Council Will Not Allow Marijuana Sales for Foreseeable Future

Monday, August 27, 2018, 7:56 am
By: 
Dan Totzkay

Above: The Greenwave medical marijuana dispensary in Lansing.

Two members of City Council have effectively decided not to allow the sale of medical marijuana in East Lansing for the foreseeable future.

At a meeting last Tuesday, August 21, Council Members Shanna Draheim and Aaron Stephens made clear they believe now is time to move forward in East Lansing with permitting the establishment of dispensaries within strict geographical limits and with a case-by-case approval process. They argued that acting now might allow the City greater control than attempting legislation after possible statewide changes in marijuana regulation.

But Council Members Erik Altmann and Ruth Beier disagree that allowing the sale of medical marijuana would be good for East Lansing at this time. Their concerns result from the City of Lansing facing complex and expensive legal issues after relicensing of provisioning centers, and concerns about odor and security as expressed by residents and by the Downtown Development Authority (DDA).

A majority of Council would be needed to move the matter forward, and it seems likely Mayor Mark Meadows will side with Altmann and Beier, as he generally does. (Meadows is currently away on vacation, with Altmann filling in on the mayoral role.) Therefore, it appears the possible legalization of medical marijuana sales in East Lansing is dead for the foreseeable future.

Legalizing provisioning centers:

The basis for discussion last week was draft Ordinance 1416a, a proposed East Lansing law that would designate allowable locations for medical marijuana provisioning centers (more commonly known as “dispensaries”). This discussion came after almost a year of deliberation over the marijuana industry’s presence in East Lansing and in advance of a statewide November vote on legalization of recreational marijuana. As ELi has reported, East Lansing's Planning Commission most recently supported provisioning centers in East Lansing.

Tim Dempsey, Director of East Lansing Planning, Building & Development, delivered City staff recommendations at last Tuesday's meeting. The first, which was effectively adopted by Beier and Altmann, was to hold off decision-making until after November when Michigan voters will decide whether recreational marijuana will be legalized.

A memo to Council from Dempsey and City Manager George Lahanas suggested a delay because the statewide legalization of recreational marijuana is “likely to drastically alter the marihuana market in yet unforeseen ways.” (Note: governments in Michigan often spell marijuana with an “h.”) The memo also states that the impacts of provisioning centers are relatively unknown and that allowing for additional time to observe their effects on other Michigan communities is warranted.

Dempsey also delivered zoning recommendations, in case Council were to proceed with Ordinance 1416a. These recommendations sought to prioritize the avoidance of proximity to residential areas, compatibility with commercial zones, input from the community, and rules about drug-free school zones.

Dempsey said this left, in effect, four possible sites for provisioning centers, shown with ELi’s addition of red arrows on the City’s voting precinct map below.

The first is the former Pontiac dealership on the south side of Michigan Avenue, just east of the Lansing-East Lansing border. The second is at the intersection of Grand River Avenue and Saginaw Highway, just west of Coolidge Road. The third area is the commercial area at the northwest corner of Lake Lansing road and Coolidge Road, near the Kroger and Burger King. The last potential site is near Costco at Merritt Road and Park Lake Road. These were chosen for being relatively isolated commercial zones, away from residential areas and avoiding the downtown area.

Concerns from City Center Condo owners:

During the public comment period at last week’s meeting, Steve Angelotti spoke on behalf of four members of the East Lansing City Center Condominium Association Board of Directors. These owner-occupied condo apartments, built about 16 years ago, occupy on the second through fourth floors above the building that also houses CVS Pharmacy and Omi Sushi.

On the main corner of that building is a former Cosi Restaurant, a retail location which ELi has reported is of interest to a marijuana provisioning company.

Angelotti voiced the four condo board members’ opposition to locating a provisioning center at the vacant Cosi location. A letter presented by Angelotti cited security concerns and advocated for disallowing any provisioning center in a building also containing residences. Angelotti told Council that the presence of such a business would decrease property value for residential condominium owners.

When asked for clarification by Altmann whether odor from the provisioning center was a concern, Angelotti said that the main concern was security. Citing experience from when Cosi was located at this site, Angelotti did explain that the spaces were closely connected in terms of ventilation, and that odor could therefore be an issue.

The odor associated with the sale of marijuana was discussed further, though only by Altmann and Beier on Council. East Lansing Planning and Zoning Administrator David Haywood clarified that the ordinance had presently only concerned the odor from cultivation and processing, reading that “no marijuana shall be cultivated, grown, manufactured, or processed that is reasonably discernable to another person in the building.” However, it was asked that language be added to include odor restrictions on locations managing the sale of marijuana.

Disagreement over whether there is an issue with access:

Also speaking during public comment was George Brookover, an attorney representing Windsor Township OG LLC, a party interested in applying for a provisioning center license in East Lansing. Brookover stressed that locating provisioning centers downtown is critical to increasing the number of people coming downtown and serving the aging population the City is trying to attract to live downtown.

But Dempsey addressed the “lack of access” argument by using an example of purchasing materials from Home Depot. Noting there is not a Home Depot in East Lansing, he said he still has access to one in Okemos or Lansing that he can drive to and use. Dempsey suggested East Lansing residents can just drive into Lansing to purchase medical marijuana.

This, however, was countered by Draheim who noted that many elderly residents may have lost the ability to drive due to medical conditions and would not be able to access medical marijuana unless it was conveniently located, especially due to the local lack of “robust public transit.” Echoing Brookover, Draheim stressed that access in this regard will continue to be an issue as downtown developments are pushed to market to residents aged 55 years and older.

Below: Rendering of the senior rental apartments to be constructed on Albert Avenue, above the new parking garage, as part of the Center City District project.

Draheim noted her own mother does not drive and lives in a senior facility that has a provisioning center on site. She stressed that she does not want to see too many provisioning centers in East Lansing, at least until they can be observed in action. But she thought it was time to move forward under the zoning-limiting and Special Use Permit system, which would give Council a lot of control over location of provisioning centers.

Beier expressed a lack of concern over accessibility, saying “I don’t think the arguments for medical marijuana have anything to do with East Lansing residents being able to access medical marijuana.” Beier did say she saw support for supporting formation of small businesses that have high revenue potential, stating “I’m a capitalist.”

That said, Beier was concerned about having too many provisioning centers and the potential of the marijuana business to push out other businesses by causing retail-space rents to rise.

Regulatory uncertainty and concerns about security:

Noting regulatory confusion that ensued after medical marijuana was legalized in 2008, Altmann expressed reluctance to invest in a model that will likely be changing and cause problems, stating “I can’t imagine why we would want to step into a regulatory framework that is in flux.” This is especially the case, he noted, with the upcoming ballot initiative in November and, potentially, some action at the Federal level. He also pointed to the potential for disarray and lawsuits in East Lansing.

Altmann additionally noted that the excise tax, by which the State will receive 3% of medical marijuana sales and to some extent will share with participating municipalities, would not come to very much money for East Lansing. Saying he would be happy to be wrong, Altmann added that did not believe it would cover increased security costs pushed on to East Lansing.

ELi previously reported that ELPD chiefs have reviewed studies of crimes associated with medical marijuana retail sales and have found that crime hasn’t risen significantly after approval of regulated sale in other jurisdictions. At last Tuesday’s meeting, Council did not call on ELPD to weigh in.

Below: City Council on August 21, 2018, from left, Shanna Draheim, Erik Altmann, Ruth Beier, and Aaron Stephens.

Ultimately, Altmann expects litigation in response to any enforcement, saying “I don’t want to be involved with an industry that seems to cause a lot of problems and sue people.”

He went on to say he thinks “prohibition is insane,” but he does not support the present regulatory scheme. That, in addition to not knowing how the State will “change rules on us,” led Altmann to advocate for pushing off a decision, saying “The nature of this discussion, the hypotheticals, just tells me that we have no idea what we’re working with.”

Now, later, or not at all?

Draheim, however, contested Altmann’s opinion by stating that many activities City addresses I involve uncertainty and unknowns, like investing in renewable energy and environmental protections. Draheim stated that it was precisely the fact that things are uncertain regarding State-level policy that Council should move now to make a decision that could be grandfathered-in to whatever framework is accepted.

Stephens also pushed to make a decision regarding the ordinance at Tuesday’s meeting, stressing the importance of doing so prior to November. His main argument for doing so was being prepared for when the state policy is rolled out, in order to have some level of local control over how issues regarding odor and community input are considered.

Stephens also stressed that procedures involved with the issuing of Special Use Permits, which would be required for provisioning centers, would give Council considerable latitude in addressing any number of potential concerns on a more case-by-case basis. He believes this, along with efforts for implementing a “community benefits model” – which involves donations from provisioning centers to a community foundation designated by the City – merit the allowance of provisioning centers in East Lansing. Altmann, however, expressed skepticism regarding the effectiveness of such a model.

Asking East Lansing voters to override Council:

Also speaking in favor of the ordinance during public comment was local attorney and marijuana advocate Jeff Hank. Hank urged Council to “get things moving,” but to favor local, East Lansing-based companies seeking to run provisioning centers before giving permits to larger, out-of-town companies or larger developers.

In 2015, East Lansing voters voted to approve a Charter Amendment decriminalizing possessing or transporting less than one ounce of marijuana for recreational purposes for those over 21 years of age. However, ELPD can still arrest and prosecute the possession of marijuana in any quantity, as this is still illegal under State and federal law. (Read more about local law.)

In his public comments last Tuesday, Hank announced he had ballot proposals ready to take to East Lansing voters if Council did not take action to move provisioning centers forward.

When reached for comment after the meeting, Hank told ELi that Council continues to use the “same discredited arguments against safe access” as were made by previous Councils.

Hank continued, “The city doesn't have any fair process in mind, and with the need for jobs and revenue in town, this delay harms the city. One or two petitions to take the issue to voters are in the works as a result. EL residents support safe access, and I think they'd be angry if they knew how the system was being gamed in an exclusionary way to the detriment of both patients and fair play for entrepreneurs.”

 

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