CANNABIS IN­DUS­TRY BAT­TLES RED TAPE, STIGMA

Peo­ple hop­ing to start busi­nesses get an­swers

The Detroit News - - News - BY BRE­ANA NOBLE The Detroit News

Detroit — Con­fu­sion be­tween fed­eral and lo­cal laws, ob­tain­ing a state li­cense and over­com­ing a stigma against mar­i­juana are some of the chal­lenges Michi­gan’s up­start cannabis in­dus­try faces.

More than 50 peo­ple came to the Cobo Cen­ter on Thurs­day to get their le­gal ques­tions an­swered about start­ing in mar­i­juana cul­ti­va­tion, pro­cure­ment and re­tail. The sem­i­nar, the 10th held by Royal Oak’s Cannabis Le­gal Group and Colorado-based Vin­cente Seder­berg, two cannabis li­cens­ing and busi­ness law firms, came less than a month be­fore the Nov. 6 elec­tion when Michi­gan vot­ers will de­cide whether to le­gal­ize recre­ational mar­i­juana use, which would cre­ate more busi­ness op­por­tu­ni­ties and rules.

“We hope our at­ten­dees will be able to progress fur­ther than with­out the sem­i­nar in achiev­ing their goal to es­tab­lish their cannabis-re­lated busi­ness,” said Bar­ton Mor­ris, an at­tor­ney for Cannabis Le­gal Group. “This is new to Michi­gan. That whole cloud over it, the po­ten­tial to be ar­rested and pros­e­cuted and jailed, that’s an­other is­sue that doesn’t ex­ist in any other le­gal in­dus­try like al­co­hol.”

Un­der fed­eral ju­ris­dic­tion, mar­i­juana is il­le­gal be­cause it is a Sched­ule 1 con­trolled sub­stance, a cat­e­gory the gov­ern­ment deems as hav­ing a high po­ten­tial for abuse and no ac­cepted med­i­cal use. This com­pli­cates pay­ing taxes and makes most banks less will­ing to work with mar­i­juana com­pa­nies, cre­at­ing a mostly cash busi­ness, Mor­ris said.

With statutes and rules in states and mu­nic­i­pal­i­ties dif­fer­ing and un­der­go­ing many changes in re­cent years, reg­u­la­tions from in­sur­ance re­quire­ments to limited zon­ing or­di­nances can be dif­fi­cult for busi­nesses to nav­i­gate.

“It’s not easy, even for be­ing a lawyer,” said Todd Win­ters, 45, of Detroit, who is in­ter­ested in le­gal con­sult­ing and mar­i­juana re­tail. “So much is in flux.”

Tina Collinsworth, 51, of Niles said she hopes to open a dis­pen­sary, but is do­ing her re­search be­fore at­tempt­ing to open shop.

“I’ve seen oth­ers in the city be de­nied,” Collinsworth said. “I know they can be re­ally par­tic­u­lar on the word­ing and kind of picky, so I’m hop­ing this will help me get a sense of what is ex­pected.”

An­drew Brisbo, the di­rec­tor of the state Bu­reau of Med­i­cal Mar­i­juana Regis­tra­tion, gave ad­vice to the in­dus­try new­com­ers on pre­par­ing their li­cens­ing ap­pli­ca­tions. Af­ter Oct. 31, Michi­gan is re­quir­ing pot shops to have an op­er­at­ing li­cense. Those who con­tinue to op­er­ate with­out a li­cense, Brisbo said, “risk get­ting their li­cense.” So far, the state has ap­proved 19 li­censes for pro­vi­sion­ing cen­ters and 18 oth­ers for mar­i­juana grow­ers, pro­ces­sors, se­cure trans­porters and safety com­pli­ance fa­cil­i­ties.

Hun­dreds more are wait­ing to be pro­cessed and for the Michi­gan Med­i­cal Mar­i­juana Li­cens­ing Board to make its de­ci­sion. Ap­pli­cants un­dergo an ex­ten­sive eval­u­a­tion and back­ground check. Brisbo said al­most al­ways, the bu­reau needs to re­quest more in­for­ma­tion or doc­u­men­ta­tion from ap­pli­cants, and de­pend­ing on how long that may take, it can make the ap­proval process drag on­ward.

Brisbo em­pha­sized on Thurs­day that ap­pli­cants should pro­vide as much in­for­ma­tion as pos­si­ble on their pre-qual­i­fi­ca­tion ap­pli­ca­tions. He said the top rea­sons peo­ple do not re­ceive li­cense ap­proval are be­cause of an owner’s or in­vestor’s char­ac­ter and rep­u­ta­tion, and be­cause they did not dis­close some per­ti­nent in­for­ma­tion such as an ar­rest or

crim­i­nal charge.

“We’ll find ev­ery­thing,” Brisbo said. “It’s in your best in­ter­est to di­vulge any­thing you think we might un­cover. We have yet to deny some­one for an is­sue that they dis­closed, even if when they dis­closed it, we didn’t find it.”

Just get­ting to that ap­pli­ca­tion point, how­ever, can be a chal­lenge. Ash­ley Bowen, 34, and Chad Red­man, 39, of On­sted are a sis­ter and brother team­ing up to start Su­pe­rior Stealth Trans­port. They have been ex­plor­ing

start­ing a se­cure trans­port busi­ness for mov­ing prod­uct for the past eight months.

The ap­pli­ca­tion fee is $6,000, and those who re­ceive ap­proval must pay be­tween $10,000 and $66,000 for a reg­u­la­tory as­sess­ment. Mu­nic­i­pal­i­ties also may charge their own fees up to $5,000.

Red­man said there is a lot of spec­u­lat­ing and com­pe­ti­tion in the in­dus­try.

“It can be frus­trat­ing to find an am­bas­sador,” Bowen said, “es­pe­cially since if you in­vest in the trans­porta­tion, you can’t in­vest in the other four li­censes.”

Be­yond the red tape, cannabis busi­nesses also face chal­lenges

with pub­lic per­cep­tion. Mort Meis­ner be­gan Grow Cannabis Mar­ket­ing af­ter be­ing ap­proached by mem­bers in the cannabis in­dus­try, while he was work­ing in tal­ent and pub­lic re­la­tions.

He asked his land­lord if he could put up a sign for his new com­pany; the an­swer was no. Meis­ner moved to Royal Oak in­stead.

“There’s an im­age is­sue,” Meis­ner said. “We need to put a bet­ter face on the mar­ket­ing. Peo­ple don’t know what they don’t know. Some want this be­low the radar, but it can’t be be­low the radar. I say show your pride.”

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