What's the holdup with awarding medical marijuana licenses in Michigan?

LANSING – Medical marijuana license applications are voluminous beasts and are taking longer than expected to vet by state regulators, but Andrew Brisbo, director of the Bureau of Medical Marijuana Regulation, says he hopes the first licenses will be awarded within the next six weeks.

“We have started inspecting facilities,” Brisbo said, noting that most are provisioning centers that have been operating under emergency rules. “There are more of these than anything else.”

The challenge has been scouring the folders and boxes full of documents that are required for a single medical marijuana business. In one case, that fills an 8-foot long folding table.

For one of the applicants, which is a business entity that wants growing, processing and dispensary licenses, there are 39 people associated with the business, Brisbo said, all of whom have to provide financial records, criminal background information, even social media accounts.

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One of the people involved in one of the businesses has 18 personal and business banking accounts. Another individual provided 1,572 pages of tax records covering three years.

“And that’s just step one of the application,” Brisbo said. “Then we have the facility review piece.”

Complicating the licensing process is a looming June 15 deadline, by which more than 200 businesses — mostly dispensaries — that have been operating under emergency rules and are awaiting their license applications to be approved by the state are supposed to shut down.

While the state doesn’t plan on sending cease and desist letters or refer those businesses to law enforcement to shut down, the licensing board could deny the businesses a license merely because they decided to stay open.

And that deadline isn’t expected to change, Brisbo said, even though the pace of approving licenses has been slow.

The June 15 deadline “is in the rules and we’re focusing our attention on processing as many of the applications as possible,” he said. "We knew it was a complex process. The amount of information we’re requesting is vast and deep. And we didn't have an existing pool of experienced people who have done this work."

Complicating the pace of license approval is the relatively small number of communities — about 80 — that have approved ordinances that will allow medical marijuana businesses in their towns. Without local approval, businesses can’t get a state license.

Left in the lurch are businesses that have invested a considerable amount of money investing in land, buildings and equipment with the hopes of getting a state license.

“We’re talking a lot of money at stake. When you’re not operational, it doesn’t mean that the rent doesn’t come due,” said Alex Leonowicz, an attorney who heads up the cannabis practice at the Royal Oak law firm Howard & Howard. “Without revenue coming in, you’re putting commercial facilities in a tight squeeze.”

Michael Stein, a Bloomfield Hills attorney with cannabis clients, said he’s getting multiple calls a week from his clients, impatient with the state’s pace of reviewing their applications.

“The calls I get now are, ‘How do I get my application to the top of the pile?’ ” he said. “I have some clients calling me every other day and I just keep telling them they’ve got to be patient.”

The state has received 459 applications from businesses that don’t have approval yet from a local community and who want to get prequalified for a license. Another 175 applicants — 66 growers, 25 processors, 74 dispensaries, six transporters and four testing facilities — have submitted applications that include local approval.

The state is reviewing the applications on a first-come, first-served basis since they began accepting applications on Dec. 15. So far, the Medical Marijuana Licensing Board has given preliminary approval for nine medical marijuana businesses, but those businesses still need to get local approval before they can get a license.

Also hurting are medical marijuana patients, who have been relying on the dispensaries that are still operating in a kind of limbo until June 15. There are 283,832 medical marijuana card holders in Michigan as of Tuesday and 43,087 registered caregivers, who can grow up to a total of 72 plants for five patients.

“Everybody is concerned. What are patients going to do on June 15?” said Barton Morris, a Royal Oak attorney who represents cannabis clients.

The attorneys all said they have some empathy for the state, which has been tasked with setting up the regulatory and taxing framework for an entirely new and complicated industry.

"I'm not too frustrated yet," Leonowicz said. "They were up front that it was going to be about a four-month turnaround time."

The Michigan Medical Licensing Board will meet three times before the June 15 deadline, including at 9 a.m. Thursday in Lansing.

Contact Kathleen Gray: 313-223-4430, kgray99@freepress.com or on Twitter @michpoligal