Whitmer order to create marijuana agency, kill medical pot licensing board

Beth LeBlanc
The Detroit News
Gov. Gretchen Whitmer

Democratic Gov. Gretchen Whitmer issued an executive order Friday abolishing the politically appointed Medical Marihuana Licensing Board and creating an agency to oversee the regulation of both medical and recreational marijuana. 

Whitmer’s order, set to take effect April 30, would create the Marijuana Regulatory Agency within the Michigan Department of Licensing and Regulatory Affairs with oversight of laws related to medical and recreational marijuana “to more efficiently regulate” the products.

The order would abolish the Bureau of Marijuana Regulation, created in the wake of the legalization of recreational marijuana in November, and the Medical Marihuana Licensing Board, created under a 2016 law approved by the GOP-led Legislature.

"This executive order will eliminate inefficiencies that have made it difficult to meet the needs of Michigan’s medical marijuana patients,” Whitmer said in a Friday statement. “All elements of this agency have been designed to serve and better protect Michigan residents, and I’m eager to have a unified effort across state departments to make sure this process runs effectively and efficiently."

The Republican-led Legislature has 60 days to review the edict and consider whether it wants to reject the order as it did with an environmental executive order in the past month.

The new agency would be led by an executive director who would be required to submit annual financial disclosures, according to Whitmer's office. The agency will hold four public meetings a year to hear complaints and provide information to the public.

The director would be required to file a financial disclosure with the governor and refrain from taking a job with or financial interest in an applicant, licensee or marijuana establishment for four years after he or she leaves the executive director post. 

The order also delegates responsibilities related to the cultivation and sale of industrial hemp to the Department of Agriculture and Rural Development.

The executive order is the seventh of Whitmer’s tenure, including three emergency winter weather declarations. Republican lawmakers rejected her first environmental order because it would have eliminated rule and permit oversight panels they wrote into law, calling it an abuse of executive authority.

But Republicans appear unlikely to challenge Whitmer's latest order.

Senate Majority Leader Mike Shirkey supports the new marijuana licensing plan and "appreciates the governor's willingness to discuss the issue" before signing her executive order, said spokeswoman Amber McCann. Whitmer and Shirkey, R-Clarklake, had already discussed the order "at length," she said. 

House Speaker Lee Chatfield, R-Levering, said his caucus will review the order and listen to any thoughts on the provisions, according to spokesman Gideon D’Assandro. “The speaker appreciates that the governor reached out ahead of time and worked with the Legislature ahead of time and got them in the loop,” he said.

LARA’s former director Shelly Edgerton, who is now an attorney with the Dykema firm and a registered lobbyist, called Whitmer's order a “step in the right direction” as Michigan seeks to lead in the regulated marijuana industry.

“The volunteer board took on a monumental lift to get this program going, but in the short time frame the program has been running, we have not seen the expected volume of licensees entering the market,” Edgerton said Friday.

Attorney General Dana Nessel also supported the order, noting in a statement the efficiencies that would be realized under the umbrella of the Marijuana Regulatory Agency, “including faster processing of marijuana applications, and better serve medical marijuana patients and the developing industry.”

Whitmer's move questioned

Licensing board member Don Bailey, who has aggressively scrutinized medical marijuana applicants, said he credits the order to the undue pressures and influence of the marijuana lobby. He worried bringing the licensing process in-house will hurt public safety.

“There’s been such pressure applied by the marijuana lobby to rush to get some of these applications approved, there’s been a lack of investigation into what’s been going on behind the scenes, who’s really applying, are they bad actors or not,” said Bailey, a retired State Police sergeant who used to work in drug enforcement.

While the data collected in the process is voluminous, a thorough investigation of the data is lacking, he said. One application to the board included a photo of $100,000 in cash instead of a bank statement needed for a financial attestation, Bailey said.

“Data collection without data analysis is nothing, and that’s where we’re at,” he said.

Former state Rep. Mike Callton, a Nashville Republican who sponsored the 2016 medical marijuana law and now works as a cannabis consultant and lobbyist, encouraged the Legislature to scrutinize Whitmer’s executive order.

“I have not heard the governor’s reasoning, but I do know that this idea has been pushed by the worst elements in the industry,” he said, suggesting the push to eliminate the board was done by applicants who were denied licenses for legitimate reasons.

Callton noted that state regulators do extensive and time-consuming background checks on each applicant to keep the “riff raff” out of what is expected to become a thriving industry.

“If the goal is to speed things up, the bottle neck is not the board, so I’m not sure what this accomplishes,” the mid-Michigan former lawmaker said. “I’m not saying LARA is a problem. I’m just saying they got a lot of work to do.”

The five-member Medical Marihuana Licensing Board was appointed in the summer of 2017 and approved its first license in July 2018.  To date, the board has approved licenses for a total of 121 facilities, 105 of which have paid their licensing fees and are officially licensed.

The state has given repeated extensions, sometimes under court order, to allow currently operating medical marijuana shops to continue operations as they slogged through the licensing process.

The long application and review process has been delayed by some board members' quibbles over applicants’ decades-old infractions or the operation of provisioning centers while the 2008 law was still ambiguous as to how those facilities could operate.

Whitmer's order overturns at least part of the GOP-led Legislature's 2016 Medical Marihuana Facilities Licensing Act, which included provisions for the medical marijuana board. The act was signed into law by Republican former Gov. Rick Snyder. 

The five-member board, whose members are all appointed by the governor, can include no more than three members of the same political party. The board was given exclusive power to grant or deny state operating licenses “within a reasonable time” and “in reasonable order."

Cannabis group hails order

Josh Hovey, a spokesman for the Michigan Cannabis Industry Association, called the medical licensing board “an unnecessary layer of government that has been a hindrance to getting a successful legal, regulated market up and running.”

Whitmer’s executive order will create consistency between the medical and pending recreational licensing systems, Hovey said.

“The challenges and the delays in getting the medical marijuana system up and running have been numerous and have been primarily because of inconsistency from the board,” he said. “From the association standpoint, we believe the staff (at the Michigan Bureau of Marijuana Regulation) are very well equipped to do their job.”

The order removes “a giant pothole” in the medical marijuana highway, but more work is needed to improve cannabis access, said Rick Thompson, a longtime marijuana activist and publisher of Michigan Cannabis Industries Report.

“This merely resolves a symptom, not the underlying illness, paralyzing the (Medical Marihuana Facilities Licensing Act) program,” Thompson said. “That illness: over-regulation.”


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