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Aug
01
posted on August 01, 2017

Brief on Medical Marihuana Facilities Licensing Act 

Background

In November of 2008, voters in the State of Michigan approved the medical use of marihuana, along with the cultivation and growing of medical marihuana through a registry program for patients and caregivers. This law has allowed for many individuals to grow their own marihuana, in addition to growing marihuana for other patients throughout the state. Regulations for cultivating and growing marihuana are specified in the law passed in 2008 and, for the most part are lax, as long as local regulations are followed.

Since that time, there has been interest from many organizations and politicians on how to improve the law that was passed by voters in 2008. This interest resulted in the Medical Marihuana Facilities Licensing Act, which was passed by the state legislature in December of 2016 and signed into law by the governor shortly after. The intent of the Medical Marihuana Facilities Licensing Act is to regulate the cultivation of medical marihuana, along with the selling of such. The Medical Marihuana Facilities Licensing Act creates a tiered system of regulation based upon the different roles in the medical marihuana growing and selling process. The Medical Marihuana Facilities Licensing Act (passed in 2016) does not do away with the law from 2008. Patients and caregivers are still allowed to cultivate and grow marihuana under the 2008 law.

About six (6) months after the passage of the Medical Marihuana Facilities Licensing Act, the City of Morenci received two (2) offers from prospective companies looking to purchase property in the Skyline Industrial Park to build industrial facilities to grow medical marihuana. These two (2) companies plan to build a new building and hire individuals to work in the facilities. Further information on job creation and proposed investment is in a chart below from the two (2) companies.

Medical Marihuana Tiered System

As mentioned prior, the Medical Marihuana Facilities Licensing Act allows for a tiered system for the growing and selling of medical marihuana. Below is information on the tiers of the system:

Grower – These businesses grow, cultivate, dry, trim, and / or package marihuana for sale to a processor or provisioning center.

Processor – These businesses purchase marihuana from a grower to create marihuana-infused products for sale to a provisioning center.

Provisioning Center – These businesses purchase marihuana from a grower or processor to sell, supply, or provide marihuana to patients.

Secure Transporters – These businesses store and transport marihuana between facilities for a fee.

Safety Compliance Facilities – These businesses test marihuana for contaminants and other substances to ensure its safety.

 

Businesses can mix the different types of tiers to create a business that encompasses more than one (1) of the tiers. A municipality has the power to decide if any of the tier businesses are allowed. If a municipality allows for the tiers, then the appropriate regulatory ordinances and zoning ordinances will be required to be approved by the municipality. Additional information on the Medical Marihuana Licensing Act can be found via the Michigan State University (MSU) Extension Office by going to: http://msue.anr.msu.edu/topic/planning/zoning/medical_marihuana_facilities_licensing_act.

Offers for Skyline Industrial Park for Medical Marihuana Uses

In June of 2017, the City of Morenci received two (2) offers for the purchase of land in the Skyline Industrial Park for medical marihuana growing operations. The offers are from KLZ Enterprises, and Green Labs, L.L.C. The offers are detailed below:

Company

Type of Business

Land Requested

Job Creation

Total Estimated Building Investment

KLZ Enterprise

Commercial grow / processing facility

5 acres

10 to 12 jobs ranging from $14.00 to $15.00 an hour

Have not stated

Green Labs, L.L.C

Commercial grow / processing facility

25 acres

25 to 30 jobs ranging from $15.00 to $20.00 an hour

$700,000.00


It is likely that if the City of Morenci allows for the proper regulations and zoning for medical marihuana growing operations that additional offers for land for such use will be realized.

Revenue Impact to Municipalities

The Michigan Municipal League (MML) has stated that with any prospective medical marihuana business that municipalities should expect revenue from the three (3) different sources. The sources of revenue to a municipality are:

·       Annual administrative fee – A municipality can annually receive up to $5,000.00 per license under legislation. This is an administrative fee that a community can receive for the licensing process of a medical marihuana facility.

·       Property tax revenue – A municipality would receive property tax revenue for a business such as this. This revenue would not only be for the municipality, but would also be for all other agencies that have the power to receive funding through taxes for that jurisdiction.

·       State shared revenues – A municipality that allows for medical marihuana facilities will be able to take part in receiving revenue from a state sales tax of three (3) percent that will be assessed on the gross retail receipts of medical marihuana. 25 percent of the revenue generated through that tax would then be allocated back to municipalities that allow for medical marihuana facilities. Municipalities that do not allow for medical marihuana facilities will not receive any of this revenue.

Municipalities also benefit from these types of facilities through utility charges. These facilities will be users of sewer and water systems in communities. Communities are able to charge for those types of services.

Input Asked

The Morenci City Council appointed a committee called the “Exploratory Committee of Concerned Citizens to Protect the Rights of Patients and Non-Patients of Medical Marihuana” in 2016. The intent of the committee was to address issues that the community faced pertaining to the 2008 voter approved medical marihuana law. The committee came up with language that protected those individuals who have a legal right to grow under the act, while also protecting property owners in the vicinity of those who grow by making it an ordinance violation for growers if they emit noise, smells, and / or other environmental issues with growing.

The committee is now looking for your input on if, after considering the background of the Medical Marihuana Facilities Licensing Act, the committee should recommend that the Morenci City Council should allow for such uses within the City of Morenci. The committee asks that you fill out the enclosed survey and return it to the City of Morenci Offices by August 14, 2017. You may also access the survey by clicking here.