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Lansing — Four medical marijuana businesses on Thursday became the first in Michigan to receive operating licenses from a state licensing board.

The approved businesses include a provisioning center and processor in Ann Arbor; a Chesaning business, which received four separate grow licenses; and a transporter in Lansing. The state’s Medical Marihuana Licensing Board denied a license to a provisioning center in Adrian and tabled an application from a provisioning center in Morenci.

Ann Arbor provisioning center CannArbor and processor Arbor Kitchen were among the facilities granted an operating license. Being among the first medical marijuana businesses to receive licenses is an honor, owner James Daly said, and "not a responsibility we take lightly." 

“We look forward to continued work with LARA to ensure a safe and efficient transition to Michigan’s new medical marijuana market," Daly said about the Department of Licensing and Regulatory Affairs. 

VB Chesaning will be able to cultivate up to 6,000 plants with the four growth licenses it received Thursday, Chief Operating Officer Jason Pasko said. He expects the company will apply for more licenses in the near future.

“This will very quickly become a commercial market and we’re prepared to be part of that,” Pasko said.

The businesses approved for the state operating licenses still have a couple of hurdles to clear, said Bureau of Medical Marijuana Regulation Director Andrew Brisbo.

To obtain their state licenses, businesses must pay a regulatory assessment of $48,000, and provisioning centers must have all of their products tested by a state-approved testing facility before selling them. The trouble is, the board has yet to approve an operating license for a testing facility.

Brisbo expects testing facilities will be up for operating licenses on the August meeting agenda, which is expected to be “the biggest yet.”

Until then, the state is trying to help facilities think through how they’ll make the transition from unlicensed to licensed.

“There is going to be a period of time where they’re going to need to go through that testing process and entering all of that information into the statewide monitoring system,” Brisbo said. “That’s going to be very hard to get done in the space of a single day so I think they should expect that there may be some disruption.”

Once the facilities are in operation, they’ll have to renew their licenses annually and be subject to inspections at least twice a year by the state and the Bureau of Fire Services, he said.

Not including those seeking operating licenses, the board also approved applications for 15 of 19 businesses that sought pre-qualification Thursday. 

The board cited applicants’ non-disclosure of criminal or arrest histories and apparent involvement in recreational marijuana sales when it denied the applications.

“We are approving medical marijuana applications, not recreational,” board Chairman Rick Johnson said.

License applicants who operated existing business and submitted applications before Feb. 15 have until Sept. 15 to obtain a license without risking their ability to obtain a license by continuing to operate without one.

Of the roughly 215 operating businesses that met the Feb. 15 application deadline, less than 40 percent have submitted their step two application, Brisbo said.

“We don’t even have an opportunity to review them and do a site inspection and present them to the board if they haven’t done that,” he said. “We will not get to all of them.”

The 10-stage application process that the medical marijuana entrepreneurs have undertaken includes a $6,000 application fee, a review by a contract investigation firm and an intelligence work-up by the state police.

The bureau is reviewing and processing hundreds of lengthy applications under the 2016 law to ensure they meet benchmarks, including high “moral character, integrity and reputation.”

The board’s Thursday approvals marked a moment in which “the new-born licensed medical marijuana industry learned to crawl,” said Rick Thompson, founder of Michigan Cannabis Business Development Group.

But the industry is still not where it should be, Thompson said, as businesses work to complete the application process before the September deadline.

“Today was historic, but it illustrates how far we have yet to go as much as it represents how far we have come in the process,” he said in a statement.

The operating licenses approved Thursday are the first in Michigan, but the state, to date, has approved 40 out of nearly 594 pre-qualification applications filed since December. The board has denied 14. Businesses also must pass a facility inspection to get licenses.

Of the nine denials issued prior to Thursday’s meeting, applicants have filed appeals on seven, Brisbo said.

eleblanc@detroitnews.com

(517) 371-3661

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