First of Two Marijuana Zoning Ordinances Passes in 4-1 Vote

At its meeting on Tuesday, December 5, with a 4-1 vote on a heavily amended version of Ordinance 1395, East Lansing’s City Council legally defined the areas of the City in which medical marijuana may be grown, processed, transported, and tested.

A separate proposed law, Ordinance 1416, addresses zoning for dispensaries, known legally as “provisioning centers.” That proposed law is set to come before Council on Tuesday, December 19.

Starting on December 15, the State of Michigan will start to accept applications for licenses to engage in all five medical-marijuana-related business activities: growing, processing, transporting, testing, and dispensing. This application and licensing process is part of the State’s 2016 law P.A. 218, which regulates all aspects of the medical marijuana business in any community that opts to allow their establishment.

Prior to passage of the state law, medical marijuana businesses in Michigan were essentially operating under a patchwork of local laws, with neither licensure nor revenue collection at the state level.

Michigan P.A. 218 allows local governments to “opt in” or “opt out” of the law, and gives them discretion about what kinds of facilities they will allow and where those facilities can locate. East Lansing has opted in, and will therefore be eligible to receive a portion of the proceeds from the State’s 3% excise tax which will be levied on the sale of medical marijuana products.

According to the Michigan House Fiscal Agency, this 3% will probably be in addition to Michigan’s 6% sales tax, but P.A. 281 is silent on the issue. A September, 2017 article in The Bridge breaks down the revenue numbers from medical marijuana sales this way: 30% to the state; 25% to the cities that opt into the new licensing program and allow marijuana facilities; 30% to the counties where facilities are located; 5% to the sheriffs’ offices in those counties; 5% to the state police; 5% to train local law enforcement officers.

The amount of tax revenue available to East Lansing would be proportional to the number of licensed marijuana facilities located in the City, and that is impossible to predict at this early stage.

Passed Tuesday in the 4-1 vote, East Lansing’s Ordinance 1395 specifies zoning requirements for marijuana growing operations, processing facilities, secure transportation, and facilities for safety compliance and testing.

Before Council’s vote, residents of the Hawk Nest and Eagle Eye neighborhoods addressed Council with their concerns that legalizing marijuana processing facilities within the City limits could lead increased crime, unpleasant odors, and lowered property values. Anne Hill, chair of the Hawk Nest Homeowners’ Association, referenced instances in which communities in California and Colorado were unable to enforce air-quality standards and suffered noxious odors.

In addition to the unfavorable comments from the residents of the Northern Tier neighborhoods, the Council heard from several people who supported the ordinance. Steve Monti told Council that East Lansing should quickly finalize its Code amendments so that, as the first wave of applications hit the state offices, East Lansing will be in a position to capture “the cream of the crop” when it comes to potential businesses.

After public comment, when Council began its deliberations on Ordinance 1395, most of the amendments proposed and passed by Council members were slight changes to clarify the intent of the language. These included an amendment from Councilmember Erik Altmann, changing the wording of a sentence regarding odor control, and Mayor Mark Meadows’ amendment specifying that the 1,000-foot perimeter prohibiting close proximity to schools be measured from the property lot lines rather than from a spot in the middle of a property.

More substantive amendments included one from Meadows that changed the language stating that “no illegal activities” could occur on the premises of medical marijuana-related businesses. Meadows proposed and Council passed a change to prohibit activities that are illegal under state and local laws, because marijuana remains an illegal substance under federal law.

Meadows also inserted wording that would require applicants to provide copies of their State Operating License application when filing an East Lansing site plan. His reasoning was that the state license application is extremely detailed, and it would provide East Lansing with additional information about the applicant and give them a tool to weed out undesirable applicants. This amendment was unanimously passed.

The Council also passed Altmann’s amendment to prohibit alcohol use along with marijuana use on the premises of these facilities.

Councilmember Ruth Beier tried more than once to pass an amendment excluding the Office Industrial Park (OIP) area on Coolidge Road from the legally available sites, since it is 1750 feet away from the Cole Academy Charter School currently under construction. Her amendments were voted down by her colleagues, largely on the basis that existing zoning laws adequately protect the areas surrounding schools.

As the law was ultimately passed, there are only three sites zoned OIP (“office industrial park”) in the city where growing and processing can occur, including: a small parcel just off of Coolidge Road, north of Abbey Road (the one which is close to the Cole Academy site); a parcel off Chandler Road to the north of The Landings apartment complex; and a parcel between Park Lake Road and Merritt Road.

The law also allows growing and processing in M1 zones, but there is only one area in the City that is zoned as an M1 area, and it is occupied by the Amtrak and bus station off of Harrison Road, so it would not be available.

Voicing support for the ordinance as amended, Councilmember Shanna Draheim spoke regarding the limitation of production and processing facilities to areas zoned M1 and OIP: “I think this is a cautious way to start and still allow the free market to behave the way it will without capping or setting up an onerous administrative process on our end.”

Councilmember Aaron Stephens expressed his appreciation for all of the public input that Council and staff received and said that success going forward would hinge on communication between members of the medical marijuana industry, City residents, and the City Council.

Stephens also addressed the concern that medical marijuana businesses could lead to an increase in crime, a concern raised repeatedly in public comment by residents from the Northern Tier: “There have been a lot of studies coming out that say that crime is usually not associated with an increase when medical marijuana is present, and there have been several studies that say that drunk driving goes down.” He says he doesn’t believe an increase in crime will be an issue after discussing it with members of the East Lansing Police Department.

Altmann also thanked the community for their input. He said he was happier to opt in to the State’s program through an ordinance drafted by an experienced attorney and reviewed by staff with neighborhood input than he would be if citizens were to make the law directly through petitions and Charter amendments. “If we don’t opt in legislatively, we’re going to be forced to opt in by petition,” he said, pointing out that the medical marijuana legalization in Michigan was driven by a petition drive and supported by popular vote.

Meadows is the only Councilmember who lives in the Hawk Nest neighborhood, the neighborhood most likely to be impacted by the zoning change and the neighborhood that organized to speak against the law. Meadows spoke specifically to his neighbors, reminding them that they know where he lives, saying that they are welcome to come and speak with him on any subject at any time.

Meadows commented on the process that brought Ordinance 1395 back to Council for a vote, saying “we obtain public input at the Planning Commission level, we obtain expertise both legally and through experienced Planning staff in making recommendations to us regarding it and then we evaluate all that on our own.”

Beier was the only “nay” vote on the Ordinance, explaining that she was not opposed to the availability of marijuana for medical use, but felt some marijuana-related businesses, such as growing and refining operations, weren’t a good fit for East Lansing areas near neighborhoods. “I think we represent the people who live in East Lansing, and we have a petition from 119 people who live in East Lansing,” she said, referring to a petition presented by Anne Hill.

That petition, which urges Council to “disapprove” both ordinances 1395 and 1416, states, “We feel passage of these two ordinances by the City Council would have a detrimental impact on the residents of East Lansing and the immediate surrounding area. Passage of the ordinances could also bring potential litigation against the city related to the manner and process that was used in determining what potential properties might qualify for development; and subsequently for approval.”

The petition goes on to say, “Additionally, the resulting impact of such a development would negatively impact property values and the environment in which the homes are located and negatively impact property owners in the surrounding areas.”

Before she voted against Ordinance 1395, Beier said“[t]he question is whether we want to open up our few industrial areas to developers who want to grow and process marijuana, which has nothing to do with whether you believe in medical marijuana. It has to do with whether you believe East Lansing should be a place that grows and processes medical marijuana.”

Beier concluded, “If we don’t, there will be plenty of medical marijuana for our retail establishments. We don’t actually have to grow it and process it and hope that we can control the odors right next to a school and a neighborhood.”