Start-up cost mandate plan riles medical pot advocates

Michael Gerstein

Lansing — Michigan’s Department of Licensing and Regulatory Affairs set off a controversy Tuesday by recommending the state require a medical marijuana dispensary to have $300,000 in capital to start, while growers would need $150,000 to $500,000 depending on the size of their operation.

The proposal to the five-member medical marijuana licensing board sparked immediate opposition from the crowd gathered for the meeting.

Two board members, Vivian Pickard and David Lamontaine, also said they were concerned that the high capital requirements would stop small businesses from entering the industry, which would help drive up the cost to consumers.

Pickard said she is “very concerned as to whether these numbers will send the state back into a black market.”

Lamontaine, a nominee of Republican House Speaker Tom Leonard of Dewitt, said he was similarly worried about the proposed liquid asset requirements, although a top state medical marijuana regulator, Andrew Brisbo, said the specific numbers are flexible.

“This seems to me to be predatory and protectionist to a certain extent,” Lamontaine said. “Our system is rigged against the little guy for the big guy. Some of this stuff to me is un-American.”

Board chairman Rick Johnson, a nominee of GOP Senate Majority Leader Arlan Meekhof of West Olive, said the board may vote on the proposal as soon as Nov. 28. He did not disclose his personal view on the proposed rule.

“You know that’s a tough decision, that’s a tough number to come up with,” Johnson said.

Johnson said he’s striving for “the best of both worlds” while not making medical marijuana too expensive for patients. He said he respects Pickard’s view and “that’s not something anybody on this board wants.”

“I don’t want black market at all. Nobody does,” Johnson said.

But handfuls of people lined up during the public comment period to decry the proposed asset requirement as a major barrier to getting into the market.

Chad Morrow, 38, criticized the proposed rule based on his experience operating a Gaylord dispensary called Cloud 45 before it was raided by police. He said he now faces 11 felony charges.

Morrow said it cost him under $50,000 to start a dispensary there.

“It’s designed to keep just the few and the rich,” Morrow said about the proposal. “The minute you start saying not only can you have more than one license but you can have them at one location … right there you’re talking multiple millions of dollars that no small mom-and-popper has.”

The board also shared recommendations from five work groups outlining proposed regulations on many aspects of the medical marijuana business.

The proposed rules include THC limits, labeling requirements, safety and potency testing requirements and a suggested daily purchasing limit of 2.5 ounces. There also were proposed mandates for people shipping marijuana, such as 360-degree cameras around the vehicle and a locked barrier between the cargo and passengers.