MEDICAL-POT LAW CLOUDS COMMUNITY

Liberal College Town Seeks Zoning Solution for Dispensaries

ANN ARBOR, Mich.--This college town, which has a long taken a
permissive stance on marijuana, is struggling with a crop of new
problems as a result of a recent state law that legalizes it for medical use.

Dating back to the 1960s and 1970s, this city gained notoriety for
its efforts to legalize pot, a reputation it reaffirmed in 2004 with
a ballot initiative that allowed for the growing and use of marijuana
for medical purposes. But following its passage, city officials were
unsure about how the new local law could be enforced, citing
conflicts with state and federal law.

Then in 2008, Michigan voters legalized medical marijuana across the
state, but the new law lacked provisions for the regulation of retail
dispensaries. Almost overnight, a dozen medical marijuana
dispensaries cropped up in this city--45 miles west of Detroit and
home to the University of Michigan--where a climate of leniency was
already established.

Newly set-up medical-marijuana dispensaries have attracted thousands
of state-registered customers to Ann Arbor from across Michigan,
seeking cannabis strains with names like Steven Tyler Kush and Purple Urkel.

City officials said they have no official estimate on the number of
dispensaries, but one owner, Daryl Mynes, the 31-year-old co-owner of
People's Choice Alternative Medicine, which opened in July and has
1,300 club members, said Ann Arbor could already have as many as 30
since the state law took effect.

"I think it's great," he said. "I think there should be standards and
we should be kept to them."

Other Michigan municipalities took a less liberal approach. Several
cities and towns have banned dispensaries and some local
law-enforcement officials are cracking down on marijuana shops they
claim are selling their products to people without state registration cards.

Oakland County Sheriff Michael Bouchard, whose deputies raided
several medical-marijuana clinics over the summer outside Detroit,
recently commented at a press conference: "In one of the places,
there were loose alligators running around protecting the product.
This is Michigan. This isn't a Cheech and Chong movie."

In a televised debate last week, Mr. Bouchard argued that the
Michigan law "was written by pro-marijuana advocates and didn't put
any regulatory structures in place. So as a result, there are really
huge gaping problems for people that truly need any kind of medical
marijuana to get it in a process that's safe, legal, effective."

Even for some Ann Arbor residents, the city's tacit acceptance
started to give way to unease. As more and more dispensaries opened
up, some residents started calling council members to complain about
congested parking and busy traffic near pot shops.

City Planner Jill Thacher said she was getting inquiries daily from
entrepreneurs in Los Angeles, Denver and Boulder, Colo., asking about
Ann Arbor's proposed rules for dispensaries in anticipation of
expanding their operations. In August, the city declared a temporary
moratorium on the opening of any new dispensaries until December.

"It wasn't a big outcry, not a giant revolution," Ms. Thacher said.
"But here and there people were becoming more concerned about what
was popping up."

Michigan's medical marijuana law approved patients to grow and
possess up to 2.5 ounces of marijuana. Since the law became effective
in April 2009, the state has issued 37,730 patient registrations and
still is processing a four-month backlog of thousands more requests.

On Monday, the Ann Arbor City Council is scheduled to hold a public
hearing and may vote on permanent zoning rules on medical-marijuana
shops that generally limit where the dispensaries can be located, ban
drive-through operations, require those under age 18 to be
accompanied by a parent and prohibit consumption of marijuana inside
a dispensary.

"Some people think there should be no regulation while some people
say they are genuinely concerned about safety in the community and
the impact on kids," Eric Mahler, the chairman of the city's planning
commission that recommended a new local zoning law, said in an
interview. "The state statute does not offer a lot of guidance about
where these medical marijuana dispensaries should go."

On Sunday, Arizona announced passage of a ballot measure legalizing
medical marijuana that would allow for the establishment of about 120
licensed dispensaries, which will be subject to local regulations.

Like Michigan, California, Nevada and Montana don't have statewide
dispensary regulations, but have varying types of functioning
dispensaries, including those subject to local regulation.

In California, which approved medical marijuana through a voter
initiative in 1996, no state agency is charged with regulating
medical-marijuana dispensaries, leaving it largely up to cities and
counties to decide whether and how to impose regulations and collect
licensing fees.

In an interview, Ann Arbor Mayor John Hieftje said that in addition
to the new zoning law, the city is also crafting licensing rules to
cap the number of dispensaries, adding, "The state really dropped the
ball on this."