provision, department employees may notify law enforcement about falsified or fraudulent information submitted to the department.

The general sense among councilmembers who took part in the conversation seemed to be that the privacy concerns are important, that the resolution before them was essentially a reaffirmation of legal principles and city policies that are already in place, and that it would be best to wait and see the exact form that the city’s licensing and zoning regulations take before enacting such a policy.

Outcome: The council voted unanimously to postpone consideration of the non-disclosure resolution until its March 21, 2011 meeting.

Medical Marijuana Licensing: Council Deliberations

Councilmembers worked from more than a dozen sheets of amendments that had been provided by the city attorney’s office at the meeting. The sheets were color-coded to reflect various alternatives for some of the amendments. No extra copies were available for members of the audience to try to follow the council’s conversation. However, the amendments were each read aloud before they were discussed.

At their March 7 meeting, councilmembers worked their way through more than a dozen pages of green and yellow highlighted amendments to the proposed medical marijuana ordinance.

Sabra Briere (Ward 1) led the council in a first pass through the amendments, but not in the order of the document – she’d identified some that she felt would be dispatched with relatively little discussion. After that initial pass, Sandi Smith (Ward 1) asked that the remaining amendments be considered in the order they appear in the ordinance.

This report is organized mostly along the lines of the chronology of the council’s deliberations. In some instances, the report consolidates discussion and votes on related amendments.

Generating the most discussion was an amendment related to how to track down information about the source of marijuana, in the event of a public health risk.

[.pdf of medical marijuana licensing proposal after March 7 amendments – "clean" version] [.pdf showing amendments undertaken at the March 7 meeting – "marked up" version]

MML Amendment: State or Local Law, not Federal

Sabra Briere (Ward 1) told her council colleagues that insertions of the phrase “state or local” in several places in the ordinance is meant to make clear that the ordinance would apply to state or local law, but not federal. Examples of the insertion are as follows.

6:420. Prohibited Acts.
It shall be unlawful for any person to: …
(b) Produce, distribute or possess more medical marijuana than allowed by any applicable state or local law.
(c) Produce, distribute or possess medical marijuana in violation of this chapter or any other applicable state or local law.

The ordinance as amended includes six instances of “state or local law.”

Outcome: The council voted unanimously to amend the ordinance by inserting “state or local” law.

MML Amendment: Punishments – Reasons for License Revocation

The council considered several separate amendments to the section of the ordinance dealing with reasons for revocation of a license. Subsection (7) was a new addition. Others were wording changes to existing subsections. In their amended form, the conditions for license revocation are as follows:

6:421. License Revocation.
A license issued under this chapter may be suspended or revoked for any of the following violations:

1. Any person required to be named on the application of the license is convicted of or found responsible for violating any provision of this chapter;
2. The application contains any misrepresentation or omission of any material fact, or false or misleading information, or the applicant has provided the City with any other false or misleading information related to the medical marijuana business;
3. Any person required to be named on the application is convicted of a crime which, if it had occurred prior to submittal of the application, could have been cause for denial of the license application;
4. Marijuana is dispensed on the business premises in violation of this chapter or any other applicable state or local law, rule or regulation;
5. The cultivation facility or dispensary is operated or is operating in violation of the specifications of the license application, any conditions of approval by the City or any other applicable state or local law, rule or regulation.
6. The City, or the County or the MDPH or any other governmental entity with jurisdiction, has closed the business temporarily or permanently or issued any sanction for failure to comply with health and safety provisions of this chapter or otherwise applicable to the business or any other applicable state or local law.
7. The dispensary or cultivation facility is determined by the City to have become a public nuisance.

Mayor John Hieftje said that with respect to 6:421 (7), he was happy to see language appearing in the ordinance that would allow the city to act, if a medical marijuana business became a problem – not that he anticipated this would happen.

Stephen Kunselman (Ward 3) wanted to know what the difference is between being “convicted of” violating a law and being “found responsible” for violating a law. Assistant city attorney Kristen Larcom clarified that when you’re guilty of violating a criminal law, that is a conviction; when you violate a civil law, you are found responsible for violating it.

Kunselman wondered if 6:421(6) made sense, given that he understood that the state statute didn’t actually give any credence to dispensaries as businesses – how could the MDPH shut down a business that was not acknowledged to exist? City attorney Stephen Postema allowed that it was not possible to anticipate all of the changes that might take place in the future.

Also related to 6:421(6), Marcia Higgins (Ward 4) wondered what would happen if the state took action on the regulation of dispensaries, and Ann Arbor’s ordinance is different from the state law – would Ann Arbor have to conform with the state’s law? Postema said the city would need to be consistent with the state law, in whatever way it is eventually clarified – legislatively, or through court cases.

Outcome: The votes on the amendments to the section on reasons for license revocations were all unanimous.

MML Amendment: Punishments – Public Nuisance

In addition to serving as a possible reason for revocation of a license, the following amendment specified that being found to be a public nuisance could result in the usual range of penalties for being a nuisance:

6:422. Revocation Not Exclusive Penalty.
Nothing in this chapter shall be deemed to prohibit the city administrator or designee from imposing other penalties authorized by this code or other ordinance of the city, including filing a public nuisance action or any other legal action in a court of competent jurisdiction.

Outcome: The council voted unanimously, without deliberation, to add the filing of a public nuisance action to the set of punishments that could be applied to a medical marijuana business, beyond the revocation of its license.

MML Amendments: Privacy – Licensing Board Membership

Privacy issues generally prompted a lot of discussion by the council. One such issue came up with a proposed amendment that addressed the membership of the licensing board. In the version the council began with, the membership was defined as “one member of Council, one physician, one medical marijuana caregiver.” An amendment proposed by Sabra Briere (Ward 1) would have extended the membership as follows: “one member of Council, one physician, one medical marijuana caregiver, one medical marijuana patient, and one Ann Arbor resident.”

The amendment as eventual approved preserved the additional number of members but struck the requirement that there be two slots for people registered with the Michigan Department of Public Health – one as a patient and one as a caregiver. As approved, the amendment also added extensive material about the basis the board can use for awarding licenses:

6:415. License Required, Number of Licenses Available, Eligibility.
…
(7) The City Council will establish a licensing board to consist of one member of Council, one physician, and three other Ann Arbor residents, these are Mayoral appointments. The Board will annually review and recommend the licensing criteria, the number of licenses authorized, the license fee structure, and recommend approval of license applications.

While a cultivation facility or dispensary shall not be eligible for a license if any person required under this chapter to be named on the application has been convicted of a felony involving controlled substances, evidence that a person required under this chapter to be named on the application has been convicted of any other type of felony, under the law of Michigan, the United States, or another state, may be used by the Board in its determination of whether or not to recommend the issuance of a license to the applicant. Among other things, the Board shall consider whether the substance of the offense would tend to indicate a likelihood that the person would be unable to serve the public in a fair, honest and open manner or to dispense or cultivate medical marijuana in compliance with the MMMA, whether there is evidence that the person has been rehabilitated, and the age of the conviction.

In response to a question from Tony Derezinski (Ward 2), Briere clarified that the intent of the wording for the membership – specifying that one be a resident of Ann Arbor – was not meant to imply that the other members would not be residents of Ann Arbor. Mayor John Hieftje indicated that the city followed a policy that all board and commission appointments needed to be residents of Ann Arbor unless they had special skills or background, if supported by a super-majority of eight members of the city council.

City attorney Stephen Postema.

City attorney Stephen Postema suggested that inclusion of the word “other” in “one other Ann Arbor resident” would imply that the previous members in the list are also Ann Arbor residents.

The council entertained brief discussion about the annual nature of the review and whether the licensing board was just recommending approval of licenses. But the main focus of their conversation was the implications of serving on a board or commission for the people filling the proposed slots for a patient and a caregiver – board and commission members have their addresses made public as a routine part of the confirmation process.

Marcia Higgins (Ward 4) was first to raise the privacy issue. She wondered how the patient and caregiver members would have their information protected. Derezinski said people would serve with the knowledge that this information would be made public – it might dissuade some, but not most. Christopher Taylor (Ward 3) suggested that there is ample evidence that there’s a willingness for people to volunteer that information – the number of people who’d addressed the council by introducing themselves as patients and caregivers was evidence of that. Hieftje was concerned, nonetheless, that it could result in a very narrow pool of possible applicants.

Responding to Taylor’s point, Higgins noted that people speaking to the council did not disclose their addresses. She also stressed that this private information would be a part of the public record for a very long time.

The council opted to lump the two registered slots into a total of three members who would be at-large Ann Arbor residents.

Outcome: The council unanimously approved the amendment on licensing board membership.

MML Amendments: Coordination with General Licensing

The medical marijuana licensing scheme is proposed to be a separate chapter in the city of Ann Arbor code – Chapter 71. The city code already contains some general provisions for business licensing in Chapter 76, called “Licenses.”

An amendment to the general provisions part of the medical marijuana licensing code was intended to establish the relationship between the two chapters of the city code, in the event there is a conflict. Assistant city attorney Kristen Larcom indicated to the council that she had not been able to identify any conflicts between the two chapters. The following amendment was eventually withdrawn:

6:416. General Provisions.
(5) The provisions of Chapter 76 of this Code apply to this Chapter unless this Chapter establishes another procedure.

For his part, Christopher Taylor (Ward 3) saw the amendment as essentially a direction to an applicant for a license to have a look at Chapter 76 as well – that kind of direction could be provided on the application form, he said. In offering a rationale for including the language, Sabra Briere (Ward 1) said that there is material in Chapter 76 on general licensing that could be added to the medical marijuana licensing chapter – for example, the right to appeal –but that it would repeat the content of Chapter 76. The idea was to avoid redundancy, Briere said.

As it became clear that the reference to a different chapter of the code was required, because there was material in that chapter that potentially is relevant to medical marijuana licensing, Marcia Higgins (Ward 4) displayed some irritation with city attorney Stephen Postema. She saw the approach of separating general licensing from medical marijuana licenses as in conflict with the council direction to his office to simplify the city code wherever possible and to consolidate all relevant codes in the same place. She mentioned the Zoning Ordinance Reorganization project (ZORO) as a specific example of that goal to consolidate and eliminate redundancy.

Postema replied to Higgins by saying that it would have been possible to write the medical marijuana licensing into the existing Chapter 76 on licensing. However, he characterized the medical marijuana licensing as a unique kind of license, but that it would “bog down” the business licensing ordinance if it were included there.

In response to Postema’s characterization of the medical marijuana licensing as an “unusual” kind of license, Higgins told him she did not think it was “unusual” because the city council was looking to implement it and it had been voter-approved.

Outcome: The amendment referring to Chapter 76 was withdrawn.

MML Amendments: Wording of Title

An amendment receiving no comment or deliberations was a title change to the section on application requirements. As amended, the title reads:

[amended text] 6:417. Application Requirements for New Annual License or Renewal of Existing License; License Requirements for New License and for Renewed License

The amendment replaced the old title, which was:

[unamended text] 6:417. Application for and Issuance of New Annual License or Renewal of Existing License for Medical Marijuana Dispensaries and Medical Marijuana Cultivation Facilities.

Outcome: The amendment on the wording of the title was unanimously approved without discussion.

MML Amendments: Definitions

Definitions for “dispensary” and “cultivation facilities” were modified; a definition for MDCH was added:

6:414. Definitions.
…
(b) Medical marijuana cultivation facility means a structure or each space in a structure that is separately owned or leased by a person other than the owner of the structure, in which marijuana plants are being cultivated in compliance with the Michigan Medical Marijuana Act. For purposes of this chapter, a medical marijuana home occupation as defined in Chapter 55 (Zoning) is not considered to be a medical marijuana cultivation facility.
(c) Medical marijuana dispensary means one or more caregivers operating at a fixed location, in compliance with the Michigan Medical Marijuana Act, for the purpose of transferring marijuana at that location to one or more persons whose medical use of marijuana is protected under the Michigan Medical Marijuana Act. For purposes of this chapter, a medical marijuana home occupation as defined in Chapter 55 (Zoning) is not considered to be a medical marijuana dispensary.
…
(f) MDCH means the Michigan Department of Community Health.

Outcome: The council unanimously voted to amend the definitions.

MML Amendments: Privacy – Getting Information on Past Criminal History

As part of the application form requirements, an amendment inserted additional language so that applicants would need to provide a statement about criminal backgrounds of people named on the application. City attorney Stephen Postema explained that such a requirement is appropriate in light of the state’s ruling that the LEIN (Law Enforcement Information Network) cannot be used for background checks for medical marijuana issues.

(2) An application for a new annual license or the renewal of an existing license for a cultivation facility or dispensary, shall be submitted to the City Clerk on a form provided by the City, which shall fulfill all of the requirements indicated on the form, including but not limited to:
…
(f) A statement with respect to each person named on the application whether the person has:
(i) Ever been convicted of a felony involving controlled substances as defined under the Michigan public health code, MCL 333.1101, et seq, the federal law, or the law of any other state and, if so, the date of the conviction and the law under which the person was convicted;
(ii) Ever been convicted of any other type of felony under the law of Michigan, the United States, or another state, and, if so, the date of the conviction and the law under which the person was convicted.

If a criminal background check can’t be done through LEIN, Marcia Higgins (Ward 4) wanted to know what it would cost using some other method. Assistant city attorney Kristen Larcom thought it might cost around $15, but she was not sure. Not being able to use LEIN, said Larcom, had the disadvantage of not automatically getting information from states other than Michigan. Sabra Briere (Ward 1) clarified that the cost of doing a criminal background check would be covered as a part of the application fee.

Outcome: The council unanimously approved the inclusion of a statement on criminal history in the application.

MML: Amendments – Application versus License Requirements Part 1

A set of changes that were intended in part to separate the application requirement from the requirements on awarding a licenses, read, in amended form, as follows:

(2) An application for a new annual license or the renewal of an existing license for a cultivation facility or dispensary, shall be submitted to the City Clerk on a form provided by the City, which shall fulfill all of the requirements indicated on the form, including but not limited to:
…
(h) Payment of a non-refundable application fee, which shall be determined by resolution of the City Council.

Additional amendments that were a part of license requirements were initially included in a motion, then withdrawn after discussion, leaving just the payment of the application fee.

Outcome: The council unanimously approved the payment of the application fee as a part of the application requirements.

MML: Amendments – Application versus License Requirements Part 2

Sabra Briere (Ward 1) then focused the council’s attention just on the set of amendments for licensing requirements. In their approved form, they read as follows:

(3) License Requirements. A new license shall not be issued to a dispensary or cultivation facility until the applicant for the license complies with all of the following requirements:
(a) The applicant has submitted a complete application and the application fee.
(b) The proposed dispensary or cultivation facility is located in a zoning district that permits its operation.
(c) The applicant has a valid and current certificate of occupancy.
(d) The applicant has installed a sign containing the following statement:
THE MICHIGAN MEDICAL MARIHUANA ACT ACKNOWLEDGES THAT “ALTHOUGH FEDERAL LAW CURRENTLY PROHIBITS ANY USE OF MARIHUANA EXCEPT UNDER VERY LIMITED CIRCUMSTANCES, STATES ARE NOT REQUIRED TO ENFORCE FEDERAL LAW OR PROSECUTE PEOPLE FOR ENGAGING IN ACTIVITIES PROHIBITED BY FEDERAL LAW. THE LAWS OF ALASKA, CALIFORNIA, COLORADO, HAWAII, MAINE, MONTANA, NEVADA, NEW MEXICO, OREGON, VERMONT, RHODE ISLAND, AND WASHINGTON DO NOT PENALIZE THE MEDICAL USE AND CULTIVATION OF MARIHUANA. MICHIGAN JOINS IN THIS EFFORT FOR THE HEALTH AND WEALTH OF ITS CITIZENS.” SEE, MCL 333.26422(c). IF YOU HAVE ANY QUESTIONS OR CONCERNS PLEASE CONSULT WITH YOUR ATTORNEY.
(e) The applicant has installed the following security measures on the premises: …

Christopher Taylor (Ward 3) wanted to make sure that the language is sufficiently clear to guard against the idea that there’s any kind of a “right” to a license if all conditions are met. City attorney Stephen Postema said he’d need to think about it further. Taylor was interested specifically in the case where there were no licenses available for issuance. Stephen Kunselman (Ward 3) wanted some clarification about how the licensing board would be doing a review that is annual. Tony Derezinski (Ward 2) suggested that there would be “comparative review,” where there are a limited number of licenses and the relative merits of applicants would have to be evaluated. Derezinski went on to say that the medical marijuana licenses would be very valuable.

Left to right: Councilmembers Carsten Hohnke (Ward 5), Stephen Kunselman (Ward 3), Sandi Smith (Ward 1).

Marcia Higgins (Ward 4) was concerned that an applicant could invest a lot of money in obtaining a certificate of occupancy – why would they do that unless they’d obtained a license?

The original amendment that Briere introduced, supported by Sandi Smith (Ward 1), included an option that did not require the posting of a sign: “The applicant must install a sign, or provide the city with a written plan of an alternate means by which patients, each time they visit the business will be provided with the following written statement…”

The original amendment included requirements on lettering, both for the signage and for the individually-issued written statements: ” … sign must have letters no smaller than one inch high and be installed in a location visible to all persons who enter the premises. If the applicant elects to provide the statement to patients individually in writing, then that statement must be in capital letters in bold type no smaller than 14pt font.”

Stephen Rapundalo (Ward 2) wanted to know what the rationale was for the alternative to a sign. Smith said that a sign could become invisible, after walking past it several times. Having something in your hand would be more effective. Rapundalo was concerned about the ability to enforce compliance – a sign is very easy to check for compliance. If a dispensary thinks it can get away without displaying a sign, then they wouldn’t display one, he said.

Smith said she would eventually be suggesting that an additional piece of paper be given to every visitor – with educational information about substance abuse – and her vision was to use the same mechanism to convey the information on the sign. Carsten Hohnke (Ward 5) said he felt it was relatively innocuous to require posting a sign as a means of compliance.

Taylor proposed amending out the alternative to posting the sign. Councilmembers voted to eliminate the alternative, over dissent from Smith and Briere.

Kunselman questioned whether certificates of occupancy could be issued to applicants – they could only be issued to facilities, he contended. Postema allowed that there had been a lot of people “messing around” with the language and that he would look into that specific issue.

Outcome: The council voted unanimously to amend the license requirements without the alternatives to posting signs.

MML: Amendments – Insurance and License Fees

An amendment to the license requirements added requirements on proof of insurance. As approved, the amended portion reads:

(3) License Requirements. A new license shall not be issued to a dispensary or cultivation facility until the applicant for the license complies with all of the following requirements:
…
(g) The applicant provides the City with a certificate signed by a qualified agent of an insurance company evidencing the existence of valid and effective policies of the following types of insurance, as well as a copy of an endorsement placed on each policy requiring ten days’ notice by mail to the City before the insurer may cancel the policy for any reason:
(i) Workers’ compensation insurance in accordance with Michigan statutory limits and Employers Liability Insurance with a minimum limit of $100,000 each accident for any employee.
(ii) Public liability and personal injury insurance with minimum limits of $500,000.00 for each occurrence as respect to bodily injury liability or property damage liability, or both combined. Documentation must explicitly state the following:
(a) the policy number;
(b) name of insurance company;
(c) name and address of the agent or authorized representative;
(d) name and address of the insured;
(e) location of coverage;
(f) policy expiration dates; and
(g) specific coverage amounts.
An original certificate of insurance may be provided as an initial indication of the required insurance. Applicant shall be required to continue without interruption during the term of the license the above named insurance coverages. If any of the above coverages expire by their terms during the term of a license, the Applicant shall deliver proof of renewal and/or new policies to the Administering Service Area/Unit at least ten days prior to the expiration date. Insurance companies, named insureds and policy forms shall be subject to the approval of the City Attorney, within five business days. Insurance policies shall not contain endorsements or policy conditions which reduce coverage required under the terms of the license.
(h) The applicant has paid the non-renewable license fee, as determined by resolution of the City Council.

The timeframe for the city attorney to approve issuance forms was inserted at the request of Marcia Higgins (Ward 4).

In the original amendment by Sabra Briere (Ward 1), there was an additional alternative for the license fee: “In the fee resolution, Council may establish a two-tiered license fee such that there is a lesser license fee for a business that makes a specific donation to a non-profit educational organization, which is listed in the resolution and the purpose of which is to educate and address drug abuse issues or to provide education as to best practices for ensuring to the extent possible that the medical marijuana cultivated for and provided to patients is safe and not harmful to their health.”

Christopher Taylor (Ward 3) asked about the material costs in processing applications, and city attorney Stephen Postema confirmed that they would likely exceed four figures. Sandi Smith (Ward 1), who’d supported the inclusion of a nonprofit donation provision, explained that it was prompted by a conversation with someone working at the state level in Colorado, who’d advised that once marijuana is more readily available – as it now is in that state – it can lead to substance abuse problems. Both Taylor and Stephen Rapundalo (Ward 2) felt that the city already has a systematic way of determining which nonprofits it allocates money to. [Rapundalo is one of the architects of the scoring metric for that system.] The council amended out the alternative, over the dissent of Smith.

Outcome: The council voted to amend the license requirements to include the insurance provisions, but not for the fee structure to include nonprofit donations.

MML Amendments: Licensing Issuance

After some wording changes to make clear that a license would be issued only if a license is available, the condition on issuance of a license was amended as follows:

6:418. Issuance of License. The city administrator or designee shall issue a license for a cultivation facility or dispensary to the applicant if a license is available for issuance and if all requirements of this Chapter have been met. …

Marcia Higgins (Ward 4) wanted to clarify that the city administrator is also empowered to deny a license if conditions had changed since the application had been received by the city.

Outcome: The council unanimously approved the amendment to the license issuance language.

MML Amendments: Safety/Privacy – Contact Information about Product

In order to address the concern that a patient needs to have some way of getting in touch with someone about the product they’d been provided, as well as have access to information about substance abuse, an amendment was proposed to include contact information on the required labeling:

(4) All marijuana delivered to a patient shall be packaged and labeled as provided in this chapter. The label shall include:
…
(f) The name, address, e-mail address, and telephone number of an authorized person who a patient can contact with any questions regarding the product.
(g) The name, address, e-mail address, and telephone number of at least one organization who may be contacted by a patient who has concerns about substance abuse of drugs, including marijuana.

Outcome: Without discussion, the council unanimously voted to amend the required labeling to include contact information.

MML Amendments: Safety/Privacy – Product Sourcing Records

After a lengthy discussion, the council elected to leave intact a requirement on dispensaries’ record-keeping:

6:419. Conduct of Business at Cultivation Facility or Dispensary.
(9) A cultivation facility or dispensary shall keep records of the persons from whom they received marijuana in any form, and shall make the records available to the City for review upon request.

One of the proposed amendments read aloud by Sabra Briere (Ward 1) [developed by Sandi Smith (Ward 1)], but ultimately not approved, was as follows: “A cultivation facility or dispensary shall keep records for each delivery of marijuana in any form to the cultivation facility or the dispensary of the following: the registry number on the caregiver identification card that the MDCH issued to the caregiver who is delivering the marijuana, the registry number on the caregiver identification card that the MDCH issued to the patient who accepted delivery, the type and volume of the product and the date of the delivery. These records shall be made available to the City for review upon request.” [A different alternative, which was not moved for consideration by the council, eliminated reference to the registry numbers and required the dispensary to create a unique identification system.]

Smith did not want the language included that would require a dispensary to make records available to the city upon request. She simply wanted a patient to have some way of tracing the origin of problematic marijuana through the dispensary. She floated the idea of requiring that a request for records be triggered by some identified public health risk.

Mayor John Hieftje was worried that such an approach wouldn’t provide any oversight, in the event that there was a public health issue. Stephen Kunselman (Ward 3) noted that the city of Ann Arbor does not have a health department and thus he did not feel that the city had any expertise to trace the product and to determine if a patient was sickened by a particular product.

The discussion turned to what entity should take action in response to any kind of public health problem suspected to be due, say, to tainted product. Tony Derezinski (Ward 2) pointed to the licensing board as a possibility – it should be up to that board to request the information. Stephen Rapundalo (Ward 2) floated the idea that it should be state or county health officials.

The conversation by the council on this point was lengthy. But the perspective that seemed to be persuasive to many councilmembers was the idea that before tasking public health officials with a responsibility to try to track down tainted product, it would be important to check with relevant agencies to see if they’re willing and able to take on such a task, including the Michigan Dept. of Public Health.

Outcome: The council voted unanimously against the amendment, leaving 6:419 (9) intact.

MML Final Outcome

If the city council votes on an ordinance at a first reading, but then subsequently amends it, sometimes the change is substantial enough that it must be voted again as a first reading before proceeding to its public hearing and second reading.

Mayor John Hieftje.

So midway through the deliberations, Mayor John Hieftje asked city attorney Stephen Postema if any of the changes that had been identified as possibly needing to be reworked would necessitate a return to first reading – if the council were to vote on the entire ordinance that night and to make amendments along the lines they’d discussed. At that point, Postema felt that none of the changes he foresaw would be substantive.

However, after discussion of 6:419 (9) Postema was more hesitant, when queried by Christopher Taylor (Ward 3). Postema said it’d be a “close call.” Taylor was inclined to give the ordinance its first vote, even if it meant that the council eventually had to give it an additional first vote. Sandi Smith (Ward 1) had an idea of a revision to 6:419 (9) that would be different from the current version and moved for a postponement on those grounds. Marcia Higgins (Ward 4) was keen to have a clean version available before giving the ordinance its first vote.

Hieftje said he didn’t have a problem delaying again, and said no one should be saying that the council couldn’t get its work done. They were simply taking a great deal of care, he said.

Outcome: The council voted to postpone consideration of the medical marijuana licensing ordinance until its March 21, 2011 meeting.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Carsten Hohnke.

Next council meeting: Monday, March 21, 2011 at 7 p.m. in the Washtenaw County administration building, 220 N. Main St. [confirm date]

The vote that was postponed is the first of two votes the council must take on any new ordinance it enacts. At its meetings over the last few months, the council has heard extensive public commentary on medical marijuana, but that commentary does not constitute a formal public hearing, which will be held at the same meeting when the council votes on final approval of the licensing, provided it eventually gives initial approval to the licensing system.

At its Oct. 18, 2010 meeting, the  council gave its initial approval to a set of zoning regulations for medical marijuana businesses, but it has not yet given its final approval to those regulations. The council’s strategy is to bring licensing and zoning forward at the same time for a final vote.

The context for development of zoning regulations was set at the council’s Aug. 5, 2010 meeting, when councilmembers voted to impose a moratorium on the use of property in the city for medical marijuana dispensaries or cultivation facilities. Subsequently, the city attorney’s office also began working on a licensing system, which the council first considered at its Jan. 3, 2010 meeting.

At its Jan. 3 meeting, the council heavily amended the licensing proposal. Among the key amendments made at that meeting was one that stripped “home occupation” businesses out of the proposal. At the Jan. 3 meeting, the council also increased the cap on the total number of licenses available to 20 for dispensaries and 10 for cultivation facilities. Another major amendment made on Jan. 3 was the creation of a board to govern the issuance of licenses. However, the council delayed voting on the first reading of the proposal. [.pdf of licensing ordinance language at the start of the Feb. 7, 2011 meeting]

At its Jan. 18 meeting, the council was poised to undertake further amendments to the licensing proposal, including many that concerned limiting the amount of information that is required to be divulged by those associated with license applications. However, the council did not amend the proposal further at that meeting.

The moratorium on additional facilities in the city to be used as medical marijuana dispensaries and cultivation facilities was extended by the council at its Jan. 18 meeting to go  through March 31, 2011.

This brief was filed from the boardroom in the Washtenaw County administration building, where the council is meeting due to renovations in the city hall building. A more detailed report will follow: [link]