ANN ARBOR CITY ATTORNEY SAYS 'DILEMMA IS EXTREME' WHEN IT COMES TO
REGULATING MEDICAL MARIJUANA DISPENSARIES

(This Story Has Been Updated to Note That Tony Keene No Longer Runs A
Medical Marijuana Cultivation Facility on South Industrial Highway. He
Says He Has Changed Directions and Now Is a Partner in a Full-Service
Cannabis Testing Lab Called Cannalytics.)

Ann Arbor Mayor John Hieftje says cities across Michigan still face a
serious dilemma when it comes to regulating medical marijuana
dispensaries -- businesses that aren't mentioned in state law but
nonetheless have sprouted in notable numbers.

"I have never seen an issue that's been before us where we have cities
in our state that are being sued from one side for failure to act to
make it more possible for these facilities to operate, and then we
also have pressure from the federal government on local governments
from the other side," he said toward the start of an hour-and-a-half
discussion on the topic.

"The dilemma is extreme," acknowledged City Attorney Stephen Postema.
"As commentators have pointed out, municipalities are really in some
ways where the rubber hits the road. This is where all of the state
statutes and enforcement issues often take place."

After months of talks about how to respond to the rise of
dispensaries, the Ann Arbor City Council appears close to finalizing a
set of regulations. A pair of complementary licensing and zoning
ordinances is scheduled to come back before council for final approval
on June 20.

Council members hope to have the regulations -- which have been under
discussion since last summer and were tweaked again Monday night --
finally completed.

"I think everybody's really, really tired of dealing with medical
marijuana," said Council Member Sabra Briere, D-1st Ward, who has
taken a lead role on the issue and has worked with other city
officials to meticulously craft the ordinances.

After the ordinances are approved, a moratorium in place since last
August will be lifted and prospective dispensary owners can apply for
licenses to do business in the city -- though most licenses will be
reserved for dispensaries that opened before the moratorium.

As currently worded, the regulations would cap the number of
dispensary licenses at 20. At a meeting last month, council members
decided they no longer want to have licensing regulations for
cultivation facilities -- places where marijuana is grown other than
homes.

Briere said there'll be one more opportunity for members of the public
to address the council on the subject of medical marijuana at the June
20 meeting.

The council made a number of small changes to both ordinances Monday
night -- what Briere called "bureaucratic improvements." Those dealt
with requirements for those who apply for licenses and how the city
might hold people accountable for the forms they fill out.

The only significant change, Briere said, is that dispensaries are
required to keep records for 30 days for patient access and 60 days
for city access.

The 30-day requirement is seen as a way of making sure patients can
trace the source of any marijuana product they received should they
become ill afterward.

"The idea for the city to have access to the information on the
relationship between dispensaries and the cultivation source," Briere
added, "was so the city could ascertain that dispensaries are actually
accurately keeping records and able to provide a source for their marijuana."

Postema said there's always the possibility that both court decisions
and revisions to state law could impact the city's regulations. He
said the city attorney's office is aware of legislation pending in
Lansing that would add additional restrictions to where caregivers can
operate. The legislative process, though, is likely to be "quite
tortured," Postema said.

"No. 1, it takes a 75 percent vote to amend what has been a citizen
initiative, so I wouldn't hold my breath for the state Legislature to
act on this," he said.

Council Member Stephen Kunselman, D-3rd Ward, said he wonders why the
city is fearful of proceeding with a licensing ordinance when Colorado
taxes medical marijuana without fear.

Postema said the federal government is looking carefully at
dispensaries and initiating action against them, and it's already
happened in Michigan.

A small handful of medical marijuana activists attended Monday's
meeting and addressed the council. Tony Keene, owner of the Hydro Med
medical marijuana co-op on South Industrial Highway, apologized for
filing and then dropping a lawsuit against the city earlier this year.

Keene told council members the purpose of his lawsuit was to push the
city to clarify the definitions of "dispensary" and "cultivation
facility," but he agreed taking legal action while the ordinances were
being crafted was premature and apologized for taking up the city
attorney's time. He said it's evident the city now has a clear and
well-defined licensing ordinance.

"I believe it to be as clear and unambiguous of an ordinance as can be
constructed under the current MMMA," Keene said, referring to the
Michigan Medical Marihuana Act.

Keene said the last time he spoke before council he also took a hard
stance against dispensaries and that was wrong. As a partner in what
he considers Michigan's only full-service medical cannabis testing
laboratory, he says he's visited many dispensaries.

"What I have experienced is a geographically dispersed, balanced, yet
diverse group of professional caregivers that have opened clear and
unambiguous transfer locations for patients," he said. "Six months ago
I would have fought hard to discourage grandfathering in licensing to
existing dispensaries. However, today now I believe it would be unfair
not to give great consideration to the hard-working compliance Ann
Arbor's current collectives exhibit."

Medical marijuana advocate Rhory Gould thanked council members for
steps taken to loosen restrictions for caregivers, but he voiced
concerns about the length of the moratorium.

"It is now June 2011 and the city has come a long way with this
ordinance," he said. "But at this time, it's time to do what's right
by passing an ordinance that protects patients, caregivers and the
dispensaries and makes them feel safe in the city."

Chuck Ream, a leading voice in the local medical marijuana movement
and owner of a dispensary on Packard, applauded the council.

"I think basically we have succeeded. I think basically we've got an
ordinance here that reflects what the voters of Ann Arbor really would
like to see," Ream said. "Voters want patients treated, they don't
want caregivers harassed, and in Ann Arbor the voters realize that the
(federal) marijuana laws are wrong in the first place."

Briere said the real test will be in two weeks. She said the council
has spent months trying to hammer out language that would please
everybody, and now it's up to the council to decide whether to
implement the ordinances that have been crafted.

"Next council meeting, we're going to start looking at this with fresh
eyes and say, 'Do I really want to support this?'" she said.

"If council members as a whole feel that dispensaries are an error
because they're not 100 percent supported in the state enabling
legislation, then that's what will happen at the vote," she said,
mentioning that only as a possible outcome. "So it'll be interesting
to see."