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HomeMy WebLinkAbout202.01.10.MM Commission PacketLansing City Clerk’s Office Ninth Floor, City Hall, 124 W. Michigan Ave., Lansing, MI 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov City of Lansing Medical Marihuana Commission Regular Meeting Friday, January 10, 2020 2:00 PM 2500 S Washington Avenue City Clerk’s Training Room Meeting Agenda 1.Call to Order/Introductions 2.Approval of the Agenda 3. Approval of Minutes from 12-06-2019 4.Public Comment on Agenda Items 5.Commission Appeal Hearings •RJB Enterprises – 6420 S Cedar St •Arbor Farm – dba Herbana – 2001 W Saginaw St 6.New Business & Updates 7.Public Comment 8.Adjournment Chris Swope Lansing City Clerk Timeline RJB Enterprises LLC 6420 S Cedar St Lansing, Michigan 48911 June 27, 2019 – Application submitted ................................................................... 2 July 1, 2019 – Department review of applications begins July 25, 2019 – Distance Maps Created ................................................................. 11 August 23, 2019 – Density Maps Created ............................................................. 12 October 7, 2019 – Score & Rank Denial Letter Sent .............................................. 16 October 11, 2019 – Hearing Officer Appeal submitted ......................................... 20 November 23, 2019 – Second Score & Rank Second Denial Letter Sent ................ 23 November 23, 2019 – Commission Hearing Date Letter Set ................................. 23 December 12, 2019 – Commission Appeal Submitted .......................................... 35 No Exhibits were submitted by the appellant. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 October 7, 2019 RJB Enterprises LLC – Emerald Growth Partners c/o Daniel Crittenden 1001 Woodward Ave – 5th Floor Detroit, MI 48226 Dear Provisioning Center Applicant, The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 56.50 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 6420 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 17 City of Lansing Provisioning Center Ranking 10/7/2019 1:00 PM Total Possible Points RJB Enterprises LLC-6420 S Cedar St Applicant Address --- #Category ---Score Location of material Scoring Insights 1 Ownership Structure 1 0 Org Docs, Ownership Struc., 1 pg.Ownership structure lacks percent of ownership as required in public scoring criteria. 10/7/19 2 Organizational Chart 1 1 Org Docs, Org Chart, 1 pg.Has Org chart. 8/22/19 3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 13 pgs.Has plan. 8/22/19 4 Short and Long Term Goals and Objectives 1 0 Org Docs, Goals, 2 pgs.Does not have short and long term goals. 9/23/19 5 Community Outreach & Education 1 0 Community Outreach, Outreach & Ed, 4 pgs.Does not have plan to reach out to neighborhood groups. 8/22/19 6 Marketing, Advertising & Promotion 3 1 Marketing Three minor minimization examples with very little detail, no budget. 7/9/19 7 Tangible Capital Investment Dollar Amount 5 2 1 page Investment Plan Allowable stated TCI is $2,000,000.00 9/23/19 8 Tangible Capital Investment Own/Lease 3 1 9 pg. Lease with Permission Applicant has a lease for the building with owner permission to operate a MM facility, but does not currently own building and did not provide a purchase agreement. 9/23/19 9 Tangible Capital Investment Supporting Material 3 0 4 pages in Support Documents Does not have supporting material to corroborate their TCI claim. 9/23/19 10 Financial Structure & Financing 2 0 Nothing submitted No GAAP operating or startup budget submitted. 8/23/19 11 LARA Pre-Qual 3 3 Demo of Reg Prequal Letter Version 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 12 Integration with Grows 4 0 IntegrateIntegration Plan Has a plan to purchase Jartnick Consulting's grow at 1322 Rensen St. This is considered speculative because Jartnick does not have a license, they are just conditionally approved. The property has to be fully licensed to be sold. 8/23/19 13 Charitable Plans & Strategies 4 4 Charity $50K per year, has signed agreements with charities. 8/22/19 14 Number of and job descriptions for PC ONLY 3 3 Job Creation FTEs More than six (6) employees with detailed job descriptions. 8/23/19 15 Healthcare 2 2 Job Creation FTEs Employer will offer Healthcare. 8/23/19 16 Paid Time Off 1 1 Job Creation FTEs Employer will offer PTO. 8/23/19 17 Retirement 1 0 Job CreationFTEs Employer does not offer 401K plan to all employees. 9/23/19 18 % of employees at $15+/hr 3 3 Job Creation FTEs 100% of employees will make $15+/hr. 8/23/19 19 Projected Annual Budget 2 0 Nothing submitted No GAAP operating budget submitted. 8/23/19 20 Total COL Jobs 6 0 Job CreationFTEs Employer will create 50 additional jobs at speculative Grow. They do not have an application in at this time, no points are awarded for speculative jobs. 8/23/19 Total Business Plan & Job Creation 50 22 21 Financial Litigation History 1 1 Financial Litigation Form Has completed form(s) for all stakeholder(s). 9/23/19 22 Net Worth 3 0 6 unduplicated pages in Finance Section Doesn't have proof of $100,000.00 in applicant (LLC) name. Doesn’t have solid proof of net worth. No CPA attestation or tax returns in stakeholders' names. Doesn’t have full documentation of initial start-up and operating costs. 9/23/19 23 LARA Pre-Qual 3 3 Demo of Reg Prequal Letter Version 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 24 Stakeholder Experience City of Lansing Businesses 1 0 Experience, Resume Mult Versions No mention of Lansing business ownership. 8/23/19 25 Stakeholder Experience Relevant Businesses 1 1 Experience, Resume Mult Versions More than five (5) years combined relevant medical, agricultural or retail business experience. 9/23/19 26 Stakeholder Experience Medical Marijuana Business 1 1 Experience, Resume Mult Versions More than five (5) years Medical Marijuana experience. 9/23/19 Total Financial Stability & Business Experience 10 6 27 Impact on Neighborhood Distance Between PC & Residential Zoning 7 3 https://lansing.maps.arcgis.com/apps/webappviewer/i ndex.html?id=be0634345255438ba55b14c9b19e9f22 PC Property abuts Residential Zoning on one side. (NW) 118 City of Lansing Provisioning Center Ranking 10/7/2019 1:00 PM 28 Impact on Neighborhood Density of PCs 7 1.5 https://lansing.maps.arcgis.com/apps/webappviewer/i ndex.html?id=be0634345255438ba55b14c9b19e9f22 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 8/23/19 29 Traffic & Parking 3 3 Public Service Review Tier 1 excellent parking and circulation 9/3/19 30 Security Plan 3 3 LPD Review Tier I - Equip specs, guard, safe, barriers, off site video storage, alarms with panic button 9/9/19 Total - Land Use & Resident Safety 20 10.50 31 Planned Outreach 1 0 Community Outreach, Outreach & Ed, 4 pgs.Does not have plan to reach out to neighborhood groups. 8/22/19 32 Improvements to Building 3 2 Building Improvements No Support Docs SEV-$723,900 $2,000,000 stated - 276% of SEV No documents to substantiate amount - one point deduction. 8/27/19 33 Plan to Minimize Traffic 1 1 TrafficTraffic Plan Has a plan. 9/3/19 34 Noise Plan 1 1 Noise & Odor Noise Plan Has a plan. 10/7/19 35 Odor Plan 4 4 Noise & Odor Odor Plan Has detailed plan with equipment specs & budget. 8/23/19 Total Outreach 10 8 36 Stakeholder History Proof of LARA Prequal 2 2 Demo of Reg Prequal Letter Version 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 37 Demo of Regulatory Compliance 5 5 https://bsaonline.com/SiteSearch/SiteSearchDetails?Se archFocus=All+Records&SearchCategory=Address&Sear chText=6420+s+cedar&uid=384&PageIndex=1&Referen ceKey=33-01-05-10-151- 002&ReferenceType=0&SortBy=&SearchOrigin=0&Reco rdKeyDisplayString=33-01-05-10-151- 002&RecordKey=1%3d33-01-05-10-151- 002%3a%3a4%3d33-01-05-10-151- 002%3a%3a7%3dac064fd1-02f6-433a-aff4- 9f2801426c82&RecordKeyType=1%3d0%3a%3a4%3d0 %3a%3a7%3d2 No conditional denial letters, no code violations since lease signed. 9/3/19 38 Morals, Good Order & General Welfare Litigation History 3 3 Demo of Reg Lit Hist Form Has completed form(s) for all stakeholder(s). 9/23/19 Total Applicant Stakeholder History 10 10 Total Score 100 56.50 219 20 21 22 23 November 23, 2019 RJB Enterprises LLC c/o Daniel Crittenden 1001 Woodward Ave, 5th Floor Detroit, MI 48226 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 6420 S Cedar St. I have determined that your appeal remains 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. Should you choose to appeal, your Commission Hearing will be held at 2:00 p.m. on Friday, January 10. 2020. Commission Hearings are held at the Clerk’s Marijuana Licensing Unit, 2500 S Washington Ave, Lansing, MI 48910. 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. Sincerely, Chris Swope, CMMC City Clerk cc: M. Yankowski, Lansing Police Chief J. Smiertka, Lansing City Attorney Chris Swope Lansing City Clerk 24 Total Possible Points RJB Enterprises LLC-6420 S Cedar St Applicant Address --- #Category ---Score Location of material Scoring Insights 1 Ownership Structure 1 0 Org Docs, Ownership Struc., 1 pg.Ownership structure lacks percent of ownership as required in public scoring criteria. 10/7/19 2 Organizational Chart 1 1 Org Docs, Org Chart, 1 pg.Has Org chart. 8/22/19 3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 13 pgs.Has plan. 8/22/19 4 Short and Long Term Goals and Objectives 1 0 Org Docs, Goals, 2 pgs.Does not have short and long term goals. 9/23/19 5 Community Outreach & Education 1 0 Community Outreach, Outreach & Ed, 4 pgs.Does not have plan to reach out to neighborhood groups. 8/22/19 6 Marketing, Advertising & Promotion 3 1 Marketing Three minor minimization examples with very little detail, no budget. 7/9/19 7 Tangible Capital Investment Dollar Amount 5 2 1 page Investment Plan Allowable stated TCI is $2,000,000.00 9/23/19 8 Tangible Capital Investment Own/Lease 3 1 9 pg. Lease with Permission Applicant has a lease for the building with owner permission to operate a MM facility, but does not currently own building and did not provide a purchase agreement. 9/23/19 9 Tangible Capital Investment Supporting Material 3 0 4 pages in Support Documents Does not have supporting material to corroborate their TCI claim. 9/23/19 10 Financial Structure & Financing 2 0 Nothing submitted No GAAP operating or startup budget submitted. 8/23/19 11 LARA Pre-Qual 3 3 Demo of Reg Prequal LetterVersion 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 12 Integration with Grows 4 0 Integrate Integration Plan Has a plan to purchase Jartnick Consulting's grow at 1322 Rensen St. This is considered speculative because Jartnick does not have a license, they are just conditionally approved. The property has to be fully licensed to be sold. 8/23/19 13 Charitable Plans & Strategies 4 4 Charity $50K per year, has signed agreements with charities. 8/22/19 14 Number of and job descriptions for PC ONLY 3 3 Job Creation FTEs More than six (6) employees with detailed job descriptions. 8/23/19 15 Healthcare 2 2 Job CreationFTEs Employer will offer Healthcare. 8/23/19 16 Paid Time Off 1 1 Job Creation FTEs Employer will offer PTO. 8/23/19 17 Retirement 1 0 Job CreationFTEs Employer does not offer 401K plan to all employees. 9/23/19 18 % of employees at $15+/hr 3 3 Job CreationFTEs 100% of employees will make $15+/hr. 8/23/19 19 Projected Annual Budget 2 0 Nothing submitted No GAAP operating budget submitted. 8/23/19 20 Total COL Jobs 6 0 Job Creation FTEs Employer will create 50 additional jobs at speculative Grow. They do not have an application in at this time, no points are awarded for speculative jobs. 8/23/19 Total Business Plan & Job Creation 50 22 21 Financial Litigation History 1 1 Financial Litigation Form Has completed form(s) for all stakeholder(s). 9/23/19 22 Net Worth 3 0 6 unduplicated pages in Finance Section Doesn't have proof of $100,000.00 in applicant (LLC) name. Doesn’t have solid proof of net worth. No CPA attestation or tax returns in stakeholders' names. Doesn’t have full documentation of initial start-up and operating costs. 9/23/19 23 LARA Pre-Qual 3 3 Demo of RegPrequal Letter Version 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 24 Stakeholder ExperienceCity of Lansing Businesses 1 0 Experience, Resume Mult Versions No mention of Lansing business ownership. 8/23/19 25 Stakeholder ExperienceRelevant Businesses 1 1 Experience, Resume Mult Versions More than five (5) years combined relevant medical, agricultural or retail business experience. 9/23/19 26 Stakeholder Experience Medical Marijuana Business 1 1 Experience, Resume Mult Versions More than five (5) years Medical Marijuana experience. 9/23/19 Total Financial Stability & Business Experience 10 6 27 Impact on Neighborhood Distance Between PC & Residential Zoning 7 3 https://lansing.maps.arcgis.com/apps/webappviewer/i ndex.html?id=be0634345255438ba55b14c9b19e9f22 PC Property abuts Residential Zoning on one side. (NW) 25 28 Impact on Neighborhood Density of PCs 7 1.5 https://lansing.maps.arcgis.com/apps/webappviewer/index.html?id=be0634345255438ba55b14c9b19e9f22 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. NoneLost 5.5 points 8/23/19 29 Traffic & Parking 3 3 Public Service Review Tier 1 excellent parking and circulation 9/3/19 30 Security Plan 3 3 LPD Review Tier I - Equip specs, guard, safe, barriers, off site video storage, alarms with panic button 9/9/19 Total - Land Use & Resident Safety 20 10.50 31 Planned Outreach 1 0 Community Outreach, Outreach & Ed, 4 pgs.Does not have plan to reach out to neighborhood groups. 8/22/19 32 Improvements to Building 3 2 Building ImprovementsNo Support Docs SEV-$723,900 $2,000,000 stated - 276% of SEV No documents to substantiate amount - one point deduction. 8/27/19 33 Plan to Minimize Traffic 1 1 Traffic Traffic Plan Has a plan. 9/3/19 34 Noise Plan 1 1 Noise & OdorNoise Plan Has a plan. 10/7/19 35 Odor Plan 4 4 Noise & OdorOdor Plan Has detailed plan with equipment specs & budget. 8/23/19 Total Outreach 10 8 36 Stakeholder History Proof of LARA Prequal 2 2 Demo of Reg Prequal LetterVersion 1 Letter dated 3/21/19 for RJB Enterprises LLC. 8/23/19 37 Demo of Regulatory Compliance 5 5 https://bsaonline.com/SiteSearch/SiteSearchDetails?Se archFocus=All+Records&SearchCategory=Address&SearchText=6420+s+cedar&uid=384&PageIndex=1&Referen ceKey=33-01-05-10-151- 002&ReferenceType=0&SortBy=&SearchOrigin=0&Reco rdKeyDisplayString=33-01-05-10-151- 002&RecordKey=1%3d33-01-05-10-151- 002%3a%3a4%3d33-01-05-10-151- 002%3a%3a7%3dac064fd1-02f6-433a-aff4- 9f2801426c82&RecordKeyType=1%3d0%3a%3a4%3d0 %3a%3a7%3d2 No conditional denial letters, no code violations since lease signed. 9/3/19 38 Morals, Good Order & General Welfare Litigation History 3 3 Demo of Reg Lit Hist Form Has completed form(s) for all stakeholder(s). 9/23/19 Total Applicant Stakeholder History 10 10 Total Score 100 56.50 26 Clerk’s Statement of Facts RJB Enterprises LLC – 6420 S Cedar St All items submitted were reviewed for the sections they were attached to. Supplemental items submitted were also reviewed for the sections indicated in email. It is the Clerk’s Office policy to not allow cure on appeal. Appellant did not submit any exhibits with their appeal. Category #4 – Short and Long Term goals were not attached to the appropriate section. Category #5 – The document they refer to was not attached to the Community Outreach & Education section. Category #6 – Applicant did not provide minor minimization plan for their marketing examples. Marketing Budget was not submitted in the Marketing, Advertising & Promotion Section. Category #7 – Tangible Capital is limited to those changes to the property that are permanent. It does not include things like taxes paid, wages paid, furniture, computers or other items which can easily be removed if the business were to shut down. Category #8 – Points given in this section correspond with the information provided in the application. Category #9 – Looking for corroboration of the number they stated in category #7. Purchase agreements, bids or invoices from vendors, and similar items. Documents mentioned by the applicant were not provided in this section. Category #10 – Documents mentioned were not provided in the Financial Section. Category #12 – There is no pending application on record for the appellant to purchase this grow. There can’t be, because it’s not allowed by the ordinance. Therefore the evidence offered by the appellant cannot be considered. Category #19 – Documents mentioned were not provided in the Financial Section. Category #20 – The reason the jobs were deemed speculative is because the appellant has no application in for other marijuana facilities in Lansing. Their argument does not apply. Category #22 - $100,000 must be (per ordinance) in the name of the applicant. Applicant is RJB Enterprises LLC. No information provided in this section that proved a connection between RJB Enterprises and Emerald Growth Partners. The appellant’s arguments contain information that was not provided in this section of the application. Category #27 – See attached COL Exhibit maps. Category #28 – See COL exhibit which shows all Provisioning Centers awarded conditional approval in round 1 are still either conditionally approved or active. The appellant’s argument that these were withdrawn or denied is false. Category #31 – The documents they refer to were not attached to the Community Outreach & Education section. 27 Email Attachments: 1. Clerk’s Statement of Facts 2. RJB Enterprises Application 3. RJB Enterprises Hearing Officer Appeal 4. RJB Enterprises Score Sheet 5. LARA Advisory Bulletin re: CPA Attestations 6. American Institute of CPA’s Definition of Compilation 7. Provisioning Center Public Scoring Criteria for Phase 2 8. Application Instructions 9. COL Density maps for RJB Enterprises 10. COL Current list of Phase I Applicants with map numbers indicated. 28 Hilary Lauver Attorney at Law Page 1 of 6 CITY OF LANSING OFFICE OF THE CITY CLERK MARIHUANA BUSINESS LICENSE APPEAL __________________________________ Date: November 20, 2019 RJB Enterprises, LLC d/b/a Emerald Growth Partners Proposed Location: 6420 S. Cedar St. Lansing, MI 48911 __________________________________ HEARING OFFICER RECOMMENDATION This decision is remitted to the Clerk of the City of Lansing by Hearing Officer, Hilary M. Lauver, Esq., having been read and informed on the issues recommends that in regard to RJB ENTERPRISES, LLC d/b/a EMERALD GROWTH PARTNERS and its license application for a Medical Marihuana Provisioning Center that the license application remain denied. FACTS RJB ENTERPRISES, LLC d/b/a EMERALD GROWTH PARTNERS (“Appellant”) applied to the City of Lansing to operate a Medical Marihuana Provisioning Center within the city limits during Phase 2. This recommendation follows a timely appeal from Appellant. On or about October 7, 2019, Appellant was informed via letter that its license application was denied. Appellant was informed that this score eliminated the possibility of scoring in the top five applications received in phase 2 and it would not be receiving a provisioning center license. Appellant was also informed that it had the right to appeal the denial within 14 (fourteen) days of the letter’s date by written statement with grounds for appeal. Appellant was also informed of the paper hearing process and advised to include information in its written appeal it wanted considered. With the letter, Appellant was provided a copy of the City of Lansing Provisioning Center Ranking sheet for its business. On the document, Appellant is able to view the total possible points, its attained points, and scoring insight statements. Appellant has point deficiencies in several categories. Appellant’s Position Appellant seeks appellate review pursuant to the Lansing ordinance. It argues that its application was not accurately scored and requests review. With its appeal, Appellant did not provide any exhibits. In its appeal letter, Appellant points to the scoring insights and provides short statements regarding the comments. 29 Hilary Lauver Attorney at Law Page 2 of 6 City Clerk Position The City Clerk affirms its position on the denial. The City Clerk iterates that application instructions told applicants to attach all relevant materials to each section that the applicant wanted considered and that applicants cannot cure on appeal with supplemental materials. APPLICABLE LAW & REASONING The issue in front of this Hearing Officer is whether Appellant’s Provisioning Center License Application for the City of Lansing was erroneously denied. In regard to the issuance of licenses and the appellate process for a license: “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.”1 At the denial of a license under City of Lansing Ordinance No. 1217, 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 from the clerk’s decision.2 * * * [The] [r]eview 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.3 The arbitrary or capricious standard of review is the commission’s review and is adopted by this Hearing Officer.4 Arbitrary and capricious have generally accepted meanings.5 Arbitrary is "without adequate determining principle . . . [f]ixed or arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances, or significance, . . . 1 See LANSING CITY CLERK’S OFFICE, City of Lansing City Charter (as amended) at 24 (2015) available at: https://www.lansingmi.gov/DocumentCenter/View/2126/City-Charter?bidId=. In this instance, the license issuance is handled with the City Clerk’s office. 2 City of Lansing Ordinance No. 1217 Sec. 1300.15(C). 3 Id. at 1300.3(E). 4 There is an inherent binary in license issuance: issued or denied, not a spectrum of decisions. Given that this is a licensing situation, and that the only prescribed review under Ordinance No. 1217 is arbitrary and capricious, that is the standard that will be observed here. 5 See Bundo v. Walled Lake, 395 Mich. 679, 703 (1976) (citing United States v. Carmack, 329 U.S. 230, 243 (1946). 30 Hilary Lauver Attorney at Law Page 3 of 6 decisive but unreasoned.”6 Capricious is "apt to change suddenly; freakish; whimsical; humorsome.”7 The burden is on the party attacking to affirmatively prove the arbitrary and unreasonable decision.8 This is not to say that a local body may “abrogate constitutional restraints.”9 As to whether an applicant can submit supplemental materials on appeal, the Lansing Ordinance in Section 1300.5(B) states that “[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[.]” (emphasis added). The ordinance then enumerates all the documents and information required for application submission. Per Michigan Court rule, appeals are based on the record already in place.10 Further, an appellate body will generally not consider issues not raised in or ruled on by a lower review.11 The appellate review is limited to the record before the lower court at the time of the relevant decision. Under the City of Lansing Ordinance No. 1217 Section 1300.5: (B)(12)(IV) Planned tangible capital investment in the city, including detail related to the number and nature of applicant’s proposed medical marihuana establishments in the city and whether the locations of such establishments will be owned or leased; further, if multiple licenses are proposed, an explanation of the economic benefits to the city and job creation, if any, to be achieved through the award of such multiple licenses. Supporting factual data shall be included with the response to this subsection[.] (emphasis added) Under the City of Lansing Ordinance No. 1217 Section 1300.6, review of an application will consider: (D) In the event that there are more applicants for provisioning center licenses who meet the minimum requirements set forth in 1300.6(B) than there are licenses available in either phase one or two, the top scoring twenty (20) applicants in phase one and top scoring five (5) applicants in phase two, shall be eligible to receive provisioning center licenses in accordance with the assessment, evaluation, scoring, and ranking procedures established in this chapter[.] An applicant must have included, inter alia, in its application for a provisioning center license: 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 establishments. . . . (17) a location area map, as measured pursuant to section 1300.13(d) of the medical marihuana establishment and surrounding area that 6 Id. 7 Id. 8 See e.g., Kropf v. Sterling Heights, 391 Mich. 139, 154 (1974) (citing Janesick v. City of Detroit, 337 Mich. 459 (1953)). 9 Id. at 162. 10 See e.g., MCR 7.105(B)(4); (5)(d) (requiring that the appellate court receive a certified copy of a case’s record and stating review of a trial court’s decision was for legitimate reason based on “arguable support in the record[.]”) 11 See Napier v. Jacobs, 429 Mich. 222, 232-35 (1987). 31 Hilary Lauver Attorney at Law Page 4 of 6 identifies the relative locations and the distances, as measured pursuant to Section 1300.13 (A).12 The Lansing Ordinance incorporates provisions and definitions of the Medical Marihuana Facilities Licensing Act, 2016 PA 281 (as amended) (“MMFLA”) so as to: “not limit an individual’s or entity’s rights under the [Michigan Medical Marihuana Act (MMMA)], MMA or the [Michigan Tracking Act (MTA)]” and drafters intended that “these acts supersede [the] ordinance where there is a conflict.”13 A Lansing applicant must then comply with the MMFLA.14 Pursuant to Sec. 402 of the MMFLA, in evaluating an applicant for licensure, an applicant’s history of “noncompliance with any regulatory requirements in this state or any other jurisdiction” will be considered.15 Pursuant to Section 409, a licensure does not “create or vest any right, title, franchise, or other property interest.” Here, this Hearing Officer will decline to review any supplemental materials16 provided by Appellant in effort to cure application deficiencies. Per requirements in the Lansing Ordinance in Section 1300.5(B) and general state appellate practice, review on appeal is to the record originally provided and reviewed. See e.g., Napier v. Jacobs, 429 Mich. 222, 232-35 (1987).17 Thus, this review will address the appeal on Appellant’s first basis and the application as originally provided. As to this appeal, Appellant provided little argument as to why its scoring is inaccurate. The lack of substance and articulable reason for why provided information sufficed is notable. It is not enough for Appellant to “simply announce a position or assert an error[.]”18 Thus leaving the overseer of appeal to “discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority to either sustain or reject his position.”19 “Failure to brief a question on appeal is tantamount to abandoning it.”20 In the instances where Appellant provides no argument and just a contrary statement to the scoring insight, its arguments are considered abandoned. SHORT AND LONG-TERM GOALS Appellant stated that it provided a section with this very title, however, Appellant did not provide it in this section. The original scoring is accurate as to this section. 12 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.5(B). 13 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.2(C). 14 Id. at Sec. 1300.2(D). 15 MMFLA, MCL § 333.27402(3)(g). 16 Here, Appellant’s appeal letter includes sufficient information and material not originally provided. It will be considered supplemental material and treated as such. 17 In this case it discusses that an “exception that review is permissible ‘to prevent a miscarriage of justice.’” “Most jurisdictions recognize the authority of an appellate court to review an issue, even where the issue was not preserved, when some fundamental error would otherwise result in some egregious result.” However, that “such power of review is to be exercised quite sparingly. Napier, 429 Mich. at 233. Under the facts presented, there is not a fundamental error so as to trigger exercising supplementing on appeal. 18 See People v. Kevorkian, 248 Mich. App. 373, 389 (2001). 19 Id. 20 Id. (citing Mitcham v. Detroit, 355 Mich. 182, 2013 (1959); see also Houghton ex rel. Johnson v. Keller, 256 Mich. App. 336, 339-40 (2003); Henderson v. Mich. Dept. of Treas., 307 Mich. App. 1, 23-24 (2014). 32 Hilary Lauver Attorney at Law Page 5 of 6 COMMUNITY OUTREACH Appellant included no information in its original application detailing plans to reach out to neighborhood groups. Appellant indicates in its appeal that this information was under Charitable Plans and Strategies. This is accurate, but Appellant cites the very reason why points weren’t allocated under this section. The documents pertain to a different category where Appellant received a different score. This Hearing Officer sees no merit in awarding points here. MARKETING & ADVERTISING Here, Appellant states that it provided 6 pages in its original application regarding this section. The scoring insights informed Appellant of the absence of detail in this section. Additionally, materials that were submitted for a different category cannot double count here. The factfinder “must give deference to an agency's findings of fact.”21 The factfinder may not set aside findings just because other facts in the record could have come to a different conclusion.22 As the City has utilized the same benchmark for each application, there is no basis for the Hearing Officer to suggest another threshold here. Thus, Appellant’s point allocation is appropriate. TANGIBLE CAPITAL The City defines tangible capital as an asset with a physical form. Thus, only such assets would count in the calculation. The City considers Tangible Capital Investment to detail how a business is going to invest its money and assets, not how many of them it has. Also considered in Tangible Capital are building improvements to the interior and exterior. Not considered are products, packaging, furniture, or other items that are readily removeable from the establishment. Appellant argues that there were detailed amounts not addressed in its scoring insights. However, it does not detail what it is referring to in its original application materials. As the City has utilized the same benchmark for each application, there is no basis for the Hearing Officer to suggest another threshold here. Appellant did not meet the thresholds and/or didn’t provide sufficient detail to corroborate its tangible capital claims. It did not do so in its original application and did not highlight what it was about those original materials that was inaccurately considered. As to category 9, Appellant points to a letter of intent that it again did not include for this section in its original application. Thus, Appellant’s point allocation here is appropriate. FINANCIAL STRUCTURE & PLANNING Again, in this section Appellant highlights a portion of its application from another section. It cannot be considered on appeal in this section. Thus, Appellant’s point allocation here is appropriate. INTEGRATION WITH GROWS Appellant highlights here an application of which there is no record of pending status. Without a pending application on record, there is no merit to Appellant’s argument because the grow facility does not have a status which can be considered per the criteria. 21 Edw. C. Levy Co. v. Marine City Zoning Bd., 293 Mich. App. 333, 341 (2011) (citing THM, Ltd. v Comm'r of Ins., 176 Mich. App. 772, 776 (1989)). 22 Id. 33 Hilary Lauver Attorney at Law Page 6 of 6 PROJECTED ANNUAL BUDGET Appellant points to its comments in a different category. The documents mentioned in the other category were again not provided in the corresponding section. Appellant did not provide information provided to correspond with generally acceptable accounting principles (GAAP). There is no basis to award additional points as the information was lacking with the original application in this section. TOTAL COL JOBS Appellant has no other applications on record. Thus, nothing can be considered in this section to allocate points as Appellant requests. IMPACT ON NEIGHBORHOOD In this category, this Hearing Officer will “give deference to an agency's findings of fact.”23 This section is not intended to relate to the buffering standards. The City relies on land use demographics, which find that the property is within ¼ mile of residential zoning. In the scoring criteria it was explained that this is “[d]istance 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 ¼ mile of the proposed location.”24 Appellant’s argument is without substance, it merely points to other businesses. Without the detail for Category 27, Appellant has in essence abandoned its argument. There is no basis for additional points here. As to Category 28, Appellant’s argument is inaccurate. As to the centers to which it references, all the provisioning centers are either conditionally approved or active. Again, there is no basis for additional points. PLANNED OUTREACH Again, Appellant points to documents that were not provided in this section. Thus, they cannot be considered in this category. CONCLUSION For the foregoing reasons, it is recommended that Appellant’s application for a provisioning center license should remain denied. Respectfully Submitted, /s/ Hilary Lauver Dated: November 20, 2019 _______________________________ Hilary M. Lauver, Hearing Officer 23 Edw. C. Levy Co., 293 Mich. App. at 341 (citing THM, Ltd. v Comm'r of Ins., 176 Mich. App. 772, 776 (1989)). 24 See FINAL Medical Marijuana Provisioning Centers Scoring Criteria, https://lansingmi.gov/DocumentCenter/View/7907/Final-Phase-2-Criteria---June-14-2019?bidId=. This document has been readily available on the City’s website: https://lansingmi.gov/1674/Medical-Marijuana-Application-Informatio. 34 1 Smith-Zande, Jennifer From:Michael Yassay <mjy@emeraldgrowthpartners.com> Sent:Thursday, December 12, 2019 1:48 PM To:Clerk, City Cc:Daniel Crittenden; Travis Harrison; Randall Buchman; berton brown Subject:[EXTERNAL] RJB Enterprises LLC - 6420 Cedar St. Provisioning Center Denial Appeal Attachments:image003.png Dear Mr. Swope, RJB Enterprises LLC d/b/a Pleasantrees wishes to appeal the denial of licensure received Saturday November 23, 2019 within the thirty (30) day window given, and to have the Commission Hearing (offered in the denial) at 2:00 pm on Friday, January 10, 2020 at the Clerk’s Marijuana Licensing Unit, 2500 S Washington Ave, Lansing, MI 48910. Please let me know if there is anything not mentioned in the denial email that is required prior to the hearing. Please confirm receipt of this email. Respectfully, Michael J. Yassay Director of Finance & Legal Operations – Emerald Growth Partners 248.756.0286 The linked image cannot be displayed. The file may have been moved, renamed, or deleted. Verify that the link points to the correct file and location. 35 Timeline Arbor Farm dba Herbana 2001 W Saginaw St Lansing, Michigan 48915 June 25, 2019 – Application submitted ................................................................... 2 July 1, 2019 – Department review of applications begins July 25, 2019 – Distance Maps Created ................................................................. 11 August 23, 2019 – Density Maps Created ............................................................. 12 October 7, 2019 – Score & Rank Denial Letter Sent .............................................. 18 October 11, 2019 – Hearing Officer Appeal submitted ......................................... 20 November 23, 2019 – Second Score & Rank Second Denial Letter Sent ................ 48 November 23, 2019 – Commission Hearing Date Letter Set ................................. 48 December 12, 2019 – Commission Appeal Submitted .......................................... 60 No Exhibits were submitted by the appellant. -1- -2- -3- -4- -5- -6- -7- -8- -9- -10- -11- -12- -13- -14- -15- -16- -17- -18- September 24, 2019 Arbor Farm I LLC c/o James Daly 201 South First Street Apt 701 Ann Arbor, Michigan 48104 Dear Provisioning Center Applicant, The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 76 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 2001 West Saginaw Street. 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 -19- City of Lansing Provisioning Center Ranking 9/24/2019 8:42 AM Total Possible Points Arbor Farm I LLC - Herbana - 2001 W Saginaw Applicant Address --- #Category ---Score Location of material Scoring Insights 1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has organizational structure. 8/9/19 2 Organizational Chart 1 1 Org Docs, Org Chart, 19 pgs.Has org chart. 8/9/19 3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 3 pgs.Has plan. 8/9/19 4 Short and Long Term Goals and Objectives 1 1 Org Docs, Goals, 1 pg.Has goals. 8/9/19 5 Community Outreach & Education 1 1 Community Outreach, Outreach & Ed, 2 pgs.Has plan. 8/9/19 6 Marketing, Advertising & Promotion 3 1 Marketing One general statement, two examples with no detail, and no budget. 9/23/19 7 Tangible Capital Investment Dollar Amount 5 5 42 Pages in TCI Section Applicant states $17,331,000 in TCI. 8/12/19 8 Tangible Capital Investment Own/Lease 3 2 12 page Purchase Agreement Has signed purchase agreement, but does not currently own the building. 8/12/19 9 Tangible Capital Investment Supporting Material 3 1 28 page Supporting Documents in TCI Section Most of Stated TCI is not corroborated by supporting material. 8/12/19 10 Financial Structure & Financing 2 2 Job Creation-Budget revenue 9 pages Detailed 3 year budget for the provisioning center with line item start up costs, expenses and revenue. 8/21/19 11 LARA Pre-Qual 3 3 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 12 Integration with Grows 4 4 Integration Applicant has applied for and received conditional approval for 10 Class C grow licenses in Lansing. 8/9/19 13 Charitable Plans & Strategies 4 3 Charitable Plans $24K per year total. $15k to Lansing Promise, $5.5K in in-kind volunteer time, and $3.5K per year in landscaping services to Point Public Art Project. A letter accepting planned donation from Lansing Promise. Less than ideal yearly contribution, which is $25K/yr. 8/9/19 14 Number of and job descriptions for PC ONLY 3 3 Job Creation FTE's More than six (6) jobs, with job descriptions. 8/9/19 15 Healthcare 2 2 Job Creation FTE's Employer will offer Healthcare. 9/12/19 16 Paid Time Off 1 1 Job Creation FTE's Employer will offer Paid Time Off. 9/12/19 17 Retirement 1 1 Job Creation FTE's Employer will offer 401K plan. 9/12/19 18 % of employees at $15+/hr 3 3 Job Creation FTE's 100% of employees will make $15+/hr. 8/9/19 19 Projected Annual Budget 2 2 Job Creation Budget revenue 9 pages Detailed 3 year budget for the provisioning center with line item start up costs, expenses and revenue. 8/21/19 20 Total COL Jobs 6 3 Job Creation Lansing 83 Full time jobs at grow and processor. This is less than the ideal number of jobs, which is 201+. 8/9/19 Total Business Plan & Job Creation 50 41 21 Financial Litigation History 1 1 2 Financial Litigation Forms Has completed form(s) for all stakeholder(s) 9/12/19 22 Net Worth 3 0 31 pages in Financial Section No proof of $100K bank account in applicant name. No solid proof of net worth. Revenue from common stock without guarantee of dollar amount 7/9/19 No documentation of initial start up and operating costs. 7/9/19 23 LARA Pre-Qual 3 3 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 24 Stakeholder Experience City of Lansing Businesses 1 0 Experience Stakeholder Resume No mention of Lansing business ownership in resumes. 7/12/19 1-20- City of Lansing Provisioning Center Ranking 9/24/2019 8:42 AM 25 Stakeholder Experience Relevant Businesses 1 1 Experience Stakeholder Resume More than five (5) years relevant medical, retail or agricultural experience. 9/12/19 26 Stakeholder Experience Medical Marijuana Business 1 1 Experience Stakeholder Resume More than five (5) years MM experience. 9/12/19 Total Financial Stability & Business Experience 10 6 27 Impact on Neighborhood Distance Between PC & Residential Zoning 7 3 https://lansing.maps.arcgis.com/apps/we bappviewer/index.html?id=be0634345255 438ba55b14c9b19e9f22 PC Property abuts Residential Zoning on the south side. 8/19/19 28 Impact on Neighborhood Density of PCs 7 4 https://lansing.maps.arcgis.com/apps/we bappviewer/index.html?id=be0634345255 438ba55b14c9b19e9f22 Lose 2 points for every existing PC within a 1/2 mile radius. #12 Lose 1 point for every existing PC within a 1 mile radius. None Lose .5 point for every existing PC within a 1.5 mile radius. #20 Lose .25 point for every existing PC within a 2 mile radius. #4, #17 Points Lost: 3. 8/9/19 29 Traffic & Parking 3 1 Public Service Review Tier 3 - poor parking/circulation, impact on nearby neighborhoods. 8/29/19 30 Security Plan 3 2 LPD Review TIER 2 - *NO off site surveillance storage noted as required by ordinance. Does have Video surveillance, alarm, specified barriers, Vault, security guard, some equip specs. Total - Land Use & Resident Safety 20 10.00 31 Planned Outreach 1 1 Community Outreach, Outreach & Ed, 2 pgs.Has plan. 8/9/19 32 Improvements to Building 3 3 Building Improvements Support Docs SEV- None, it has been a church since 2011 Sale price in 2011 was $175,000. Total improvements planned $331,157 = 189% of last sale price. Has construction estimate from Dymaxion Development. 8/26/19 33 Plan to Minimize Traffic 1 1 Traffic Plan 1 pg. Has a plan 8/27/19 34 Noise Plan 1 1 Noise & Odor Noise Plan Has plan. 8/9/19 35 Odor Plan 4 3 Noise & Odor Odor Plan Has plan with good description, but no specs or budget. 8/9/19 Total Outreach 10 9 36 Stakeholder History Proof of LARA Prequal 2 2 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 37 Demo of Regulatory Compliance 5 5 https://bsaonline.com/SiteSearch/SiteSearchDetails?SearchFocus=All+Records&SearchCategory=Address&SearchText=2001+w+saginaw&uid=384&PageIndex=1&ReferenceKey=33-01-01-17-102-001&ReferenceType=0&SortBy=&SearchOrigin=0&RecordKeyDisplayString=33-01-01-17-102-001&RecordKey=1%3d33-01-01-17-102-001%3a%3a4%3d33-01-01-17-102-001%3a%3a7%3d7a729fdf-c836-4e09-8b54-9f28012b504c&RecordKeyType=1%3d0%3a%3a4%3d0%3a%3a7%3d2No code violations. No conditional denial letters. 8/30/19 38 Morals, Good Order & General Welfare Litigation History 3 3 Demo of Reg Morals Form Has completed form(s) for all stakeholder(s). 9/12/19 Total Applicant Stakeholder History 10 10 Total Score 100 76.00 2-21- -48- November 23, 2019 Arbor Farm I LLC c/o James Daly 201 S First St, Apt 701 Ann Arbor, MI 48104 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 2001 W Saginaw St. I have determined that your appeal remains 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. Should you choose to appeal, your Commission Hearing will be held at 2:00 p.m. on Friday, January 10. 2020. Commission Hearings are held at the Clerk’s Marijuana Licensing Unit, 2500 S Washington Ave, Lansing, MI 48910. 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. Sincerely, Chris Swope, CMMC City Clerk cc: M. Yankowski, Lansing Police Chief J. Smiertka, Lansing City Attorney Chris Swope Lansing City Clerk -49- Total Possible Points Arbor Farm I LLC - Herbana - 2001 W Saginaw Applicant Address --- #Category ---Score Location of material Scoring Insights 1 Ownership Structure 1 1 Org Docs, Ownership Struc., 1 pg.Has organizational structure. 8/9/19 2 Organizational Chart 1 1 Org Docs, Org Chart, 19 pgs.Has org chart. 8/9/19 3 Worker Training Program 1 1 OtherReqDocs, Worker Training Plan, 3 pgs.Has plan. 8/9/19 4 Short and Long Term Goals and Objectives 1 1 Org Docs, Goals, 1 pg.Has goals. 8/9/19 5 Community Outreach & Education 1 1 Community Outreach, Outreach & Ed, 2 pgs.Has plan. 8/9/19 6 Marketing, Advertising & Promotion 3 1 Marketing One general statement, two examples with no detail, and no budget. 9/23/19 7 Tangible Capital InvestmentDollar Amount 5 5 42 Pages in TCI Section Applicant states $17,331,000 in TCI. 8/12/19 8 Tangible Capital Investment Own/Lease 3 2 12 page Purchase Agreement Has signed purchase agreement, but does not currently own the building. 8/12/19 9 Tangible Capital InvestmentSupporting Material 3 1 28 page Supporting Documents in TCI Section Most of Stated TCI is not corroborated by supporting material. 8/12/19 10 Financial Structure & Financing 2 2 Job Creation-Budget revenue 9 pages Detailed 3 year budget for the provisioning center with line item start up costs, expenses and revenue. 8/21/19 11 LARA Pre-Qual 3 3 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 12 Integration with Grows 4 4 Integration Applicant has applied for and received conditional approval for 10 Class C grow licenses in Lansing. 8/9/19 13 Charitable Plans & Strategies 4 3 Charitable Plans $24K per year total. $15k to Lansing Promise, $5.5K in in-kind volunteer time, and $3.5K per year in landscaping services to Point Public Art Project. A letter accepting planned donation from Lansing Promise. Less than ideal yearly contribution, which is $25K/yr. 8/9/19 14 Number of and job descriptions for PC ONLY 3 3 Job Creation FTE's More than six (6) jobs, with job descriptions. 8/9/19 15 Healthcare 2 2 Job CreationFTE's Employer will offer Healthcare. 9/12/19 16 Paid Time Off 1 1 Job Creation FTE's Employer will offer Paid Time Off. 9/12/19 17 Retirement 1 1 Job CreationFTE's Employer will offer 401K plan. 9/12/19 18 % of employees at $15+/hr 3 3 Job Creation FTE's 100% of employees will make $15+/hr. 8/9/19 19 Projected Annual Budget 2 2 Job Creation Budget revenue 9 pages Detailed 3 year budget for the provisioning center with line item start up costs, expenses and revenue. 8/21/19 20 Total COL Jobs 6 3 Job Creation Lansing 83 Full time jobs at grow and processor. This is less than the ideal number of jobs, which is 201+. 8/9/19Total Business Plan & Job Creation 50 41 21 Financial Litigation History 1 1 2 Financial Litigation Forms Has completed form(s) for all stakeholder(s) 9/12/19 22 Net Worth 3 0 31 pages in Financial Section No proof of $100K bank account in applicant name. No solid proof of net worth. Revenue from common stock without guarantee of dollar amount 7/9/19No documentation of initial start up and operating costs. 7/9/19 23 LARA Pre-Qual 3 3 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 24 Stakeholder Experience City of Lansing Businesses 1 0 Experience Stakeholder Resume No mention of Lansing business ownership in resumes. 7/12/19 25 Stakeholder Experience Relevant Businesses 1 1 Experience Stakeholder Resume More than five (5) years relevant medical, retail or agricultural experience. 9/12/19 -50- 26 Stakeholder Experience Medical Marijuana Business 1 1 Experience Stakeholder Resume More than five (5) years MM experience. 9/12/19 Total Financial Stability & Business Experience 10 6 27 Impact on Neighborhood Distance Between PC & Residential Zoning 7 3 https://lansing.maps.arcgis.com/apps/we bappviewer/index.html?id=be0634345255 438ba55b14c9b19e9f22 PC Property abuts Residential Zoning on the south side. 8/19/19 28 Impact on Neighborhood Density of PCs 7 4 https://lansing.maps.arcgis.com/apps/we bappviewer/index.html?id=be0634345255 438ba55b14c9b19e9f22 Lose 2 points for every existing PC within a 1/2 mile radius. #12 Lose 1 point for every existing PC within a 1 mile radius. None Lose .5 point for every existing PC within a 1.5 mile radius. #20 Lose .25 point for every existing PC within a 2 mile radius. #4, #17 Points Lost: 3. 8/9/19 29 Traffic & Parking 3 1 Public Service Review Tier 3 - poor parking/circulation, impact on nearby neighborhoods. 8/29/19 30 Security Plan 3 2 LPD Review TIER 2 - *NO off site surveillance storage noted as required by ordinance. Does have Video surveillance, alarm, specified barriers, Vault, security guard, some equip specs. Total - Land Use & Resident Safety 20 10.00 31 Planned Outreach 1 1 Community Outreach, Outreach & Ed, 2 pgs.Has plan. 8/9/19 32 Improvements to Building 3 3 Building Improvements Support Docs SEV- None, it has been a church since 2011 Sale price in 2011 was $175,000. Total improvements planned $331,157 = 189% of last sale price. Has construction estimate from Dymaxion Development. 8/26/19 33 Plan to Minimize Traffic 1 1 Traffic Plan 1 pg. Has a plan 8/27/19 34 Noise Plan 1 1 Noise & OdorNoise Plan Has plan. 8/9/19 35 Odor Plan 4 3 Noise & Odor Odor Plan Has plan with good description, but no specs or budget. 8/9/19 Total Outreach 10 9 36 Stakeholder History Proof of LARA Prequal 2 2 demo of reg prequalification Letter dated May 7, 2018 for Arbor Farms I LLC 7/10/19 37 Demo of Regulatory Compliance 5 5 https://bsaonline.com/SiteSearch/SiteSearc No code violations. No conditional denial letters. 8/30/19 38 Morals, Good Order & General Welfare Litigation History 3 3 Demo of Reg Morals Form Has completed form(s) for all stakeholder(s). 9/12/19 Total Applicant Stakeholder History 10 10 Total Score 100 76.00 -51- Clerk’s Statement of Facts Arbor Farm I, LLC dba Herbana – 2001 W Saginaw The appellant provided only argument, no exhibits from the appellant’s application were provided. Cure on appeal is not permitted. Part I – 1 – Marketing, Advertising & Promotion – See Scoring Insights Part I – 2 – Tangible Capital Investment Own/Lease – See Scoring Insights Part I – 3 – Tangible Capital Investment Supporting Materials – See Scoring Insights. Parts of Appellant’s arguments are redacted as they contain information which was not provided in this section of the original application. In the Clerk’s Office review, employee salaries were not considered Tangible Capital for any application. Part I – 4 – Charitable Plans & Strategies – See Scoring insights – Parts of Appellant’s arguments are redacted as they contain information which was not provided in this section of the original application. No information was found to show their “Public Art Project” was a 501(c)3 charity. Part 1 – 5 – Total COL Jobs – See Scoring Insights Part II – 1 – Net Worth – See Scoring Insights Part III – 1 – Impact on Neighborhood Density of PCs – See Scoring Insights and COL Exhibits of GIS Density Measurements Part III – 2 – Traffic & Parking – Traffic & Parking was reviewed by a City of Lansing Public Service employee who specializes in this area. See Scoring Insights. Part III – 3 – Security Plan – Security Plans were reviewed by the Lansing Police Department. See Scoring Insights. Part IV – 1 – Odor Plan – Parts of Appellant’s arguments are redacted as they contain information which was not provided in this section of the original application. Email Attachments: 1. Clerk’s Statement of Facts 2. Arbor Farm’s Application 3. Arbor Farm’s Hearing Officer Appeal 4. Arbor Farm’s Score Sheet 5. LARA Advisory Bulletin re: CPA Attestations 6. American Institute of CPA’s Definition of Compilation 7. GIS Density Maps for .5 Mile, 1 Mile, 1.5 Miles, 2 Miles, and close ups of PC #4 8. Provisioning Center Public Scoring Criteria for Phase 2 9. Application Instructions -52- Hilary M. Barnard Attorney at Law Page 1 of 7 CITY OF LANSING OFFICE OF THE CITY CLERK MARIHUANA BUSINESS LICENSE APPEAL __________________________________ Date: October 19, 2019 ARBOR FARM I, LLC D/B/A HERBANA Proposed Location: 2001 W. Saginaw Lansing, MI 48915 __________________________________ HEARING OFFICER RECOMMENDATION This decision is remitted to the Clerk of the City of Lansing by Hearing Officer, Hilary M. Barnard, Esq., having been read and informed on the issues recommends that in regard to ARBOR FARM I, LLC d/b/a HERBANA and its license application for a Medical Marihuana Provisioning Center that the license application remain denied. FACTS ARBOR FARM I, LLC d/b/a HERBANA (“Appellant”) applied to the City of Lansing to operate a Medical Marihuana Provisioning Center within the city limits during Phase 2. This recommendation follows a timely appeal from Appellant. By letter dated September 24, 2019, Appellant was informed that its license application was denied. Appellant was informed that this score eliminated the possibility of scoring in the top five applications received in phase 2 and it would not be receiving a provisioning center license. Appellant was also informed that it had the right to appeal the denial within 14 (fourteen) days of the letter’s date by written statement with grounds for appeal. With the letter, Appellant was provided a copy of the City of Lansing Provisioning Center Ranking sheet for its business. On the document, Appellant is able to view the total possible points, its attained points, and scoring insight statements. Appellant has point deficiencies in several categories. Appellant’s Position Appellant seeks appellate review pursuant to the Lansing ordinance. It argues that its application was not accurately scored, and the point allocation should be 92.25 -53- Hilary M. Barnard Attorney at Law Page 2 of 7 City Clerk Position The City Clerk affirms its position on the denial. The City Clerk iterates that application instructions told applicants to attach all relevant materials to each section that the applicant wanted considered. APPLICABLE LAW & REASONING The issue in front of this Hearing Officer is whether Appellant’s Provisioning Center License Application for the City of Lansing was erroneously denied. In regard to the issuance of licenses and the appellate process for a license: “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.”1 At the denial of a license under City of Lansing Ordinance No. 1217, 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 from the clerk’s decision.2 * * * [The] [r]eview 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.3 1 See LANSING CITY CLERK’S OFFICE, City of Lansing City Charter (as amended) at 24 (2015) available at: https://www.lansingmi.gov/DocumentCenter/View/2126/City-Charter?bidId=. In this instance, the license issuance is handled with the City Clerk’s office. 2 City of Lansing Ordinance No. 1217 Sec. 1300.15(C). 3 Id. at 1300.3(E). -54- Hilary M. Barnard Attorney at Law Page 3 of 7 The arbitrary or capricious standard of review is the commission’s review and is adopted by this Hearing Officer.4 Arbitrary and capricious have generally accepted meanings.5 Arbitrary is "without adequate determining principle . . . [f]ixed 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.”6 Capricious is "apt to change suddenly; freakish; whimsical; humorsome.”7 The burden is on the party attacking to affirmatively prove the arbitrary and unreasonable decision.8 This is not to say that a local body may “abrogate constitutional restraints.”9 As to whether an applicant can submit supplemental materials on appeal, the Lansing Ordinance in Section 1300.5(B) states that “[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[.]” (emphasis added). The ordinance then enumerates all the documents and information required for application submission. Per Michigan Court rule, appeals are based on the record already in place.10 Further, an appellate body will generally not consider issues not raised in or ruled on by a lower review.11 The appellate review is limited to the record before the lower court at the time of the relevant decision. Under the City of Lansing Ordinance No. 1217 Section 1300.5: (B)(12)(IV) Planned tangible capital investment in the city, including detail related to the number and nature of applicant’s proposed medical marihuana establishments in the city and whether the locations of such establishments will be owned or leased; further, if multiple licenses are proposed, an explanation of the economic benefits to the city and job creation, if any, to be achieved through the award of such multiple licenses. Supporting factual data shall be included with the response to this subsection[.] (emphasis added) Under the City of Lansing Ordinance No. 1217 Section 1300.6, review of an application will consider: (D) In the event that there are more applicants for provisioning center licenses who meet the minimum requirements set forth in 1300.6(B) than there are licenses available in either phase one or two, the top scoring twenty (20) applicants in phase 4 There is an inherent binary in license issuance: issued or denied, not a spectrum of decisions. Given that this is a licensing situation, and that the only prescribed review under Ordinance No. 1217 is arbitrary and capricious, that is the standard that will be observed here. 5 See Bundo v. Walled Lake, 395 Mich. 679, 703 (1976) (citing United States v. Carmack, 329 U.S. 230, 243 (1946). 6 Id. 7 Id. 8 See e.g., Kropf v. Sterling Heights, 391 Mich. 139, 154 (1974) (citing Janesick v. City of Detroit, 337 Mich. 459 (1953)). 9 Id. at 162. 10 See e.g., MCR 7.105(B)(4); (5)(d) (requiring that the appellate court receive a certified copy of a case’s record and stating review of a trial court’s decision was for legitimate reason based on “arguable support in the record[.]”) 11 See Napier v. Jacobs, 429 Mich. 222, 232-35 (1987). -55- Hilary M. Barnard Attorney at Law Page 4 of 7 one and top scoring five (5) applicants in phase two, shall be eligible to receive provisioning center licenses in accordance with the assessment, evaluation, scoring, and ranking procedures established in this chapter[.] An applicant must have included, inter alia, in its application for a provisioning center license: 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 establishments. . . . (17) a location area map, as measured pursuant to section 1300.13(d) of the medical marihuana establishment and surrounding area that identifies the relative locations and the distances, as measured pursuant to Section 1300.13 (A).12 The Lansing Ordinance incorporates provisions and definitions of the Medical Marihuana Facilities Licensing Act, 2016 PA 281 (as amended) (“MMFLA”) so as to: “not limit an individual’s or entity’s rights under the [Michigan Medical Marihuana Act (MMMA)], MMA or the [Michigan Tracking Act (MTA)]” and drafters intended that “these acts supersede [the] ordinance where there is a conflict.”13 A Lansing applicant must then comply with the MMFLA.14 Pursuant to Sec. 402 of the MMFLA, in evaluating an applicant for licensure, an applicant’s history of “noncompliance with any regulatory requirements in this state or any other jurisdiction” will be considered.15 Pursuant to Section 409, a licensure does not “create or vest any right, title, franchise, or other property interest.” Here, this Hearing Officer will decline to review any supplemental materials16 provided by Appellant in effort to cure application deficiencies. Per requirements in the Lansing Ordinance in Section 1300.5(B) and general state appellate practice, review on appeal is to the record originally provided and reviewed. See e.g., Napier v. Jacobs, 429 Mich. 222, 232-35 (1987).17 Thus, this review will address the appeal on Appellant’s first basis and the application as originally provided. MARKETING, ADVERTISING & PROMOTION In this section, the scoring insights provided that “One general statement, two examples with no detail, and no budget.” Appellant argues that its score is incorrect because its submission met the 12 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.5(B). 13 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.2(C). 14 Id. at Sec. 1300.2(D). 15 MMFLA, MCL § 333.27402(3)(g). 16 Here, Appellant’s appeal letter includes sufficient information and material not originally provided. It will be considered supplemental material and treated as such. 17 In this case it discusses that an “exception that review is permissible ‘to prevent a miscarriage of justice.’” “Most jurisdictions recognize the authority of an appellate court to review an issue, even where the issue was not preserved, when some fundamental error would otherwise result in some egregious result.” However, that “such power of review is to be exercised quite sparingly. Napier, 429 Mich. at 233. Under the facts presented, there is not a fundamental error so as to trigger exercising supplementing on appeal. -56- Hilary M. Barnard Attorney at Law Page 5 of 7 requirements of the City’s rubric. Appellant argues that it will do what the plan says, but this is not a demonstration of detail of a plan. Further, there appears to be no budget information related to marketing provided in this section, and no argument provided for its absence. There is no basis to award further points in this category. TANGIBLE CAPITAL The City defines tangible capital as an asset with a physical form. Thus, only such assets would count in the calculation. The City considers Tangible Capital Investment to detail how a business is going to invest its money and assets, not how many of them it has. Also considered in Tangible Capital are building improvements to the interior and exterior. Not considered are products, packaging, furniture, or other items that are readily removeable from the establishment. Appellant argues that its score is incorrect for each subcategory under tangible capital. First, regarding ownership and lease. The Appellant argues that its purchase agreement is better than a warranty deed or proof of ownership. This Hearing Officer disagrees. The purchase agreement functions as a contract, where as a deed or other ownership proof demonstrates that the building is owned by the business and is not contingent on a trigger. The point allocation is appropriate here. Second, Appellant argues that its score for supporting materials is inaccurate. Much of Appellant’s argument was not provided with its initial application and cannot now be considered as an attempt to cure deficiencies on appeal. The City also does not consider employee salaries in this section. There is no basis to provide additional points for supporting materials. CHARITABLE PLANS Here, much of Appellant’s argument was not originally provided with its application which cannot be considered on appeal. The scoring insights provide, “$24K per year total. $15k to Lansing Promise, $5.5K in in-kind volunteer time, and $3.5K per year in landscaping services to Point Public Art Project. A letter accepting planned donation from Lansing Promise. Less than ideal yearly contribution, which is $25K/yr.” Also unclear from the appeal letter and the application materials is whether the referenced Public Art Project is a 501(c)(3) charity. The factfinder is “must give deference to an agency's findings of fact.”18 The factfinder may not set aside findings just because other facts in the record could have come to a different conclusion.19 As the City has utilized the same bench mark for each application, there is no basis for the Hearing Officer to suggest another threshold here. Thus, Appellant’s point allocation is appropriate. TOTAL COL JOBS Appellant again in this section requests that the threshold amount that the City utilized be undermined. There is no basis nor authority for the Hearing Officer to do. Even if this were not the case, Appellant points to 83 jobs being created and an estimated salary amount. The salary amount does not relate to numeric existence of jobs; thus, Appellant’s argument is unconvincing. There is no basis to award additional points here. 18 Edw. C. Levy Co. v. Marine City Zoning Bd., 293 Mich. App. 333, 341 (2011) (citing THM, Ltd. v Comm'r of Ins., 176 Mich. App. 772, 776 (1989)). 19 Id. -57- Hilary M. Barnard Attorney at Law Page 6 of 7 NET WORTH Under this section, Appellant’s argument rests on the pertinent funds actually residing in accounts pertaining to Appellant’s holding organization. Appellant even cites the exact language that defeats its argument, “Verification, including copies of actual bank statements, showing that the applicant has minimum net worth of $100,000.00 in the applicant’s name.” (emphasis added). As the funds do not reside in Appellant’s name, there is no basis for this Hearing Officer to exceed the ordinance language. IMPACT ON NEIGHBORHOOD In this category, this Hearing Officer will “give deference to an agency's findings of fact.”20 This section is not intended to relate to the buffering standards. The City relies on land use demographics, which find that the property is within ¼ mile of residential zoning. In the scoring criteria it was explained that this is “[d]istance 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 ¼ mile of the proposed location.”21 The argument that Appellant was not aware of this is without merit. TRAFFIC & PARKING Appellant’s score provides that “Tier 3 - poor parking/circulation, impact on nearby neighborhood.” Appellant argues that there would be a minimal or non-existent impact on traffic. Appellant is located in a high-traffic part of the city. There is little traffic circulation due to the nature of the road set up. The City of Lansing Public Service evaluates this aspect of the applicant materials. The factfinder may not set aside findings just because other facts in the record could have come to a different conclusion.22 Deferring to the agency’s finding, there is no basis for additional points here. SECURITY PLAN Here, Appellant is lacking off-site surveillance as required. Not excluding off-site storage is not the same as a plan that specifically details it. Saying one will follow rules and regulations is neither an example of how it will be done or details of plans to do so. There is no basis to award additional points here. ODOR PLAN The entirety of Appellant’s argument under this section was not included in its original application. Appellant is not able to cure on appeal. Thus, no points could be added here. 20 Edw. C. Levy Co., 293 Mich. App. at 341 (citing THM, Ltd. v Comm'r of Ins., 176 Mich. App. 772, 776 (1989)). 21 See FINAL Medical Marijuana Provisioning Centers Scoring Criteria, https://lansingmi.gov/DocumentCenter/View/7907/Final-Phase-2-Criteria---June-14-2019?bidId=. This document has been readily available on the City’s website: https://lansingmi.gov/1674/Medical-Marijuana-Application-Informatio. 22 Edw. C. Levy Co., 293 Mich. App. at 341 (citing THM, Ltd. v Comm'r of Ins., 176 Mich. App. 772, 776 (1989)). -58- Hilary M. Barnard Attorney at Law Page 7 of 7 CONCLUSION For the foregoing reasons, it is recommended that Appellant’s application for a provisioning center license should remain denied. Respectfully Submitted, Dated: October 19, 2019 _______________________________ Hilary M. Barnard, Hearing Officer -59- -60- -61- -62- -63- -64- -65- -66- -67- -68- -69- -70- -71- -72- -73- -74- -75- -76- -77-