HomeMy WebLinkAboutBlackstone Harvest PacketTimeline
Blackstone Harvest, LLC
6450 S Cedar St Lansing,
Michigan 48910
June 26, 2019 – Application submitted ................................................................... 2
July 1, 2019 – Department review of applications begins
September 20, 2019 – Score & Rank Denial Letter Sent ........................................ 13
October 1, 2019 – Grow Application Submitted .................................................... 17
October 4, 2019 – Hearing Officer Appeal submitted ........................................... 18
October 8, 2019 – Second Score & Rank Second Denial Letter Sent ..................... 97
November 28, 2019 – Commission Appeal Submitted ........................................ 110
Exhibit 2 – Was not considered in reviewing section 35.
Exhibit 3 – Removed, wasn’t attached to section argued.
Exhibit 4 – Removed, wasn’t attached to section argued.
Exhibit 5 – Removed, wasn’t attached to section argued.
Exhibit 6 – Removed, wasn’t attached to section argued.
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September 20, 2019
Blackstone Harvest, LLC Joann Steil 22618 Shorewood Dr St. Clair Shores, MI 48081 Dear Provisioning Center Applicant,
The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 73.50 out of 100 eliminates the possibility of scoring in the top five. Therefore, your application for licensure is denied.
Attached are your sub-scores based on the criteria posted on https://lansingmi.gov/1637/Medical-Marijuana and a brief summary of determining factors for each sub-score. You will not be selected to receive a Provisioning Center license in the City of Lansing for the proposed business at 6450 S Cedar St. You have the right to appeal this denial of licensure within 14 days of the date of this letter by filing with the City Clerk’s Office a written statement setting forth fully the grounds for the appeal pursuant to Chapter 1300.15(c). Please note that
initial appeals are referred to a hearing officer appointed by the City Clerk who will review the appeal and information submitted. The hearing officer will consider the information and make a recommendation to the City Clerk, who will make a decision on the appeal. To encourage efficiency, appeals will be conducted as a paper hearing without oral presentation. Please ensure that you include all information in your written appeal that you would like the hearing officer to consider. Appeals are limited to materials provided during the application process. No new application material will be considered on appeal.
Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted.
Sincerely,
Chris Swope, CMMC/MMC Lansing City Clerk
CC: City Attorney Lansing Police Department
Chris Swope
Lansing City Clerk
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City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
Total
Possible
Points
Blackstone Harvest LLC ‐ District Club‐6450 S. Cedar
Applicant Address ‐‐‐
#Category ‐‐‐Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes
budget. 7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job
descriptions for PC ONLY 3 3 Job Creation
FTE's 34‐40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start‐up and operating costs. 9/12/19
23 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
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Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
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PC has residential zoned property within 1/4 mile. 9/20/19
115
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
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Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I ‐ bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total ‐ Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV‐$280,600
Proposed Improvements $643,250.00 ‐ 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus
=All+Records&SearchCategory=Address&SearchText=6450+s+ced
ar&uid=384&PageIndex=1&ReferenceKey=33‐01‐05‐10‐151‐
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDis
playString=33‐01‐05‐10‐151‐012&RecordKey=1%3d33‐01‐05‐10‐
151‐012%3a%3a4%3d33‐01‐05‐10‐151‐
012%3a%3a7%3d55b67cb1‐daee‐40e6‐9dae‐
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%
3a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
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17
BLACKSTONE HARVEST, LLC APPEAL OF DENIAL OF PROVISIONING CENTER APPLICATION
Proposed Location: 6450 S. Cedar St., Lansing, MI 48911
Prepared by:
Nadeem Noah Harfouch, Esq. Mike M. Bahoura, Esq. The Harfouch Law Firm, PLLC Law Offices of Mike M. Bahoura, PLLC 631 East Big Beaver Road, Suite 211 631 East Big Beaver Road, Suite 211
Troy, MI 48083 Troy, MI 48083
Ph: 248-274-6529 Ph: 248-392-1586 nharfouch@harfouchlaw.com mike@bahouralaw.com
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TABLE OF CONTENTS STATEMENT OF ISSUES………………………………………………………………………3
INTRODUCTION………………………………………………………………………………..4
STATEMENT OF FACTS……………………………………………………………………….5 PROCEDURAL STATEMENT………………………………………………………………….7
STANDARD OF REVIEW………………………………………………………………………8 ARGUMENT………………………………………………………………….………………….9
I. Financial Structure and Financing (Section 10)……………………………………..10
II. Integration with Grows & Total COL Jobs (Section 12 and Section 20)……………13
III. Projected Annual Budget (Section 19)………………………………………………13
IV. Net Worth (Section 22)………………………………………………………………17 V. Odor Plan (Section 35)…………………………………………………………….…18 CONCLOSION AND RELIEF REQUESTED……………………………………………….…19
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STATEMENT OF ISSUES 1) Were the scores given to the applicant based on clearly erroneous findings?
Answer: Yes.
2) Were the scoring decisions based on and supported by competent material and substantial evidence?
Answer: No.
3) Were the scores based on inconsistent scoring? Answer: Yes.
4) Was the scoring in compliance and in accordance with Lansing’s ordinance? Answer: No.
5) Were the scoring decisions arbitrary and capricious?
Answer: Yes. 6) Should the decision to deny the application be reversed?
Answer: Yes.
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INTRODUCTION
Blackstone Harvest, LLC (“Blackstone”) is a state prequalified entity pursuant to the
licensing provisions of the Medical Marihuana Facilities Licensing Act (MMFLA) and
Administrative Rule 5 (R 333.205). Blackstone is owned by a single member, Joann Steil, who
has over fifteen years of experience in the health care industry. Ms. Steil has successfully owned
and operated a health care case management company called Advanced Placement Services. She
works in collaboration with physicians, patients, and their families to ensure safe and efficient
transitions of care.
Blackstone recently applied for a provisioning center license with the City of Lansing
under its ordinance and in accordance with the MMFLA. Blackstone also applied for a medical
marijuana grower facility license in the City of Lansing. Blackstone was a qualified applicant
that submitted complete documentation for all categories considered for scoring.
A full review of the application would corroborate that the denial of Blackstone’s
application in Lansing is unjustifiable because 1) plans and documentation submitted by
Blackstone were ignored or poorly reviewed, and/or 2) the City did not follow its own guidance
on scoring in accordance with the applicable rules and ordinances and made reversible errors
based upon an abuse of discretion and arbitrary and capricious decision making.
Blackstone hereby submits this appeal for review of its score and status in the City of
Lansing and respectfully requests a reversal of the City’s decision to deny Blackstone’s
provisioning center application.
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STATEMENT OF FACTS
On June 26, 2019, Blackstone submitted its City of Lansing Medical Marijuana
Application for a provisioning center (the “Application”). The City of Lansing accepted the
Application and the application fees were paid and deemed accepted by the city that same day.
The Application consisted of over 125 attachments, which provided detailed
documentation related to the proposed building, operational plans, staffing plans, security plans,
facility plans, and floor plans, among other required documents. The Application covered all
aspects of Lansing’s scoring rubric and was consistent with the Lansing ordinance.
Per the application, Blackstone submitted proof of purchase related to the proposed
property located at 6450 S. Cedar 5031 S. Cedar St., Lansing, MI 48911. Blackstone has plans to
develop and operate a licensed medical marijuana provisioning center at the proposed property.
The total capital investment to purchase the property was $1,200,000.00. Per Blackstone’s
building development plan and construction plans, the renovation needed for 6450 S. Cedar
would cost an additional $643,250.00.
Blackstone submitted detailed plans related to its staffing at the proposed provisioning
center. Per the Application submitted, Blackstone will employ between 34 to 40 employees to
work at the provisioning center. Of those employees, approximately ten (10) employees will be
in a management or leadership position.
Blackstone is also purchasing a 13,600 sq. ft. property to integrate a grower facility with
the proposed provisioning center. This grower facility will have a Class C grow license that will
allow a 1,500-plant grow operation. The property Blackstone is purchasing is commonly known
as 209 Baker Street, Lansing, MI 48910. A valid purchase agreement for the Baker property was
provided, and subsequent to the filing of the provisioning center application, Blackstone
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submitted a grow application in relation to the Baker property. The total capital investment to
purchase Baker was $1,000,000.00, and the estimated additional investment to renovate the
interior and exterior of the Baker building was $2,040,000.00.
In total, Blackstone submitted that it would create between 84 and 100 new jobs in the
City of Lansing between its proposed provisioning center and proposed medical marijuana
grower facility. The plans to staff and employ residents of Lansing would have a profound effect
on the local economy.
Despite submitting a complete and well-supported application to the City of Lansing
detailing Blackstone’s proposals, budgets, and operational plans, on September 20, 2019,
Blackstone received correspondence from the City of Lansing stating that Blackstone had not
been selected to receive a provisioning center license at the proposed location of 6450 S. Cedar.
Per the correspondence, and the attached scoring rubric, Blackstone received a score of 73.50 out
of 100. Consequently, the City of Lansing denied Blackstone the opportunity to receive
licensure, which was largely due to erroneous, arbitrary, inconsistent, and unreasonable scoring
of the Blackstone Application.
As of right, Blackstone hereby appeals the City of Lansing’s decision to deny the
Application in accordance with Chapter 1300.15(c).
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PROCEDURAL STATEMENT
At the denial of a license, an applicant:
May appeal to the city clerk, who shall appoint a hearing officer to hear and evaluate the appeal and make a recommendation to the clerk. Such appeal shall be taken by filing with the city clerk, within 14 days after notice of the action complained of has been mailed to
the applicant’s last known address on the records of the city clerk, a written statement
setting forth fully the grounds for the appeal. The clerk shall review the report and recommendation of the hearing officer and make a decision on the matter. The clerk’s decision may be further appealed to the commission if applied for in writing to the commission no later than thirty (30) days form the clerk’s decision.
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STANDARD OF REVIEW
The review of an appeal shall not be de novo. The commission shall only overturn, or
modify, a decision or finding of the clerk if it finds such decision or finding to be arbitrary or
capricious and not supported by material, substantial, and competent facts on the whole record
considered by the clerk in arriving at such decision or finding.
Arbitrary means “without adequate determining principle… fixed or arrived at through an
exercise of will or by caprice, without consideration or adjustment with reference to principles,
circumstances, or significance... decisive but unreasoned.” Capricious means “apt to change;
suddenly; freakish; whimsical; humorsome.”
Further, the applicable standard requires a review of whether the decision is supported by
competent, material, and substantial evidence on the record, and represents the reasonable
exercise of the board’s discretion. “Substantial evidence” is evidence that a reasonable person
would accept as sufficient to support a conclusion. Edw C Levy Co v. Marine City Zoning Bd of
Appeals, 293 Mich App 333, 341-42; 810 N.W.2d 621 (2011) (quoting Dowerk v. Charter Tp of
Oxford, 233 Mich App 62, 72; 592 N.W.2d 724 (1998)). Furthermore, scoring must be proper,
consistent, comply with the applicable ordinance and not be based upon an abuse of discretion.
The basis for this appeal is 1) the scoring is not based on competent, material, and
substantial evidence; 2) scoring insights provided to Blackstone are based on clearly erroneous
findings; 3) Blackstone score was based on improper/inconsistent scoring; 4) scoring methods do
not comply with the ordinance; 5) scoring insights were inconsistent with the ordinance; 6)
scoring decisions related to Blackstone application were arbitrary and capricious; and 7) scoring
was based upon an abuse of discretion. The Blackstone Application and supporting materials,
which is in the City of Lansing’s possession, is hereby fully incorporated by reference.
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ARGUMENT
I. FINANCIAL STRUCTURE & FINANCING (Section 10)
The submission criteria refers applicants to Chapter 1300.05(b)(23), which states:
An estimate of the number and type of jobs that the medical marihuana establishment is expected to create, the amount and type of compensation expected to be paid for such
jobs, and the projected annual budget and revenue of the medical marihuana establishment (emphasis added).
Blackstone was only awarded 1 out of 2 points for this scoring category. Exhibit 1 –
Scoring Rubric. The basis for the one-point deduction, per the scoring insights, was that a
“start-up budget [was] not attached.” Exhibit 1. The scorer’s determination is arbitrary and
unreasonable.
Nowhere in Chapter 1300.05(b)(23) is there a requirement to provide a “startup budget.”
Nevertheless, a startup budget and initial startup costs were included in the pro forma submitted
with the Application. See attached Exhibit 2 – Pro Forma. Per the scoring insights, the scorer
acknowledged review of the pro forma by stating: “submitted a 3-year GAAP budget with
revenue and line item expenses (“Pro Forma”).” Exhibit 2. Certainly, “startup costs” are under
the umbrella of “expenses.”
The Pro Forma clearly included specific line items for startup costs in the first year of
operation. Exhibit 2. Review of the Pro Forma demonstrates the following: 1) In year 1,
Blackstone expected initial capital investments of $1,843,250.00, which directly correlates with
both their purchase of the proposed location, as well as the documented construction costs; 2)
Blackstone identified initial startup costs for furniture and equipment in the amount of
$160,000.00; 3) Blackstone intended to have an initial spend on noise elimination and odor
elimination equipment in the total amount of $129,000.00; and 4) that wages in year 1 would
equate to $1,490,000.00. Exhibit 2. These figures clearly do not deviate from the “Tangible
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Capital Investments” described in Blackstone’s Building Construction Plan, Land Contract for
the proposed property, as well as the Building Construction quotes provided as supporting
materials to the Application. See attached Exhibit 3 – Building Construction Plan; Exhibit 4
– Land Contract re Cedar St. Property; Exhibit 5 – Building Construction Quotes; Exhibit
6 – Tangible Capital Investment Plan. These figures also equally match Blackstone’s staffing
and job creation plan.
Even a cursory look at the Pro Forma depicts the vast difference for “expenses” in the
first year (approximately $4,200,000.00) in comparison to expenses in years two and three,
which were estimated at $2,508,000.00 and $2,301,000.00, respectively. Exhibit 2. The glaring
evidence of startup costs being included in the Pro Forma should not have been ignored by the
scorer. Thus, the decision was not supported by substantial evidence or reasonable exercise of
discretion.
The Pro Forma clearly included startup costs. Exhibit 2. Thus, the scorer’s determination
that a startup budget was not attached is unreasonable. The one-point deduction is a clear error.
This Section of the scoring rubric must be reconsidered, and Blackstone should be awarded a
total of 2 out of 2 points under this category.
II. INTEGRATION WITH GROWS (Section 12) & TOTAL COL JOBS (Section 20) Zero points were awarded for Section 12 and Section 20 of the scoring rubric. Exhibit 1.
Such a score is utterly unfathomable given the numerous supporting documents provided in the
Application.
In support of Section 12 of the scoring rubric, Blackstone submitted a Plan to Integrate
with a Grower Facility. See attached Exhibit 7 – Plan to Integrate with Grow. In fact, at the
time of Application submission, Blackstone had already entered into a signed purchase
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agreement to purchase 209 Baker Street, Lansing, MI 48910. See attached Exhibit 8 –
Purchase Agreement re 209 Baker. The purchase price for the proposed grow was
$1,000,000.00. Exhibit 8. To support its plan to integrate, Blackstone included a copy of the
purchase agreement as an attachment to the Application as well as construction quotes for the
proposed grower facility. See attached Exhibit 9 – Construction Quotes for 209 Baker;
Exhibit 8. Entering into the purchase agreement for the 209 Baker property was an act in
furtherance of Blackstone’s plan to integrate with a grow. Moreover, Blackstone submitted an
application for a grower facility with the City of Lansing, which was yet another act in
furtherance of pursuing integration with a grower facility. See attached Exhibit 10 –
Application Submission Receipt. Additionally, obtaining construction quotes was another act in
furtherance of the plans to integrate. Exhibit 9. Under no circumstance, can these acts in
furtherance of moving forward with integration be deemed “speculative.”
Indeed, Blackstone has every intention of integrating a grow facility with its proposed
provisioning center. Blackstone did in fact eventually file its grow application with the City of
Lansing, which was never taken into consideration. Blackstone hereby requests that notice is
taken of Blackstone’s submitted grower application, which was filed with the City of Lansing
and is hereby fully incorporated by reference.
Moreover, the City of Lansing asked for plans of integration with a grower facility. Yet,
the scoring does not award points for having plans. Even if, assuming arguendo, that
Blackstone’s plan for integration lacked support and was merely “speculative,” then, at
minimum, Blackstone should have received points for submitting an integration plan in
accordance with the applicable ordinance. To award zero points completely undermines the
Lansing ordinance and falls completely out of the scorer’s allowable discretion. In contrast,
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applicant was awarded points for submitting “plans” in other areas of the application – for
example, Blackstone received three out of four points for their charitable plan under Section 12
of the scoring rubric. The City cannot reasonably assert that plans in one category are
“speculative,” unless they assume that mere plans, in general, are always speculative. The
disfunction in scoring only sends one message, that scoring in this category was arbitrary,
capricious, and unreasonable.
In support of Section 20 of the scoring rubric, Blackstone submitted numerous job
creation plans that outlined not only jobs at the provisioning center, but also indicated the vast
number of jobs that would be created at the proposed grow facility Blackstone plans to integrate
with at the 209 Baker Property. See attached Exhibit 11 – Job Creation Plan. Again, under the
same logic the scorer used for Section 12, see supra, the scorer awarded zero points on the basis
that the grow facility was “speculative.” Exhibit 1. However, the scorer completely ignored the
fact that plans were submitted, and also ignored the totality of jobs that Blackstone intended to
bring to the City of Lansing. As indicated in the supporting documentation, Blackstone was fully
committed to implementing its hiring and staffing plans. Exhibit 11. At the integrated grow,
Blackstone had plans to hire over 50 employees. Exhibit 11. At the provisioning center,
Blackstone had plans to hire over 35 employees. Blackstone’s Pro Forma, as well as its staffing
and job creation plans, depicted a planned budget for such hiring. Exhibit 2; Exhibit 11.
When making its determination to award zero points for the above-referenced categories,
the decision of the scorer was arbitrary and unreasonable. The scorer’s inference that the grow
facilities were “speculative” is without basis. The supporting documentation certainly indicates
that Blackstone fully intends to integrate with a grow facility and that it took steps towards
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accomplishing that plan. As such, these scores must be reconsidered and Blackstone should be
awarded, at minimum, 7 out of the 10 points available under these categories.
III. PROJECTED ANNUAL BUDGET (Section 19)
The scorer acknowledges, in the scoring insights section, that applicant included a “3-
year budget with revenue and line item expenses,” and then goes on to state that “no startup
budget attached.” This assertion is wrong. A start-up budget was incorporated into the Pro
Forma, which was acknowledged by the scorer. Exhibit 2. The Pro Forma clearly included
specific line items for startup costs in the first year of operation. For instance, the Pro Forma
indicates $1,843,250.00 allocated for “Capital Investments” in year 1. These figures clearly do
not deviate from the “Tangible Capital Investments” described in Blackstone’s Building
Construction Plan, as well as the Building Construction quotes provided as supporting materials
to the Application. Exhibit 6.
Additionally, the Pro Forma included line items for other startup costs such as “Noise
Elimination Equipment” and “Odor Elimination Equipment,” which were expenses to be
absorbed only within the first year of operation. Exhibit 2. Certainly, “start-up costs” are under
the umbrella of “expenses.” Even a cursory look at the Pro Forma depicts the vast difference for
“expenses” in the first year (approximately $4,200,000.00) in comparison to expenses in years
two and three, which collectively total less than $5,000,000.00. Exhibit 2. The glaring evidence
of startup costs being included in the Pro Forma cannot be ignored. Thus, the scorer’s
determination that a startup budget was not attached is unreasonable.
IV. NET WORTH (Section 22)
Blackstone was not awarded any of the three possible points in this scoring category.
Exhibit 1. The basis for the entire three-point deduction, per the scoring insights, was that
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Blackstone “Doesn’t have $100K in a bank account in the applicant’s name. Doesn’t have solid
proof of net worth. No submitted document in name of applicant. Doesn’t have full
documentation of initial start-up and operating costs.” Exhibit 1. The scorer’s determination is
unreasonable.
The submission criterion for this scoring category refers applicants to section
1300.05(b)(12)(vii) and 1300.06(b)(5) which respectively state:
(12) A copy of the proposed business plan for the establishment, including, but not
limited to, the following: (vii)Financial structure and financing of the proposed medical marihuana establishment(s)
See Chapter 1300.05(b)(12)(vii).
* * * (5) Whether the applicant has reasonably and tangibly demonstrated it possesses
sufficient financial resources to fund, and the requisite business experience to execute,
the submitted business plan and other plans required by Section 1300.05. The maximum number of scoring points in this category shall be ten points. See Chapter 1300.06(b)(5).
Blackstone’s sole owner, Joann Steil, provided a detailed personal financial statement
from her CPA indicating a net worth of nearly $1,400,000.00, with available cash in excess of
$750,000.00. See attached Exhibit 12 – CPA Attested Financials. Ms. Steil is 100% owner of
Blackstone (a flow-thru entity), meaning that Ms. Steil and the entity are one and the same. See
attached Exhibit 13 – Ownership Structure; Exhibit 14 – Operating Agreement.
Additionally, Ms. Steil demonstrated that over $100,000.00 of liquid capital was
immediately available for capital contribution to Blackstone. See attached Exhibit 15 – Bank
Statements and Deeds; See attached Exhibit 16 – Financial Cover Page. Ms. Steil provided
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detailed bank statements demonstrating there was sufficient cash at her disposal for contribution
to Blackstone. Exhibit 15. As such, point reductions in this category are unjustified.
The scorer deducted points claiming that there wasn’t solid proof of net worth despite the
fact that Ms. Steil’s CPA attestation specifically provided the necessary assurances, wherein the
CPA stated, “our responsibility is to conduct this engagement in accordance with Statements on
Standards for Attestation Engagements (SSAE)… We believe that the results of these procedures
provide a reasonable basis of our conclusion.” Exhibit 12. The CPA attested financials also state
that “based on the agreed upon procedures performed, we declare to the best of our knowledge,
the statement of financial condition of Joann Steil is complete and accurate.” Exhibit 12. The
decision to award 0 points is vastly unreasonable given Ms. Steil’s net worth and the supporting
documentation demonstrating that the entity was well capitalized.
Additionally, Blackstone provided Lansing with numerous supporting documents to
further provide assurance of its finances. The supporting materials included, bank statements,
annuity accounts and real estate deeds. Exhibit 15. The conclusions and decisions derived by the
score are arbitrary and unreasonable and are inconsistent with the supporting materials provided,
which if viewed reasonably, would have qualified Blackstone to receive all points under this
category.
Chapter 1300.06(b)(5) states that the City, as part of its scoring process, should consider
“whether the applicant has reasonably and tangibly demonstrated it possesses sufficient financial
resources…” The key word in this section of the ordinance is reasonably. It would be
completely unreasonable for the City to deduct points from Blackstone after its inclusion of the
numerous documents that corroborated Ms. Steil’s net worth and access to capital. This is in
addition to Ms. Steil signing a sworn statement as to the truth of this documentation and placing
32
her reputation, other business licenses, and livelihood at stake by doing so. See attached Exhibit
17 – Sworn Statement. Any objective person would find the documentation submitted by Ms.
Steil to be reasonable and that she did provide assurances of her financial ability and business
experience to operate this business.
In addition to the above, the scorer indicates that applicant failed to include a start-up
budget. This assertion is wrong. A start-up budget was included in the Pro Forma submitted
with the Application. Exhibit 2. Applicant included a 3-year Pro Forma which clearly included
a specific line items for startup costs in the first year of operation. For instance, the Pro Forma
indicates $1,843,250.00 allocated for “Capital Investments” in year 1. These figures clearly do
not deviate from the “Tangible Capital Investments” described in Blackstone’s Building
Construction Plan, as well as the Building Construction quotes provided as supporting materials
to the Application. Exhibit 6.
Additionally, the Pro Forma included line items for startup costs such as “Noise
Elimination Equipment” and “Odor Elimination Equipment,” which were expenses to be
absorbed only within the first year of operation. Exhibit 2. Certainly, “start-up costs” are under
the umbrella of “expenses.” Even a cursory look at the Pro Forma depicts the vast difference for
“expenses” in the first year (approximately $4,200,000.00) in comparison to expenses in years
two and three, which collectively total less than $5,000,000.00. The glaring evidence of startup
costs being included in the Pro Forma cannot be ignored. Thus, the scorer’s determination that a
startup budget was not attached is unreasonable.
Given that Blackstone clearly showed readily available funds in excess of $100,000, with
solid proof of net worth and clear evidence of start-up costs, the scorer’s decisions were made in
33
error, or were unjustified and unreasonable. In either event, Applicant must be awarded all
possible points in this category.
V. ODOR PLAN (Section 35) The submission criteria for this category refers applicants to Chapter 1300.06(b)(3) and
Chapter 1300.09(i). Chapter 1300.06(b)(3) states:
Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the
building housing the medical marihuana establishment, including plans to eliminate or
minimize traffic, noise, and odor effects on the surrounding neighborhood. The maximum number of scoring points in this category shall be ten point
Chapter 1300.09(i) states:
No medical marihuana provisioning center shall be operated in a manner creating noise,
dust, vibration, glare, fumes, or odors detectable to normal senses beyond the boundaries of the property on which the medical marihuana provisioning center is operated; or any other nuisance that hinders the public health, safety and welfare of the residents of the City.
Applicant was only awarded 3 of 4 points in this category, despite including a detailed
Odor Mitigation Plan. See attached Exhibit 18 – Odor Plan. The scorer, per the scoring
insights, based their decision on an unreasonable conclusion that the Odor Plan submitted did not
include “specs, or budget.” Exhibit 1. To the contrary, the Odor Plan submitted by Blackstone
included detailed equipment specs. Exhibit 18. Moreover, the Pro Forma submitted by
Blackstone clearly indicated a line item for Odor Equipment in the amount of $104,000.00.
Exhibit 2.
In addition, prior to submission of applications, the Clerk’s office provided applicants,
via the City’s website, a scoring rubric scoring guide with specific items to include to obtain
maximum points. See attached Exhibit 19 – Sample Rubric. In Section 35, “Plan to
Minimize/Eliminate Odor,” the criteria column states, “Any plan(s) the applicant has provided
which would minimize or eliminate the impact of increased odor on nearby neighborhoods
34
please document in budget of expenditures.” Here, Blackstone followed these instructions
precisely as requested and did, in fact, document the odor equipment cost in the budget of
expenditures, which is clearly listed as a separate line item in year 1 of the previously attached
Pro Forma. Exhibit 2. Adversely, the scorer deducted a point because the Odor Plan did not
include the cost of the equipment being proposed. Exhibit 1. However, the instructions clearly
stated to document said cost directly into the budget of expenditures, which applicant did based
upon a plain reading of the Lansing City Ordinance and other City materials. Exhibit 18.
The scorer also indicates that there were “no specs” provided for the odor equipment
being proposed. Exhibit 1. However, the attached Odor Plan, which was included as part of
Applicant’s application submission, includes specific details about the type of equipment to be
used. Exhibit 18. Specifically, Applicant’s Odor Plan provides a detailed description of the
equipment that will be used, including the type of system (mini-split), type of drive (belt),
amount of carbon (30 lbs), additional equipment (ozone generator), type of odor measuring
equipment (differential pressure gauge & Olfactometer), and type of comparative scale of
reference (OIRS - Odor Intensity Reference Scale). The main points of the Odor Plan have been
included here for your reference:
• The space will be conditioned using multiple split heat pump systems of various
capacities and a ductless mini-split system. Each of the split-systems, excluding the ductless mini-split system, are equipped with unit-level pleated filters.
• An in-line, belt driven exhaust fan is provided to remove the amount of fresh air provided
for the occupants and an additional amount that will ensure a negative pressure within the
space.
• The in-line exhaust fan is equipped with a filter section loaded with approximately thirty pounds of activated carbon, in a rack-mounted configuration.
• An ozone generator will be placed upstream of the carbon filters, in the housing assembly.
35
• A differential pressure gauge will be used to ensure a negative building static of no less than .05” of negative building static has been achieved. A maximum negative building
static shall not exceed .15”
• Testing shall be done using a field Olfactometer, calibrated in accordance with odor control standards using the scheduled monitoring protocol.
• We will compile and compare the data we record to establish norms using a 5-point Odor
Intensity Reference Scale to compare daily readings. The scorer’s determination that Applicant provided neither a budgeted cost nor any
specifics on the type of equipment proposed for this location cannot be possibly derived from the
materials submitted. Thus, the scorer’s decision should be deemed arbitrary and
unreasonable. Applicant clearly provided both aforementioned items with adequate sufficiency
and, as such, must be awarded one (1) additional point in this category.
CONCLUSION AND REQUESTED RELIEF
The scored rubric which applicant received with its denial is riddled with clear and
obvious errors and in some cases, direct contradictions made by the scorer.
It is also clear that the City of Lansing has decided to deduct points arbitrarily and
capriciously. As referenced above, many of the deductions were non-objective, unreasonable,
and without basis under the requirements set forth in the City of Lansing’s applicable ordinances.
These numerous errors and blatant disregard for the requirements set forth in the ordinance
bolster Applicant’s claims that the scoring was arbitrary and capricious; and was not supported
by material, substantial, and competent facts on the whole record considered by the Clerk.
Applicant maintains that the entire application needs to be re-scored with the additional points
outlined above being added to Blackstone’s score.
Blackstone hereby reserves all rights. Additionally, the Exhibits attached hereto are not
meant to replace the application, or the totality of documents submitted in support of each
36
category of scoring. Blackstone hereby incorporates its entire Application, as well as its grower
application fully by reference herein.
Respectfully submitted,
/s/ Nadeem Noah Harfouch /s/ Mike M. Bahoura
Nadeem Noah Harfouch, Esq. Mike M. Bahoura, Esq. The Harfouch Law Firm, PLLC Law Offices of Mike M. Bahoura, PLLC 631 East Big Beaver Road, Suite 211 631 East Big Beaver Road, Suite 211 Troy, MI 48083 Troy, MI 48083
Ph: 248-274-6529 Ph: 248-392-1586
nharfouch@harfouchlaw.com mike@bahouralaw.com Dated: October 2, 2019 Dated: October 2, 2019
37
EXHIBIT
1
Scoring Rubric, as scored by the Clerk
38
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
Total
Possible
Points
Blackstone Harvest LLC ‐ District Club‐6450 S. Cedar
Applicant Address ‐‐‐
#Category ‐‐‐Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes
budget. 7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job
descriptions for PC ONLY 3 3 Job Creation
FTE's 34‐40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start‐up and operating costs. 9/12/19
23 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
27
Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
PC has residential zoned property within 1/4 mile. 9/20/19
139
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I ‐ bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total ‐ Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV‐$280,600
Proposed Improvements $643,250.00 ‐ 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus
=All+Records&SearchCategory=Address&SearchText=6450+s+ced
ar&uid=384&PageIndex=1&ReferenceKey=33‐01‐05‐10‐151‐
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDis
playString=33‐01‐05‐10‐151‐012&RecordKey=1%3d33‐01‐05‐10‐
151‐012%3a%3a4%3d33‐01‐05‐10‐151‐
012%3a%3a7%3d55b67cb1‐daee‐40e6‐9dae‐
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%
3a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
240
EXHIBIT
2
Pro Forma/Budget
41
BLACKSTONE HARVEST, LLC - PRO FORMA YEAR 1 YEAR 2 YEAR 3
Sales $9,000,000 $10,500,000 12,000,000
Costs of Goods Sold/Inventory $2,640,000 $2,900,000 $3,215,000
GROSS PROFIT $6,360,000 $7,600,000 $8,785,000
OPERATING EXPENSES
Salary and Wages $1,490,000 $1,550,000 $1,575,000
Employee Benefits and Bonuses $150,000 $160,000 $170,000
Capital Investments $1,843,250 $300,000 0
Outside Services $35,000 $35,000 $35,000
Supplies/Furniture/Equipment (Office & Operation) $160,000 $50,000 $70,000
Repairs & Maintenance $23,000 $38,000 $41,000
Noise Elimination Equipment $25,000 $0 $0
Odor Elimination Equipment $104,000 $0 $0
Marketing & Advertising $58,000 $36,000 $42,000
Car & Travel & Vehicle Misc. $50,000 $55,000 $57,000
Accounting $24,000 $25,000 $26,000
Legal $36,000 $36,000 $36,000
Telephone $10,000 $10,000 $10,000
Utilities $19,000 $19,000 $20,000
Insurance & Workers Comp $10,000 $10,000 $10,000
Security Monitoring $16,000 $16,000 $16,000
General Admin $3,000 $3,000 $3,000
Patient Education $20,000 $20,000 $20,000
Community Spending and Charity $130,000 $145,000 $170,000
TOTAL EXPENSES $4,206,250 $2,508,000 $2,301,000
NET INCOME BEFORE INTEREST TAX DEPRECIATION AND AMORTIZATION $2,153,750 $5,092,000 $6,484,000
42
EXHIBIT
7
Plan to Integrate
43
Blackstone Harvest, LLC – Plan to Integrate with a Grower Facility
Blackstone Harvest, LLC (“Blackstone Harvest”) will integrate the provisioning center with a medical marijuana grower facility in the City of Lansing. Blackstone Harvest has a signed purchase agreement for the property commonly known as 209 Baker Street, Lansing, Michigan 48910. Blackstone Harvest will be purchasing the property for $1,000,000.00. The property is
approximately 13,600 square feet and is situated on approximately 2.47 acres of land. Blackstone
Harvest will file an application to operate a licensed medical marijuana grower facility at the property. Blackstone Harvest will grow 1,000 plants or more at the proposed facility. Blackstone Harvest’s application for the proposed grower facility will include separate business and operational plans, as well as other relevant information, in accordance with the City of Lansing’s Code of Ordinances.
44
10/2/2019 City of Lansing Clerk,MI-Online Payments
https://client.pointandpay.net/web/cityoflansingclerkmi 1/1
Step 1: Select Payments Step 2: Review and Submit Step 3: Confirmation and Receipt
Step 3: Confirmation and Receipt
Result: Payment Authorized
Confirmation Number: 64893086
Your payment has been authorized successfully and payment will be processed.
The City of Lansing Clerk thanks you for your payment. For questions about your account, please call 517-483-4131. Credit card payments will show up as City of Lansing Clerk. E-check
payments will show up as PNP BILLPAYMENT 8888916064 Thank you for using our bill payment services.
Please save or print a copy of this receipt for record keeping purposes.
My Bills
Description Amount
MJ Facilities License payment of $5,000.00 on Submission Number 10787 $5,000.00
Customer Information
First Name: Joann
Last Name: Steil
Address Line 1: 22618 Shorewood Dr
Address Line 2:
City:St Clair Shores
State: Michigan
Zip Code: 48081
Phone Number: 5867031702
Email Address: jsteil902@gmail.com
Subtotal:$5,000.00
Convenience Fee: $150.00
Total Payment:$5,150.00
Payment Information
Payment Date: 10/02/2019
Card Type: Visa
Card Number: ************5774
Print
45
46
47
EXHIBIT
10
Receipt for Grow Application
48
10/2/2019 City of Lansing Clerk,MI-Online Payments
https://client.pointandpay.net/web/cityoflansingclerkmi 1/1
Step 1: Select Payments Step 2: Review and Submit Step 3: Confirmation and Receipt
Step 3: Confirmation and Receipt
Result: Payment Authorized
Confirmation Number: 64893086
Your payment has been authorized successfully and payment will be processed.
The City of Lansing Clerk thanks you for your payment. For questions about your account, please call 517-483-4131. Credit card payments will show up as City of Lansing Clerk. E-check
payments will show up as PNP BILLPAYMENT 8888916064 Thank you for using our bill payment services.
Please save or print a copy of this receipt for record keeping purposes.
My Bills
Description Amount
MJ Facilities License payment of $5,000.00 on Submission Number 10787 $5,000.00
Customer Information
First Name: Joann
Last Name: Steil
Address Line 1: 22618 Shorewood Dr
Address Line 2:
City:St Clair Shores
State: Michigan
Zip Code: 48081
Phone Number: 5867031702
Email Address: jsteil902@gmail.com
Subtotal:$5,000.00
Convenience Fee: $150.00
Total Payment:$5,150.00
Payment Information
Payment Date: 10/02/2019
Card Type: Visa
Card Number: ************5774
Print
49
EXHIBIT
11
Job Creation Plan
50
Blackstone Harvest, LLC – Job Creation – Additional Lansing Jobs
Investment in 209 Baker Street, Lansing, MI 48910:
The Company is also purchasing a 13,600 sq. ft. property to integrate a grower facility with the
proposed provisioning center. This grower facility will have a Class C grow license that will
allow a 1,500-plant grow operation. The property we are purchasing is commonly known as 209 Baker Street, Lansing, MI 48910. The total capital investment to purchase the property will be $1,000,000.00. We project that this building will require an additional investment of $2,040,000.00 to renovate the interior and exterior of the building for purposes of a medical marijuana grower facility.
Job Creation at 209 Baker Street, Lansing, MI 48910:
We will employ approximately 50 to 60 employees to work at the grower facility.
Job Creation Effects on Economy of Lansing:
The total jobs added in Lansing will be between 50 to 60 new jobs. This will have a profound effect on the local economy, especially since our Company will seek to hire locally.
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All of our employees will be paid more than $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings
plans, which will include employer contributions, and an employer paid health insurance
package, among other things. Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals by increasing
and improving the job opportunities available. We will build resources that support environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Employer Covered Group Health Insurance Plan:
Our employees will receive health benefits. We will find a plan that best meets our needs and give employees the option to enroll in our group health insurance plan. Health insurance will be fully covered by our Company.
51
Employee Benefits:
Our Company will provide employees with a variety of benefits for working with us. We want the best candidates and we will incentivize employees for staying with us by offering long-term benefits. After the first six months of employment, employees will be eligible for a week of paid vacation time off and three (3) days of personal time off. After
the first three (3) years of employment with our Company, employees will have two
weeks of paid vacation time off, and four (4) days of personal time off. Additionally, we will work with a nationally recognized service provider, such as Merrill Lynch, to adopt a retirement and benefits package for our employees to enroll in. Any employee that puts money towards their employee retirement account will receive a
Company match of up to 3% of the employee’s yearly income.
Employee Bonuses:
Our Company will offer bonuses to employees based on their performance and continued training. Bonuses will be discretionary and will be paid on a yearly basis after Q4.
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered
Patients can see familiar faces at our facility.
Employing the Chronically Underemployed: We want to give the chronically underemployed new opportunities in this new and
fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work hours. We will connect with the Michigan Unemployment Insurance Agency and use the
Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
Job Creation – Jobs and Compensation at Grower Facility:
Position Number of
Employees
Designation Compensation
Horticulturists 22 8 Full-Time - Hourly 14 Part-Time – Hourly
$17.00/hr.
52
Packaging Team Member 4 1 Full-Time - Hourly 3 Part-Time – Hourly
$17.00/hr.
Tissue Culture Technician 1 Full-Time – Salary $60,000.00/year
Director of Quality Assurance 1 Full-Time – Salary $60,000.00/year
Director of Cultivation 1 Full-Time – Salary $150,000.00/year
Inventory Manager 1 Full-Time – Salary $55,000.00/year
Cultivation and Quality Assurance Techs 8 2 Full-Time – Hourly 6 Part-Time - Hourly
$16.00/hr.
Packaging Manager 1 Full-Time – Salary $60,000.00/year
General Manager 1 Full-Time – Salary $75,000.00/year
Assistant Manager(s) 2 Full-Time – Salary $50,000.00/year
Account Manager 1 Full-Time – Salary $55,000.00/year
Master Grower(s) 2 Full-Time – Salary $150,000.00/year
Compliance Director 1 Full-Time –
Salary
$55,000.00/year
Maintenance Manager 1 Full-Time -
Hourly
$16.00/hr.
Security Manager 1 Full-Time – Salary $55,000.00/year
Receptionist/Admin 1 1 Full-Time Hourly $18.00/hr.
Security Officer(s) 3 1 Full-Time Hourly 2 Part-Time
Hourly
$16.00/hr.
Community Outreach
Manager
1 Full-Time
Hourly
$18.00/hr.
Information Technology
Specialist(s)
1 Full-Time
Hourly
$18.00/hr.
53
Blackstone Harvest, LLC – Employee Compensation and Jobs Available
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All of our employees will receive above $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things.
Investment in 6450 S. Cedar St., Lansing, MI 48911:
Blackstone Harvest, LLC (the “Company”) is purchasing the property commonly known as 6450
S. Cedar St., Lansing, Michigan 48911 for the purpose of developing and operating a licensed medical marijuana provisioning center. The total capital investment to purchase the property will be $1,200,000.00. Per our building development plan and construction plans, the renovation needed for the building will cost an additional $643,250.00.
Job Creation at 6450 S. Cedar St., Lansing, MI 48911: We will employ between 34 to 40 employees to work at the provisioning center. Of those employees, approximately ten (10) employees will be in a management or leadership position.
Job Creation Effects on Economy of Lansing:
The total jobs added in Lansing exclusively from our provisioning center will be between 34 and 40 new jobs. This will have a profound effect on the local economy, especially since our
Company will seek to hire locally.
Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals by increasing and improving the job opportunities available. We will build resources that support
environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered
Patients can see familiar faces at our facility.
54
Employing the Chronically Underemployed:
We want to give the chronically underemployed new opportunities in this new and fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work
hours. We will connect with the Michigan Unemployment Insurance Agency and use the
Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
Executive Salary Compensation:
Position Number of
Employees
Designation Compensation
CEO 1 Full-Time – Salary $130,000.00/year
CFO 1 Full-Time – Salary $90,000.00/year
COO 1 Full-Time – Salary $90,000.00/year General Counsel 1 Full-Time - Salary $90,000.00/year
Full-Time/Part-Time Staff Compensation:
Position Number of
Employees
Designation Compensation
Compliance Manager 1 Full-Time – Salary $45,000.00/year
Human Resources Manager 1 Full-Time –
Salary
$45,000.00/year
Accountant/Bookkeeper 1 Full-Time –
Salary
$50,000.00/year
Product Pricing Specialist 1 Full-Time –
Salary
$40,000.00/year
Financial Analyst 1 Full-Time – Salary $45,000.00/year
Security Manager 1 Full-Time – Salary $45,000.00/year
General Manager 1 Full-Time – Salary $65,000.00/year
Assistant Manager(s) 1 Full-Time – Salary $45,000.00/year
Account Manager 1 Full-Time – Salary $40,000.00/year
Patient Care Specialist(s) 8 4 Full-Time Hourly 4 Part-Time Hourly
$16.00/hr.
Provisioning Center Technician(s) 8 4 Full-Time Hourly $16.00/hr.
55
4 Part-Time Hourly
Maintenance Manager 1 Part-Time
Hourly
$16.00/hr.
Inventory Coordinator(s) 1 Full-Time
Hourly
$18.00/hr.
Receptionist(s) 3 1 Full-Time
Hourly 2 Part-Time Hourly
$16.00/hr.
Security Officer(s) 4 1 Full-Time Hourly 3 Part-Time Hourly
$16.00/hr.
Community Outreach Manager 1 Full-Time Hourly $18.00/hr.
Information Technology Specialist(s) 1 Full-Time Hourly $18.00/hr.
Organizational Job Descriptions
Chief Executive Officer/President (CEO)
The CEO is responsible for all facets of the operation, including financial oversight. The CEO is the leader of the
management team with responsibility for managing all senior managers. The CEO will have significant interaction
with the principals/owners of the Company and all outside groups including state regulators, local government
officials, and community groups. The CEO develops policy and communicates expectations and the Company’s
mission.
Chief Financial Officer (CFO)
The CFO is responsible for direction and oversight of the financial functions of the Company, in accordance with
U.S. generally accepted accounting principles and in accordance with MMFLA rules and regulations. The CFO
oversees accounting controls and procedures concerning the collection, verification, and analysis of financial
information.
56
Chief Operations Officer (COO)
The COO is responsible for carrying out our Company’s strategic plan through overseeing operations, developing
functional roles and assigning responsibilities to employees. The COO is responsible for overseeing the inventory
control system which includes day-to-day operations of dispensing, packaging, administrative offices and inventory
control.
General Counsel
The General Counsel is responsible for offering counsel on a variety of legal issues, advising Company executives,
and ensuring compliance with legal requirements.
Financial Analyst
The Financial Analyst is responsible for financial planning, analysis, and projection for the Company. The Financial
Analyst identifies trends and makes recommendations concerning system improvements.
Product Pricing Specialist
The Product Pricing Specialist implements pricing strategies that meet the Company’s standards, policies and
procedures.
Accountant/Bookkeeper
The Bookkeeper is responsibility for daily accounting duties. The Bookkeeper will cooperate with the Company’s
outside accounting firm and Inventory Coordinator to complete regular audits of the system.
Human Resource Manager
The HRM oversees policies, procedures and compliance relating to Company employees. Further, HRM ensures all
human resources activities are in compliance with local, state and federal laws; and implements and oversees
programs related to employee benefits and initiatives. Employee benefits are overseen by the HRM as well. The
HRM makes recommendations on potential policy changes to ensure the Company offers a healthy package of
57
salary and benefits to employees. The HRM ensures the workplace is accommodating and free of harassment,
handling complaints in accordance with policy and any relevant laws.
Compliance Manager
The Compliance Manager is responsible for upholding the Michigan Medical Marihuana Program guiding principles
as well as overall Company compliance. The Compliance Manager will be responsible for communicating with the
Department to schedule inspections, reviewing policies and procedures and updating on a quarterly basis as well
as educating the Company’s employees on compliance and regulations. The Compliance Manager will also assist
the inventory coordinator with quality control and ensure all products are tested, labeled, and packaged properly.
Security Manager/Officers
The dispensary will employ a Security Manager and Security Officers to oversee the safety of staff and the security
of the facility. The Security Manager is responsible for all security of the facility and its perimeter, and will train all
staff as to basic security protocols. The Security Manager is also responsible for the security and safety of the
immediate environment outside of the facility perimeter to the extent that the provisioning center’s operations
relate to the welfare of the neighbors, arising from the facility’s presence in the neighborhood. The Security
Manager will maintain strict vigilance for diversion and deviation of medicine.
Information Technology Specialist
The IT Specialist is responsible for the implementation of the Company’s computer systems. The IT Specialist will
also be responsible for systems-related staff training, as well as integrity of the information and security of the
systems including physical and as electronic security.
Community Outreach Manager
The Community Outreach Manager will oversee the planning and implementation of outreach strategies. The
Community Outreach Manager is primarily responsible for connecting people in the broader community and
cultivating relationships with businesses, individuals, and other relevant organizations.
58
Maintenance Manager
The Maintenance Manager is responsible for planning, organizing and managing preventive maintenance, cleaning,
and repairs to equipment, fixtures, furnishings and the structure.
General Manager
The General Manager’s responsibility is to oversee all day-to-day operations of the Company including sales,
money inventory, storage of medical marihuana Products, cleanliness and organization, and signage. The General
Manager will also be responsible for ensuring that all operations are compliant with state and local law, and that
all appropriate steps are being taken to mitigate exposure under Federal law.
Account Manager
The Account Manager serves as lead point of contact for all account management matters, and completes
administrative work as required.
Inventory Coordinator
The Inventory Coordinator will be responsible for taking inventory of any usable or unusable medical marihuana
during all processes from seed to sale. The Inventory Coordinator will also be responsible for reporting any
inventory discrepancies to the appropriate supervisor.
Receptionist
The Receptionist is responsible for checking in a patient and ensuring the patient is an active card holder. Since the
Receptionist is the front lines of operations, it is imperative that this individual is professional, knowledgeable, and
trustworthy.
Provisioning Center Tech
The Provisioning Center Techs are responsible for verifying the status registered qualified patients and maintains
accurate records of transactions, patient data, and identification documents. They respond to inquiries and walk
guests through the facility.
59
Patient Care Specialist
The Patient Care Specialists will be stationed in the Provisioning Center and will dispense Medical Marihuana
Products to Patients. Other responsibilities will include providing each Patient/Designated Caregiver with
knowledgeable and welcoming service, entering each sale into the POS system, and working closely with the
General Manager to ensure the Provisioning Center area is clean and organized.
60
Blackstone Harvest, LLC – Other Compensation and Information
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All our employees will receive at least $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things. Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing (the “City”) and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals
by increasing and improving the job opportunities available. We will build resources that support environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Employer Covered Group Health Insurance Plan:
We will offer our employees health benefits. We will find a plan that best meets our needs and give employees the option to enroll in our group health insurance plan. Health insurance will be fully covered by our Company.
Employee Benefits:
Our Company will provide employees with a variety of benefits for working with us. We want
the best candidates and we will incentivize employees for staying with us by offering long-term
benefits. After the first six months of employment, employees will be eligible for a week of paid vacation time off and three (3) days of personal time off. After the first three (3) years of employment with our Company, employees will have two weeks of paid vacation time off, and four (4) days of personal time off.
Additionally, we will work with a nationally recognized service provider, such as Merrill Lynch, to adopt a retirement and benefits package for our employees to enroll in. Any employee that puts money towards their employee retirement account will receive a Company match of up to 3% of the employee’s yearly income.
Employee Bonuses: Our Company will offer bonuses to employees based on their performance and continued training. Bonuses will be discretionary and will be paid on a yearly basis after Q4.
61
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered Patients can see familiar faces at
our facility.
Employing the Chronically Underemployed: We want to give the chronically underemployed new opportunities in this new and fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the
chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work hours. We will connect with the Michigan Unemployment Insurance Agency and use the Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
62
Blackstone Harvest, LLC – Commitment to Pay Over $15.00/hr.
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All our employees will receive above $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things.
63
Blackstone Harvest, LLC
Blackstone Harvest, LLC – Employee Staffing & Training Plan
CEO/President
64
EXHIBIT
12
CPA Attested Financial Statement
65
As of December 31, 2018
Statement of Financial Condition
Joann Steil
66
Accountants' Agreed Upon Procedures Report
Financial Statements:
Statement of Assets and Liabilities
Notes to Financial Statements
Table of Contents
As of December 31, 2018
Statement of Financial Condition
Joann Steil
67
Joann Steil
22618 Shorewood Dr
St. Clair Shores, MI 48081
We have performed and applied agreed-upon procedures enumerated below on behalf of Joann Steil.
These agreed-upon procedures were conducted in accordance with Statement on Standards for
Attestation Engagements (SSAE) established by the American Institute of Certified Public Accountants
(AICPA). The sufficiency of these procedures is solely the responsibility of those parties specified in
this report. Consequently, we make no representation regarding the sufficiency of the procedures
described below either for the purpose for which this report has been requested or for any other purpose.
These agreed upon procedures have been applied to determine the statement of financial condition of
Joann Steil as of December 31, 2018, and the related notes to the financial statement.
However, we do not express an opinion on these financial statements.
Joann Steil's Responsibility for the Financial Statement
Joann Steil is responsible for the preparation and fair presentation of this financial statement
in accordance with accounting principles generally accepted in the United States. This includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of a financial statement that is free from material misstatement whether due to fraud or error.
Accountant's Responsibility
Our responsibility is to conduct this engagement in accordance with Statements on Standards
for Attestation Engagements (SSAE) promulgated by the American Institute of Certified Public
Accountants (AICPA). We believe that the results of these procedures provide a reasonable basis
of our conclusion.
Accountant's Conclusion
Based on the agreed upon procedures performed, we declare to the best of our knowledge, the
statement of financial condition of Joann Steil is complete and accurate.
Best Regards,
Simon H. Gumma, CPA, CGMA
President
February 14, 2019
P: (248) 729-7171 / F: (248) 729-7373
Troy, MI 48084
888 W Big Beaver Rd, Ste 300
Certified Public Accounting
Gummaco, P.C.
68
Cash on Hand 1,000$
Cash in Banks
PNC Bank - Adv Plc Serv Inc Checking #...1339 24,748$
Extra Credit Union Checking #...0040 36,261
Extra Credit Union Savings #...0001 367,688
Extra Credit Union Savings #...8036 31,107
Chemical Bank Savings #...1238 87,577
Total 547,382
AXA Advisors Annuity 201,512
Furniture & Personal Effects 27,500
Jewelry 30,000
Automobiles / Boats / Motorcycles
2010 Jeep Wrangler Islander 20,000
2007 GMC Savana Conversion Van 9,500
2010 Rinker Boat 15,000
2002 Harley Davidson Road King Classic 20,000
2014 Harley Davidson Sportster 883 4,000
Total 68,500
Principal Residence - 22618 Shorewood Dr 450,000
Investments in Business Ventures 35,000
Investments in Real Estate 250,000
Total Assets 1,610,894$
Mortgage - Wells Fargo Bank 172,943$
Estimated income taxes on the difference
between the estimated current value of assets
and their tax basis (See Note 4)40,000
Total Liabilities 212,943$
Net Worth 1,397,951$
Total Liabilities and Net Worth 1,610,894$
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Assets
Liabilities & Net Worth
69
Ownership Fair Market Net Share of
Business Description %Value (FMV)Liabilities Equity Equity
Advanced Placement Services Inc 100.000%35,000 - 35,000 35,000
Elder Care Placement Services
22618 Shorewood Dr
St. Clair Shores, MI 48081
Totals 35,000$ -$ 35,000$ 35,000$
Ownership Fair Market Total Share of
Real Estate Description %Value (FMV)Liabilities Equity Equity
10410 E Jefferson LLC 50.000%500,000 - 500,000 250,000
Future Development
10410 - 10440 E Jefferson Ave
Detroit, MI 48214
Totals
500,000$ -$ 500,000$ 250,000$
Schedule of Real Estate Investments
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Schedule of Business Ventures
70
Note 1:
Estimated current values were based at either (1) fair market values,
(2) appraised values or (3) broker purchase opinion (BPO).
Note 2:
Amounts for Investments in Business Ventures were based on
compiled financial statements as of December 31, 2018.
Note 3:
Amounts for Investments in Commercial Real Estate were based at either
(1) fair market values, (2) appraised values or (3) broker purchase opinion (BPO).
Note 4:
Estimated income taxes have been provided on the excess of the
estimated current values of assets over their tax basis as if the
estimated current values of the assets, had been realized on the
statement date, using applicable tax and regulations.
The provision will probably differ from the amount of income taxes
that eventually might be paid because those amounts are determined
by the timing and the method of disposal or realization.
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Notes to Financial Statements
71
EXHIBIT
15
Bank Statements, Annuity, Deed
72
73
74
75
76
77
78
79
80
81
EXHIBIT
16
Financial Structure Cover Page
82
Blackstone Harvest, LLC – Financial Structure and Financing
Blackstone Harvest, LLC is owned solely by its managing member, Joann Steil. Ms. Steil has provided CPA attested financials that demonstrate she has a net worth of almost $1.4 million, of which $500,000 is available in cash in her bank accounts. Additionally, Ms.
Steil has access to cash from an annuity valued at $201,512. These financials are supported by
bank/account statements included with this application. Ms. Steil acquired the property located at 6450 S. Cedar by land contract, which has limited her initial out-of-pocket costs significantly (although Ms. Steil is responsible for paying the remaining balance of the property over time).
Ms. Steil will acquire the property at 209 Baker by utilizing her cash and financing options. The interior and exterior renovations to the proposed provisioning center at 6450 S. Cedar and
the proposed grow facility at 209 Baker will be performed by 4 Seasons Contracting, which has
agreed to provide Ms. Steil with financing for the project. This type of arrangement is not uncommon for large projects like the proposed renovations to 6450 S. Cedar and 209 Baker.
83
EXHIBIT
17
Sworn Statement of Truthfulness
84
85
EXHIBIT
18
Odor Plan
86
Blackstone Harvest, LLC – Odor Plan
Our desire to be a good neighbor includes avoiding nuisances of odor that may be
generated by our operations. It’s not a secret – medical marijuana has a distinct odor. However, our company has designed the following odor control plan with our HVAC vendor to mitigate against such a nuisance: 1. The space will be conditioned using multiple split heat pump systems of various capacities and a ductless mini-split system. Each of the
split-systems, excluding the ductless mini-split system, are equipped
with unit-level pleated filters. Fresh air is brought to each of the
ducted systems via a fresh air duct that is run to the exterior of the
structure. This fresh air will tend to pressurize the space.
2. The space is designed for a negative pressure to contain internal odors. To accomplish this, an in-line, belt driven exhaust fan is provided to remove the amount of fresh air provided for the occupants and an additional amount that will ensure a negative pressure within the space.
3. To prevent odors from escaping the structure, the in-line exhaust fan
is equipped with a filter section loaded with approximately thirty
pounds of activated carbon, in a rack-mounted configuration.
Activated carbon is an extremely effective absorptive odor control
substance. An ozone generator will be placed upstream of the carbon
filters, in the housing assembly. Ozone (O3) is an effective odor
control mechanism. In this case, it is used to help control out-going airstream odors and recharge the activated carbon filter media, extending the life of the media.
4. Once systems are running, systems shall be air balanced to ensure
design air flows for supply, fresh air, and exhaust air base values have
been met. Once completed, a differential pressure gauge will be used
to ensure a negative building static of no less than .05” of negative
building static has been achieved. A maximum negative building
static shall not exceed .15”. An initial test with a trade-specific calibrated sensor establishes the base-line of operation for odors in the out-going air stream.
87
5. Once odor control has been established, periodic testing will be
conducted to ensure that the odor control systems are operating to maintain the baseline. As the filters age, replacement will be required and will be conducted, as determined by the calibrated sensor on the test equipment. 6. Testing will be done, in the absence of other standards in accordance
with Standardized Odor Measurement Practices for Air Quality
Testing. Testing shall be done using a field Olfactometer, calibrated in
accordance with odor control standards using the scheduled
monitoring protocol.
7. We will have planned and scheduled monitoring in which we will conduct a daily walk-about visit around the exterior of the site, near the exhaust system. We will compile and compare the data we record to establish norms using a 5-point Odor Intensity Reference Scale to
compare daily readings. If values equal 3 on the 5-point scale, then we
will evaluate and repair the carbon-filtration exhaust system, as
required. Evaluation will include, but is not limited to, fan operation,
distribution system integrity, and filter media effectiveness.
88
EXHIBIT
19
Sample Scoring Rubric
Provided by City
89
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
1 Ownership Structure Including percent ownership for each stakeholder 1 1300.05(b)(12)(i)
2 Organizational Chart Please include name, position and job description 1 1300.05(b)(12)(ii)
3 Worker Training Program 1 1300.05(b)(12)(vi)
4 Short and Long Term Goals and
Objectives 1 1300.05(b)(12)(viii)
5 Community Outreach & Education 1 1300.05(b)(12)(x)
6 Marketing, Advertising &
Promotion
Minimization of Exposure to Minors List methods/type, and how to
reduce chances of exposure to minors for each, including a budget and
examples.
3 1300.05(b)(12)(iii)
7 Tangible Capital Investment ‐
Dollar Amount
Total Capital Investment, stated in dollar amounts and supported by
factual data, which will directly benefit the City of Lansing, including all
types of medical marihuana facilities. Consideration of whether facility
is definite, feasible, or speculative.
Clarification 6/14/19: After reviewing the total TCI from the Top 20
Provisioning Centers in Phase 1, we determined the average TCI was
over $4 million. Scoring in this category will be distributed accordingly,
starting at ½ million of tangible capital investment.
5 1300.05(b)(12)(iv)
Medical Marijuana Provisioning Centers Scoring Criteria
Business Plan & Job Creation
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 90
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
8 Tangible Capital Investment ‐
Own/Lease
Documentation demonstrating ownership or exclusive lease of
provisioning center building by one or more stakeholders or applicant.
Preference given to ownership.
3 1300.05(b)(12)(iv)
9 Tangible Capital Investment ‐
Supporting Material
The completeness and quality of the documentation which
corroborates the financial figures provided for total capital investment 3 1300.05(b)(12)(iv)
10
Points awarded for evidence and explanation of the financial structure
and financing for the proposed medical marijuana establishment(s)
based upon (GAAP) general accepted accounting principles
2 1300.05(b)(12)(vii)
11 Proof of LARA Pre‐Qualification within 60 days of application filing 3
1300.08(e)
1300.04(b)
MCL 333.27402 (3)
(a), (b), (c )
12 Plans to Integrate Grower Facility
with other Establishments
Points awarded for evidence which documents ownership of licensed
(or pending application for) medical marijuana grow operations within
the City of Lansing.
4 1300.05(b)(12)(ix)
Financial Structure and Financing
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 91
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
13 Charitable Plans and Strategies Contributions, stated financial commitments, and/or volunteer work
supported by specific donation amount or value of volunteer work. 4 1300.05(b)(12)(xi)
14 Number of and job descriptions for FTE (Full‐time Equivalent) jobs at
this provisioning center ONLY.3 1300.05(b)(23)
14 Amount and type of other compensation ‐ Healthcare 2 1300.05(b)(23)
16 Amount and type of other compensation ‐ PTO
(Paid Time Off)1 1300.05(b)(23)
17 Amount and type of other compensation ‐ Retirement 1 1300.05(b)(23)
18 Percent of employees earning over $15 per hour.3 1300.05(b)(23)
19 Projected annual budget and revenue based upon (GAAP) generally
accepted accounting principles 2 1300.05(b)(23)
20
Number of additional jobs created by your stakeholders within the City
of Lansing at other medical marijuana facilities types.
(Grower/Processor)
6 1300.05(b)(12)(v)
Total ‐ Business Plan/Job
Creation Incomplete plan will get zero points 50 1300.06(b)(1)
Job Creation
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 92
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
21
Based on the completeness and amount of court‐ordered financial
liability reported on the Financial Resources Litigation history form. 1 1300.06(b)(5)
22 CPA Attestation of Net Worth or Bank Statements Supporting Initial
Start‐Up and Operating Costs 3
1300.05(b)(12)vii
1300.05(b)(22)
1300.06(b)(5)
MCL333.27402 (3)(a)
23 Proof LARA Pre‐Qualification submitted within 60 days of application
filing.3 1300.08(e)
MCL333.27402 (3)(a)
24 Combined stakeholder history of success in owning/operating a
relevant business or businesses in the City of Lansing. 1 1300.05(b)(8)
1300.06(b)(5)
25 Combined stakeholder history of success in owning/operating a
relevant business or businesses 1 1300.05(b)(8)
1300.06(b)(5)
26 Combined stakeholder history of success in owning/operating a
medical marihuana business or businesses.1 1300.05(b)(8)
1300.06(b)(5)
Total ‐ Financial Stability &
Experience 10 1300.06(b)(5)
Financial Stability & Experience
Sufficient Financial Resources
Business Experience
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 93
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
27
Surrounding Neighborhoods: Distance between residential zoned
areas and applicant's provisioning center. Evaluation is based on
whether any residential property abuts the proposed location, and if
not, whether there is residential zoning within 1/4 mile of the
proposed location.
7 1300.06(b)(2)
28
Surrounding Neighborhoods: Density of Provisioning Centers
surrounding the applicant's proposed location. Evaluation is based on
how many of the first round 20 PCs are within 1‐2 mile radius of
proposed provisioning center.
7 1300.06(b)(2)
29 Plan to Keep Traffic out of
Neighborhoods
Review of location site and any plan(s) the applicant has provided
which would minimize the traffic and parking impact on nearby
neighborhoods.
3 1300.06(b)(2)
30 Resident Safety Security Plan Review to ensure compliance with the Ordinance 3 1300.06(b)(2)
1300.05(b)(14)
Total ‐ Land Use 20 1300.06(b)(2)
Land Use
Impact on Neighborhood
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 94
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
31 Planned Outreach
Plan to meet with neighborhood organizations, business association,
crime watch, and other neighborhood organizations to provide contact
information for questions, concerns, etc.
1 1300.06(b)(3)
32 Improvements made or Proposed
to Building
Plan to make improvements to building and property. Applies to both
those that own and those that lease building. Please supply
documentation to support costs of improvements.
3 1300.06(b)(3)
33 Plan to Minimize/Eliminate Traffic Any plan(s) the applicant has provided which would minimize the
traffic and parking impact on nearby neighborhoods. 1 1300.06(b)(3)
1300.09(i)
34 Plan to minimize/eliminate noise
Any plan(s) the applicant has provided which would minimize or
eliminate the impact of increased noise on nearby neighborhoods.
Please document in budget of expenditures.
1 1300.06(b)(3)
1300.09(i)
35 Plan to Minimize/Eliminate Odor
Any plan(s) the applicant has provided which would minimize or
eliminate the impact of increased odor on nearby neighborhoods.
Please document in budget of expenditures.
4 1300.6B(3)
1300.09(i)
Total ‐ Outreach 10 1300.06(b)(3)
Outreach, Physical Improvements, Etc.
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 95
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
36 Applicant provides proof of LARA Pre‐Qualification within 60 days of
application filing. 2
1300.06(b)(4)
MCL 333.27401,
.27402 & .27405
37 Demonstration of regulatory compliance.5 1300.06(b)(4)
38
Based on the completeness and specific litigation reported on the
Morals, Good Order and General Welfare Litigation history form.3 1300.06(b)(4)
Total ‐ Applicant/Stakeholder
History
Will get zero points if found to have violated 2016 Ordinance #1202
Moratorium.10 1300.06(b)(4)
Total Points 100
Applicant/Stakeholders Record of
Acts Detrimental to Security,
Safety, Morals, Good Order,
General Welfare
Applicant/Stakeholder History
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 96
97
October 30, 2019
Blackstone Harvest LLC
c/o Joann Steil
22618 Shorewood Dr
St Clair Shores, MI 48081
Dear Provisioning Center Applicant,
I have reviewed the report and recommendation of the hearing officer on your appeal of the Scoring and
Ranking denial of your application to operate a Medical Marihuana Provisioning Center in the City of Lansing
at 6450 S Cedar St. I have determined that your appeal is denied.
You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30)
days of the date of this letter by filing a written statement to the Commission with the City Clerk’s Office.
The Medical Marihuana Commission Appeal will become a matter of public record. The Commission’s review
of the appeal shall not be de novo. The Commission shall only overturn, or modify, a decision or finding of
the Clerk if it finds such decision or finding to be arbitrary or capricious and not supported by material,
substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or
finding.
Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be
returned. This refund will be processed after all appeals are exhausted.
If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02,
you must cease operations. Operations may resume only if your appeal is granted and the requirements of
licensure are satisfied.
Sincerely,
Chris Swope, CMMC
City Clerk
cc: M. Yankowski, Lansing Police Chief
J. Smiertka, Lansing City Attorney
Chris Swope
Lansing City Clerk
98
Clerk’s Statement of Facts
Blackstone Harvest LLC – 6450 S Cedar St
1. Section 10 – Financial Structure and Financing – Please refer to COL Exhibits: Public Scoring
Criteria, Score Sheet with Scoring Insights, and Blackstone Harvest Application Copy with list of
attachments for each section and signed attestations. Blackstone Harvest Exhibits 3, 4 and 5
cannot be considered for this section because they weren’t attached to this section of the
application.
2. Section 12 - Integration with Grows – Please refer to COL Exhibits: Blackstone Harvest Denial
Date and Blackstone Harvest Grow Application Date. Cure on appeal is not allowed. Exhibits 8
and 9 cannot be considered for this section because they weren’t attached to this section of
the application.
Section 20 – COL Jobs – Refer to Public Scoring Criteria and Score Sheet with Scoring Insights.
3. Section 19 – Projected Annual Budget –Refer to Public Scoring Criteria and Score Sheet with
Scoring Insights. Exhibit 6 cannot be considered for this section because they weren’t
attached to this section of the application.
4. Section 22 – Net Worth – Refer to Public Scoring Criteria and Score Sheet with Scoring
Insights. The name of the applicant is Blackstone Harvest, LLC. Please also review COL Exhibits
“LARA Advisory Bulletin” and “Definition of Compilation”. Exhibits 13, 14 & 15 cannot be
considered for this section because they weren’t attached to this section of the application.
5. Section 35 – Odor Plan - Exhibit 2 cannot be considered for this section because they
weren’t attached to this section of the application.
Email Attachments
1. Clerk’s Statement of Facts
2. Blackstone Harvest Hearing Officer Appeal
3. Application for Provisioning Center with Attachments Listed and Attestations Signed
4. Proof of Payment for Grow with Submission Date Highlighted
5. Proof of Application Date for Grow
6. Proof of Denial Date for PC
7. General Instructions for Submitting Application
8. Public Criteria
9. LARA Advisory Bulletin on CPA Attestations
10. American Institute of CPAs Definition of Compilation
99
City of Lansing
Hearing Officer Recommendation
In Re:
Blackstone Harvest, LLC
Proposed Location: 6450 S. Cedar St.
Provisioning Center License Denial
This recommendation is remitted to the Clerk of the City of Lansing by Hearing Officer Amanda
M. Brzezinski, Esq., having reviewed the facts and issues presented upon appeal of medical marihuana provisioning center licensure denial by BLACKSTONE HARVEST, LLC under the Lansing Medical Marihuana Ordinance Chapter 1300 (Chapter 1300). Chapter 1300.15(c) directs that upon notice of denial of licensure applicants may appeal to the City Clerk who shall
appoint a hearing officer to hear and evaluate the appeal and submit a recommendation to the
Clerk. The recommendation of the Hearing Officer in the aforementioned matter is that the license application for BLACKSTONE HARVEST, LLC remain denied.
FACTS
BLACKSTONE HARVEST, LLC (“Appellant”) applied to the City of Lansing for a license to operate a Medical Marihuana Provisioning Center within the city limits. This recommendation
follows a timely appeal from Appellant.
An email dated September 20, 2019, from the City Clerk’s office was sent to the Appellant providing notice of the license application denial, having received a score of 73.5 out of a possible 100 points, eliminating Appellant from top five scoring and the possibility of
provisioning center licensure. Within the email sub-scores and their determining factors were provided, as well as a link to the Public Scoring Criteria and appeal rights, grounds, and instructions.
Appellant’s Position
Appellant disputes the denial on a basis that (1) the scoring is not based on competent, material, and substantial evidence; 2) scoring insights were based on clearly erroneous findings; 3) the score was based on improper/inconsistent scoring; 4) scoring methods do not comply with the ordinance; 5) scoring insights were inconsistent with the ordinance; 6) scoring decisions related
to Appellants application were arbitrary and capricious; and 7) scoring was based on an abuse of discretion.
City Clerk Position
The City Clerk affirms its position on the denial based on the Public Scoring Criteria,
Appellant’s Score Sheet with Scoring Insights, Appellant’s Application Copy with attachment
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2
lists for each section, and signed attestations. The City Clerk also asserts Chapter 1300.5(b) and the general legal standard that no right to cure exists upon appeal.
APPLICABLE LAW & REASONING
The issue is whether Appellant’s Provisioning Center License Application was erroneously
denied. The City of Lansing’s authority to issue licenses exists within its lawful police powers to regulate activities within the City, and it outlines the appellate procedure by ordinance within the City Charter.1
“The City Council shall provide, by ordinance, a procedure for the issuance of licenses and permits. The ordinance shall, to the greatest extent possible, place the responsibility for the issuance of licenses and permits under one official in order that persons requesting
specific licenses and permits will not have to contact more than one City office.”2
Here, the City has placed responsibility for Provisioning Center licensing with the City Clerk. Upon denial of a Provisioning Center License application, Chapter 1300.15(c) permits applicants to appeal the denial with the City Clerk, who shall appoint a Hearing Officer to evaluate the appeal and submit a recommendation to the Clerk. The Clerk will then review the
recommendation and report of the Hearing Officer and render a decision on the matter, which may be further appealed to the Medical Marihuana Commission for judicial review purposes.3 “The Commission's review of an appeal shall not be de novo. The Commission shall
only overturn, or modify, a decision or finding of the Clerk if it finds such decision or
finding to be arbitrary or capricious and not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or finding.”4 The Michigan Court of Appeals defined the arbitrary and capricious standard within Cona v.
Avondale: "'[A]rbitrary' means fixed or arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances or significance,
and 'capricious' means apt to change suddenly, freakish or whimsical. For instance, a
reason is arbitrary and capricious if it is based on prejudice, animus or improper motives."5
1 See LANSING CITY CLERK’S OFFICE, City of Lansing Charter (as amended) at 8-101.1-.2 (2019) available at:
https://library.municode.com/mi/lansing/codes/code_of_ordinances?nodeId=CHLAMI_ART8REPOCO_CH1LI_8-
102ISLI.
2 Id. at 8-102.
3 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.15(c).
4 Id. at 1300.03(e).
5 See Cona v Avondale Sch Dist, 303 Mich App 123; 842 NW2d 277 (2013).
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3
This recommendation will cogitate the arbitrary and capricious definition above when examining the submitted appeal for errors, prejudice, animus, or improper motives on the part of the City
Clerk in the denial of the Provisioning Center license. Appellant’s brief sections do not align with their seven assertions which serve as their basis for their appeal, so the Hearing Officer will consider Appellant’s brief sections which are tied to the
scoring sections of the Public Scoring Criteria Sheet.
Financial Structure & Financing (Section 10) Appellant contends that the City Clerk’s scoring determination was arbitrary and unreasonable, for only awarding 1 of 2 points possible within Section 10 “Financial Structure and Scoring” of
the Scoring Sheet for not including a startup budget with the application. Appellant points to Chapter 1300.05(b)(23) of the as the submission criteria for Section 10, when the Public Scoring Sheet and City of Lansing Medical Marihuana Facilities Application Checklist both stress that Section 10 scoring is rooted in Chapter1300.05(b)(12)(vii) of the Ordinance which states:
“(b)A complete application for a license or licenses required by this chapter shall be made under oath on forms provided by the City Clerk, and shall contain all of the following: … (12)A copy of the proposed business plan for the establishment, including, but not limited to, the following: … (vii)Financial structure and financing of the proposed medical marihuana establishment(s)”6
The Ordinance above clearly requires that a complete application be submitted to the City Clerk including but not limited to financial structure and financing. The Public Scoring Sheet Criteria also informs:
“Points awarded for evidence and explanation of the financial structure and financing for the proposed medical marijuana establishment(s) based upon (GAAP) general accepted accounting principles”7 The Public Scoring Sheet Criteria clearly advises applicants that points will be awarded for
evidence and explanation of the financial structure, and the burden is on the applicant to clearly present both evidence and an explanation, as to not leave the City Clerk’s office piecing together an applicant’s financial structure with assumptions. The burden was on the Appellant to explain with effectively presented evidence that the larger first year budget was due to the inclusion of
startup costs, not upon the Clerk to inherently know the detail of Appellant’s business plan.
6 See LANSING CITY CLERK’S OFFICE, City of Lansing Charter (as amended) at 8-101.1-.2 (2019) available at:
https://library.municode.com/mi/lansing/codes/code_of_ordinances?nodeId=CHLAMI_ART8REPOCO_CH1LI_8-
102ISLI; City of Lansing Medical Marijuana Facilities Application Checklist, available at:
https://www.lansingmi.gov/DocumentCenter/View/7846/Medical-Marijuana-Facilities-Application-
Checklist?bidId=; City of Lansing Medical Marijuana Provisioning Center Scoring Criteria, available at:
https://www.lansingmi.gov/DocumentCenter/View/7907/Final-Phase-2-Criteria---June-14-2019?bidId=.
7 Id. Scoring Criteria.
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4
Startup costs are the expenses incurred during the process of creating a new business. These can be quite different from a typical annual budget, therefor it could be seen as an appropriate
measure to break them out in their own budget – especially when they are being reviewed by a city with many interests to balance within the licensing process. Essential to the startup effort is the creation of a business plan – a detailed map of the new
business to be created. A business plan forces consideration of the different startup costs for the
business. Underestimating expenses will falsely increase expected net profit. The Appellant states that the scorer’s determination was unreasonable. The granting of limited availability licenses to best-scoring applicants, in an effort to ensure successful businesses within the city limits, is reasonable with the city keeping the best interests of the customers who will
rely upon the business in mind, as well as the City’s best interests in mind of a thriving community including business that will not draw upon City resources due to incomplete planning, but will instead contribute to the area’s success.
Appellant’s exhibit’s 3, 4 and 5 will not be considered for Section 10 within this
recommendation as they were not submitted with Section 10 on the application and no efforts to cure application deficiencies on appeal are permissible per Chapter 1300.5(b) stating “A complete application for a license or licenses required by this chapter shall be made…” and general state appellate practice; review available on appeal is to the record originally submitted and reviewed.8
Integration with Grows (Section 12) & Total COL Jobs (Section 20) Zero points were awarded to Appellant in Section 12 of the Scoring Sheet. The Provisioning
Center Scoring Criteria points applicants to Chapter1300.05(b)(12)(ix) which states:
“If a medical marihuana grower facility(ies) are proposed, plans to integrate such facility(ies) with other proposed medical marihuana establishments and a statement whether the medical marihuana grower facility will grow 1,000 plants or more and the square footage of the building(s) housing such grower facility, and if so, will the facility
contain more than 10,000 square feet of space;”9 The Public Scoring Sheet Criteria states:
“Points awarded for evidence which documents ownership of licensed (or pending
application for) medical marijuana grow operations within the City of Lansing.” Appellant did submit an Integration Plan with their application which stated they will own a grow, but no applications for a grow had been submitted which led the Clerk to deem the statement speculative as it had no accompanying supporting evidence. Exhibits 8 and 9 cannot be
considered as supporting evidence of Appellant’s intent as they were not submitted with the correct section of the initial application as specifically instructed within the application
8 See Napier v. Jacobs, 429 Mich. 222, 232-35 (1987).
9 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(ix).
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5
instructions. As discussed above, there is no right to cure upon appeal. With numerous applicants, and one Clerk with other duties, applicants must heed and follow instructions.
Appellant points to Exhibit 10, an application submitted for a Grower Facility submitted on October 2, 2019 well after notice from the City Clerk that the Provisioning Center License Application was denied (September 20, 2019).
Section 20 points applicants to Chapter 1300.05(b)(12)(v) which states the proposed business
plan shall be submitted with: “Expected job creation from the proposed medical marihuana establishment(s)”10 The Scoring Criteria advises that points shall be awarded for the:
“Number of additional jobs created by your stakeholders within the City of Lansing at other medical marijuana facilities types (Grower/Processor).”11
Since the Appellant had not submitted a Grower Facility application until well after the license
application was reviewed, it is reasonable and appropriate to find the number of additional jobs created by Appellant’s stakeholders within the City at other medical marijuana facilities speculative and the zero points awarded are affirmed. The Scoring Criteria made available to the public states that incomplete plans will be awarded zero points.
Projected Annual Budget (Section 19) The Medical Marijuana Provisioning Centers Scoring Criteria sheet that is available to the public states that the ordinance source for Section 19 is Chapter 1300.05(b)(23):
“An estimate of the number and type of jobs that the medical marihuana establishment is expected to create, the amount and type of compensation expected to be paid for such jobs, and the projected annual budget and revenue of the medical marihuana establishment.”12
The Public Scoring Criteria advises that points will be awarded for providing the: “Projected annual budget and revenue based upon (GAAP) generally accepted accounting principles”13
The City Clerk states on the Scoring Insights that no startup budget was included within this section of the application. As discussed above regarding the lack of submitting appropriate documentation and evidence, in this case a startup budget, can reasonably lead to zero points being awarded in a scoring category.
10 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(v).
11 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
12 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(23).
13 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
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6
Appellant points to exhibit 6, supporting materials that were provided within the application upon submission but again, they were not attached within the correct, corresponding application
section and therefore were not considered for scoring in that section and now cannot be considered as an attempt to cure upon appeal.
Net Worth (Section 22)
Provisioning Centers Scoring Criteria cites four areas as its ordinance source. The first is MCL333.27402(3)(a) which states: “(3) In determining whether to grant a license to an applicant, the board may also consider all of the following: (a) The integrity, moral character, and reputation; personal
and business probity; financial ability and experience; and responsibility or means to operate or maintain a marihuana facility of the applicant and of any other person that meets either of the following: (i) Controls, directly or indirectly, the applicant. (ii) Is controlled, directly or indirectly, by the applicant or by a person who controls, directly or
indirectly, the applicant.”14
Appellate contends that there was an error in not awarding any of the possible three points in this section. Appellant submitted a detailed “personal” financial statement from her CPA. Appellant’s Exhibit 12 does show the financial state of a Joann Stiel, but no mention is made of BLACKSTONE HARVEST LLC who is the license applicant. Nor any supporting evidence of
Appellant’s claim that BLACKSTONE HARVEST LLC is solely owned and operated by Ms. Stiel. Without more evidence and explanation presented within this section of the application, it is reasonable and prudent to not assume a connection. Exhibit’s 13, 14 and 15 cannot be considered as they were not attached to this section of the application as supporting evidence.
The Provisioning Centers Scoring Criteria next points to Chapter 1300.05(b)(12)(vii) which states: “Financial structure and financing of the proposed medical marihuana establishment(s)”15
Applicant received no points allocated for omitting to provide a startup budget as discussed earlier. Of note is the corresponding Scoring Criteria description “CPA Attestation of Net Worth or Bank Statements Supporting Initial Start‐Up and Operating Costs” which specifically call out the need to clearly show initial startup costs.
The third citation of the Section 22 ordinance source is Chapter 1300.05(b)(22): “Verification, including copies of actual bank statements, showing that the applicant has minimum net worth of $100,000.00 in the applicant's name.”16
14 MMFLA, MCL § 333.27402(3)(a).
15 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(vii).
16 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(22).
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7
This distinctly points out that the applicant is to have the net worth documentation in the applicant’s name. Here, the applicant is BLACKSTONE HARVEST LLC.
The final citation of the Section 22 ordinance source is Chapter 1300.06(b)(5) which directs the City Clerk to assess:
“Whether the applicant has reasonably and tangibly demonstrated it possesses sufficient
financial resources to fund, and the requisite business experience to execute, the submitted business plan and other plans required by Section 1300.05.”17 Appellant did not reasonably and tangibly demonstrate BLACKSTONE HARVEST LLC possessed sufficient financial resources due to the lack of clarity and thorough explanation in the
application and materials attached within that section. No points shall be awarded for assumptions and the drawing of conclusions on the applicant’s behalf.
Odor Plan (Section 35)
The Provisioning Centers Scoring Criteria states up to four points will be awarded for: “Any plan(s) the applicant has provided which would minimize or eliminate the impact of increased odor on nearby neighborhoods. Please document in budget of expenditures.”18
Chapter 1300.06(b)(3) states: “Planned outreach on behalf of the proposed establishment, and whether the applicant or
its stakeholders have made, or plan to make, significant physical improvements to the
building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood.”19 Chapter 1300.09(i) states:
“No medical marihuana provisioning center shall be operated in a manner creating noise, dust, vibration, glare, fumes, or odors detectable to normal senses beyond the boundaries of the property on which the medical marihuana provisioning center is operated; or any other nuisance that hinders the public health, safety and welfare of the residents of the
City.”20
The City Clerk awarded 3 of a possible 4 points for this section because the applicant did not provide specifications and documentation of the odor plan that was submitted within a budget attached in the section of the application which is requested within the Scoring Criteria.
17 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.06(b)(5).
18 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
19 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.06(b)(3).
20 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.09(i).
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8
Appellant’s reference to Exhibit 2 is inappropriate as the Exhibit was not attached within this section of the application.
CONCLUSION
After reviewing the following:
1. Appellant’s brief and the Exhibits that were initially attached to the appropriate, corresponding application sections, 2. The City Clerk’s Statement of Facts 3. The Lansing Medical Marihuana Ordinance Chapter 1300 4. The Provisioning Centers Scoring Criteria
5. The Signed Application for Provisioning Center with Attachments Listed and Attestations 6. Proof of Payment for Grow with Submission Date Highlighted 7. Proof of Application Date for Grow
8. Proof of Denial Date for Provisioning Center
9. General Instructions for Submitting Application 10. The Public Criteria 11. LARA’s Advisory Bulletin on CPA Attestations 12. The American Institute of CPAs Definition of Compilation
The recommendation of the Hearing Officer formed above is that Appellant’s application for a Provisioning Center License remain denied. Respectfully Submitted,
/s/ Amanda M. Brzezinski Amanda M. Brzezinski, Esq., Hearing Officer P83413
Dated: October 24, 2019
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City of Lansing Provisioning Center Ranking 10/30/2019 4:16 PM
Total
Possible
Points
Blackstone Harvest LLC - District Club-6450 S. Cedar
Applicant Address ---
#Category ---Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes budget.
7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre-Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job descriptions
for PC ONLY 3 3 Job Creation
FTE's 34-40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start-up and operating costs. 9/12/19
23 LARA Pre-Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
1108
City of Lansing Provisioning Center Ranking 10/30/2019 4:16 PM
27 Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
PC has residential zoned property within 1/4 mile. 9/20/19
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I - bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total - Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV-$280,600
Proposed Improvements $643,250.00 - 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus=
All+Records&SearchCategory=Address&SearchText=6450+s+cedar
&uid=384&PageIndex=1&ReferenceKey=33-01-05-10-151-
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDisplayString=33-01-05-10-151-012&RecordKey=1%3d33-01-05-10-151-
012%3a%3a4%3d33-01-05-10-151-012%3a%3a7%3d55b67cb1-
daee-40e6-9dae-
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%3
a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
2109
The Harfouch Law Firm, PLLC
631 E Big Beaver Rd, Suite 211
Troy, MI 48083
Ph: (248) 274-6529
Fax: (248) 850-2424
www.harfouchlaw.com
Nadeem Noah Harfouch* * Admitted to Practice in:
Michigan November 27, 2019
Mr. Chris Swope VIA ELECTRONIC MAIL Lansing City Clerk Ninth Floor, City Hall 124 W. Michigan Ave
Lansing, MI 48933
Re: Medical Marihuana Commission Appeal Denial of Provisioning Center Application for Blackstone Harvest, LLC Proposed location: 6450 S. Cedar St., Lansing, MI
Dear Mr. Swope: This appeal to the Medical Marihuana Commission is being submitted pursuant the Lansing City Ordinance No. 1300.15 on behalf of Blackstone Harvest, LLC (“Blackstone”) for their application to operate a
Provisioning Center at the above-referenced address.
On September 20, 2019, the Lansing City Clerk’s Office notified Blackstone via e-mail that its application for a provisioning center was denied (See Attached Exhibit A). The Clerk provided a scoring rubric with notes on each subsection (See Attached Exhibit B). The e-mail stated that Blackstone received a
score of 73.50 out of 100, thereby eliminating Blackstone from scoring in the top five. Blackstone, through its
counsel, appealed the Clerk’s decision, which was subsequently assigned to a Hearing Officer. On October 30, 2018 the Clerk’s Office notified Blackstone that after reviewing the report and recommendation of the Hearing Officer, the Clerk determined that the appeal was denied (See Attached
Exhibit C). Attached with the correspondence was a recommendation report from the Hearing Officer as well
as an updated scoring rubric, concluding that the application remained denied (See Attached Exhibit D). There are several issues found in the Hearing Officer’s denial letter and updated scoring rubric that are disputable. We have outlined those issues in our attached appeal.
110
Attached hereto as Exhibit E is Blackstone’s appeal to the Medical Marihuana Commission. The basis for this appeal is that the scoring was arbitrary and capricious; the scoring is not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such a decision; and
the scoring methods do not comply with the requirements set forth by the Ordinance. Therefore, the applicant’s
entire application should be re-scored. Please forward this Letter and Appeal to the Marihuana Commission for review.
Thank you for your attention to this matter. If you have any questions or concerns, please feel free to
contact our office. Very truly yours,
Nadeem Noah Harfouch
NNH w/ Enclosures
cc: Blackstone Harvest, LLC (via Electronic Mail)
111
EXHIBIT
A
112
From: "Smith-Zande, Jennifer" <Jennifer.Smith-Zande@lansingmi.gov> Date: September 20, 2019 at 4:42:48 PM EDT To: "jsteil902@gmail.com" <jsteil902@gmail.com>
Cc: "Swope, Chris" <Chris.Swope@lansingmi.gov>, "Jackson, Brian" <Brian.Jackson@lansingmi.gov>, "Biehler, Deb" <Deb.Biehler@lansingmi.gov>, "O'Boyle, Amanda" <Amanda.O'Boyle@lansingmi.gov>, "Sumner, Heather" <Heather.Sumner@lansingmi.gov> Subject: Application Denial - Blackstone Harvest, LLC - Score & Rank
September 20, 2019
Blackstone Harvest, LLC
Joann Steil
22618 Shorewood DR
St. Clair Shores, MI 48081
Dear Provisioning Center Applicant,
The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 73.50 out of 100 eliminates the possibility of scoring in the top five. Therefore, your application for licensure is denied.
Attached are your sub-scores based on the criteria posted on https://lansingmi.gov/1637/Medical-Marijuana and a brief summary of determining factors for each sub-score.
You will not be selected to receive a Provisioning Center license in the City of Lansing for the proposed business at 6450 S Cedar St.
You have the right to appeal this denial of licensure within 14 days of the date of this letter by filing with the City Clerk’s Office a written statement setting forth fully the grounds for the appeal pursuant to Chapter 1300.15(c). Please note that initial appeals are referred to a hearing officer appointed by the City Clerk who will review the appeal and information submitted. The hearing officer will consider the
113
information and make a recommendation to the City Clerk, who will make a decision on the appeal. To encourage efficiency, appeals will be conducted as a paper hearing without oral presentation. Please ensure that you include all information in your written appeal that you would like the hearing officer to consider. Appeals are limited to materials provided during the application process. No new application material will be considered on appeal.
Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted.
Sincerely,
6 attachments
image004.png 1K
image003.jpg
11K
ATT00002.htm
1K
ATT00003.htm 1K
ATT00001.htm
5K
Blackstone Harvest LLC (District Club) - 6450 S. Cedar Street.pdf 90K
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EXHIBIT
B
115
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
Total
Possible
Points
Blackstone Harvest LLC ‐ District Club‐6450 S. Cedar
Applicant Address ‐‐‐
#Category ‐‐‐Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes
budget. 7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job
descriptions for PC ONLY 3 3 Job Creation
FTE's 34‐40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start‐up and operating costs. 9/12/19
23 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
27
Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
PC has residential zoned property within 1/4 mile. 9/20/19
1116
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I ‐ bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total ‐ Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV‐$280,600
Proposed Improvements $643,250.00 ‐ 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus
=All+Records&SearchCategory=Address&SearchText=6450+s+ced
ar&uid=384&PageIndex=1&ReferenceKey=33‐01‐05‐10‐151‐
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDis
playString=33‐01‐05‐10‐151‐012&RecordKey=1%3d33‐01‐05‐10‐
151‐012%3a%3a4%3d33‐01‐05‐10‐151‐
012%3a%3a7%3d55b67cb1‐daee‐40e6‐9dae‐
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%
3a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
2117
EXHIBIT
C
118
Smith-Zande, Jennifer
Wed, Oct 30, 5:04
PM
to jsteil902@gmail.com, me, Chris, Brian, Deb, Amanda, Heather
October 30, 2019
Blackstone Harvest LLC c/o Joann Steil
22618 Shorewood Dr. St Clair Shores, MI 48081
Dear Provisioning Center Applicant,
I have reviewed the report and recommendation of the hearing officer on your appeal of
the Scoring and Ranking denial of your application to operate a Medical Marihuana Provisioning Center in the City of Lansing at 6450 S Cedar St. I have determined that your appeal is denied.
You have the right to appeal this denial of licensure to the Medical Marihuana Commission
within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk’s Office.
The Medical Marihuana Commission Appeal will become a matter of public record. The
Commission’s review of the appeal shall not be de novo. The Commission shall only
overturn, or modify, a decision or finding of the Clerk if it finds such decision or finding to be arbitrary or capricious and not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or finding.
Chapter 1300 provides that should the applicant not receive a license, one-half the
application fee shall be returned. This refund will be processed after all appeals are exhausted.
If you have begun business operations pursuant to State Emergency Rule 19 and
Executive Order 2017-02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of licensure are satisfied.
Sincerely,
Chris Swope, CMMC City Clerk
cc: M. Yankowski, Lansing Police Chief
J. Smiertka, Lansing City Attorney
119
EXHIBIT
D
120
City of Lansing
Hearing Officer Recommendation
In Re:
Blackstone Harvest, LLC
Proposed Location: 6450 S. Cedar St.
Provisioning Center License Denial
This recommendation is remitted to the Clerk of the City of Lansing by Hearing Officer Amanda
M. Brzezinski, Esq., having reviewed the facts and issues presented upon appeal of medicalmarihuana provisioning center licensure denial by BLACKSTONE HARVEST, LLC under theLansing Medical Marihuana Ordinance Chapter 1300 (Chapter 1300). Chapter 1300.15(c)directs that upon notice of denial of licensure applicants may appeal to the City Clerk who shall
appoint a hearing officer to hear and evaluate the appeal and submit a recommendation to the
Clerk. The recommendation of the Hearing Officer in the aforementioned matter is that thelicense application for BLACKSTONE HARVEST, LLC remain denied.
FACTS
BLACKSTONE HARVEST, LLC (“Appellant”) applied to the City of Lansing for a license to
operate a Medical Marihuana Provisioning Center within the city limits. This recommendation
follows a timely appeal from Appellant.
An email dated September 20, 2019, from the City Clerk’s office was sent to the Appellant providing notice of the license application denial, having received a score of 73.5 out of a possible 100 points, eliminating Appellant from top five scoring and the possibility of
provisioning center licensure. Within the email sub-scores and their determining factors were provided, as well as a link to the Public Scoring Criteria and appeal rights, grounds, and instructions.
Appellant’s Position
Appellant disputes the denial on a basis that (1) the scoring is not based on competent, material, and substantial evidence; 2) scoring insights were based on clearly erroneous findings; 3) the score was based on improper/inconsistent scoring; 4) scoring methods do not comply with the ordinance; 5) scoring insights were inconsistent with the ordinance; 6) scoring decisions related
to Appellants application were arbitrary and capricious; and 7) scoring was based on an abuse of discretion.
City Clerk Position
The City Clerk affirms its position on the denial based on the Public Scoring Criteria,
Appellant’s Score Sheet with Scoring Insights, Appellant’s Application Copy with attachment
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2
lists for each section, and signed attestations. The City Clerk also asserts Chapter 1300.5(b) and the general legal standard that no right to cure exists upon appeal.
APPLICABLE LAW & REASONING
The issue is whether Appellant’s Provisioning Center License Application was erroneously
denied. The City of Lansing’s authority to issue licenses exists within its lawful police powers to regulate activities within the City, and it outlines the appellate procedure by ordinance within the City Charter.1
“The City Council shall provide, by ordinance, a procedure for the issuance of licenses and permits. The ordinance shall, to the greatest extent possible, place the responsibility for the issuance of licenses and permits under one official in order that persons requesting
specific licenses and permits will not have to contact more than one City office.”2
Here, the City has placed responsibility for Provisioning Center licensing with the City Clerk. Upon denial of a Provisioning Center License application, Chapter 1300.15(c) permits applicants to appeal the denial with the City Clerk, who shall appoint a Hearing Officer to evaluate the appeal and submit a recommendation to the Clerk. The Clerk will then review the
recommendation and report of the Hearing Officer and render a decision on the matter, which may be further appealed to the Medical Marihuana Commission for judicial review purposes.3 “The Commission's review of an appeal shall not be de novo. The Commission shall
only overturn, or modify, a decision or finding of the Clerk if it finds such decision or
finding to be arbitrary or capricious and not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or finding.”4 The Michigan Court of Appeals defined the arbitrary and capricious standard within Cona v.
Avondale: "'[A]rbitrary' means fixed or arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances or significance,
and 'capricious' means apt to change suddenly, freakish or whimsical. For instance, a
reason is arbitrary and capricious if it is based on prejudice, animus or improper motives."5
1 See LANSING CITY CLERK’S OFFICE, City of Lansing Charter (as amended) at 8-101.1-.2 (2019) available at:
https://library.municode.com/mi/lansing/codes/code_of_ordinances?nodeId=CHLAMI_ART8REPOCO_CH1LI_8-
102ISLI.
2 Id. at 8-102.
3 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.15(c).
4 Id. at 1300.03(e).
5 See Cona v Avondale Sch Dist, 303 Mich App 123; 842 NW2d 277 (2013).
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3
This recommendation will cogitate the arbitrary and capricious definition above when examining the submitted appeal for errors, prejudice, animus, or improper motives on the part of the City
Clerk in the denial of the Provisioning Center license. Appellant’s brief sections do not align with their seven assertions which serve as their basis for their appeal, so the Hearing Officer will consider Appellant’s brief sections which are tied to the
scoring sections of the Public Scoring Criteria Sheet.
Financial Structure & Financing (Section 10) Appellant contends that the City Clerk’s scoring determination was arbitrary and unreasonable, for only awarding 1 of 2 points possible within Section 10 “Financial Structure and Scoring” of
the Scoring Sheet for not including a startup budget with the application. Appellant points to Chapter 1300.05(b)(23) of the as the submission criteria for Section 10, when the Public Scoring Sheet and City of Lansing Medical Marihuana Facilities Application Checklist both stress that Section 10 scoring is rooted in Chapter1300.05(b)(12)(vii) of the Ordinance which states:
“(b)A complete application for a license or licenses required by this chapter shall be made under oath on forms provided by the City Clerk, and shall contain all of the following: … (12)A copy of the proposed business plan for the establishment, including, but not limited to, the following: … (vii)Financial structure and financing of the proposed medical marihuana establishment(s)”6
The Ordinance above clearly requires that a complete application be submitted to the City Clerk including but not limited to financial structure and financing. The Public Scoring Sheet Criteria also informs:
“Points awarded for evidence and explanation of the financial structure and financing for the proposed medical marijuana establishment(s) based upon (GAAP) general accepted accounting principles”7 The Public Scoring Sheet Criteria clearly advises applicants that points will be awarded for
evidence and explanation of the financial structure, and the burden is on the applicant to clearly present both evidence and an explanation, as to not leave the City Clerk’s office piecing together an applicant’s financial structure with assumptions. The burden was on the Appellant to explain with effectively presented evidence that the larger first year budget was due to the inclusion of
startup costs, not upon the Clerk to inherently know the detail of Appellant’s business plan.
6 See LANSING CITY CLERK’S OFFICE, City of Lansing Charter (as amended) at 8-101.1-.2 (2019) available at:
https://library.municode.com/mi/lansing/codes/code_of_ordinances?nodeId=CHLAMI_ART8REPOCO_CH1LI_8-
102ISLI; City of Lansing Medical Marijuana Facilities Application Checklist, available at:
https://www.lansingmi.gov/DocumentCenter/View/7846/Medical-Marijuana-Facilities-Application-
Checklist?bidId=; City of Lansing Medical Marijuana Provisioning Center Scoring Criteria, available at:
https://www.lansingmi.gov/DocumentCenter/View/7907/Final-Phase-2-Criteria---June-14-2019?bidId=.
7 Id. Scoring Criteria.
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4
Startup costs are the expenses incurred during the process of creating a new business. These can be quite different from a typical annual budget, therefor it could be seen as an appropriate
measure to break them out in their own budget – especially when they are being reviewed by a city with many interests to balance within the licensing process. Essential to the startup effort is the creation of a business plan – a detailed map of the new
business to be created. A business plan forces consideration of the different startup costs for the
business. Underestimating expenses will falsely increase expected net profit. The Appellant states that the scorer’s determination was unreasonable. The granting of limited availability licenses to best-scoring applicants, in an effort to ensure successful businesses within the city limits, is reasonable with the city keeping the best interests of the customers who will
rely upon the business in mind, as well as the City’s best interests in mind of a thriving community including business that will not draw upon City resources due to incomplete planning, but will instead contribute to the area’s success.
Appellant’s exhibit’s 3, 4 and 5 will not be considered for Section 10 within this
recommendation as they were not submitted with Section 10 on the application and no efforts to cure application deficiencies on appeal are permissible per Chapter 1300.5(b) stating “A complete application for a license or licenses required by this chapter shall be made…” and general state appellate practice; review available on appeal is to the record originally submitted and reviewed.8
Integration with Grows (Section 12) & Total COL Jobs (Section 20) Zero points were awarded to Appellant in Section 12 of the Scoring Sheet. The Provisioning
Center Scoring Criteria points applicants to Chapter1300.05(b)(12)(ix) which states:
“If a medical marihuana grower facility(ies) are proposed, plans to integrate such facility(ies) with other proposed medical marihuana establishments and a statement whether the medical marihuana grower facility will grow 1,000 plants or more and the square footage of the building(s) housing such grower facility, and if so, will the facility
contain more than 10,000 square feet of space;”9 The Public Scoring Sheet Criteria states:
“Points awarded for evidence which documents ownership of licensed (or pending
application for) medical marijuana grow operations within the City of Lansing.” Appellant did submit an Integration Plan with their application which stated they will own a grow, but no applications for a grow had been submitted which led the Clerk to deem the statement speculative as it had no accompanying supporting evidence. Exhibits 8 and 9 cannot be
considered as supporting evidence of Appellant’s intent as they were not submitted with the correct section of the initial application as specifically instructed within the application
8 See Napier v. Jacobs, 429 Mich. 222, 232-35 (1987).
9 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(ix).
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5
instructions. As discussed above, there is no right to cure upon appeal. With numerous applicants, and one Clerk with other duties, applicants must heed and follow instructions.
Appellant points to Exhibit 10, an application submitted for a Grower Facility submitted on October 2, 2019 well after notice from the City Clerk that the Provisioning Center License Application was denied (September 20, 2019).
Section 20 points applicants to Chapter 1300.05(b)(12)(v) which states the proposed business
plan shall be submitted with: “Expected job creation from the proposed medical marihuana establishment(s)”10 The Scoring Criteria advises that points shall be awarded for the:
“Number of additional jobs created by your stakeholders within the City of Lansing at other medical marijuana facilities types (Grower/Processor).”11
Since the Appellant had not submitted a Grower Facility application until well after the license
application was reviewed, it is reasonable and appropriate to find the number of additional jobs created by Appellant’s stakeholders within the City at other medical marijuana facilities speculative and the zero points awarded are affirmed. The Scoring Criteria made available to the public states that incomplete plans will be awarded zero points.
Projected Annual Budget (Section 19) The Medical Marijuana Provisioning Centers Scoring Criteria sheet that is available to the public states that the ordinance source for Section 19 is Chapter 1300.05(b)(23):
“An estimate of the number and type of jobs that the medical marihuana establishment is expected to create, the amount and type of compensation expected to be paid for such jobs, and the projected annual budget and revenue of the medical marihuana establishment.”12
The Public Scoring Criteria advises that points will be awarded for providing the: “Projected annual budget and revenue based upon (GAAP) generally accepted accounting principles”13
The City Clerk states on the Scoring Insights that no startup budget was included within this section of the application. As discussed above regarding the lack of submitting appropriate documentation and evidence, in this case a startup budget, can reasonably lead to zero points being awarded in a scoring category.
10 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(v).
11 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
12 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(23).
13 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
125
6
Appellant points to exhibit 6, supporting materials that were provided within the application upon submission but again, they were not attached within the correct, corresponding application
section and therefore were not considered for scoring in that section and now cannot be considered as an attempt to cure upon appeal.
Net Worth (Section 22)
Provisioning Centers Scoring Criteria cites four areas as its ordinance source. The first is MCL333.27402(3)(a) which states: “(3) In determining whether to grant a license to an applicant, the board may also consider all of the following: (a) The integrity, moral character, and reputation; personal
and business probity; financial ability and experience; and responsibility or means to operate or maintain a marihuana facility of the applicant and of any other person that meets either of the following: (i) Controls, directly or indirectly, the applicant. (ii) Is controlled, directly or indirectly, by the applicant or by a person who controls, directly or
indirectly, the applicant.”14
Appellate contends that there was an error in not awarding any of the possible three points in this section. Appellant submitted a detailed “personal” financial statement from her CPA. Appellant’s Exhibit 12 does show the financial state of a Joann Stiel, but no mention is made of BLACKSTONE HARVEST LLC who is the license applicant. Nor any supporting evidence of
Appellant’s claim that BLACKSTONE HARVEST LLC is solely owned and operated by Ms. Stiel. Without more evidence and explanation presented within this section of the application, it is reasonable and prudent to not assume a connection. Exhibit’s 13, 14 and 15 cannot be considered as they were not attached to this section of the application as supporting evidence.
The Provisioning Centers Scoring Criteria next points to Chapter 1300.05(b)(12)(vii) which states: “Financial structure and financing of the proposed medical marihuana establishment(s)”15
Applicant received no points allocated for omitting to provide a startup budget as discussed earlier. Of note is the corresponding Scoring Criteria description “CPA Attestation of Net Worth or Bank Statements Supporting Initial Start‐Up and Operating Costs” which specifically call out the need to clearly show initial startup costs.
The third citation of the Section 22 ordinance source is Chapter 1300.05(b)(22): “Verification, including copies of actual bank statements, showing that the applicant has minimum net worth of $100,000.00 in the applicant's name.”16
14 MMFLA, MCL § 333.27402(3)(a).
15 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(12)(vii).
16 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.05(b)(22).
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7
This distinctly points out that the applicant is to have the net worth documentation in the applicant’s name. Here, the applicant is BLACKSTONE HARVEST LLC.
The final citation of the Section 22 ordinance source is Chapter 1300.06(b)(5) which directs the City Clerk to assess:
“Whether the applicant has reasonably and tangibly demonstrated it possesses sufficient
financial resources to fund, and the requisite business experience to execute, the submitted business plan and other plans required by Section 1300.05.”17
Appellant did not reasonably and tangibly demonstrate BLACKSTONE HARVEST LLC possessed sufficient financial resources due to the lack of clarity and thorough explanation in the
application and materials attached within that section. No points shall be awarded for assumptions and the drawing of conclusions on the applicant’s behalf.
Odor Plan (Section 35)
The Provisioning Centers Scoring Criteria states up to four points will be awarded for:
“Any plan(s) the applicant has provided which would minimize or eliminate the impact of increased odor on nearby neighborhoods. Please document in budget of expenditures.”18
Chapter 1300.06(b)(3) states:
“Planned outreach on behalf of the proposed establishment, and whether the applicant or
its stakeholders have made, or plan to make, significant physical improvements to the
building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood.”19
Chapter 1300.09(i) states:
“No medical marihuana provisioning center shall be operated in a manner creating noise, dust, vibration, glare, fumes, or odors detectable to normal senses beyond the boundaries of the property on which the medical marihuana provisioning center is operated; or any other nuisance that hinders the public health, safety and welfare of the residents of the
City.”20
The City Clerk awarded 3 of a possible 4 points for this section because the applicant did not provide specifications and documentation of the odor plan that was submitted within a budget attached in the section of the application which is requested within the Scoring Criteria.
17 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.06(b)(5).
18 City of Lansing Medical Marijuana Provisioning Center Scoring Criteria.
19 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.06(b)(3).
20 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.09(i).
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8
Appellant’s reference to Exhibit 2 is inappropriate as the Exhibit was not attached within this section of the application.
CONCLUSION
After reviewing the following:
1. Appellant’s brief and the Exhibits that were initially attached to the appropriate,corresponding application sections,2. The City Clerk’s Statement of Facts3. The Lansing Medical Marihuana Ordinance Chapter 13004. The Provisioning Centers Scoring Criteria
5. The Signed Application for Provisioning Center with Attachments Listed andAttestations6. Proof of Payment for Grow with Submission Date Highlighted7. Proof of Application Date for Grow
8. Proof of Denial Date for Provisioning Center
9. General Instructions for Submitting Application10. The Public Criteria11. LARA’s Advisory Bulletin on CPA Attestations12. The American Institute of CPAs Definition of Compilation
The recommendation of the Hearing Officer formed above is that Appellant’s application for a Provisioning Center License remain denied.
Respectfully Submitted,
/s/ Amanda M. Brzezinski Amanda M. Brzezinski, Esq., Hearing Officer P83413
5200 Chinook Ln. Lyons, MI 48851 Ph: 517.898.3676 Mandy.Brzezinski@gmail.com
Dated: October 24, 2019
128
City of Lansing Provisioning Center Ranking 10/30/2019 4:16 PM
Total
Possible
Points
Blackstone Harvest LLC - District Club-6450 S. Cedar
Applicant Address ---
#Category ---Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes budget.
7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre-Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job descriptions
for PC ONLY 3 3 Job Creation
FTE's 34-40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start-up and operating costs. 9/12/19
23 LARA Pre-Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
1129
City of Lansing Provisioning Center Ranking 10/30/2019 4:16 PM
27 Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
PC has residential zoned property within 1/4 mile. 9/20/19
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I - bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total - Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV-$280,600
Proposed Improvements $643,250.00 - 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus=
All+Records&SearchCategory=Address&SearchText=6450+s+cedar
&uid=384&PageIndex=1&ReferenceKey=33-01-05-10-151-
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDisplayString=33-01-05-10-151-012&RecordKey=1%3d33-01-05-10-151-
012%3a%3a4%3d33-01-05-10-151-012%3a%3a7%3d55b67cb1-
daee-40e6-9dae-
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%3
a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
2130
EXHIBIT
E
131
In re: BLACKSTONE HARVEST, LLC
Applicant
/
APPLICANT’S APPEAL TO THE MEDICAL MARIJUANA COMMISSION FOR
DENIAL OF PROVISIONING CENTER LICENSE
Entity: Blackstone Harvest, LLC
Proposed Location: 6450 S. Cedar St., Lansing, MI 48911
INTRODUCTION
Blackstone Harvest, LLC (“Applicant”) submitted its application for a license to operate
a medical marijuana provisioning center at 6450 S. Cedar St., Lansing, Michigan on June 26,
2019. On September 20, 2019, an e-mail denying Applicant’s application was sent by the City
Clerk’s office. Per the correspondence, Applicant received a score of 73.50 out of 100. As was
justified, Applicant timely appealed the City of Lansing’s decision in accordance with Chapter
1300.15(C).
The City Clerk appointed Amanda M. Brzezinski as the hearing officer for review of
Applicant’s appeal. On October 30, 2019, the City Clerk, after reviewing the report and
recommendation of the hearing officer, determined that Applicant’s appeal was denied.
The Applicant timely submits this appeal to the Medical Marijuana Commission in accordance
with Chapter 1300.15(C).
CHAPTER 1300.15(C)
The applicable ordinance states:
1300.15 – LICENSE REVOCATION; BASES FOR REVOCATION; APPEAL OF
LICENSE DENIAL
(C) APEAL OF DENIAL OF AN APPLICATION OR REVOCATION OF A LICENSE:
The city clerk shall notify an applicant of the reason(s) for denial of an application for a license
or license renewal or for revocation of a license or any adverse decision under this chapter and
provide the applicant with the opportunity to be heard. Any applicant aggrieved by the denial or
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revocation of a license or adverse decision under this chapter may appeal to the city clerk, who
shall appoint a hearing officer to hear and evaluate the appeal and make a recommendation to the
clerk. Such appeal shall be taken by filing with the city clerk, within 14 days after notice of the
action complained of has been mailed to the applicant’s last known address on the records of the
city clerk, a written statement setting forth fully the grounds for the appeal. The clerk shall
review the report and recommendation of the hearing officer and make a decision on the matter.
The clerk’s decision may be further appealed to the commission if applied for in writing to the
commission no later than thirty (30) days from the clerk’s decision. The review of an appeal or
denial or revocation or adverse action shall be by the commission pursuant to section 1300.3.
Any decision by the commission on an appeal shall be final for purposes of judicial review. The
clerk may engage professional experts to assist with the proceedings under this section 1300.15.
CHAPTER 1300.3(E)
Chapter 1300.3 states, in pertinent part:
1300.3 – ESTABLISHMENT OF THE MEDICAL MARIHUANA COMMISSION;
MEMBERSHIP; CHAIRPERSON; MEETINGS
(E) The commission shall review and decide all appeals that are forwarded to it by the city clerk
under this chapter. The commission’s review of an appeal shall not be de novo. The commission
shall only overturn, or modify, a decision or finding of the clerk if it finds such decision or
finding to be arbitrary or capricious and not supported by material, substantial, and competent
facts on the whole record considered by the clerk in arriving at such decision or finding.
STANDARD OF REVIEW
The review of an appeal shall not be de novo. The commission shall only overturn, or
modify, a decision or finding of the clerk if it finds such decision or finding to be arbitrary or
capricious and not supported by material, substantial, and competent facts on the whole record
considered by the clerk in arriving at such a decision or finding.
Arbitrary means “without adequate determining principle… fixed or arrived at through an
exercise of will or by caprice, without consideration or adjustment with reference to principles,
circumstances, or significance… decisive but unreasoned.” Capricious means “apt to change;
suddenly; freakish; whimsical; humorsome.” Bundo v Walled Lake, 395 Mich 679, 703, n17; 238
N.W.2d 154 (1976) citing the United States Supreme Court decision of United States v Carmack,
329 US 230, 243; 67 S Ct 252; 91 L Ed 209 (1946). Moreover, the term “arbitrary,” has been
133
defined by Michigan Eastern District Federal Court Judge Laurie Michelson, using Black’s Law
Dictionary as “not supported by fair, solid, and substantial cause, and without reason given.”
Cerjanec v FCA US LLC, 2018 US Dist LEXIS 131434 (Decided August 6, 2018) (ED MI
2018).
Further, the applicable standard requires a review of whether the decision is supported by
competent, material, and substantial evidence on the record, and represents the reasonable
exercise of the board’s discretion. “Substantial evidence” is evidence that a reasonable person
would accept as sufficient to support a conclusion. Edw C Levy Co v. Marine City Zoning Bd of
Appeals, 293 Mich App 333, 341-42; 810 N.W.2d 621 (2011) (quoting Dowerk v Charter Tp of
Oxford, 233 Mich App 62, 72; 592 N.W.2d 724 (1998)). Furthermore, scoring must be proper,
consistent, comply with the applicable ordinances, and not be based upon an abuse of discretion.
BASIS OF APPEAL
The basis for this appeal is 1) the scoring is not based on competent, material, and
substantial evident; 2) scoring insights provided to applicant are based on clearly erroneous
findings; 3) Applicant’s score was based on improper/inconsistent scoring; 4) scoring methods
do not comply with the ordinance; 5) scoring insights were inconsistent with the ordinance; 6)
scoring decisions related to Applicant’s application were arbitrary and capricious; 7) the scoring
was not supported by material, substantial, and competent facts on the whole record considered
by the clerk; and 8) scoring was based upon an abuse of discretion.
STATEMENT OF FACTS
Blackstone Harvest, LLC (“Blackstone”) is a state prequalified entity pursuant to the
licensing provisions of the Medical Marihuana Facilities Licensing Act (MMFLA) and
Administrative Rule 5 (R 333.205). Blackstone is owned by a single member, Joann Steil, who
has over fifteen years of experience in the health care industry. Ms. Steil has successfully owned
134
and operated a health care case management company called Advanced Placement Services. She
works in collaboration with physicians, patients, and their families to ensure safe and efficient
transitions of care.
Blackstone recently applied for a provisioning center license with the City of Lansing
under its ordinance and in accordance with the MMFLA. Blackstone also applied for a medical
marijuana grower facility license in the City of Lansing. Blackstone was a qualified applicant
that submitted complete documentation for all categories considered for scoring.
A full review of the application would corroborate that the denial of Blackstone’s
application in Lansing is unjustifiable because 1) plans and documentation submitted by
Blackstone were ignored or poorly reviewed, and/or 2) the City did not follow its own guidance
on scoring in accordance with the applicable rules and ordinances and made reversible errors
based upon an abuse of discretion and arbitrary and capricious decision making.
On June 26, 2019, Blackstone submitted its City of Lansing Medical Marijuana
Application for a provisioning center (the “Application”). The City of Lansing accepted the
Application and the application fees were paid and deemed accepted by the city that same day.
The Application consisted of over 125 attachments, which provided detailed
documentation related to the proposed building, operational plans, staffing plans, security plans,
facility plans, and floor plans, among other required documents. The Application covered all
aspects of Lansing’s scoring rubric and was consistent with the Lansing ordinance.
Per the application, Blackstone submitted proof of purchase related to the proposed
property located at 6450 S. Cedar 5031 S. Cedar St., Lansing, MI 48911. Blackstone has plans to
develop and operate a licensed medical marijuana provisioning center at the proposed property.
The total capital investment to purchase the property was $1,200,000.00. Per Blackstone’s
135
building development plan and construction plans, the renovation needed for 6450 S. Cedar
would cost an additional $643,250.00.
Blackstone submitted detailed plans related to its staffing at the proposed provisioning
center. Per the Application submitted, Blackstone will employ between 34 to 40 employees to
work at the provisioning center. Of those employees, approximately ten (10) employees will be
in a management or leadership position.
Blackstone is also purchasing a 13,600 sq. ft. property to integrate a grower facility with
the proposed provisioning center. This grower facility will have a Class C grow license that will
allow a 1,500-plant grow operation. The property Blackstone is purchasing is commonly known
as 209 Baker Street, Lansing, MI 48910. A valid purchase agreement for the Baker property was
provided, and subsequent to the filing of the provisioning center application, Blackstone
submitted a grow application in relation to the Baker property. The total capital investment to
purchase Baker was $1,000,000.00, and the estimated additional investment to renovate the
interior and exterior of the Baker building was $2,040,000.00.
In total, Blackstone submitted that it would create between 84 and 100 new jobs in the
City of Lansing between its proposed provisioning center and proposed medical marijuana
grower facility. The plans to staff and employ residents of Lansing would have a profound effect
on the local economy.
Despite submitting a complete and well-supported application to the City of Lansing
detailing Blackstone’s proposals, budgets, and operational plans, on September 20, 2019,
Blackstone received correspondence from the City of Lansing stating that Blackstone had not
been selected to receive a provisioning center license at the proposed location of 6450 S. Cedar.
Per the correspondence, and the attached scoring rubric, Blackstone received a score of 73.50 out
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of 100. Consequently, the City of Lansing denied Blackstone the opportunity to receive
licensure, which was largely due to erroneous, arbitrary, inconsistent, and unreasonable scoring
of the Blackstone Application.
As of right, Blackstone hereby appeals the City of Lansing’s decision to deny the
Application in accordance with Chapter 1300.15(c).
DISCUSSION AND ARGUMENT
I. FINANCIAL STRUCTURE & FINANCING (Section 10)
The submission criteria refers applicants to Chapter 1300.05(b)(23), which states:
An estimate of the number and type of jobs that the medical marihuana establishment is expected to create, the amount and type of compensation expected to be paid for such jobs, and the projected annual budget and revenue of the medical marihuana establishment (emphasis added).
Blackstone was only awarded 1 out of 2 points for this scoring category. Exhibit 1 –
Scoring Rubric. The basis for the one-point deduction, per the scoring insights, was that a
“start-up budget [was] not attached.” Exhibit 1. The scorer’s determination is arbitrary and
unreasonable.
Nowhere in Chapter 1300.05(b)(23) is there a requirement to provide a “startup budget.”
Nevertheless, a startup budget and initial startup costs were included in the pro forma submitted
with the Application. See attached Exhibit 2 – Pro Forma. Per the scoring insights, the scorer
acknowledged review of the pro forma by stating: “submitted a 3-year GAAP budget with
revenue and line item expenses (“Pro Forma”).” Exhibit 2. Certainly, “startup costs” are under
the umbrella of “expenses.”
The Pro Forma clearly included specific line items for startup costs in the first year of
operation. Exhibit 2. Review of the Pro Forma demonstrates the following: 1) In year 1,
Blackstone expected initial capital investments of $1,843,250.00, which directly correlates with
137
both their purchase of the proposed location, as well as the documented construction costs; 2)
Blackstone identified initial startup costs for furniture and equipment in the amount of
$160,000.00; 3) Blackstone intended to have an initial spend on noise elimination and odor
elimination equipment in the total amount of $129,000.00; and 4) that wages in year 1 would
equate to $1,490,000.00. Exhibit 2. These figures clearly do not deviate from the “Tangible
Capital Investments” described in Blackstone’s Building Construction Plan, Land Contract for
the proposed property, as well as the Building Construction quotes provided as supporting
materials to the Application. See attached Exhibit 3 – Building Construction Plan; Exhibit 4
– Land Contract re Cedar St. Property; Exhibit 5 – Building Construction Quotes; Exhibit
6 – Tangible Capital Investment Plan. These figures also equally match Blackstone’s staffing
and job creation plan.
Even a cursory look at the Pro Forma depicts the vast difference for “expenses” in the
first year (approximately $4,200,000.00) in comparison to expenses in years two and three,
which were estimated at $2,508,000.00 and $2,301,000.00, respectively. Exhibit 2. The glaring
evidence of startup costs being included in the Pro Forma should not have been ignored by the
scorer. Thus, the decision was not supported by substantial evidence or reasonable exercise of
discretion.
The Pro Forma clearly included startup costs. Exhibit 2. Thus, the scorer’s determination
that a startup budget was not attached is unreasonable. The one-point deduction is a clear error.
This Section of the scoring rubric must be reconsidered, and Blackstone should be awarded a
total of 2 out of 2 points under this category.
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II. INTEGRATION WITH GROWS (Section 12) & TOTAL COL JOBS (Section 20)
Zero points were awarded for Section 12 and Section 20 of the scoring rubric. Exhibit 1.
Such a score is utterly unfathomable given the numerous supporting documents provided in the
Application.
In support of Section 12 of the scoring rubric, Blackstone submitted a Plan to Integrate
with a Grower Facility. See attached Exhibit 7 – Plan to Integrate with Grow. In fact, at the
time of Application submission, Blackstone had already entered into a signed purchase
agreement to purchase 209 Baker Street, Lansing, MI 48910. See attached Exhibit 8 –
Purchase Agreement re 209 Baker. The purchase price for the proposed grow was
$1,000,000.00. Exhibit 8. To support its plan to integrate, Blackstone included a copy of the
purchase agreement as an attachment to the Application as well as construction quotes for the
proposed grower facility. See attached Exhibit 9 – Construction Quotes for 209 Baker;
Exhibit 8. Entering into the purchase agreement for the 209 Baker property was an act in
furtherance of Blackstone’s plan to integrate with a grow. Moreover, Blackstone submitted an
application for a grower facility with the City of Lansing, which was yet another act in
furtherance of pursuing integration with a grower facility. See attached Exhibit 10 –
Application Submission Receipt. Additionally, obtaining construction quotes was another act in
furtherance of the plans to integrate. Exhibit 9. Under no circumstance, can these acts in
furtherance of moving forward with integration be deemed “speculative.”
Indeed, Blackstone has every intention of integrating a grow facility with its proposed
provisioning center. Blackstone did in fact eventually file its grow application with the City of
Lansing, which was never taken into consideration. Blackstone hereby requests that notice is
139
taken of Blackstone’s submitted grower application, which was filed with the City of Lansing
and is hereby fully incorporated by reference.
Moreover, the City of Lansing asked for plans of integration with a grower facility. Yet,
the scoring does not award points for having plans. Even if, assuming arguendo, that
Blackstone’s plan for integration lacked support and was merely “speculative,” then, at
minimum, Blackstone should have received points for submitting an integration plan in
accordance with the applicable ordinance. To award zero points completely undermines the
Lansing ordinance and falls completely out of the scorer’s allowable discretion. In contrast,
applicant was awarded points for submitting “plans” in other areas of the application – for
example, Blackstone received three out of four points for their charitable plan under Section 12
of the scoring rubric. The City cannot reasonably assert that plans in one category are
“speculative,” unless they assume that mere plans, in general, are always speculative. The
disfunction in scoring only sends one message, that scoring in this category was arbitrary,
capricious, and unreasonable.
In support of Section 20 of the scoring rubric, Blackstone submitted numerous job
creation plans that outlined not only jobs at the provisioning center, but also indicated the vast
number of jobs that would be created at the proposed grow facility Blackstone plans to integrate
with at the 209 Baker Property. See attached Exhibit 11 – Job Creation Plan. Again, under the
same logic the scorer used for Section 12, see supra, the scorer awarded zero points on the basis
that the grow facility was “speculative.” Exhibit 1. However, the scorer completely ignored the
fact that plans were submitted, and also ignored the totality of jobs that Blackstone intended to
bring to the City of Lansing. As indicated in the supporting documentation, Blackstone was fully
committed to implementing its hiring and staffing plans. Exhibit 11. At the integrated grow,
140
Blackstone had plans to hire over 50 employees. Exhibit 11. At the provisioning center,
Blackstone had plans to hire over 35 employees. Blackstone’s Pro Forma, as well as its staffing
and job creation plans, depicted a planned budget for such hiring. Exhibit 2; Exhibit 11.
When making its determination to award zero points for the above-referenced categories,
the decision of the scorer was arbitrary and unreasonable. The scorer’s inference that the grow
facilities were “speculative” is without basis. The supporting documentation certainly indicates
that Blackstone fully intends to integrate with a grow facility and that it took steps towards
accomplishing that plan. As such, these scores must be reconsidered and Blackstone should be
awarded, at minimum, 7 out of the 10 points available under these categories.
III. PROJECTED ANNUAL BUDGET (Section 19)
The scorer acknowledges, in the scoring insights section, that applicant included a “3-
year budget with revenue and line item expenses,” and then goes on to state that “no startup
budget attached.” This assertion is wrong. A start-up budget was incorporated into the Pro
Forma, which was acknowledged by the scorer. Exhibit 2. The Pro Forma clearly included
specific line items for startup costs in the first year of operation. For instance, the Pro Forma
indicates $1,843,250.00 allocated for “Capital Investments” in year 1. These figures clearly do
not deviate from the “Tangible Capital Investments” described in Blackstone’s Building
Construction Plan, as well as the Building Construction quotes provided as supporting materials
to the Application. Exhibit 6.
Additionally, the Pro Forma included line items for other startup costs such as “Noise
Elimination Equipment” and “Odor Elimination Equipment,” which were expenses to be
absorbed only within the first year of operation. Exhibit 2. Certainly, “start-up costs” are under
the umbrella of “expenses.” Even a cursory look at the Pro Forma depicts the vast difference for
141
“expenses” in the first year (approximately $4,200,000.00) in comparison to expenses in years
two and three, which collectively total less than $5,000,000.00. Exhibit 2. The glaring evidence
of startup costs being included in the Pro Forma cannot be ignored. Thus, the scorer’s
determination that a startup budget was not attached is unreasonable.
IV. NET WORTH (Section 22)
Blackstone was not awarded any of the three possible points in this scoring category.
Exhibit 1. The basis for the entire three-point deduction, per the scoring insights, was that
Blackstone “Doesn’t have $100K in a bank account in the applicant’s name. Doesn’t have solid
proof of net worth. No submitted document in name of applicant. Doesn’t have full
documentation of initial start-up and operating costs.” Exhibit 1. The scorer’s determination is
unreasonable.
The submission criterion for this scoring category refers applicants to section
1300.05(b)(12)(vii) and 1300.06(b)(5) which respectively state:
(12) A copy of the proposed business plan for the establishment, including, but not
limited to, the following:
(vii)Financial structure and financing of the proposed medical marihuana establishment(s) See Chapter 1300.05(b)(12)(vii).
* * * (5) Whether the applicant has reasonably and tangibly demonstrated it possesses sufficient financial resources to fund, and the requisite business experience to execute,
the submitted business plan and other plans required by Section 1300.05. The maximum
number of scoring points in this category shall be ten points. See Chapter 1300.06(b)(5).
Blackstone’s sole owner, Joann Steil, provided a detailed personal financial statement
from her CPA indicating a net worth of nearly $1,400,000.00, with available cash in excess of
142
$750,000.00. See attached Exhibit 12 – CPA Attested Financials. Ms. Steil is 100% owner of
Blackstone (a flow-thru entity), meaning that Ms. Steil and the entity are one and the same. See
attached Exhibit 13 – Ownership Structure; Exhibit 14 – Operating Agreement.
Additionally, Ms. Steil demonstrated that over $100,000.00 of liquid capital was
immediately available for capital contribution to Blackstone. See attached Exhibit 15 – Bank
Statements and Deeds; See attached Exhibit 16 – Financial Cover Page. Ms. Steil provided
detailed bank statements demonstrating there was sufficient cash at her disposal for contribution
to Blackstone. Exhibit 15. As such, point reductions in this category are unjustified.
The scorer deducted points claiming that there wasn’t solid proof of net worth despite the
fact that Ms. Steil’s CPA attestation specifically provided the necessary assurances, wherein the
CPA stated, “our responsibility is to conduct this engagement in accordance with Statements on
Standards for Attestation Engagements (SSAE)… We believe that the results of these procedures
provide a reasonable basis of our conclusion.” Exhibit 12. The CPA attested financials also state
that “based on the agreed upon procedures performed, we declare to the best of our knowledge,
the statement of financial condition of Joann Steil is complete and accurate.” Exhibit 12. The
decision to award 0 points is vastly unreasonable given Ms. Steil’s net worth and the supporting
documentation demonstrating that the entity was well capitalized.
Additionally, Blackstone provided Lansing with numerous supporting documents to
further provide assurance of its finances. The supporting materials included, bank statements,
annuity accounts and real estate deeds. Exhibit 15. The conclusions and decisions derived by the
score are arbitrary and unreasonable and are inconsistent with the supporting materials provided,
which if viewed reasonably, would have qualified Blackstone to receive all points under this
category.
143
Chapter 1300.06(b)(5) states that the City, as part of its scoring process, should consider
“whether the applicant has reasonably and tangibly demonstrated it possesses sufficient financial
resources…” The key word in this section of the ordinance is reasonably. It would be
completely unreasonable for the City to deduct points from Blackstone after its inclusion of the
numerous documents that corroborated Ms. Steil’s net worth and access to capital. This is in
addition to Ms. Steil signing a sworn statement as to the truth of this documentation and placing
her reputation, other business licenses, and livelihood at stake by doing so. See attached Exhibit
17 – Sworn Statement. Any objective person would find the documentation submitted by Ms.
Steil to be reasonable and that she did provide assurances of her financial ability and business
experience to operate this business.
In addition to the above, the scorer indicates that applicant failed to include a start-up
budget. This assertion is wrong. A start-up budget was included in the Pro Forma submitted
with the Application. Exhibit 2. Applicant included a 3-year Pro Forma which clearly included
a specific line items for startup costs in the first year of operation. For instance, the Pro Forma
indicates $1,843,250.00 allocated for “Capital Investments” in year 1. These figures clearly do
not deviate from the “Tangible Capital Investments” described in Blackstone’s Building
Construction Plan, as well as the Building Construction quotes provided as supporting materials
to the Application. Exhibit 6.
Additionally, the Pro Forma included line items for startup costs such as “Noise
Elimination Equipment” and “Odor Elimination Equipment,” which were expenses to be
absorbed only within the first year of operation. Exhibit 2. Certainly, “start-up costs” are under
the umbrella of “expenses.” Even a cursory look at the Pro Forma depicts the vast difference for
“expenses” in the first year (approximately $4,200,000.00) in comparison to expenses in years
144
two and three, which collectively total less than $5,000,000.00. The glaring evidence of startup
costs being included in the Pro Forma cannot be ignored. Thus, the scorer’s determination that a
startup budget was not attached is unreasonable.
Given that Blackstone clearly showed readily available funds in excess of $100,000, with
solid proof of net worth and clear evidence of start-up costs, the scorer’s decisions were made in
error, or were unjustified and unreasonable. In either event, Applicant must be awarded all
possible points in this category.
V. ODOR PLAN (Section 35) The submission criteria for this category refers applicants to Chapter 1300.06(b)(3) and
Chapter 1300.09(i). Chapter 1300.06(b)(3) states:
Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the
building housing the medical marihuana establishment, including plans to eliminate or
minimize traffic, noise, and odor effects on the surrounding neighborhood. The maximum number of scoring points in this category shall be ten point
Chapter 1300.09(i) states:
No medical marihuana provisioning center shall be operated in a manner creating noise,
dust, vibration, glare, fumes, or odors detectable to normal senses beyond the boundaries of the property on which the medical marihuana provisioning center is operated; or any other nuisance that hinders the public health, safety and welfare of the residents of the City.
Applicant was only awarded 3 of 4 points in this category, despite including a detailed
Odor Mitigation Plan. See attached Exhibit 18 – Odor Plan. The scorer, per the scoring
insights, based their decision on an unreasonable conclusion that the Odor Plan submitted did not
include “specs, or budget.” Exhibit 1. To the contrary, the Odor Plan submitted by Blackstone
included detailed equipment specs. Exhibit 18. Moreover, the Pro Forma submitted by
Blackstone clearly indicated a line item for Odor Equipment in the amount of $104,000.00.
Exhibit 2.
145
In addition, prior to submission of applications, the Clerk’s office provided applicants,
via the City’s website, a scoring rubric scoring guide with specific items to include to obtain
maximum points. See attached Exhibit 19 – Sample Rubric. In Section 35, “Plan to
Minimize/Eliminate Odor,” the criteria column states, “Any plan(s) the applicant has provided
which would minimize or eliminate the impact of increased odor on nearby neighborhoods
please document in budget of expenditures.” Here, Blackstone followed these instructions
precisely as requested and did, in fact, document the odor equipment cost in the budget of
expenditures, which is clearly listed as a separate line item in year 1 of the previously attached
Pro Forma. Exhibit 2. Adversely, the scorer deducted a point because the Odor Plan did not
include the cost of the equipment being proposed. Exhibit 1. However, the instructions clearly
stated to document said cost directly into the budget of expenditures, which applicant did based
upon a plain reading of the Lansing City Ordinance and other City materials. Exhibit 18.
The scorer also indicates that there were “no specs” provided for the odor equipment
being proposed. Exhibit 1. However, the attached Odor Plan, which was included as part of
Applicant’s application submission, includes specific details about the type of equipment to be
used. Exhibit 18. Specifically, Applicant’s Odor Plan provides a detailed description of the
equipment that will be used, including the type of system (mini-split), type of drive (belt),
amount of carbon (30 lbs), additional equipment (ozone generator), type of odor measuring
equipment (differential pressure gauge & Olfactometer), and type of comparative scale of
reference (OIRS - Odor Intensity Reference Scale). The main points of the Odor Plan have been
included here for your reference:
• The space will be conditioned using multiple split heat pump systems of various
capacities and a ductless mini-split system. Each of the split-systems, excluding the ductless mini-split system, are equipped with unit-level pleated filters.
146
• An in-line, belt driven exhaust fan is provided to remove the amount of fresh air provided for the occupants and an additional amount that will ensure a negative pressure within the
space.
• The in-line exhaust fan is equipped with a filter section loaded with approximately thirty pounds of activated carbon, in a rack-mounted configuration.
• An ozone generator will be placed upstream of the carbon filters, in the housing
assembly.
• A differential pressure gauge will be used to ensure a negative building static of no less than .05” of negative building static has been achieved. A maximum negative building
static shall not exceed .15”
• Testing shall be done using a field Olfactometer, calibrated in accordance with odor control standards using the scheduled monitoring protocol.
• We will compile and compare the data we record to establish norms using a 5-point Odor
Intensity Reference Scale to compare daily readings. The scorer’s determination that Applicant provided neither a budgeted cost nor any
specifics on the type of equipment proposed for this location cannot be possibly derived from the
materials submitted. Thus, the scorer’s decision should be deemed arbitrary and
unreasonable. Applicant clearly provided both aforementioned items with adequate sufficiency
and, as such, must be awarded one (1) additional point in this category.
CONCLUSION AND REQUESTED RELIEF
The scored rubric which applicant received with its denial is riddled with clear and
obvious errors and in some cases, direct contradictions made by the scorer.
It is also clear that the City of Lansing has decided to deduct points arbitrarily and
capriciously. As referenced above, many of the deductions were non-objective, unreasonable,
and without basis under the requirements set forth in the City of Lansing’s applicable ordinances.
These numerous errors and blatant disregard for the requirements set forth in the ordinance
bolster Applicant’s claims that the scoring was arbitrary and capricious; and was not supported
147
by material, substantial, and competent facts on the whole record considered by the Clerk.
Applicant maintains that the entire application needs to be re-scored with the additional points
outlined above being added to Blackstone’s score.
Blackstone hereby reserves all rights. Additionally, the Exhibits attached hereto are not
meant to replace the application, or the totality of documents submitted in support of each
category of scoring. Blackstone hereby incorporates its entire Application, as well as its grower
application fully by reference herein.
Respectfully submitted,
/s/ Nadeem Noah Harfouch /s/ Mike M. Bahoura
Nadeem Noah Harfouch, Esq. Mike M. Bahoura, Esq. The Harfouch Law Firm, PLLC Law Offices of Mike M. Bahoura, PLLC 631 East Big Beaver Road, Suite 211 631 East Big Beaver Road, Suite 211 Troy, MI 48083 Troy, MI 48083
Ph: 248-274-6529 Ph: 248-392-1586
nharfouch@harfouchlaw.com mike@bahouralaw.com Dated: November 27, 2019 Dated: November 27, 2019
148
EXHIBIT
1
Scoring Rubric, as scored by the Clerk
149
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
Total
Possible
Points
Blackstone Harvest LLC ‐ District Club‐6450 S. Cedar
Applicant Address ‐‐‐
#Category ‐‐‐Score Location of material Scoring Insights
1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has structure. 8/12/19
2 Organizational Chart 1 1 Org Docs, Org Chart, 6 pgs.Has org chart. 8/12/19
3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 95 pgs.Has plan. 8/12/19
4 Short and Long Term Goals and
Objectives 1 1 Org Docs, Goals, 71 pgs.Has goals. 8/12/19
5 Community Outreach &
Education 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
6 Marketing, Advertising &
Promotion 3 3 Marketing Five examples of minor minimization with good detail. Includes marketing materials. Includes
budget. 7/9/19
7 Tangible Capital Investment
Dollar Amount 5 5 4 page Investment Plan in TCI section Calculated $4,883,250 TCI from narrative. 8/12/19
8 Tangible Capital Investment
Own/Lease 3 3 19 pages in Lease with Permission in TCI Folder Stakeholder owns the property. 8/12/19
9 Tangible Capital Investment
Supporting Material 3 3 47 pages in TCI Supporting Documents Has supporting materials which fully corroborate stated/calculated TCI. 8/12/19
10 Financial Structure & Financing 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
11 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
12 Integration with Grows 4 0 Integration
Integration Plan
Integration plan says they will have grow, but does not have any application(s) submitted. Deemed
speculative. 9/20/19
13 Charitable Plans & Strategies 4 3 Charitable
Charitable Plan Plans to contribute $125K in cash and $10K in volunteer time. No receipts or agreements. 8/12/19
14 Number of and job
descriptions for PC ONLY 3 3 Job Creation
FTE's 34‐40 FTE's at PC. Job descriptions with adequate detail. 8/12/19
15 Healthcare 2 2 Job Creation
Healthcare Employer will provide healthcare. 8/12/19
16 Paid Time Off 1 1 Job Creation
Healthcare Employer will provide paid time off. 9/12/19
17 Retirement 1 1 Job Creation
Healthcare Employer will provide 401K or similar plan. 8/12/19
18 % of employees at $15+/hr 3 3 Job Creation
Plus 15 100% of employees will make $15+/hr. 8/12/19
19 Projected Annual Budget 2 1 Job Creation, Budget Revenue 1 page and Finance, Startup Costs
Budget 1 page 3 year budget with revenue and line item expenses. No startup budget attached. 8/21/19
20 Total COL Jobs 6 0 Job Creation
Lansing Jobs Has not submitted application for grow, therefore jobs are speculative 9/16/19
Total Business Plan &
Job Creation 50 37
21 Financial Litigation History 1 1 Financial Litigation History Form Financial Litigation History Form submitted on sole stakeholder. 7/10/19
22 Net Worth 3 0 6 pages in Financial Section of Laserfiche
Doesn’t have $100K in a bank account in the applicant’s name.
Doesn’t have solid proof of net worth. No submitted document in name of applicant. 9/16/19
Doesn’t have full documentation of initial start‐up and operating costs. 9/12/19
23 LARA Pre‐Qual 3 3 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
24 Stakeholder Experience
City of Lansing Businesses 1 0 Experience Stakeholder Resume Resume does not list any Lansing business ownership. 7/12/19
25 Stakeholder Experience
Relevant Businesses 1 1 Experience Stakeholder Resume Sole stakeholder has 18 years experience in a medical related field. 7/12/19
26 Stakeholder Experience
Medical Marijuana Business 1 0 Experience Stakeholder Resume Sole stakeholder did not list any medical marijuana related experience. 7/12/19
Total Financial Stability
&
Business Experience
10 5
27
Impact on Neighborhood
Distance Between PC &
Residential Zoning
7 5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
PC has residential zoned property within 1/4 mile. 9/20/19
1150
City of Lansing Provisioning Center Ranking 9/20/2019 3:51 PM
28 Impact on Neighborhood
Density of PCs 7 1.5
https://lansing.maps.arcgis.com/apps/webappviewe
r/index.html?id=be0634345255438ba55b14c9b19e9f
22
Lose 2 points for every existing PC within a 1/2 mile radius. None
Lose 1 point for every existing PC within a 1 mile radius. #5, #9, #10, #11, #13
Lose .5 point for every existing PC within a 1.5 mile radius.#2
Lose .25 point for every existing PC within a 2 mile radius. None
Lost 5.5 points. 8/12/19
29 Traffic & Parking 3 3 Public Service Review Tier 1 plan. Excellent parking/circulation. 8/30/19
30 Security Plan 3 3 LPD Review Tier I ‐ bank vault, on site guard, alarm system w/ color printer, panic button, off site video storage,
Man trap barrier, equipment specs 8/20/19
Total ‐ Land Use &
Resident Safety 20 12.50
31 Planned Outreach 1 1 Community Outreach, Outreach&Ed, 7 pgs. Has plan. 8/12/19
32 Improvements to Building 3 3 Building Improvements
Support Docs
SEV‐$280,600
Proposed Improvements $643,250.00 ‐ 229% of SEV
Has proposal from ZA Design Build which supports that amount. 8/26/19
33 Plan to Minimize Traffic 1 1 Traffic Study, Neighborhood Compatibility & Plans to minimize
traffic 10pgs total Has a plan. 9/12/19
34 Noise Plan 1 1 Noise & Odor
Noise Plan Has plan. 8/12/19
35 Odor Plan 4 3 Noise & Odor
Odor Plan, Odor Plan, 2 pages Has detailed plan, but no specs or budget. 8/12/19
Total Outreach 10 9
36 Stakeholder History
Proof of LARA Prequal 2 2 demo of reg prequalification Received prequalification letter dated 7/18/19 for Blackstone Harvest, LLC. 8/12/19
37 Demo of Regulatory
Compliance 5 5
https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus
=All+Records&SearchCategory=Address&SearchText=6450+s+ced
ar&uid=384&PageIndex=1&ReferenceKey=33‐01‐05‐10‐151‐
012&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDis
playString=33‐01‐05‐10‐151‐012&RecordKey=1%3d33‐01‐05‐10‐
151‐012%3a%3a4%3d33‐01‐05‐10‐151‐
012%3a%3a7%3d55b67cb1‐daee‐40e6‐9dae‐
9f2801426ce9%3a%3a13%3d4975&RecordKeyType=1%3d0%3a%
3a4%3d0%3a%3a7%3d2%3a%3a13%3d1
No code violations, no conditional denial letters. 9/12/19
38 Morals, Good Order & General
Welfare Litigation History 3 3 Morals Lit Hist Demo of Reg Has completed form(s) for all stakeholder(s). 9/12/19
Total Applicant
Stakeholder History 10 10
Total Score 100 73.50
2151
EXHIBIT
2
Pro Forma/Budget
152
BLACKSTONE HARVEST, LLC - PRO FORMA YEAR 1 YEAR 2 YEAR 3
Sales $9,000,000 $10,500,000 12,000,000
Costs of Goods Sold/Inventory $2,640,000 $2,900,000 $3,215,000
GROSS PROFIT $6,360,000 $7,600,000 $8,785,000
OPERATING EXPENSES
Salary and Wages $1,490,000 $1,550,000 $1,575,000
Employee Benefits and Bonuses $150,000 $160,000 $170,000
Capital Investments $1,843,250 $300,000 0
Outside Services $35,000 $35,000 $35,000
Supplies/Furniture/Equipment (Office & Operation) $160,000 $50,000 $70,000
Repairs & Maintenance $23,000 $38,000 $41,000
Noise Elimination Equipment $25,000 $0 $0
Odor Elimination Equipment $104,000 $0 $0
Marketing & Advertising $58,000 $36,000 $42,000
Car & Travel & Vehicle Misc. $50,000 $55,000 $57,000
Accounting $24,000 $25,000 $26,000
Legal $36,000 $36,000 $36,000
Telephone $10,000 $10,000 $10,000
Utilities $19,000 $19,000 $20,000
Insurance & Workers Comp $10,000 $10,000 $10,000
Security Monitoring $16,000 $16,000 $16,000
General Admin $3,000 $3,000 $3,000
Patient Education $20,000 $20,000 $20,000
Community Spending and Charity $130,000 $145,000 $170,000
TOTAL EXPENSES $4,206,250 $2,508,000 $2,301,000
NET INCOME BEFORE INTEREST TAX DEPRECIATION AND AMORTIZATION $2,153,750 $5,092,000 $6,484,000
153
EXHIBIT
7
Plan to Integrate
154
Blackstone Harvest, LLC – Plan to Integrate with a Grower Facility
Blackstone Harvest, LLC (“Blackstone Harvest”) will integrate the provisioning center with a medical marijuana grower facility in the City of Lansing. Blackstone Harvest has a signed purchase agreement for the property commonly known as 209 Baker Street, Lansing, Michigan 48910. Blackstone Harvest will be purchasing the property for $1,000,000.00. The property is
approximately 13,600 square feet and is situated on approximately 2.47 acres of land. Blackstone
Harvest will file an application to operate a licensed medical marijuana grower facility at the property. Blackstone Harvest will grow 1,000 plants or more at the proposed facility. Blackstone Harvest’s application for the proposed grower facility will include separate business and operational plans, as well as other relevant information, in accordance with the City of Lansing’s Code of Ordinances.
155
156
157
EXHIBIT
8
209 Baker - Purchase Agreement
158
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164
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165
EXHIBIT
9
209 Baker - Construction Quote
166
Interior & Exterior
Commercial & Residential Properties
______________________________
2011 Orchard Lake Road
Sylvan Lake, Michigan 48320
(248) 791-2222 Office
Date: 06/26/2019
Customer: Blackstone Harvest LLC
Address: 209 Baker St
Lansing, MI 48910
JOB: Baker St Lansing
It is agreed between contractor and the undersigned customer as follows:
Demolition
Remove all debris from site
Site Work
Underground utilities
Grade Site
New asphalt and striping per plan
New concrete curbing per plan
New handi-cap sign
New dumpster enclosure with foundation, block work and fence per plan
New landscaping per plan
Concrete
Trench footing
4” concrete floor
Masonry
Masonry block framing 4” burnished block per plan
167
4” brick veneer per plan
Metals
Exterior corrugated metal framing
Steel awnings per plan 3 5/8” 20 GA. Interior metal framing Roof steel framing and steel beams Parapet metal coping
Carpentry 1/2” sheathing over parapet walls
Rough framing
Laminate counters per plan
Thermal and Moisture Protection
Batt insulation per energy calculation
Sound insulation R11
Doors
(10) 3'-0"x6'-8" solid doors per plan 3'-0"x6'-8" hollow metal security door (4) New entry door per plan
Finishes
4” rubber base 5/8” drywall per plan. Sherwin Williams paint.
Buff all concrete floors.
New glass system per plan.
Purchaser agrees to pay the contractor the sum of ($2,040,000.00) on the following terms:
Deposit with Contract ($40,000.00), Balance ($2,000,000.00). BALANCE TO BE PAID MONTHLY AS
WORK IS IN PROGRESS, WITH BALANCE DUE WITHIN SIX (6) MONTHS AFTER PROJECT
COMPLETION.
Upon the failure of the Purchaser to comply with any payment term, other than the deposit term of the contract,
the entire contract price or so much as then remains unpaid shall be deemed immediately due and payable.
“IN THE EVENT PAYMENTS ARE NOT MADE WHEN DUE, THE CUSTOMER SHALL BE LIABLE FOR
PAYMENT OF A REASONABLE ATTORNEY FEE AND
TO ENFORCE COURT COST TO ENFORCE COLLECTION THEREOF.”
Contractor: X____________________________
Four Seasons Contracting, Inc.
Customer: X_____________________________
Blackstone Harvest, LLC
168
EXHIBIT
10
Receipt for Grow Application
169
10/2/2019 City of Lansing Clerk,MI-Online Payments
https://client.pointandpay.net/web/cityoflansingclerkmi 1/1
Step 1: Select Payments Step 2: Review and Submit Step 3: Confirmation and Receipt
Step 3: Confirmation and Receipt
Result: Payment Authorized
Confirmation Number: 64893086
Your payment has been authorized successfully and payment will be processed.
The City of Lansing Clerk thanks you for your payment. For questions about your account, please call 517-483-4131. Credit card payments will show up as City of Lansing Clerk. E-check
payments will show up as PNP BILLPAYMENT 8888916064 Thank you for using our bill payment services.
Please save or print a copy of this receipt for record keeping purposes.
My Bills
Description Amount
MJ Facilities License payment of $5,000.00 on Submission Number 10787 $5,000.00
Customer Information
First Name: Joann
Last Name: Steil
Address Line 1: 22618 Shorewood Dr
Address Line 2:
City:St Clair Shores
State: Michigan
Zip Code: 48081
Phone Number: 5867031702
Email Address: jsteil902@gmail.com
Subtotal:$5,000.00
Convenience Fee: $150.00
Total Payment:$5,150.00
Payment Information
Payment Date: 10/02/2019
Card Type: Visa
Card Number: ************5774
Print
170
EXHIBIT
11
Job Creation Plan
171
Blackstone Harvest, LLC – Job Creation – Additional Lansing Jobs
Investment in 209 Baker Street, Lansing, MI 48910:
The Company is also purchasing a 13,600 sq. ft. property to integrate a grower facility with the
proposed provisioning center. This grower facility will have a Class C grow license that will
allow a 1,500-plant grow operation. The property we are purchasing is commonly known as 209 Baker Street, Lansing, MI 48910. The total capital investment to purchase the property will be $1,000,000.00. We project that this building will require an additional investment of $2,040,000.00 to renovate the interior and exterior of the building for purposes of a medical marijuana grower facility.
Job Creation at 209 Baker Street, Lansing, MI 48910:
We will employ approximately 50 to 60 employees to work at the grower facility.
Job Creation Effects on Economy of Lansing:
The total jobs added in Lansing will be between 50 to 60 new jobs. This will have a profound effect on the local economy, especially since our Company will seek to hire locally.
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All of our employees will be paid more than $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings
plans, which will include employer contributions, and an employer paid health insurance
package, among other things. Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals by increasing
and improving the job opportunities available. We will build resources that support environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Employer Covered Group Health Insurance Plan:
Our employees will receive health benefits. We will find a plan that best meets our needs and give employees the option to enroll in our group health insurance plan. Health insurance will be fully covered by our Company.
172
Employee Benefits:
Our Company will provide employees with a variety of benefits for working with us. We want the best candidates and we will incentivize employees for staying with us by offering long-term benefits. After the first six months of employment, employees will be eligible for a week of paid vacation time off and three (3) days of personal time off. After
the first three (3) years of employment with our Company, employees will have two
weeks of paid vacation time off, and four (4) days of personal time off. Additionally, we will work with a nationally recognized service provider, such as Merrill Lynch, to adopt a retirement and benefits package for our employees to enroll in. Any employee that puts money towards their employee retirement account will receive a
Company match of up to 3% of the employee’s yearly income.
Employee Bonuses:
Our Company will offer bonuses to employees based on their performance and continued training. Bonuses will be discretionary and will be paid on a yearly basis after Q4.
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered
Patients can see familiar faces at our facility.
Employing the Chronically Underemployed: We want to give the chronically underemployed new opportunities in this new and
fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work hours. We will connect with the Michigan Unemployment Insurance Agency and use the
Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
Job Creation – Jobs and Compensation at Grower Facility:
Position Number of
Employees
Designation Compensation
Horticulturists 22 8 Full-Time - Hourly 14 Part-Time – Hourly
$17.00/hr.
173
Packaging Team Member 4 1 Full-Time - Hourly 3 Part-Time – Hourly
$17.00/hr.
Tissue Culture Technician 1 Full-Time – Salary $60,000.00/year
Director of Quality Assurance 1 Full-Time – Salary $60,000.00/year
Director of Cultivation 1 Full-Time – Salary $150,000.00/year
Inventory Manager 1 Full-Time – Salary $55,000.00/year
Cultivation and Quality Assurance Techs 8 2 Full-Time – Hourly 6 Part-Time - Hourly
$16.00/hr.
Packaging Manager 1 Full-Time – Salary $60,000.00/year
General Manager 1 Full-Time – Salary $75,000.00/year
Assistant Manager(s) 2 Full-Time – Salary $50,000.00/year
Account Manager 1 Full-Time – Salary $55,000.00/year
Master Grower(s) 2 Full-Time – Salary $150,000.00/year
Compliance Director 1 Full-Time –
Salary
$55,000.00/year
Maintenance Manager 1 Full-Time -
Hourly
$16.00/hr.
Security Manager 1 Full-Time – Salary $55,000.00/year
Receptionist/Admin 1 1 Full-Time Hourly $18.00/hr.
Security Officer(s) 3 1 Full-Time Hourly 2 Part-Time
Hourly
$16.00/hr.
Community Outreach
Manager
1 Full-Time
Hourly
$18.00/hr.
Information Technology
Specialist(s)
1 Full-Time
Hourly
$18.00/hr.
174
Blackstone Harvest, LLC – Employee Compensation and Jobs Available
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All of our employees will receive above $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things.
Investment in 6450 S. Cedar St., Lansing, MI 48911:
Blackstone Harvest, LLC (the “Company”) is purchasing the property commonly known as 6450
S. Cedar St., Lansing, Michigan 48911 for the purpose of developing and operating a licensed medical marijuana provisioning center. The total capital investment to purchase the property will be $1,200,000.00. Per our building development plan and construction plans, the renovation needed for the building will cost an additional $643,250.00.
Job Creation at 6450 S. Cedar St., Lansing, MI 48911: We will employ between 34 to 40 employees to work at the provisioning center. Of those employees, approximately ten (10) employees will be in a management or leadership position.
Job Creation Effects on Economy of Lansing:
The total jobs added in Lansing exclusively from our provisioning center will be between 34 and 40 new jobs. This will have a profound effect on the local economy, especially since our
Company will seek to hire locally.
Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals by increasing and improving the job opportunities available. We will build resources that support
environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered
Patients can see familiar faces at our facility.
175
Employing the Chronically Underemployed:
We want to give the chronically underemployed new opportunities in this new and fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work
hours. We will connect with the Michigan Unemployment Insurance Agency and use the
Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
Executive Salary Compensation:
Position Number of
Employees
Designation Compensation
CEO 1 Full-Time – Salary $130,000.00/year
CFO 1 Full-Time – Salary $90,000.00/year
COO 1 Full-Time – Salary $90,000.00/year General Counsel 1 Full-Time - Salary $90,000.00/year
Full-Time/Part-Time Staff Compensation:
Position Number of
Employees
Designation Compensation
Compliance Manager 1 Full-Time – Salary $45,000.00/year
Human Resources Manager 1 Full-Time –
Salary
$45,000.00/year
Accountant/Bookkeeper 1 Full-Time –
Salary
$50,000.00/year
Product Pricing Specialist 1 Full-Time –
Salary
$40,000.00/year
Financial Analyst 1 Full-Time – Salary $45,000.00/year
Security Manager 1 Full-Time – Salary $45,000.00/year
General Manager 1 Full-Time – Salary $65,000.00/year
Assistant Manager(s) 1 Full-Time – Salary $45,000.00/year
Account Manager 1 Full-Time – Salary $40,000.00/year
Patient Care Specialist(s) 8 4 Full-Time Hourly 4 Part-Time Hourly
$16.00/hr.
Provisioning Center Technician(s) 8 4 Full-Time Hourly $16.00/hr.
176
4 Part-Time Hourly
Maintenance Manager 1 Part-Time
Hourly
$16.00/hr.
Inventory Coordinator(s) 1 Full-Time
Hourly
$18.00/hr.
Receptionist(s) 3 1 Full-Time
Hourly 2 Part-Time Hourly
$16.00/hr.
Security Officer(s) 4 1 Full-Time Hourly 3 Part-Time Hourly
$16.00/hr.
Community Outreach Manager 1 Full-Time Hourly $18.00/hr.
Information Technology Specialist(s) 1 Full-Time Hourly $18.00/hr.
Organizational Job Descriptions
Chief Executive Officer/President (CEO)
The CEO is responsible for all facets of the operation, including financial oversight. The CEO is the leader of the
management team with responsibility for managing all senior managers. The CEO will have significant interaction
with the principals/owners of the Company and all outside groups including state regulators, local government
officials, and community groups. The CEO develops policy and communicates expectations and the Company’s
mission.
Chief Financial Officer (CFO)
The CFO is responsible for direction and oversight of the financial functions of the Company, in accordance with
U.S. generally accepted accounting principles and in accordance with MMFLA rules and regulations. The CFO
oversees accounting controls and procedures concerning the collection, verification, and analysis of financial
information.
177
Chief Operations Officer (COO)
The COO is responsible for carrying out our Company’s strategic plan through overseeing operations, developing
functional roles and assigning responsibilities to employees. The COO is responsible for overseeing the inventory
control system which includes day-to-day operations of dispensing, packaging, administrative offices and inventory
control.
General Counsel
The General Counsel is responsible for offering counsel on a variety of legal issues, advising Company executives,
and ensuring compliance with legal requirements.
Financial Analyst
The Financial Analyst is responsible for financial planning, analysis, and projection for the Company. The Financial
Analyst identifies trends and makes recommendations concerning system improvements.
Product Pricing Specialist
The Product Pricing Specialist implements pricing strategies that meet the Company’s standards, policies and
procedures.
Accountant/Bookkeeper
The Bookkeeper is responsibility for daily accounting duties. The Bookkeeper will cooperate with the Company’s
outside accounting firm and Inventory Coordinator to complete regular audits of the system.
Human Resource Manager
The HRM oversees policies, procedures and compliance relating to Company employees. Further, HRM ensures all
human resources activities are in compliance with local, state and federal laws; and implements and oversees
programs related to employee benefits and initiatives. Employee benefits are overseen by the HRM as well. The
HRM makes recommendations on potential policy changes to ensure the Company offers a healthy package of
178
salary and benefits to employees. The HRM ensures the workplace is accommodating and free of harassment,
handling complaints in accordance with policy and any relevant laws.
Compliance Manager
The Compliance Manager is responsible for upholding the Michigan Medical Marihuana Program guiding principles
as well as overall Company compliance. The Compliance Manager will be responsible for communicating with the
Department to schedule inspections, reviewing policies and procedures and updating on a quarterly basis as well
as educating the Company’s employees on compliance and regulations. The Compliance Manager will also assist
the inventory coordinator with quality control and ensure all products are tested, labeled, and packaged properly.
Security Manager/Officers
The dispensary will employ a Security Manager and Security Officers to oversee the safety of staff and the security
of the facility. The Security Manager is responsible for all security of the facility and its perimeter, and will train all
staff as to basic security protocols. The Security Manager is also responsible for the security and safety of the
immediate environment outside of the facility perimeter to the extent that the provisioning center’s operations
relate to the welfare of the neighbors, arising from the facility’s presence in the neighborhood. The Security
Manager will maintain strict vigilance for diversion and deviation of medicine.
Information Technology Specialist
The IT Specialist is responsible for the implementation of the Company’s computer systems. The IT Specialist will
also be responsible for systems-related staff training, as well as integrity of the information and security of the
systems including physical and as electronic security.
Community Outreach Manager
The Community Outreach Manager will oversee the planning and implementation of outreach strategies. The
Community Outreach Manager is primarily responsible for connecting people in the broader community and
cultivating relationships with businesses, individuals, and other relevant organizations.
179
Maintenance Manager
The Maintenance Manager is responsible for planning, organizing and managing preventive maintenance, cleaning,
and repairs to equipment, fixtures, furnishings and the structure.
General Manager
The General Manager’s responsibility is to oversee all day-to-day operations of the Company including sales,
money inventory, storage of medical marihuana Products, cleanliness and organization, and signage. The General
Manager will also be responsible for ensuring that all operations are compliant with state and local law, and that
all appropriate steps are being taken to mitigate exposure under Federal law.
Account Manager
The Account Manager serves as lead point of contact for all account management matters, and completes
administrative work as required.
Inventory Coordinator
The Inventory Coordinator will be responsible for taking inventory of any usable or unusable medical marihuana
during all processes from seed to sale. The Inventory Coordinator will also be responsible for reporting any
inventory discrepancies to the appropriate supervisor.
Receptionist
The Receptionist is responsible for checking in a patient and ensuring the patient is an active card holder. Since the
Receptionist is the front lines of operations, it is imperative that this individual is professional, knowledgeable, and
trustworthy.
Provisioning Center Tech
The Provisioning Center Techs are responsible for verifying the status registered qualified patients and maintains
accurate records of transactions, patient data, and identification documents. They respond to inquiries and walk
guests through the facility.
180
Patient Care Specialist
The Patient Care Specialists will be stationed in the Provisioning Center and will dispense Medical Marihuana
Products to Patients. Other responsibilities will include providing each Patient/Designated Caregiver with
knowledgeable and welcoming service, entering each sale into the POS system, and working closely with the
General Manager to ensure the Provisioning Center area is clean and organized.
181
Blackstone Harvest, LLC – Other Compensation and Information
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All our employees will receive at least $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things. Our Company also seeks to increase the number and diversity of job opportunities for residents in the City of Lansing (the “City”) and its surrounding community. We’re confident that our presence in the City will improve the standard of living and quality of life for many individuals
by increasing and improving the job opportunities available. We will build resources that support environmental protection, education, and cultural and social growth. Our educational programs and training will lead to a knowledgeable staff who will possess skillsets that will translate to opportunities for career growth and development.
Employer Covered Group Health Insurance Plan:
We will offer our employees health benefits. We will find a plan that best meets our needs and give employees the option to enroll in our group health insurance plan. Health insurance will be fully covered by our Company.
Employee Benefits:
Our Company will provide employees with a variety of benefits for working with us. We want
the best candidates and we will incentivize employees for staying with us by offering long-term
benefits. After the first six months of employment, employees will be eligible for a week of paid vacation time off and three (3) days of personal time off. After the first three (3) years of employment with our Company, employees will have two weeks of paid vacation time off, and four (4) days of personal time off.
Additionally, we will work with a nationally recognized service provider, such as Merrill Lynch, to adopt a retirement and benefits package for our employees to enroll in. Any employee that puts money towards their employee retirement account will receive a Company match of up to 3% of the employee’s yearly income.
Employee Bonuses: Our Company will offer bonuses to employees based on their performance and continued training. Bonuses will be discretionary and will be paid on a yearly basis after Q4.
182
Hiring Local:
Our Company will use its best efforts to employ City of Lansing residents. We will use existing City resources, and/or online recruitment services, to help us in the endeavor of receiving an abundance of employment applications from City residents. Our goal is to develop and maintain a dynamic partnership with City residents so that our Registered Patients can see familiar faces at
our facility.
Employing the Chronically Underemployed: We want to give the chronically underemployed new opportunities in this new and fascinating industry. Our commitment to hire locally will also be matched with our commitment to hire the
chronically underemployed. We will work to find individuals who have unexpectedly lost their jobs or are experiencing a significant drop in work hours. We will connect with the Michigan Unemployment Insurance Agency and use the Pure Michigan Talent Connect database to hire underemployed Michigan citizens.
183
Blackstone Harvest, LLC – Commitment to Pay Over $15.00/hr.
Our Company will provide a living wage that is at least 200% above the Federal Poverty Level for a family of two (2). All our employees will receive above $15.00/hr. in wages and will be eligible for Company paid health insurance, as well as benefits. Our benefits will include, but are not limited to, paid vacation time off, paid personal time off, employee retirement savings plans,
which will include employer contributions, and an employer paid health insurance package,
among other things.
184
Blackstone Harvest, LLC
Blackstone Harvest, LLC – Employee Staffing & Training Plan
CEO/President
185
EXHIBIT
12
CPA Attested Financial Statement
186
As of December 31, 2018
Statement of Financial Condition
Joann Steil
187
Accountants' Agreed Upon Procedures Report
Financial Statements:
Statement of Assets and Liabilities
Notes to Financial Statements
Table of Contents
As of December 31, 2018
Statement of Financial Condition
Joann Steil
188
Joann Steil
22618 Shorewood Dr
St. Clair Shores, MI 48081
We have performed and applied agreed-upon procedures enumerated below on behalf of Joann Steil.
These agreed-upon procedures were conducted in accordance with Statement on Standards for
Attestation Engagements (SSAE) established by the American Institute of Certified Public Accountants
(AICPA). The sufficiency of these procedures is solely the responsibility of those parties specified in
this report. Consequently, we make no representation regarding the sufficiency of the procedures
described below either for the purpose for which this report has been requested or for any other purpose.
These agreed upon procedures have been applied to determine the statement of financial condition of
Joann Steil as of December 31, 2018, and the related notes to the financial statement.
However, we do not express an opinion on these financial statements.
Joann Steil's Responsibility for the Financial Statement
Joann Steil is responsible for the preparation and fair presentation of this financial statement
in accordance with accounting principles generally accepted in the United States. This includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of a financial statement that is free from material misstatement whether due to fraud or error.
Accountant's Responsibility
Our responsibility is to conduct this engagement in accordance with Statements on Standards
for Attestation Engagements (SSAE) promulgated by the American Institute of Certified Public
Accountants (AICPA). We believe that the results of these procedures provide a reasonable basis
of our conclusion.
Accountant's Conclusion
Based on the agreed upon procedures performed, we declare to the best of our knowledge, the
statement of financial condition of Joann Steil is complete and accurate.
Best Regards,
Simon H. Gumma, CPA, CGMA
President
February 14, 2019
P: (248) 729-7171 / F: (248) 729-7373
Troy, MI 48084
888 W Big Beaver Rd, Ste 300
Certified Public Accounting
Gummaco, P.C.
189
Cash on Hand 1,000$
Cash in Banks
PNC Bank - Adv Plc Serv Inc Checking #...1339 24,748$
Extra Credit Union Checking #...0040 36,261
Extra Credit Union Savings #...0001 367,688
Extra Credit Union Savings #...8036 31,107
Chemical Bank Savings #...1238 87,577
Total 547,382
AXA Advisors Annuity 201,512
Furniture & Personal Effects 27,500
Jewelry 30,000
Automobiles / Boats / Motorcycles
2010 Jeep Wrangler Islander 20,000
2007 GMC Savana Conversion Van 9,500
2010 Rinker Boat 15,000
2002 Harley Davidson Road King Classic 20,000
2014 Harley Davidson Sportster 883 4,000
Total 68,500
Principal Residence - 22618 Shorewood Dr 450,000
Investments in Business Ventures 35,000
Investments in Real Estate 250,000
Total Assets 1,610,894$
Mortgage - Wells Fargo Bank 172,943$
Estimated income taxes on the difference
between the estimated current value of assets
and their tax basis (See Note 4)40,000
Total Liabilities 212,943$
Net Worth 1,397,951$
Total Liabilities and Net Worth 1,610,894$
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Assets
Liabilities & Net Worth
190
Ownership Fair Market Net Share of
Business Description %Value (FMV)Liabilities Equity Equity
Advanced Placement Services Inc 100.000%35,000 - 35,000 35,000
Elder Care Placement Services
22618 Shorewood Dr
St. Clair Shores, MI 48081
Totals 35,000$ -$ 35,000$ 35,000$
Ownership Fair Market Total Share of
Real Estate Description %Value (FMV)Liabilities Equity Equity
10410 E Jefferson LLC 50.000%500,000 - 500,000 250,000
Future Development
10410 - 10440 E Jefferson Ave
Detroit, MI 48214
Totals
500,000$ -$ 500,000$ 250,000$
Schedule of Real Estate Investments
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Schedule of Business Ventures
191
Note 1:
Estimated current values were based at either (1) fair market values,
(2) appraised values or (3) broker purchase opinion (BPO).
Note 2:
Amounts for Investments in Business Ventures were based on
compiled financial statements as of December 31, 2018.
Note 3:
Amounts for Investments in Commercial Real Estate were based at either
(1) fair market values, (2) appraised values or (3) broker purchase opinion (BPO).
Note 4:
Estimated income taxes have been provided on the excess of the
estimated current values of assets over their tax basis as if the
estimated current values of the assets, had been realized on the
statement date, using applicable tax and regulations.
The provision will probably differ from the amount of income taxes
that eventually might be paid because those amounts are determined
by the timing and the method of disposal or realization.
Joann Steil
Statement of Financial Condition
As of December 31, 2018
Notes to Financial Statements
192
EXHIBIT
13
Organizational Structure
193
Blackstone Harvest, LLC – Ownership Structure
Blackstone Harvest, LLC (“Blackstone Harvest”) is a Michigan limited liability company. Blackstone Harvest was established in January 2019. It has a registered office located at 2222 W. Grand River, Ste A, Okemos MI 48864. Blackstone Harvest is owned by a single member – Joann Steil.
NAME OWNERSHIPT INTEREST
Joann Steil 100%
194
EXHIBIT
14
Operating Agreement
195
196
197
198
199
EXHIBIT
15
Bank Statements, Annuity, Deed
200
201
202
203
204
205
206
207
EXHIBIT
16
Financial Structure Cover Page
208
Blackstone Harvest, LLC – Financial Structure and Financing
Blackstone Harvest, LLC is owned solely by its managing member, Joann Steil. Ms. Steil has provided CPA attested financials that demonstrate she has a net worth of almost $1.4 million, of which $500,000 is available in cash in her bank accounts. Additionally, Ms.
Steil has access to cash from an annuity valued at $201,512. These financials are supported by
bank/account statements included with this application. Ms. Steil acquired the property located at 6450 S. Cedar by land contract, which has limited her initial out-of-pocket costs significantly (although Ms. Steil is responsible for paying the remaining balance of the property over time).
Ms. Steil will acquire the property at 209 Baker by utilizing her cash and financing options. The interior and exterior renovations to the proposed provisioning center at 6450 S. Cedar and
the proposed grow facility at 209 Baker will be performed by 4 Seasons Contracting, which has
agreed to provide Ms. Steil with financing for the project. This type of arrangement is not uncommon for large projects like the proposed renovations to 6450 S. Cedar and 209 Baker.
209
EXHIBIT
17
Sworn Statement of Truthfulness
210
211
EXHIBIT
18
Odor Plan
212
Blackstone Harvest, LLC – Odor Plan
Our desire to be a good neighbor includes avoiding nuisances of odor that may be
generated by our operations. It’s not a secret – medical marijuana has a distinct odor. However, our company has designed the following odor control plan with our HVAC vendor to mitigate against such a nuisance: 1. The space will be conditioned using multiple split heat pump systems of various capacities and a ductless mini-split system. Each of the
split-systems, excluding the ductless mini-split system, are equipped
with unit-level pleated filters. Fresh air is brought to each of the
ducted systems via a fresh air duct that is run to the exterior of the
structure. This fresh air will tend to pressurize the space.
2. The space is designed for a negative pressure to contain internal odors. To accomplish this, an in-line, belt driven exhaust fan is provided to remove the amount of fresh air provided for the occupants and an additional amount that will ensure a negative pressure within the space.
3. To prevent odors from escaping the structure, the in-line exhaust fan
is equipped with a filter section loaded with approximately thirty
pounds of activated carbon, in a rack-mounted configuration.
Activated carbon is an extremely effective absorptive odor control
substance. An ozone generator will be placed upstream of the carbon
filters, in the housing assembly. Ozone (O3) is an effective odor
control mechanism. In this case, it is used to help control out-going airstream odors and recharge the activated carbon filter media, extending the life of the media.
4. Once systems are running, systems shall be air balanced to ensure
design air flows for supply, fresh air, and exhaust air base values have
been met. Once completed, a differential pressure gauge will be used
to ensure a negative building static of no less than .05” of negative
building static has been achieved. A maximum negative building
static shall not exceed .15”. An initial test with a trade-specific calibrated sensor establishes the base-line of operation for odors in the out-going air stream.
213
5. Once odor control has been established, periodic testing will be
conducted to ensure that the odor control systems are operating to maintain the baseline. As the filters age, replacement will be required and will be conducted, as determined by the calibrated sensor on the test equipment. 6. Testing will be done, in the absence of other standards in accordance
with Standardized Odor Measurement Practices for Air Quality
Testing. Testing shall be done using a field Olfactometer, calibrated in
accordance with odor control standards using the scheduled
monitoring protocol.
7. We will have planned and scheduled monitoring in which we will conduct a daily walk-about visit around the exterior of the site, near the exhaust system. We will compile and compare the data we record to establish norms using a 5-point Odor Intensity Reference Scale to
compare daily readings. If values equal 3 on the 5-point scale, then we
will evaluate and repair the carbon-filtration exhaust system, as
required. Evaluation will include, but is not limited to, fan operation,
distribution system integrity, and filter media effectiveness.
214
EXHIBIT
19
Sample Scoring Rubric
Provided by City
215
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
1 Ownership Structure Including percent ownership for each stakeholder 1 1300.05(b)(12)(i)
2 Organizational Chart Please include name, position and job description 1 1300.05(b)(12)(ii)
3 Worker Training Program 1 1300.05(b)(12)(vi)
4 Short and Long Term Goals and
Objectives 1 1300.05(b)(12)(viii)
5 Community Outreach & Education 1 1300.05(b)(12)(x)
6 Marketing, Advertising &
Promotion
Minimization of Exposure to Minors List methods/type, and how to
reduce chances of exposure to minors for each, including a budget and
examples.
3 1300.05(b)(12)(iii)
7 Tangible Capital Investment ‐
Dollar Amount
Total Capital Investment, stated in dollar amounts and supported by
factual data, which will directly benefit the City of Lansing, including all
types of medical marihuana facilities. Consideration of whether facility
is definite, feasible, or speculative.
Clarification 6/14/19: After reviewing the total TCI from the Top 20
Provisioning Centers in Phase 1, we determined the average TCI was
over $4 million. Scoring in this category will be distributed accordingly,
starting at ½ million of tangible capital investment.
5 1300.05(b)(12)(iv)
Medical Marijuana Provisioning Centers Scoring Criteria
Business Plan & Job Creation
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 216
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
8 Tangible Capital Investment ‐
Own/Lease
Documentation demonstrating ownership or exclusive lease of
provisioning center building by one or more stakeholders or applicant.
Preference given to ownership.
3 1300.05(b)(12)(iv)
9 Tangible Capital Investment ‐
Supporting Material
The completeness and quality of the documentation which
corroborates the financial figures provided for total capital investment 3 1300.05(b)(12)(iv)
10
Points awarded for evidence and explanation of the financial structure
and financing for the proposed medical marijuana establishment(s)
based upon (GAAP) general accepted accounting principles
2 1300.05(b)(12)(vii)
11 Proof of LARA Pre‐Qualification within 60 days of application filing 3
1300.08(e)
1300.04(b)
MCL 333.27402 (3)
(a), (b), (c )
12 Plans to Integrate Grower Facility
with other Establishments
Points awarded for evidence which documents ownership of licensed
(or pending application for) medical marijuana grow operations within
the City of Lansing.
4 1300.05(b)(12)(ix)
Financial Structure and Financing
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 217
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
13 Charitable Plans and Strategies Contributions, stated financial commitments, and/or volunteer work
supported by specific donation amount or value of volunteer work. 4 1300.05(b)(12)(xi)
14 Number of and job descriptions for FTE (Full‐time Equivalent) jobs at
this provisioning center ONLY.3 1300.05(b)(23)
14 Amount and type of other compensation ‐ Healthcare 2 1300.05(b)(23)
16 Amount and type of other compensation ‐ PTO
(Paid Time Off)1 1300.05(b)(23)
17 Amount and type of other compensation ‐ Retirement 1 1300.05(b)(23)
18 Percent of employees earning over $15 per hour.3 1300.05(b)(23)
19 Projected annual budget and revenue based upon (GAAP) generally
accepted accounting principles 2 1300.05(b)(23)
20
Number of additional jobs created by your stakeholders within the City
of Lansing at other medical marijuana facilities types.
(Grower/Processor)
6 1300.05(b)(12)(v)
Total ‐ Business Plan/Job
Creation Incomplete plan will get zero points 50 1300.06(b)(1)
Job Creation
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 218
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
21
Based on the completeness and amount of court‐ordered financial
liability reported on the Financial Resources Litigation history form. 1 1300.06(b)(5)
22 CPA Attestation of Net Worth or Bank Statements Supporting Initial
Start‐Up and Operating Costs 3
1300.05(b)(12)vii
1300.05(b)(22)
1300.06(b)(5)
MCL333.27402 (3)(a)
23 Proof LARA Pre‐Qualification submitted within 60 days of application
filing.3 1300.08(e)
MCL333.27402 (3)(a)
24 Combined stakeholder history of success in owning/operating a
relevant business or businesses in the City of Lansing. 1 1300.05(b)(8)
1300.06(b)(5)
25 Combined stakeholder history of success in owning/operating a
relevant business or businesses 1 1300.05(b)(8)
1300.06(b)(5)
26 Combined stakeholder history of success in owning/operating a
medical marihuana business or businesses.1 1300.05(b)(8)
1300.06(b)(5)
Total ‐ Financial Stability &
Experience 10 1300.06(b)(5)
Financial Stability & Experience
Sufficient Financial Resources
Business Experience
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 219
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
27
Surrounding Neighborhoods: Distance between residential zoned
areas and applicant's provisioning center. Evaluation is based on
whether any residential property abuts the proposed location, and if
not, whether there is residential zoning within 1/4 mile of the
proposed location.
7 1300.06(b)(2)
28
Surrounding Neighborhoods: Density of Provisioning Centers
surrounding the applicant's proposed location. Evaluation is based on
how many of the first round 20 PCs are within 1‐2 mile radius of
proposed provisioning center.
7 1300.06(b)(2)
29 Plan to Keep Traffic out of
Neighborhoods
Review of location site and any plan(s) the applicant has provided
which would minimize the traffic and parking impact on nearby
neighborhoods.
3 1300.06(b)(2)
30 Resident Safety Security Plan Review to ensure compliance with the Ordinance 3 1300.06(b)(2)
1300.05(b)(14)
Total ‐ Land Use 20 1300.06(b)(2)
Land Use
Impact on Neighborhood
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 220
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
31 Planned Outreach
Plan to meet with neighborhood organizations, business association,
crime watch, and other neighborhood organizations to provide contact
information for questions, concerns, etc.
1 1300.06(b)(3)
32 Improvements made or Proposed
to Building
Plan to make improvements to building and property. Applies to both
those that own and those that lease building. Please supply
documentation to support costs of improvements.
3 1300.06(b)(3)
33 Plan to Minimize/Eliminate Traffic Any plan(s) the applicant has provided which would minimize the
traffic and parking impact on nearby neighborhoods. 1 1300.06(b)(3)
1300.09(i)
34 Plan to minimize/eliminate noise
Any plan(s) the applicant has provided which would minimize or
eliminate the impact of increased noise on nearby neighborhoods.
Please document in budget of expenditures.
1 1300.06(b)(3)
1300.09(i)
35 Plan to Minimize/Eliminate Odor
Any plan(s) the applicant has provided which would minimize or
eliminate the impact of increased odor on nearby neighborhoods.
Please document in budget of expenditures.
4 1300.6B(3)
1300.09(i)
Total ‐ Outreach 10 1300.06(b)(3)
Outreach, Physical Improvements, Etc.
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 221
FINAL June 14, 2019
#Criteria Maximum
Points Ordinance Source
Medical Marijuana Provisioning Centers Scoring Criteria
36 Applicant provides proof of LARA Pre‐Qualification within 60 days of
application filing. 2
1300.06(b)(4)
MCL 333.27401,
.27402 & .27405
37 Demonstration of regulatory compliance.5 1300.06(b)(4)
38
Based on the completeness and specific litigation reported on the
Morals, Good Order and General Welfare Litigation history form.3 1300.06(b)(4)
Total ‐ Applicant/Stakeholder
History
Will get zero points if found to have violated 2016 Ordinance #1202
Moratorium.10 1300.06(b)(4)
Total Points 100
Applicant/Stakeholders Record of
Acts Detrimental to Security,
Safety, Morals, Good Order,
General Welfare
Applicant/Stakeholder History
6/14/19 ‐ City of Lansing Medical Marijuana Provisioning Center Scoring Criteria ‐ Phase 2 222