DEBATE CONTINUES OVER LANSING'S MEDICAL MARIJUANA DISPENSARIES

Shekina Pena once was a registered nurse at Sparrow Hospital.

Ken Van Every had been a vice president of a marketing firm and
advertising agency.

And selling marijuana used to be illegal in Michigan.

That changed in November 2008, when Michigan voters approved a ballot
proposal to legalize the medical use of marijuana. Along with giving
people a legal way to use the drug to ease the aches and pains of
cancer, AIDS and other diseases, the new law ushered in a wave of
entrepreneurs legally doing business in what had been an illegal industry.

Pena and Van Every joined a group of budding entrepreneurs, opening
medical marijuana dispensaries, clinics and supply houses and selling
equipment to people licensed to grow and use marijuana.

"It was an opportunity to get in on the ground floor," said Van Every,
who opened the Compassionate Apothecary of Lansing, 2201 E. Michigan
Ave., in August 2010. "It should be considered just like any other
type of business."

But like many new things, the introduction of medical marijuana has
not come without controversy. It swirls like smoke around Lansing's
East Michigan Avenue, a stretch of road that has seen at least a dozen
medical marijuana businesses crop up in the past year or so.

Dispensary owners claim their shops, often located in buildings that
had been abandoned for months or years, draw visitors to Lansing from
such places as Mackinaw City, Traverse City and Alpena, along with
other states. And some owners of non-marijuana businesses say they're
seeing some of those people also spend time in their shops.

But not everyone is a fan of the new marketplace. A group of eastside
neighborhood organizations and businesses, including animal and food
testing company Neogen Corp., is trying to snuff out the marijuana
mile on Michigan Avenue.

The groups contend the proliferation of marijuana businesses scares
away potential customers, makes local residents feel unsafe and gives
the community a bad image.

It's a debate that has played out for months at City Hall, with
neither side a clear winner. City Council members recently approved an
ordinance that limits dispensaries to industrial and commercial zones
and requires them to stay 1,000 feet from schools, churches and other
marijuana businesses.

The 48 already recognized as operating in Lansing will have a year to
relocate if they don't meet those rules.

"I'm sure the community, when they voted this in, didn't expect to see
Amsterdam," said Van Every, referring to the Dutch city known for its
tolerance of marijuana shops. "We're on board and working with City
Council."

Cap of 48 proposed

Ultimately, Michigan Avenue will look different when the council
finalizes a cap on the number of dispensaries allowed within city limits.

Council members are set to discuss a proposed cap of 48 medical
marijuana businesses within city limits on Monday. That number would
prevent the 48 already in operation from having to close. Some likely
still will have to move by next year.

Suggestions from residents include dividing the businesses evenly
among the city's four wards. That sentiment results in part from the
number on East Michigan Avenue.

Most people asked couldn't point to a particular reason for the
cluster of marijuana shops that have sprung up there.

One explanation, they said, could be the corridor in recent years had
seen a lot of vacant buildings and office space as companies either
folded or moved elsewhere.

"That's where you're going to go," said Van Every, whose site is near
the corner of Michigan and Magnolia avenues. "When you're first
starting off, overhead is something you really have to consider, so if
you can get a decent lease on a piece of property, then that's better
for the business."

He invested about $5,000 to get started after he was inspired by a
friend in Mount Pleasant. Under his business plan, patients and
caregivers lease locker and display space. The dispensary profits from
rental fees and a 20 percent service charge.

Marijuana is not grown, consumed or purchased there, Van Every said,
and he installed multiple security systems.

"We're trimming the bushes. We don't have neon lights all over the
place," he said. "Somebody is taking care of the property."

Pena opened Your Healthy Choice LLC in 2010, not far from Clara's
Lansing Station restaurant on Michigan Avenue.

She initially wasn't supportive of medical marijuana. Her views
changed, she said, after prescription medication she took to treat her
multiple sclerosis left her feeling too sick to care for her young
children.

Now she uses products that don't require smoking. She sells both
forms.

Her dispensary is also a clinic. A primary care physician from Canton,
whom Pena didn't name, is on site twice a week to evaluate potential
medical marijuana patients.

"We have turned away people. It's a liability on his behalf," she
said.

Rumors of license mills, however true, are a stain on those who
practice compliance, she said: "It's just been an insult, almost like
a mockery. We lose credibility."

Crime increase feared

While community supporters want to see more activity in local
storefronts, some think the pot shops are hurting - not helping - the
neighborhood.

Nancy Mahlow, president of the Eastside Neighborhood Organization,
said crime along Michigan Avenue has increased since medical marijuana
businesses began locating there.

"We have had an increase in larcenies and burglaries and that type of
thing," she said.

Joan Nelson, executive director of the nonprofit Allen Neighborhood
Center, said she has similar concerns.

"I get (a) steady stream of emails from small businesses on the avenue
and from people living in the moderate-density neighborhoods half a
block away who are concerned about what they're seeing," she said,
adding that she has heard reports of marijuana being grown in the open
and people loitering around medical marijuana businesses.

According to statistics compiled by Lansing police, the picture is not
that clear.

From July 1, 2010 to June 30, 1,357 total incidents were tallied
within 500 and 1,000 feet of 12 establishments on Michigan Avenue.
That is up 2 percent from the 1,333 logged from July 1, 2009 to June
30, 2010. But the numbers likely are skewed because some incidents are
counted more than once, since businesses located near one another
overlap buffering zones.

The data also show:

* In general, people are stealing more. Total reported burglaries near
the addresses increased by 43 percent year over year, from 134 in
2009-10 to 192 last year. In all, robberies of all types spiked to 44
last year from 17 in 2009-10. But larcenies in all categories fell by
two - from 240 in 2009-10 to 238 last year.

* Incidents of disorderly conduct and disturbing the peace fell from
47 in 2009-10 to 27 last year.

* Reported incidents of criminal marijuana possession dropped from 19
to three in the same time frame.

Lansing police Capt. Ray Hall said dispensaries are analogous to
liquor or party stores from a law enforcement perspective, and that
"it's a reasonable assumption" that crime would increase when more
people are attracted to an area.

But, he added, it's inaccurate to assume that dispensaries cause
increased crime.

"Just because they're in near proximity doesn't mean that the
establishment had anything to do with these crimes," Hall said, adding
that numbers alone don't account for motive. "You have to look at each
case on its own merits."

Medical marijuana users must be licensed by the state. As of June 28,
82,148 people were licensed to use marijuana in Michigan, according to
the state Department of Licensing and Regulatory Affairs.

Of them, 7,190 are in Ingham, Eaton and Clinton counties, data show as
of Tuesday. The largest share is in Ingham County, home to 4,916
patients. The department said figures are broken down by county or zip
code, not by municipality.

It is unknown how many more potential cardholders are in the pipeline.
A department spokeswoman said workers are more than two months behind
in processing applications, and some applicants send multiple copies
or documents.

Other community activists aren't convinced that marijuana is the root
of an increase in crime in the area.

"We had a rash of burglaries, but I think that was unrelated to the
medical marijuana thing," said Brian Baer, president of the Foster
Neighborhood Association.

But, he admitted, many people are wary of the new marijuana
businesses: "They're nervous and kind of concerned about it."

Many dispensary operators are skittish to talk on the record, but
those who do say they carefully follow laws in order to stay out of
trouble and keep their businesses clean.

"I obey every law. We do everything the right way," said Frank Lain, a
business partner in The Popcorn Bag, 1824 E. Michigan Ave.

Image alarms some

Opponents of the medical marijuana businesses assert that the cluster
of pot shops also harms the east side's image and economic vitality.

The corridor has long been struggling to overcome an excess of empty
storefronts.

While dispensaries have brought life to some of the shuttered
storefronts, the concentration of them is off-putting to detractors.

"It's never a good thing for a nascent renaissance district to be
identified for a single purpose," Nelson said. "What we're interested
in is a lively and diverse area. We're looking for a few more
restaurants, galleries, businesses that serve the people of the east
side."

There have been signs of progress. Several eateries, such as the Soup
Spoon Cafe and Lamai's Thai Kitchen, have drawn in visitors. Specialty
shops such as Rae's Yarn Boutique and Lansing Art Glass also call the
avenue home.

Scott Harris, owner of the Everybody Reads bookstore, said that he's
noticed a bump in business since the pot shops moved in. He welcomes
them openly and his store now carries a selection of books about
marijuana cultivation.

The effect of the dispensaries on his business "is palpable," Harris
said.

No evidence is yet available on the businesses' impact on either the
state or local economy. Some state departments, including licensing
and treasury, said they don't know of any such studies.

Informally, some dispensaries and non-marijuana businesses are finding
ways to work together.

The Popcorn Bag, for example, promotes Everybody Reads to its
customers, along with other businesses such as Gone Wired Cafe and the
Soup Spoon.

"We're trying to create a synergy," Lain said. "If you want Lansing to
be sustainable, shop on Michigan Avenue. Shop your
neighborhood."

Adding to economy

Pena, of Your Healthy Choice, employs eight people full time. Payroll
expenses had totaled roughly $6,000 every two weeks.

Pena said she nets enough to cover expenses. The shop takes in
marijuana products at $8.90 per gram and distributes it at $12 per
gram, she said. Profit estimates vary based on the month.

She's waiting to learn what will happen to her business.

"The clustering shouldn't have happened," Pena said, adding that City
Council waited too long to enact a moratorium. "It's something that
will gradually evolve."

Down the street, the Compassionate Apothecary occupies a house that
had last been used as an insurance agency, but has been empty for an
unknown amount of time.

Van Every said businesses like his are as important as any other in
terms of economic impact. An average month can yield about $65,000, of
which the dispensary keeps a share.

Including himself, Van Every employs four full-time and two part-time
workers. The going rate is $10 per hour. His business pays taxes.

Van Every said he understands the need for an ordinance. But he
doesn't want to move away from Michigan Avenue.

He knows it's probable, given the fact that a church is within 1,000
feet.

As soon as details on how to apply for a license are available, he
said, "we will be out looking for property."

State law doesn't address dispensaries

Medical marijuana patients apply for cards through the Michigan
Department of Licensing and Regulatory Affairs. They have to submit
names, addresses and other identifying information for themselves,
their caregivers and the physicians who authorized their applications.
The fee to apply for or renew cards is $100.

The law, approved by voters in 2008, does not address dispensaries. As
such, the state can't advise patients on how to become growers or
obtain the drug, said Rae Ramsdell, acting director of the
department's Bureau of Health Professions.

Ramsdell said she has heard of businesses requiring patients to
possess a medical marijuana card or documentation showing they have
been approved.

"Technically, I don't know what the requirements are" for individual
dispensaries, she said, adding that the state's main role is issuing
patient cards. "That's all we can do."

- - Lindsey VanHulle

About the law

Under Michigan's medical marijuana law, adopted in
2008:

- - Patients must be diagnosed with a "debilitating" illness, such as
cancer, glaucoma, HIV or AIDS, or have an illness that leads to such
symptoms as severe or chronic pain and nausea, among others.

- - Caregivers have to be licensed and at least 21 years old. Patients
can be younger than 18, but a parent or guardian must be their caregiver.

- - Because the federal government considers marijuana an illegal
substance, it can't be obtained through a traditional pharmacy.

- - Caregivers are allowed to grow up to 12 plants for each of five
patients.

Source: Michigan Department of Licensing and Regulatory Affairs