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HomeMy WebLinkAbout2018.11.17.MM Commission Appeal Packet Timeline 5273 LLC 6001 S Pennsylvania Ave Lansing, Michigan 48910 December 15, 2017 —Application submitted December 21, 2017 — Department review of applications begins July 31, 2018 — Scoring and Ranking denial letter sent..............................................1 August 114, 2018—Appeal submitted.........................................................................7 September 25, 2018 —Appeal to Hearing Officer October 15, 2018— Hearing Officer Denial letter sent.............................................55 November 14, 2018— Commission Appeal submitted.............................................58 stamps enclicia Shipping Label Receipt Delivery Confirmation- Service Number: 9405 5116 9900 0884 3766 14 Priority Mail 2-DAY with USPS TRACKING#" Electronic Service Fee:$0.000 Total Postage and Fees:$6.35 Weight: 1 oz Print Date: 07/312018 Mailing Date:07/312018 From: Chris Swope Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 To: 5273 LLC USPS Canna wide Postmark 6125 Lydia Court Here West Bloomfield MI 48322-1917 'Regular Priority Mail 2-DAY Service postage rates apply.There is no fee for Delivery Confirmation*"service on Priority Mail services with use of this electronic shipping Jebel. Postmark required if fee refund requested. Delivery information is not available by phone for the electronic option Instructions: 1. Adhere shipping label to package with tape or glue-DO NOT TAPE OVER BARCODE.Be sure all edges are secured.Self-adhesive label is recommended. 2- Place the label so it does not wrap around the edge of the package. 3. This package may be deposited in any collection box,handed to Your mail carrier,or presented to a clerk at your local Post Office. 4• Each confirmation number is unique and can be used only once- DO NOT PHOTOCOPY. 5• You must mail this package on the"mail date"that is specified on this label. -1- S I �G Chris Swope Lansing City Clerk cHrG July 31, 2018 5273 LLC 612 Lydia Court West Bloomfield, MI 48322-1917 Dear Provisioning Center Applicant, The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 65 out of 100 eliminates the possibility of scoring in the top twenty. 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 6001 South Pennsylvania Avenue. 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 by the City Clerk. 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. Lansing 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 -2- 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 the temporary operation are satisfied. Sincerely, Chris Swope, Master Municipal Clerk Lansing City Clerk CC: City of Lansing Law Department Lansing 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 -3- City of Lansing Provisioning Center Ranking Total Applicant Name Possible 5273 Points LLC 5273 LLC Applicant Address --- 6001 PP S 6001 S PENNSYLVANIA AVE --- --- Scoring Insights Applicant provides many detailed examples of marketing, Marketing,Advertising and 4 4 advertising,promotion,and minor minimization(e.g.,age verified Promotion website,no ads designed for minors,social media,branded apparel,etc.). Applicant indicates they will lease the 8K sq.ft.building at 6001 PA Tangible Capital Investment Ave.for the provisioning center($84K/year in rent and investing at in the City of Lansing least$1 million in improvements),operate a second PC at 3425 S. (Investment in applicants 15 9 MLK,purchase a 39K sq.ft.building for processing($900K)and other provisioning centers considering investing in a 110K sq.ft.building for growing(several was not included in score) million dollars).Lacks ownership and a definitive plan investing in a grow facility. Job Creation Applicant indicates about 62 new Lansing jobs and up to 120 new (Integrated System) jobs will be created if they pursue and open the larger grow facility. Overall number of jobs 5 3 Types of jobs are detailed along and worker training program. created Falls short of an optimal number ofjobs and a definitive commitment to the larger grow facility. Applicant provides proof of access to$5 million with supporting documentation(e.g.,XIB letter),linking this to their business plan Financial Structure and and anticipated operating expenses.Note that one owner agrees to Financing 3 3 pay$70K by five business days of receiving business license to operate the provisioning center(i.e.,in addition to$40K already in place from the other owner). Existing liquid assets more than cover$100,000. Plans to Integrate Facility Applicant Indicates they will integrate their provisioning center with Other Establishments 2 2 with a Class C(1,500 plant)grow operation to be located at 1121 River Road. -4- City of Lansing Provisioning Center Ranking Applicant provides examples of organizations they would like to partner with(e.g.,DARE,community mental health,food drives) Charitable Plans and 4 2 and discusses their long-term goal of spending$25K/year to local Strategies charitable and civic organizations,plus encourage its members to volunteer time.Falls short of optimal dollar commitment potential and lacks proof of actual payment or an executed agreement. Number of Jobs at the Provisioning Center Category Thresholds:1=<6 jobs,insufficient details;2= Applicant indicates the provisioning center will have at least 16 full- <6 jobs,sufficient details;3 5 4 time salaried employees and provides a description of job titles and =6 jobs,sufficient details;4 salaries. Falls short of the optimal level of details. _>6 jobs insufficient details; 5 =>6jobs,sufficient/good details. Amount and Type of Applicant indicates that not all provisioning center positions will Compensation(PC) 2 1 pay at least$15 per hour. Falls short of the optimal amount of compensation and support details. Percent of Employees Earning t Least$15/Hour) 3 1 Applicant indicates 11 of 16(69%)provisioning center employees (PC) will earn at least$15/hour. Falls short of the optimal percentage. Applicant provides projected annual budget and revenue numbers Projected Annual Budget and (e.g.,$1.4 million in expenses and$1.6 million in revenues)and Revenue(PC) 2 1 generally describes the source of these numbers. However,they do not provide any line item details(i.e.,financial spreadsheet) showing how these numbers were derived. Lacks sufficient details. Applicant does not provide any litigation compliance verification Sufficient Financial Resources 5 4 forms for key team members. Applicant proves they have more than$100K in the bank and access to a$5 million line of credit from a respected lender. Applicant indicates they have at least 9 years of medical marihuana industry experience,plus decades of other applicable business Business Experience 5 5 experience(retail management,highly regulated liquor industry, etc.),plus have access to an advisory board who have decades of applicable experience. -5- City of Lansing Provisioning Center Ranking Content and Sufficiency of Information;Professionalism of submitted documentation 5 3 Treasury letter for minor issue and Facility Plan letter to cure from including clear labeling of building safety required items Buffering between residential zoned areas and 5 4 inadequate buffering but not close to residential establishment Increased traffic on side streets will be scored lower 5 2 Major traffic control renovations needed Entrance and exit on main streets,adequate parking TIER 3—Does not meet minimum requirements,requires not on residential streets, 10 4 correction and/or has missing/or incomplete information.4pts Quality of Security Plan traffic,Strong traffic patterns and parking Plan to meet with neighborhood organizations 1 1 Have Plan Improvements made or 3 1 Some improvements will need to be made,more than indicated on proposed to building facility plans Plan to minimize/eliminate traffic 1 1 traffic plan included Plan to minimize/eliminate 2 0 inadequate noise plan noise Plan to minimize/eliminate odor 3 3 three independent air filtration technologies LPD Complaints 4 4 none Demo of Regulatory 4 3 minor tax issue Compliance Litigation History 2 0 inadequate history for a Stakeholder Total 100 65 -6- 5273, LLC ("APPELLENT") APPEAL Prepared by Michael D. Stein, Esq. Chad Proadlock Virg Bernero -7- TABLE OF CONTENTS Page(s) TABLE OF CONTENTS.................................................. ii .......................................................... STATEMENT OF ISSUES PRESENTED............................................ "' I. INTRODUCTION........................................................... 1 ................................. II. STATEMENT OF FACTS..................... 1................................................................ III. STANDARD OF REVIEW............................... 2 IV. ARGUMENT................................................................................. 2 V. CONCLUSION................................................................................................................. 12 VI. RELIEF REQUESTED..................................................................................................... 12 ii -8- STATEMENT OF ISSUES PRESENTED 1. WAS THE REVIEWER'S DECISION SUPPORTED BY COMPETENT MATERIAL, AND SUBSTANTIAL EVIDENCE? Appellant Answers: No 2. WERE THE APPLICANTS SCORES BASED ON CLEARLY ERRONEOUS FINDINGS Appellant Answers: Yes �. WERE THE APPLICANTS SCORES BASED ON IMPROPER/INCONSISTENT SCORING Appellant Answers: Yes 4. DID THE SCORING METHOD COMPLY WITH LANSING'S ORDINANCE Appellant Answers: No 5. SHOULD THIS CITY CLERK REVERSE THE DECISION TO DENY APPELLANTS APPLICATION? Appellant Answers: Yes iii -9- I. INTRODUCTION This appeal involves highly recognized and awarded local Michigan residents, and an internationally renowned cannabis consulting company who have been successful with cannabis licensure in California, Colorado, Arizona, Michigan, and Canada. The applicant has applied for a Provisioning Center license in the City of Lansing under its ordinance and in accordance with the Michigan Medical Marihuana Facilities Licensing Act however, Appellant's license was denied for purported insufficient material. Quite simply, the City of Lansing either did not fully review the entire application or ignored the sufficiency of the plans provided. Appellant has therefore filed the instant appeal as its only avenue to seek review of its score and status in the City of Lansing and asks this Clerk to reverse the City's decision due to lack of material, competent, and substantial evidence, erroneous and improper scoring and failure to score the application in accordance with its own ordinance. II. STATEMENT OF FACTS A. APPELLANT'S MMPC APPLICATION Appellant, 5273, LLC ("5273") is owned by highly recognized and awarded local Michigan residents, and an internationally renowned cannabis consulting company who have been successful with cannabis licensure in California, Colorado, Arizona, Michigan, and Canada. 5273 timely filed an application for an MMPC license with the City of Lansing for the location of 6001 S. Pennsylvania Ave., Lansing, MI. B. PROCEDURAL HISTORY On or about July 31, 2018, 5273 received an email from your office advising that it would not be selected to receive a Provisioning Center license. The correspondence from your office indicated -10- that the basis for the denial was as follows: "Your score of 65 out of 100 eliminates the possibility of scoring in the top twenty. Therefore, your application for licensure is denied." In addition, the denial correspondence included the applicant's sub-scores based on the ordinance criteria along with a brief summary of determining factors for each sub-score; this scoring sheet is also attached (Exhibit A). After this denial, 5273 is left with no further avenues for reconsideration of the City's administrative decision. Therefore, 5273 files the instant Appeal. III.STANDARD OF REVIEW The basis for this appeal is (1) the scoring is not based on competent, material and substantial evidence; (2) Scoring Insights are based on clearly erroneous findings; (3) Applicants scoring was based on improper/inconsistent scoring; (2) Scoring methods do not comply with the ordinance; and (3) Scoring was an abuse of discretion. Although Appellant recognizes the Clerk's office is not a court of law, the applicable standard of review is 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 NW2d 621 (2011) (quoting Dowerk v Charter Tp of Oxford, 233 Mich App 62, 72; 592 NW2d 724 (1998)). Furthermore, scoring must be proper, consistent, comply with the applicable ordinance and not an abuse of discretion. IV. ARGUMENT A. Tangible Capital Investment in the City of Lansing (Investment in applicants other provisioning centers ►vas not Included in score). 2 -11- The scoring insight for this category states, in part, as follows: "Applicant...lacks Ownership and a definitive plan investing in a grow facility." This is erroneous as the applicant clearly states it will be investing in a grow at the 1121 River St. location AS WELL AS another larger 110,000 square foot facility (See Exhibit B). The scoring in this section also fails to recognize applicant has already made a commitment via signed legal documents investing in two provisioning center locations (6001 Pennsylvania and 3425 S. MLK) AND a processing center located at 1121 River St. Applicant was punished significantly(9 out of 15 points) because of a misinterpretation of the plan by the reviewer. The reviewer acknowledged the lease cost and cost of improvements to the first provisioning center and the cost of the processing building but disregarded or misinterpreted that another $1,000,000 in property improvements will be made to the second dispensary and another $1,000,000 (could be as much as $5,000,000) would be made to the processing center whereby an old dilapidated eyesore will be turned into a viable facility, and further choose to punish the applicant for what it believes is a non-committal to a fourth cultivation facility. A plain reading of this section of the application demonstrates a full committal to a fourth building as it says "we have targeted two potential properties", one of which applicant has under contract and the second which they are actively pursuing (See Exhibit B). The reviewer interprets this as a wavering committal however it's a full committal which has since been acted upon as the building is currently under contract with applicant's affiliate company. In regards to the fourth building the plan states "we would invest several million dollars in upgrading and retrofitting the facility to accommodate at least one, and possibly three large grow operations" (See Exhibit B). The reviewer's note that this is not a definitive plan is erroneous, inaccurate and a blatant attempt to "deduct" points where they should not be deducted. Although a specific figure is not given, 3 -12- "several million dollars" indicates a figure of at least$2,000,00045,000,000 and the score needs to reflect this tremendous additional investment in Lansing. Lastly, in the "plans to integrate facility" category the reviewer notes the applicant will "integrate the PC with its Class C license." In other words, the class C license is recognized in one category but not the other. This type of scoring is improper and inconsistent and must be adjusted upward by 6 points. B. Job Creation (Integrated System) Overall number of jabs created In the category entitled "Job Creation", the reviewers determined that "62 new Lansing jobs and up to 120 new jobs will be created if they pursue and open larger grow facility.... Falls short of optimal number of jobs and definitive created commitment to the larger grow facility." The applicant was only awarded 3 out of 5 points due to this alleged deficiency. Again, the reviewers finding of non-committal is inaccurate. The plan details applicants desire to obtain the building and without giving the address, which would be made part of the public record, identified the building by is square footage (See Exhibit B & C). It's clear the applicant wants the building and was aggressively pursuing the purchase of the same. As further evidence of improper scoring, the reviewer determined the job range was 62-120 when in fact the number is 62 plus jobs for "architectural, electrical, flooring, mechanical and plumbing" all from Lansing based companies in addition to the 120 jobs brought about by the cultivation facility (See Exhibit C). The total planned jobs for all business's is not 62, it is 62 plus tradesman plus 120 cultivation jobs for a total of well over 182 jobs which is more than worthy of an additional 2 points and a perfect score in this category. C. Charitable Plans and Strategies. 4 -13- Applicant provides specific companies for whom they will partner with (e.g., DARE, community health Organization, food drives) and discuss their long term financial contributions based on meetings with each specified company (See Exhibit D). In fact, applicant pledges to give $50,000.00 for 2018 even though the facilities might not be open and operational. The plan calls for a $50,000.00 charitable contribution for the 41h quarter of 2018 alone (See Exhibit D). This is a substantial figure for only one quarter of operation. Obviously, charitable contributions don't decrease, they increase, and that is the applicants plan moving forward. The principle responsible for transcribing the plan clearly made a typographical error when typing the figure of "$25,000". The proper figure, and in congruence with the stated 4`h quarter 2018 donation is 1 $250,000" for the entire year with plans to increase it by 25% each year. As evidence of this scriveners error, the applicant, Steve Kesto, has attached an affidavit attesting to the typographical error (See Exhibit E). $250,000 in charitable contributions per year is substantial and merits being awarded the full amount of points. In addition to financial contributions, the principles also encourage its employees and owners to volunteer their time. Specific references to charitable organizations represent more than mere conjecture and demonstrate proof of a well thought out plan. This plan along with the appropriate figure of $250,000 in charitable contribution commitments per year and volunteering time demand an additional 2 points for full points in this category. D. Number of Jobs at the Provisioning Center. This category deals with the "number of jobs" at the provisioning center NOT job description even though applicant gives a job title for each role. 5273 clearly indicates "16"jobs per PC as well as ancillary jobs for tradesmen. It is improper and an abuse of discretion to take away points for "lack of details." Furthermore, 5273 gives a title for each job held. Is it that hard for a 5 -14- reviewer to discern what a "security guard", "executive", or "Patient Outreach Manager" does? 5273 can only assume a Medical Marijuana Provisioning Center reviewer would have a cursory knowledge of these roles in a cannabis business and would be able to identify general job responsibilities based on titles. Does an attorney need to explain his duties or is this common knowledge amongst professions? Explaining job duties to reviewer's who should have common knowledge of the cannabis industry in a category simply asking the # of jobs is unfair and unnecessary. Based on the # of PC jobs created an additional point should be given as anything less than a perfect score is an improper score and further abuse of discretion. E. Amount and type of compensation and Percent of Employees Earning at least$15.00 per hour Applicants "Job Creation" analysis demonstrates at least 84% of its employees will make over $15.00 per hour not 69% as noted by the reviewer (See Exhibit C). The only job for which applicant is responsible for setting wages who may not initially earn $15.00 per hour is a "Packing Representative". Generally, security guards are contracted from security companies such a LaGarda or Prudential Security. The security contractor is responsible for setting its employee's wages. Applicant is not in a position to set wages for employees of companies it contracts with and therefore cannot be deducted points because of a third parties set wages. Additionally, the lone position who's purported hourly rate is under $15.00 per hour actually makes $15.22 per hour. When you take into account the # of hours worked per year (1,920 hours) minus 2 week's vacation you get 1,840 hours per year and makes the hourly rate $15.22 per hour. This position, as stated in the job creation plan also receives supervisor training and employment education provided by management to help these individuals move up in the company hierarchy. 6 -15- Applicant received 2 out of 5 points solely because one listed position (the entry level position) had an inaccurately listed hourly rate of$13.00 per when in actuality it is $15.22 per hour. A 3 point deduction is an abuse of discretion and an improper score. Applicant deserves at least an additional 2 points for high paying positions its offering and for paying 84% of its staff more than$15.00 per hour. F. Sufficient Financial Resources The scoring insight for this category states that "Applicant does not provide a complete litigation compliance verification form for the key team members. This is incorrect. The checklist prepared by the Clerk's office upon receipt of the application on December 15, 2017 did not indicate this was missing. In fact, the applicant and stakeholder stated they have no litigation history. This disclosure is in full compliance with Ordinance No. 1217 § 1300.6(4). Again, this is very perplexing that this item was supplied and referenced in the Table of Contents but scored as if nothing was supplied. The reviewer also notes that applicant "proves it has $100,000 in the bank and access to a $5,000,000.00 line of credit" which is 50 times more than the required capital to operate a PC in Lansing. As further evidence of improper and inconsistent scoring, applicants second PC application was rightfully scored a 5 out of 5 in this section and this score should be adjusted upward to match the 5 out of 5 so rightfully deserved (See Exhibit F). G. Content and Sufficiency of Information;Professionalism of submitted documentation including clear labeling of required items. The reviewer insight comments do not reference a single issue with "content and sufficiency of information" or "professionalism of submitted documentation including clear labeling of required items". Taking two points was another blatant attempt to erroneously steal points from 7 -16- an otherwise impeccably drafted application. Why would applicant be deducted two points for a minor issue that was cured? 1) no issue as to the application presentation was cited and 2) the "minor" issue was cured immediately, which was a $50 tax from over 10 years ago. The applicants run very successful businesses with thousands of transactions a year without any issues, own licenses pertaining to liquor, alcohol, tobacco, construction etc....why would a minor issue warrant a loss of 40% of points in a category? This deduction is unwarranted, an abuse of discretion and excessive. 2 additional points should be awarded in the category. H. Buffering between residential zoned areas and establishment. The applicant was only awarded 4 out of 5 points and the comment states "inadequate buffering but not close to residential." Ordinance section §1300.13 is entitled "Location, buffering, dispersion, and zoning requirements for medical marihuana provisioning centers." Specifically, the applicant's location is zoned F-1 Commercial and, as such, a provisioning center is permitted in this zone. Ordinance §1300.13(B). The buffering between the subject property and the residential has been approved by the City of Lansing and meets the screening and buffering requirements of the Lansing Zoning Ordinance in Chapter 1290. There is no authority in the ordinance to deduct points for being "not to close to residential" when the location is in a permitted zone and has complied with the buffering requirements in both the general zoning ordinance and the medical marihuana ordinance. The reviewer cites no complaints or issues from adjacent residential properties. The city council did not adopt a setback or buffering requirement for residential properties adjacent to a provisioning center in and F-1 Commercial zone, and there is no basis to administratively determine that this is too 8 -17- close to homes when city council already made the determination legislatively. An additional point should be added. L Increased traffic on side streets Applicant provided a robust "Land Use" plan to minimize traffic on the side streets. In fact, the plan specifically address's "traffic control renovations". The plan states "we will employ several strategies to attempt to mitigate any potential issues. First, our facility is directly adjacent to a CATA bus line, so we intend to encourage patrons to use public transportation whenever possible. Second, we will regularly maintain the sidewalks adjacent to our facility in order to insure that individuals wishing to walk or bike to our facility are able to do so.....In order to minimize the potential for traffic accidents, and so as not to increase traffic on Andrew Jackson Avenue, we are considering closing or barricading this entrance. Thus patrons would only enter our parking lot via S. Pennsylvania Ave" (See Exhibit G). The "major renovations" which the reviewer calls for are in fact discussed in the plan and would eliminate increased traffic on the side streets. Why are no points given for this proposed improvement?A 2 out 5 might be warranted if no improvements were planned however that is not the case. Based on applicant's plan to further minimize side street traffic 3 more points must be awarded in this category. J. Entrance and exit on main streets, adequate parking not on residential streets, and quality of security plan. The applicant only received 4 out of 10 points and this category address three separate issues: Entrance and exist on main streets. This facility is located a very busy main thoroughfare, S. Pennsylvania Ave., and the entrance and exits are on "main streets." There is nothing more the applicant could do to comply with this requirement. Applicant provided a robust "Land Use" plant to minimize traffic on the side streets. In fact, the plan specifically address's "traffic control 9 -18- renovations". The plan states "we will employ several strategies to attempt to to mitigate any potential issues (See Exhibit G). "First, our facility is directly adjacent to a CATA bus line, so we intend to encourage patrons to use public transportation whenever possible. Second, we will regularly maintain the sidewalks adjacent to our facility in order to insure that individuals wishing to walk or bike to our facility are able to do so.....In order to minimize the potential for traffic accidents, and so as not to increase traffic on Andrew Jackson Avenue, we are considering closing or barricading this entrance. Thus patrons would only enter our parking lot via S. Pennsylvania Ave" (See Exhibit G). Minimizing side street access is discussed in the plan and would eliminate increased traffic on the side streets. Why are no points given for this proposed improvement? Based on applicants plan to further minimize side street traffic more points must be awarded in this category. Adequate parking not on residential streets. The applicant showed the site plan that depicts an adequate number of parking spaces with handicapped (H) accessible spaces indicated. The applicant meets the ordinance requirement for parking and there is no use of parking on residential streets. There is nothing more the applicant could to comply with this requirement. Quality of Security Plan. A complete and comprehensive security plan is provided. The owners assume responsibility for all security operations. The applicant indicated that it trains employees on security and storage of product pursuant to LARA Emergency Rule 43 (see security plan). The applicant provided a full security plan showing the following: Interior and Exterior Lighting Plan, Alarms, Barriers, Recording/monitoring devices, Security Guard, and Visitor Log. The security plan shows full compliance with LARA Emergency Rule 27 with respect to recording and monitoring devices (30+ cameras and 60 days of recording maintained) and Emergency Mule 10 -19- 21 for a visitor log. Specific equipment, plans, and designs in place have exceeded the emergency rules, and was based on the security consultants 25+ years of experience in building facilities and business in the narcotic, tobacco, alcohol, and pharmaceutical industry throughout North America. There are three items scored in this category and the applicant was fully compliant with items one (1) and two (2). The reviewers offered no insight why this is a"poor security plan." It is an abuse of discretion to deduct 6 points without any explanation where this falls short of the requirements in the ordinance and state laws and regulations governing facility security. In light of the other errors, raising the possibility that the reviewers missed items that were actually supplied, we request another review of this scoring item and an additional 6 points. K. Improvements made or proposed to building The scoring insight for this category states (incredibly) "Some Improvements will need to be made." Please review the following which contradicts this statement: • Please see the section entitled "Planned Tangible Capital Investment in the City." Over $1,000,000.00 in improvements are planned. This documentation was submitted in compliance with the ordinance at §1300(12)(IV). • A full set of architectural drawings was submitted with the application materials. Included are the site plans, floor plans and building permits along with accessibility (ADA) notes and details all of which show significant improvements will be made. L. Plan to minimize noise, In spite of the voluminous submissions by applicant addressing this issues, the applicant was awarded zero points for this category. In regards to noise, the applicant provided a full set of architectural plans with city building permit approvals for all required categories and compliance with the applicable building codes and SOP's which state how noise is reduced. Please add 2 additional points in this category (See application SOP's). 11 -20- M. Demonstration of Regulatory Compliance Applicants own and operate several cannabis facilities generating sales and revenue over $10,000,000.00. No issues are cited by the reviewer accept for what is termed a "minor tax issue" that was noted as corrected by the reviewer. The stakeholders demonstrate not one single issue with its business operation yet the reviewer deems it necessary to deduct one point for a minor tax issue that was cured, which was $50 in taxes owed from over 10 years ago. The applicants run very successful businesses with thousands of transactions a year without any issues, own licenses pertaining to liquor, alcohol, tobacco, construction etc... This is yet another blatant attempt to deduct points for no apparent reason and represents a gross abuse of discretion. There is no reason a full score should not be given to applicant for its stellar record of regulatory compliance across North America. Please add 1 point in this category. N. Litigation History 0 out of 2 points in this category is absurd. First, the litigation disclosure form was provided and showed no history of litigation. For a multi-million dollar company to have no litigation history is an anomaly and should be rewarded not punished erroneously. Furthermore, as part of its "experience" section, applicants attest to the fact they have no litigation history. The applicant& stakeholder's significant business history and lack of litigation history demand 2 out of 2 points in this category. V. CONCLUSION On behalf of the applicant, we request an immediate review of this appeal as we have raised serious concerns about the competency of this review and scoring that has missed many items that were actually supplied. 12 -21- VI. RELIEF REQUESTED It is clear in this case that 5273's application was wrongfully denied and that it has now been unfairly stripped of its ability to receive a license. The City's denial is clearly inappropriate and inaccurate. WHEREFORE, Appellant respectfully requests the City Clerk order the City of Lansing to reverse its decision, award 35 additional points and give applicant approval for its Lansing Medical Marijuana Provisioning Center. Respectfully su i ed, -�/// ichael tein, Esq 13 -22- EXHIBIT A 14 -23- m ru c .n w > V) LNn O O C pC E: O ra O L ++ ` t4 Z m a) N O C a) +, C 3Ln > -0 to U fD L c > + � E° a o o vi ooLn c o 5 a4 m 0 U -n � — U c E h U > a) C bD a (n cL U U U a) -0 C Ln m L -C m >• toin ro .N O ,� E a) U rn E a c c c " _^ s ,n +- c o U) v 4- c ,n o a) — a, '�' c 3 .'^ E 'L L o co L '� > ru w a) ra -c u > Q L v t o o o Ln o aJ 6 cLn a Y , d H °' L7 O v ~ o U tip z U i i , a) L L •C Y Y O cJc 4 Ia o G C) to O_ v7 0 cn C �O L •O a .�.•r V - cn t/1. 'O j•. 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C ro N ro - '3 Q O •M 00 a CL u a x a w L co a E Do Linn 0 a t •C +_' a c O c QoQ ary u r , -o o •Ec aaj oc :3a -+0c+ L a C 41 O 4- a 6, ru - L OO+ O 4- w 3 .+' O a a a a to L t�ii t in = 'O A -+- a O — L O m m a — 0 o E c °J '� n. oc - E 0 n Y x -0 +, 7 O J -0 ai ro -O •- C ro L pp C i- a a C a C C a a- a c c 3 0 o L ro 0 4- C �O 4- O N O 'O E O .v E .n f a s rco L a 0 L a co Ln +n 4- 0 O a a-' Ln L •`-^ a X a"' r0 � �+ 7 6 O a _C (O C M O Ln rd d N O O 4.1 =3 O w oai v = C 0 .m _0 O 7a +' E E co _@ a 0 + ~ 0 U -32- EXHIBIT B 15 -33- PLANNED TANGIBLE CAPITAL INVESTMENT We are committed to heavily investing in the City of Lansing and bringing significant economic development to the area. To this end, our ownership group is seeking two provisioning center licenses in the City(one at 6001 South Pennsylvania Avenue and one at 3425 South Martin Luther King Jr. Boulevard),as well as one processor license(located at 1121 River Street)and at least one 1,500 plant Class C grower license (located at 1121 River Street), with a desire to increase this investment over time. Lansing has welcomed the medical marihuana industry, and we hope to establish a significant, long-term economic relationship with the City. Concerning our provisioning center operations, we anticipate that each facility will create approximately 16 full-time, salaried jobs. As discussed herein,those jobs include: • Executive—$80,000 annual salary • Chief Operations Officer/Facility Manager 470,000 • Patient Outreach Manager-$60,000 Quality Assurance/Control Technician-$55,000 • Nurse Field Representative-$50,000 • Sanitation Specialist- $45,000 • Office Manager-$45,000 • Community Outreach and Patient Education Specialist-$40,000 • Addiction Prevention Directors -$40,000 • Inventory Control Manager- $35,000 • Order Fulfillment Representative - $34,000 • Security Guards -$30,000 x 4 • Packing Representative - $28,000 Thus, these 32 provisioning center positions would contribute approximately$1.4 million in new annual wages in the City, all of which would be subject to the City's income tax. These amounts are in addition to revenue related to property taxes,personal property taxes, application and renewal fees,and the City's share of excise tax revenue under the Medical Marihuana Facilities Licensing Act. Moreover, wherever possible, we will look to hire Lansing residents for each of -34- these positions, meaning that these wages would stay in the City and that the City's income tax revenue would be greater than if we hired non-residents. To date, we have also targeted two potential properties within the City that can house our grow and processor facilities: one is a 39,000 square foot industrial building that is currently occupied and the other is a vacant 110,000 square foot facility. On October 10, 2017, we entered into a purchase agreement for the 39,000 square foot building located at 1121 River Street in Lansing (tax parcel identification number 33-01-01-21- 279-041) for a price of$900,000. We are currently in the due diligence period with regard to this property, but intend to close shortly. As soon as we close on this property, we will submit an application for a Class C grow license and a processor license. Our intent is to invest approximately $1 million dollars in upgrading and building out this facility to accommodate one, and possibly two, Class C grower licenses, as well as a processor license. In undertaking this project, we are looking to partner with local contractors, architects, and engineers. To date, we have spoken to a number of Lansing-based companies and identified the following companies as those that we would retain for these projects: • Architectural—Rockwood Design, PC,East Lansing • Electrical—A/C Electric, Lansing • Flooring—Lansing Tile&Mosaic, Inc., Lansing • Mechanical—Superior Mechanical LLC,Lansing • Plumbing—Honeycutt Plumbing, Lansing In addition to the money spent on Lansing-based contractors, as a result of this project,we would create approximately 30 full-time employment positions, and would look to first hire Lansing residents. Depending upon skill, education, and experience, these positions will each pay approximately $20-$40 per hour in wages. This would result in approximately $1.25 million to $2.5 million per year in new wages paid in the Lansing area, in addition to increased property tax -35- revenue, application and renewal fees, and the City's share of the excise tax revenue under the Medical Marihuana Facilities Licensing Act. Additionally,if we obtain the I 10,000 square foot facility,our investment in the City would be even larger. The facility is currently vacant,so we would return it to productive status, thereby increasing tax revenue to the City. Additionally, we would invest several million dollars in upgrading and retrofitting the facility to accommodate at least one, and possibly three large grow operations.Again,we would look to hire local contractors,architects,and engineers in completing this construction. As a result of procuring this larger facility, we would likely create at least 60 full-time positions, also looking to first hire Lansing residents. Again, depending upon the circumstances,these positions would pay approximately$20440 per hour. In addition to property tax revenue,application and renewal fees,and the City's share of the Medical Marihuana Facilities Licensing Act excise tax, this facility would generate approximately$2.5 million to $5 million in new wages in the City. Overall, with our two provisioning centers, one grower, and one processor, we will create approximately 62 new jobs in Lansing, and contribute roughly $2.65 million to $3.9 million in annual wages.Additionally,if we are successful in opening our second, larger cultivation facility, we will contribute a total of approximately 120 new jobs with Lansing-based wages totaling approximately$3.15 million to $8.9 million annually. Few municipalities in the State are as well-positioned as Lansing to benefit from investment in the medical marihuana industry, and we are committed to being a positive part of that investment. We look forward to partnering with the City to create a long-term economic relationship that positively benefits us both. -36- EXHIBIT C 16 -37- EXPECTED JOB CREATION ESTIMATES As discussed above,we are looking to make a significant investment in the City of Lansing, both in terms of job creation and economic development. Moreover, for all of our positions, we would look to hire residents of the City of Lansing wherever possible, and we are looking to offer competitive wages, salaries, and benefits to our employees. For each of our provisioning centers, we anticipate creating at least 16 full-time, salaried positions per facility, with the following titles and salaries: • Executive 480,000 annual salary (—$38 per hour) • Chief Operations Officer/Facility Manager 470,000 (434 per hour) • Patient Outreach Manager-$60,000 (—$29 per hour) • Quality Assurance/Control Technician-$55,000 (—$26 per hour) • Nurse Field Representative-$50,000 (—$24 per hour) • Sanitation Specialist-$45,000 (—$22 per hour) • Office Manager-$45,000(422 per hour) • Community Outreach and Patient Education Specialist-$40,000 (—$18 per hour) • Addiction Prevention Directors -.$40,000(—$.1.8 per hour) • Inventory Control Manager-$35,000 (-$17 per hour) • Order Fulfillment Representative- $34,000 (—$16 per hour) • Security Guards - $30,000 x 4 (—$14 per hour) • Packing Representative- $28,000 (—$13 per hour) As noted above, we are applying for two provisioning center licenses in the City. This means we will create a total of 32 new jobs with annual wages of approximately $1.4 million. Additionally, nearly 70 percent of our employees will earn more than$15 per hour in wages. Additionally, as discussed above, we currently have a purchase agreement in place for a 39,000 square foot building located at 1121 River Street in the City. We will be applying for at least one Class C(1,500 plant)license at this facility,as well as a processor license.Consequently, as discussed above, we will create at least 30 additional jobs, all of which will pay approximately $20440 per hour in wages. In total, we plan to create at least 62 new jobs in Lansing, and contribute roughly$2.65 million to$3.9 million in annual wages.Additionally,if we are successful -38- in opening our second, larger cultivation facility, we will contribute a total of approximately I20 new jobs with Lansing-based wages totaling approximately$3.15 million to$8.9 million annually. -39- EXHIBIT D 17 -40- CHARITABLE PLANS AND STRATEGIES Like all of our other businesses,we want to be good corporate citizens and good neighbors. We also understand that marihuana still has a stigma, and that, because of this, proactive and positive outreach is important. To this end,we have developed a comprehensive plan to engage in charitable activities that will benefit the Lansing medical marihuana community and the City at- large. All charity begins at home and,for us,that means investing our time,resources,and energy in our neighborhood. To this end, we are currently looking for local parks and playgrounds that we can "adopt" and maintain, whether that be landscaping, repairing or repainting equipment,or ensuring that the park is properly supported. We also wish to not only donate our time, but also our resources. To this end,we will actively look to sponsor events throughout the City of Lansing, whether that means sponsoring 5K races or golf outings. While we are not in the general vicinity of residential areas, we also want to help the residents of south Lansing.To this end, we will be organizing various events throughout the year that will help to benefit area residents. For example, we plan to organize a coat drive in order to provide needed winter clothing to many in the area. Similarly, we will be using our facility as a drop-off location for a number of charitable causes, including receiving gifts for Toys for Tots near the holidays,and also operating a canned food drive for our employees and customers.Finally, we are also planning to host a Thanksgiving turkey giveaway,with the hope of giving away more than 100 frozen turkeys to area families in need. As a medical marihuana retailer, we are also very sensitive to issues related to substance abuse in the community. As a result, we are committing to donate approximately $100,000 over the next five years to the Community Mental Health Authority of Clinton, Eaton, and Ingham -41- County for its Substance Abuse Services and Corrections Mental Health programs. These donations will go to assist individuals suffering from drug and alcohol dependency in the Lansing area, and will also help individuals incarcerated in local jails to overcome substance abuse issues that may be the root cause of their criminality. Additionally, we plan on offering reduced prices to certain segments of our customers. First, we believe that marihuana is a beneficial medicine, and that it should be affordable to all who might benefit from its use. This is particularly important as insurance does not cover medical marihuana use, as it does with prescription medications. Recognizing the cost of this substance, we will offer reduced prices to individuals who are below certain income thresholds. Moreover, we will also be offering reduced prices to individuals who are veterans of the armed services.It is well-documented that many veterans who have returned from war zones suffer from Post- Traumatic Stress Disorder,and that the use of medical marihuana can greatly benefit many of these individuals. As such, in recogrCition of their service to our nation,we will be offering discounts to United States veterans. Finally, we are an industry that is heavily-reliant upon science and technology.To this end, we are absolutely dependent upon employees who are knowledgeable about those topics. Thus, we wish to partner with Lansing Public Schools in order to donate computer and laboratory equipment that can be used in teaching science, technology, engineering, and mathematics ("STEM") classes. -42- EXHIBIT E 18 -43- AFFIDAVIT OF STEVEN KESTO STEVEN KESTO, first being duly sworn, states: 1. I am a Michigan resident, and owner of 5273,LLC. 2. I spoke to the lawyer for 5273,LLC for our Medical Marijuana Provisioning Center application to the City of Lansing 3. As part of the application I was in charge of advising the lawyer the charitable contribution plan. 4. The lawyer made a typographical error when transcribing the amount of charitable contribution 5273, LLC will provide each year. The figure written of "$25,000" per year is incorrect. The proper figure should have read "$250,000" per year as that was the commitment made by my client, 5273, LLC. FURTHER AFFIANT SAITH NOT. I declare under oath that the above statements are true to the best my knowledge, information and belief. i If DATE Steven t STATE OF MICHIGAN ) )ss COUNTY OF OAKLAND ) Subscribed and sworn to MAY TOU before me on this ial�day FA&ftq Y PIJeUC.BTAZ of August,2018 �^m"�QA o" �EWres .�Cody Of ,Notary Public —A ounty Michigan, - Acting in County _ My Commission Expires: ` {00176930} -44- EXHIBIT F 19 -45- City of Lansing Provisioning Center Ranking it .R. R .Posstb,�ee ACY HOLDINGS,LLC AEY HOLDINGS,LLC prt+wt�uC�f LK•F fir" — 3425 S MLK Jr Blvd .�V�,af jfjgrr^���e�S[(g (��,g•e n .. Applicant provides many detailed examples of marketing,advertising,promotion,and 4 minor minimltallon(e.g.,age verified website,no ads designed forminors,social media, ;�.'pt�.h •.,'.s brandedapparel.ete). �r fl A- 1 d ' Applicant Indlatn they will lease the 3,724 sq.ft.building at 34255 MLK Io the f'➢ iafi k"z y 5? d?/Zz provisioning center(investing approximately 51 million in Improvements),op—lea Jy;4"r �•.. [ *db y�ni. 9 second PC at 6001 S.PA Ave..purchase a 39K sq,it.building for processing($900K)and dip Q"'vvv�r p� ill t` . t r$' '• considering investing Ina 110Ksq-IL building for growing(several SmilRon). Lacks y'v fs •.,E'*.-,`f;. "�" cc...� a,t• - '+`•" ownership and a dofinlLive plan for Investing in a grow facplty, t. 6y �%IYQ,ei trr` ae b eaftQd�gc7 �tv „r ?"4a�'�`.�..• H Appliant Indicates about62 new Lansing jobs and up to 120 new job;i(they punuaand 3 open the larger grow ladllty.Type of jobs are detailed along and worker training ,.r program. Fall,'hortofan optimal number cf)ohs and a derritive—n-itmens tothe �t :'. ...,,• larger grow fadity. 11c 1 , Applicant rovidesP proof of access to SS million with supporting documentation(e.8,%IB 1' I7 rfsr�'�1 U' r ai,� letter),linking'hit to their business plan and anticipated operating expenses.Note that sB_­�ry� Qone owner agrees to pay$701(by live hudnesc days of repelving busiTxn license to operalothe provisioning center(In addition to$40K already in place from the other ie(` _ ,"• owned.Edstfn¢Ilquld assets more than mver$loa,000. M a�el's�*t lftfite t a if � �`', 2 Appflantlndiateslhey will Integrate their provisioning center with a Class C(1,5o0 esFyrC Yl e s:3s j:_+, plant)grow operation to be located at 1121 illver Road. ,I'M Appliant provldeseamples of organlallons[heY would like to partner with(e.g.,adopt �i M-1-411yj ? 3 _ P,alsnd a park,coal drives,turkey giveaways.etc)and dltcustes their long-tttm goal or spending 2 $251c/year to Community Mental Health,plus donate computers and equipment to schools.Fa11s short or optimal dollar commitment potential and lacks proof of actual h mot, Payment or an executed agreement. Agg WA U d r Ofl! en3e� ,�n .. "� Appllantindlatesthe provisioning center will have atleast i6full•tkne salaried 2 S6 i 5 CT�t)tp g )$fs3 4 employees and prov des a sieve iption of job tltlrs and salaries.Falls short of an optimal level or details. twig 1 APPIIcantincilate,sthat not all provisioning center positions will pay at least$15 per P(il-�''' ". hour,Falls short of the optimal amountafmmpanatlon and support details, q " ki< , {ll .• 2 1 Applicant indlates 11 of15(69%)provisioning center emplayees will earn at lean S35/houo Falls short or the optimal percentage. ;$ Applicant provides projected annual budget and revenue number(e.g,,SL4 million In Jg expcnsm and$16 million In revenuesl and gerimllydescribes The source of These 1 n t s m t j 1 numbers.However,they do not provide anyllne item details(he.,financial spreadsheutl a8euer► � jt�� �T?+.i';{ showing how these numbers were derived.Inds sufficient details. -46- City of Lansing Provisioning Center Ranking '#YnJGf MS �S �A A ppilonl provides litigation compliance verification forms(or all key team members. �'+�'i '{�11a(1vEtesQtlrce `.F. 5 Applicant proves they have more than S100K In the bank,and access to a$5 million fine of Credit from a respected lender. � a Applicant Indicates they have a[least 9Yean of medical marihuana industry nPerience, I s� 3 S fr L ❑e L r i plus decades of otherapplfoble business experience(retail management,highly rPt "� 5 uorindus regulated ll q try,etc),plus have access to an advisory board who have decades of applicable eaperfence. " 'a�t e Uffj a` d 4 r n,a o slob i�t{s , Qf'S31 Q elJWkl 3 Treasury letter for minor issue and Facility Man letter to orre from bufldlne salety a IF r � l Ire-51, al jO�p2�P�3 (Nd s'��s� � ' S Good bafflers&distance from residential -J'.> t3l�SS _Mereff sei( a ¢ r, e S Goodplan s�efrtr ] d;¢ in p "'s y37 Tier 1 Aa security Plan,5 is traffic Strong vaf0c pagems,driveways,parkin,and �{ 10 N P 6 eyyTTLtlt 4*ti� �F tab 10 rtv pcve e rgna I 1 t es n�T�et`,7•a �fQ,y,�_S•,p�) 2 Some chi are indkared an the hoar plans submitted �� i�rs`� P(a t to ie`�iimlgaYe 4 'r }0 �-. y �'� 1 traffic plan Included 111 • -'�, IS�X�s' 0 Imdequaro noise plan la ;ta a el mkt y 3MR �•7 3 three Independent air filtration technologies - rat Ys a`Ja"zo 2 S&E alarms-1 Bar check-1 BaE report-1 light Call-7 Met-1 MOOP cog-T medical eoh-a WIN ; Double eah-1trespassing This may be VILasufp mall.2S.1, to "� 3 minar tact Issue 0 Inadequate hlnory for Stakeholder -47- EXHIBIT G 20 -48- LAND USE AND IMPACT ON SURROUNDING AREA Our facility at 6001 S. Pennsylvania Avenue is an ideal location for a medical marihuana provisioning center, and will not have a detrimental impact on the character, traffic flow, or resident safety in the surrounding area. As a threshold matter, the facility is not abutting or adjacent to any areas that are zoned for residential use. As such,there are no concerns about the proposed facility's impact on surrounding neighborhoods. Rather,the facility will be consistent with the surrounding geographic area,which, according to the Land Use Plan in the Design Lansing 2012 Comprehensive Plan (the "Comprehensive Plan") is predominantly "Suburban Commercial" and "Light Industrial." According to the Comprehensive Plan, "Suburban Commercial"areas include a"conglomeration of larger footprint retail, small strip malls, smaller freestanding retail and service uses and office buildings..." In the immediate vicinity of our facility are a bank, several automotive dealerships, a strip mall, and several additional retail and office buildings. Thus, we feel that having a provisioning center in this area is consistent with the general business aesthetic in the area,as well as the Comprehensive Plan. Moreover, we are sufficiently removed from any residential areas as to not have a detrimental impact on any housing. Finally, we will also be conducting outreach to all neighboring businesses in order to provide contact information that can be used if the business witnesses any suspicious activity in the vicinity or has a complaint related to our operations and the impact on their businesses. We strive to be good neighbors and will work closely with any aggrieved neighbor to mitigate any potential issues that may arise. The facility is currently a vacant building that was previously utilized as a retail facility known as The Teacher's Store. Having been vacant for an extended period of time, we are looking forward to returning the facility back to active use. We plan to make significant physical -49- improvements to the building. Over the next several years, we plan to invest approximately$1 million into renovating the existing facility in order to upgrade it to meet our specifications and safety protocols. We understand that there is always a concern related to criminal activity when a medical marihuana-related facility is located in any area. To this end, we plan to take every precaution to enact security measures that both protect our property and ensure that our facility does not have a detrimental impact on the businesses surrounding us. Aside from the extensive security measures employed within our facility—which are documented in our Security Plan—we will also employ four full-time security guards for the facility, at least one of whom will be on premises during all hours of operation. These individuals will not only inspect the interior of the building, but will regularly check the exterior of the building,parking lot, and adjacent areas for suspicious activity. The building will also have at least eight security cameras on its exterior, which will be able to record all activity nears points of ingress and egress, as well as the parking lot and rear of the facility. Finally, our building and parking lot will be well lit to discourage intruders or unauthorized access.We plan to install flood lights and motion-detecting lights around the exterior of the building, including in the rear of the facility. We believe that these extensive internal and external security measures will create a facility that is safe and secure,not just for our patients and employees, but also for the surrounding community. Additionally, another component of our security plan is to regularly interact with our neighbors and local law enforcement, including the Lansing Police Department. Each of our neighbors will receive contact information for the facility's manager,and will be instructed to call, day or night, if they observe individuals loitering near the premises or other suspicious or questionable behavior. We will also proactively engage with our neighbors to discuss any such -50- I � activity. Additionally, prior to commencing operation, we will invite the Lansing Police Department into our facility to meet with our manager and security team,and to do a walk-through of the premises. We will actively seek input from law enforcement on an ongoing basis with regard to facility security and potential enhancements. Finally,the facility is located on South Pennsylvania Avenue,which is aheavily-trafficked, four-lane thoroughfare with a center turn lane. As part of our business planning, we are sensitive to minimizing activity to ensure that traffic in the area is not negatively impacted by our operation. According to the Comprehensive Plan, the segment of South Pennsylvania Avenue along which our facility is located is a "corrective corridor segmento with high driveway densities and congestion." As a threshold matter, we do not believe that our facility will create traffic issues along South Pennsylvania Avenue. However, we will employ several strategies to attempt to mitigate any potential issues. First,our facility is directly adjacent to a stop on the CATA bus line, so we intend to encourage patrons to use public transportation whenever possible. Second,we will regular maintain the sidewalks adjacent to our facility in order to ensure that individuals wishing to walk or bike to our facility are able to do so. Finally, our facility parking lot has two entrances: one on South Pennsylvania Avenue and one on the adjoining side street, Andrew Jackson Drive. In order to minimize the potential for traffic accidents, and so as not to increase traffic on Andrew Jackson Avenue,we are considering closing or barricading this entrance.Thus,patrons would only enter our parking lot via South Pennsylvania Avenue, thereby minimizing the potential for traffic accidents. Additionally, our facility currently has 13 available parking spaces in the front of the building. We are exploring the option of adding additional parking spaces in the rear of the facility to be used for employees. This would allow ample parking in a safe, well-lit lot. Moreover, by -51- 7 potentially closing the parking lot entrance on Andrew Jackson Avenue, we also ensure that patrons do not use street parking, which also tends to increase traffic accidents. Overall, we believe that the commercial setting of our facility, as well as the precautions and plans that we will implement and exercise will allow our provisioning center to operate without having a detrimental impact on the surrounding area in terms of criminal activity,odor, noise,and traffic flow. -52- Medical Marihuana Application: 5273 LLC City Clerk Summary of Key Findings Tangible Capital Investment Because of the City's declared interest in promoting economic development, including job creation and training, Tangible Capital Investment shall include proposed medical marihuana establishments. Factual data must be presented to support each claimed proposed medical marihuana establishment. Based upon the information provided by the applicant, the City may consider whether the proposed medical marihuana establishment is definite, feasible, or speculative. The Clerk's Office defines a tangible capital investment as an asset that has a physical form. Noise Plan In response to the Appeal statement that the "SOP" stated how the noise was reduced, an additional review of the six different "SOP" sections found no heading or details about a noise reduction plan. Floor and building plans were not reviewed in any application to determine for scoring noise reduction plan. Litigation History After an intensive reviewing of the whole application, the missing stakeholder's litigation form was not found. Entrance and Exit on Main Streets, Adequate Parking not on Residential Streets, and Quality Security Plan It was discovered on August 23 that the Security Plan was not reviewed by the Lansing Police Department, and was sent immediately. After the review was completed, an additional 2 points was awarded for the "Entrance and Exit on -53- Main Streets, Adequate Parking not on Residential Streets, and Quality Security Plan" Category. However, the new score of 67 points is still too low to make it into the top 20. -54- ;n, @ �$-04 Q D§ $}%\ - § I�Eo ( E �] cr g « em < ) eE0 > r- \!] m c«��» c n Boo - En0 M} ©: ° 0w nA \ § § \ / { % 0 \�} ƒ q / / / \E kCD / 0 > _ 2 � m N) w � & � �_ \ § }6 0 / / / [\ D ) q k (\ § 2 / 2 / $ / ° § m n 2 K 7 00 R G 202 E\\ ? ® 2 / ° M { 01 § ` o of � & mu [I} o q 3n � 0 �&c A 0 § k ( $ 2 § £i§ 3 Q F D m\% 0 / « E e E o ;=2 �_ o m @© q s m c 2 CD m 0 \ 0 _ \� 0 k » " 2 9 / \ E § ; Q \i/ $ f k q g } - 0 * $ 7 0 \ § 2 E E }\ k )\� / / ~ 7 2 0 $ [ � R U; c C § n ko m }$\ � § 2 a EF CD � rr' k\ &/! w Ch - CD Cl) o cn CD \ k � k2 � § _ CD e2 � � / § \� = / E fID w t) m7 § . p m / CD -55- y�N S I�G Chris Swope Lansing City Clerk cHIG �' October 15, 2018 5273 LLC c/o Steven Kesto 6125 Lydia Court West Bloomfield, MI 48322 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 6001 S Pennsylvania Avenue. I have determined your appeal is denied. Based upon your appeal and due diligence by the City Clerk to ensure the most accurate and appropriate scoring, please find enclosed an updated score sheet relating to your application for licensure. 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 pursue a Commission appeal, your appeal hearing date will be Saturday, November 17, 2018 at 10:00 AM at a Lansing location to be determined. The Medical Marihuana Commission Appeal will become a matter of public record. 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. 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. Lansing City Clerk's Office Ninth Floor, City Hall, 124 W. Mi n Ave., Lansing, MI 48933-1695 517-483-4131 -56--377-0068 FAX www.lansinami.gov/clerk city.clerk@lansingmi.gov 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 the temporary operation are satisfied. Sincerely, CZ14--4 J;� Chris Swope, CMMC City Clerk cc: M. Yankowski, Lansing Police Chief J. Smiertka, Lansing City Attorney Lansing City Clerk's Office Ninth Floor, City Hall, 124 W. Mi n Ave., Lansing, MI 48933-1695 517-483-4131 -57--377-0068 FAX www.lansin.qmi.gov/clerk city.clerk@lansingmi.gov 5273,LLC ("APPELLENT")APPEAL Prepared by Michael D. Stein,Esq. Chad Proudlock Virg Bernero -58- TABLE OF CONTENTS Page(s) TABLE OF CONTENTS.............................. STATEMENT OF ISSUES PRESENTED.............. .................... I. INTRODUCTION....... 1 II. STATEMENT OF FACTS.............................. III. STANDARD OF REVIEW.......... IV. ARGUMENT........................... 2 .................................................................................... V. CONCLUSION................................... .................................. 12 ............................................ VI. RELIEF REQUESTED..................................................................................................... 12 ii -59- STATEMENT OF ISSUES PRESENTED 1. WAS THE REVIEWER'S DECISION SUPPORTED BY COMPETENT MATERIAL, AND SUBSTANTIAL EVIDENCE? Appellant Answers: No 2. WERE THE APPLICANTS SCORES BASED ON CLEARLY ERRONEOUS FINDINGS Appellant Answers: Yes 3. WERE THE APPLICANTS SCORES BASED ON IMPROPER/INCONSISTENT SCORING Appellant Answers: Yes 4. DID THE SCORING METHOD COMPLY WITH LANSING'S ORDINANCE Appellant Answers: No 5. SHOULD THIS CITY CLERK REVERSE THE DECISION TO DENY APPELLANTS APPLICATION? Appellant Answers: Yes -60- I. INTRODUCTION This appeal involves highly recognized and awarded local Michigan residents, and an internationally renowned cannabis consulting company who have been successful with cannabis licensure in California, Colorado, Arizona, Michigan, and Canada. The applicant has applied for a Provisioning Center license in the City of Lansing under its ordinance and in accordance with the Michigan Medical Marihuana Facilities Licensing Act however, Appellant's license was denied for purported insufficient material. Quite simply, the City of Lansing either did not fully review the entire application or ignored the sufficiency of the plans provided. Appellant has therefore filed an appeal to the City Clerk as its only avenue to seek review of its score and status in the City of Lansing and asks this Clerk to reverse the City's decision due to lack of material, competent, and substantial evidence, erroneous and improper scoring and failure to score the application in accordance with its own ordinance. II. STATEMENT OF FACTS A. APPELLANT'S MMPC APPLICATION Appellant, 5273, LLC ("5273") is owned by highly recognized and awarded local Michigan residents, and an internationally renowned cannabis consulting company who have been successful with cannabis licensure in California, Colorado, Arizona, Michigan, and Canada. 5273 timely filed an application for an MMPC license with the City of Lansing for the location of 6001 S. Pennsylvania Ave., Lansing, MI. B. PROCEDURAL HISTORY On or about July 31, 2018, 5273 received an email from your office advising that it would not be selected to receive a Provisioning Center license. The correspondence from your office indicated -61- that the basis for the denial was as follows: "Your score of 65 out of 100 eliminates the possibility of scoring in the top twenty. Therefore, your application for licensure is denied." In addition, the denial correspondence included the applicant's sub-scores based on the ordinance criteria along with a brief summary of determining factors for each sub-score; this scoring sheet is also attached (Exhibit A). Thereafter, Appellant appealed and was assigned a "hearing officer" to review the score. The hearing officer determined another two points were warranted. On October 15"', 2018, 5273 received an email from your office advising that it would not be selected to receive a Provisioning Center license but the score was adjusted to 69. In addition, the denial correspondence included the applicant's sub-scores based on the ordinance criteria along with a brief summary of determining factors for each sub-score; this scoring sheet is also attached (Exhibit A-2). The hearing officer decision recommendation addresses the standard of review which Appellant clearly stated in its appeal and only analyzes two of the eleven arguments Appellant raises as part of its appeal (See Exhibit A-3, Hearing Officer Letter). The hearing officer acknowledges the "Tangible Capital Investment" & "Entrance & Exit" arguments(recommends 2 additional points) but does not provide any rational or response to Appellant's arguments in 12 other categories. After this denial, 5273 is left with no further avenues for reconsideration of the City's administrative decision. Therefore, 5273 files the instant Appeal. III.STANDARD OF REVIEW The basis for this appeal is (1) the scoring is not based on competent, material and substantial evidence; (2) Scoring Insights are based on clearly erroneous findings; (3) Applicants scoring 2 -62- was based on improper/inconsistent scoring; (2) Scoring methods do not comply with the ordinance; and (3) Scoring was an abuse of discretion. Although Appellant recognizes the Clerk's office is not a court of law, the applicable standard of review is 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 NW2d 621 (2011) (quoting Dowerk v Charter To of Oxford, 233 Mich App 62, 72; 592 NW2d 724 (1998)). Furthermore, scoring must be proper, consistent, comply with the applicable ordinance and not an abuse of discretion. IV. ARGUMENT A. Tangible Capital In vestment in the City of Lansing(Investment in applicants other provisioning centers was not Included in score). The scoring insight for this category states, in part, as follows: "Applicant...lacks Ownership and a definitive plan investing in a grow facility." This is erroneous as the applicant clearly states it will be investing in a grow at the 1121 River St. location AS WELL AS another larger 110,000 square foot facility (See Exhibit B). The scoring in this section also fails to recognize applicant has already made a commitment via signed legal documents investing in two provisioning center locations (6001 Pennsylvania and 3425 S. MLK) AND a processing center located at 1121 River St. Applicant was punished significantly(9 out of 15 points)because of a misinterpretation of the plan by the reviewer. The reviewer acknowledged the lease cost and cost of improvements to the first provisioning center and the cost of the processing building but disregarded or misinterpreted that another $1,000,000 in property improvements will be made to the second dispensary and 3 -63- another $1,000,000 (could be as much as $5,000,000) would be made to the processing center whereby an old dilapidated eyesore will be turned into a viable facility, and further choose to punish the applicant for what it believes is a non-committal to a fourth cultivation facility. A plain reading of this section of the application demonstrates a full committal to a fourth building as it says "we have targeted two potential properties", one of which applicant has under contract and the second which they are actively pursuing (See Exhibit B). The reviewer interprets this as a wavering committal however it's a full committal which has since been acted upon as the building is currently under contract with applicant's affiliate company. In regards to the fourth building the plan states "we would invest several million dollars in upgrading and retrofitting the facility to accommodate at least one, and possibly three large grow operations" (See Exhibit B). The reviewer's note that this is not a definitive plan is erroneous, inaccurate and a blatant attempt to "deduct" points where they should not be deducted. Although a specific figure is not given, "several million dollars" indicates a figure of at least$2,000,00045,000,000 and the score needs to reflect this tremendous additional investment in Lansing. Lastly, in the "plans to integrate facility" category the reviewer notes the applicant will "integrate the PC with its Class C license." In other words, the class C license is recognized in one category but not the other. This type of scoring is improper and inconsistent and must be adjusted upward by 6 points. B. .lob Creation (Integrated System) Overall number of jobs created In the category entitled "Job Creation", the reviewers determined that "62 new Lansing jobs and up to 120 new jobs will be created if they pursue and open larger grow facility.... Falls short of optimal number of jobs and definitive created commitment to the larger grow facility." The applicant was only awarded 3 out of 5 points due to this alleged deficiency. Again, the 4 -64- reviewers finding of non-committal is inaccurate. The plan details applicants desire to obtain the building and without giving the address, which would be made part of the public record, identified the building by is square footage (See Exhibit B & C). It's clear the applicant wants the building and was aggressively pursuing the purchase of the same. As further evidence of improper scoring, the reviewer determined the job range was 62-120 when in fact the number is 62 plus jobs for "architectural, electrical, flooring, mechanical and plumbing" all from Lansing based companies in addition to the 120 jobs brought about by the cultivation facility (See Exhibit C). The total planned jobs for all business's is not 62, it is 62 plus tradesman plus 120 cultivation jobs for a total of well over 182 jobs which is more than worthy of an additional 2 points and a perfect score in this category. C. Charitable Plans and Strategies. Applicant provides specific companies for whom they will partner with (e.g., DARE, community health Organization, food drives) and discuss their long term financial contributions based on meetings with each specified company (See Exhibit D). In fact, applicant pledges to give $50,000.00 for 2018 even though the facilities might not be open and operational. The plan calls for a $50,000.00 charitable contribution for the 41h quarter of 2018 alone (See Exhibit D). This is a substantial figure for only one quarter of operation. Obviously, charitable contributions don't decrease, they increase, and that is the applicants plan moving forward. The principle responsible for transcribing the plan clearly made a typographical error when typing the figure of "$25,000". The proper figure, and in congruence with the stated 40' quarter 2018 donation is "$250,000" for the entire year with plans to increase it by 25% each year. As evidence of this scriveners error, the applicant, Steve Kesto, has attached an affidavit attesting to the typographical error (See Exhibit E). $250,000 in charitable contributions per year is substantial 5 -65- and merits being awarded the full amount of points. In addition to financial contributions, the principles also encourage its employees and owners to volunteer their time. Specific references to charitable organizations represent more than mere conjecture and demonstrate proof of a well thought out plan. This plan along with the appropriate figure of $250,000 in charitable contribution commitments per year and volunteering time demand an additional 1 point for full points in this category. D. Number of Jobs at the Provisioning Center. This category deals with the"number of jobs"at the provisioning center NOT job description even though applicant gives a job title for each role. 5273 clearly indicates "16"jobs per PC as well as ancillary jobs for tradesmen. It is improper and an abuse of discretion to take away points for "lack of details." Furthermore, 5273 gives a title for each job held. Is it that hard for a reviewer to discern what a "security guard", "executive", or "Patient Outreach Manager"does? 5273 can only assume a Medical Marijuana Provisioning Center reviewer would have a cursory knowledge of these roles in a cannabis business and would be able to identify general job responsibilities based on titles. Does an attorney need to explain his duties or is this common knowledge amongst professions? Explaining job duties to reviewer's who should have common knowledge of the cannabis industry in a category simply asking the # of jobs is unfair and unnecessary. Based on the # of PC jobs created an additional point should be given as anything less than a perfect score is an improper score and further abuse of discretion. E. Amount and type of compensation: and Percent of Employees Earning at least$15.00 per hour Applicants "Job Creation" analysis demonstrates at least 84% of its employees will make over $15.00 per hour not 69% as noted by the reviewer (See Exhibit C). The only job for which 6 -66- applicant is responsible for setting wages who may not initially cam $15.00 per hour is a "Packing Representative". Generally, security guards are contracted from security companies such a LaGarda or Prudential Security. The security contractor is responsible for setting its employee's wages. Applicant is not in a position to set wages for employees of companies it contracts with and therefore cannot be deducted points because of a third parties set wages. Additionally, the lone position who's purported hourly rate is under $15.00 per hour actually makes $15.22 per hour. When you take into account the # of hours worked per year (1,920 hours) minus 2 week's vacation you get 1,840 hours per year and makes the hourly rate $15.22 per hour. This position, as stated in the job creation plan also receives supervisor training and employment education provided by management to help these individuals move up in the company hierarchy. Applicant received 2 out of 5 points solely because one listed position (the entry level position) had an inaccurately listed hourly rate of$13.00 per when in actuality it is $15.22 per hour. A 3 point deduction is an abuse of discretion and an improper score. Applicant deserves at least an additional 2 points for high paying positions its offering and for paying 84% of its staff more than$15.00 per hour. F. Sufficient Financial Resources The scoring insight for this category states that"Applicant does not provide a complete litigation compliance verification form for the key team members. This is incorrect. The checklist prepared by the Clerk's office upon receipt of the application on December 15, 2017 did not indicate this was missing. In fact, the applicant and stakeholder stated they have no litigation history. This disclosure is in full compliance with Ordinance No. 1217 § 1300.6(4). Again, this is very perplexing that this item was supplied and referenced in the Table of Contents but scored as if 7 -67- nothing was supplied. The reviewer also notes that applicant "proves it has $100,000 in the bank and access to a $5,000,000.00 line of credit" which is 50 times more than the required capital to operate a PC in Lansing. As further evidence of improper and inconsistent scoring, applicants second PC application was rightfully scored a 5 out of 5 in this section and this score should be adjusted upward to match the 5 out of 5 so rightfully deserved(See Exhibit F). G. Content and Suffcciency of Information;Professionalism of submitted documentation including clear labeling of required items. The reviewer insight comments do not reference a single issue with "content and sufficiency of information" or "professionalism of submitted documentation including clear labeling of required items". Taking two points was another blatant attempt to erroneously steal points from an otherwise impeccably drafted application. Why would applicant be deducted two points for a minor issue that was cured? 1) no issue as to the application presentation was cited and 2) the "minor" issue was cured immediately, which was a $50 tax from over 10 years ago. The applicants run very successful businesses with thousands of transactions a year without any issues, own licenses pertaining to liquor, alcohol,tobacco, construction etc....why would a minor issue warrant a loss of 40% of points in a category? This deduction is unwarranted, an abuse of discretion and excessive. 2 additional points should be awarded in the category. H. Buffering between residential zoned areas and establishment. The applicant was only awarded 3 out of 5 points and the comment states "inadequate buffering but not close to residential." Ordinance section §1300.13 is entitled "Location, buffering, dispersion, and zoning requirements for medical marihuana provisioning centers." 8 -68- Specifically, the applicant's location is zoned F-1 Commercial and, as such, a provisioning center is permitted in this zone. Ordinance §1300.13(B). The buffering between the subject property and the residential has been approved by the City of Lansing and meets the screening and buffering requirements of the Lansing Zoning Ordinance in Chapter 1290. There is no authority in the ordinance to deduct points for being "not to close to residential" when the location is in a permitted zone and has complied with the buffering requirements in both the general zoning ordinance and the medical marihuana ordinance. The reviewer cites no complaints or issues from adjacent residential properties. The city council did not adopt a setback or buffering requirement for residential properties adjacent to a provisioning center in and F-1 Commercial zone, and there is no basis to administratively determine that this is too close to homes when city council already made the determination legislatively. An additional 2 points should be added. Additionally, the applicant was initially awarded 4 out of 5 points in this category. Mysteriously, upon Appellants appeal, nine months later&several months after sending 5373 its score, the City re-measured the distance from residential zoning with a "better measurement tool" and a point taken away. Appellant seriously questions the motives behind this unordinary conduct wonders whether all distances for all applicants have been re-measured with a "better tool". The "re-measurement" that occurred on 9/18/18 is both highly unusual and not permitted under the ordinance in any manner. Moreover, both scoring sheets still list the buffering as"Not to close to residential". The reviewer cites no complaints or issues from adjacent residential properties. The city council did not adopt a setback or buffering requirement for residential properties adjacent to a provisioning center in and F-1 Commercial zone, and there is no basis to 9 -69- administratively take away points based on a "new measurement" with a "better tool".. An additional point 2 points should be added. I. Increased traffic on side streets Applicant provided a robust "Land Use" plan to minimize traffic on the side streets. In fact, the plan specifically address's "traffic control renovations". The plan states "we will employ several strategies to attempt to mitigate any potential issues. First, our facility is directly adjacent to a CATA bus line, so we intend to encourage patrons to use public transportation whenever possible. Second, we will regularly maintain the sidewalks adjacent to our facility in order to insure that individuals wishing to walk or bike to our facility are able to do so.....In order to minimize the potential for traffic accidents, and so as not to increase traffic on Andrew Jackson Avenue, we are considering closing or barricading this entrance. Thus patrons would only enter our parking lot via S. Pennsylvania Ave" (See Exhibit G). The "major renovations" which the reviewer calls for are in fact discussed in the plan and would eliminate increased traffic on the side streets. Why are no points given for this proposed improvement?A 4 out 5 might be warranted if no improvements were planned however that is not the case. Based on applicant's plan to further minimize side street traffic 1 more point must be awarded in this category. J. Entrance and exit on mail: streets, adequate parking not on residential streets, and quality of security plan. The applicant only received 6 out of 10 points and this category address three separate issues: Entrance and exist on main streets. This facility is located a very busy main thoroughfare, S. Pennsylvania Ave., and the entrance and exits are on "main streets." There is nothing more the applicant could do to comply with this requirement. Applicant provided a robust "Land Use" 10 -70- plant to minimize traffic on the side streets. In fact, the plan specifically address's"traffic control renovations". The plan states "we will employ several strategies to attempt to to mitigate any potential issues (See Exhibit G). "First, our facility is directly adjacent to a CATA bus line, so we intend to encourage patrons to use public transportation whenever possible. Second, we will regularly maintain the sidewalks adjacent to our facility in order to insure that individuals wishing to walk or bike to our facility are able to do so.. An order to minimize the potential for traffic accidents, and so as not to increase traffic on Andrew Jackson Avenue, we are considering closing or barricading this entrance. Thus patrons would only enter our parking lot via S. Pennsylvania Ave" (See Exhibit G). Minimizing side street access is discussed in the plan and would eliminate increased traffic on the side streets. Why are no points given for this proposed improvement? Based on applicants plan to further minimize side street traffic more points must be awarded in this category. Adequate parking not on residential streets. The applicant showed the site plan that depicts an adequate number of parking spaces with handicapped (H) accessible spaces indicated. The applicant meets the ordinance requirement for parking and there is no use of parking on residential streets. There is nothing more the applicant could to comply with this requirement. Quality of Security Plan. A complete and comprehensive security plan is provided. The owners assume responsibility for all security operations. The applicant indicated that it trains employees on security and storage of product pursuant to LARA Emergency Rule 43 (see security plan). The applicant provided a full security plan showing the following: Interior and Exterior Lighting Plan, Alarms, Barriers, Recording/monitoring devices, Security Guard, and Visitor Log. The security plan shows full compliance with LARA Emergency Rule 27 with respect to recording 11 -71- and monitoring devices (30+cameras and 60 days of recording maintained) and Emergency Rule 21 for a visitor log. Specific equipment, plans, and designs in place have exceeded the emergency rules, and was based on the security consultants 25+ years of experience in building facilities and business in the narcotic, tobacco, alcohol, and pharmaceutical industry throughout North America. There are three items scored in this category and the applicant was fully compliant with items one (1) and two (2). The reviewers offered no insight why this is a"poor security plan." It is an abuse of discretion to deduct 6 points without any explanation where this falls short of the requirements in the ordinance and state laws and regulations governing facility security. In light of the other errors, raising the possibility that the reviewers missed items that were actually supplied, we request another review of this scoring item and an additional 6 points. K. Improvements made or proposed to building The scoring insight for this category states (incredibly) "Some Improvements will need to be made."Please review the following which contradicts this statement: • Please see the section entitled "Planned Tangible Capital Investment in the City." Over $1,000,000.00 in improvements are planned. This documentation was submitted in compliance with the ordinance at §1300(12)(M. • A full set of architectural drawings was submitted with the application materials. Included are the site plans, floor plans and building permits along with accessibility (ADA)notes and details all of which show significant improvements will be made. Upon appeal a point was deducted from the original score without any basis. Now 2 more points should be added. L. Plan to minimize noise, 19 -72- In spite of the voluminous submissions by applicant addressing this issues, the applicant was awarded zero points for this category. In regards to noise, the applicant provided a full set of architectural plans with city building permit approvals for all required categories and compliance with the applicable building codes and SOP's which state how noise is reduced. Please add 2 additional points in this category(See application SOP's). M. Demonstration of Regulatory Compliance Applicants own and operate several cannabis facilities generating sales and revenue over $10,000,000.00. No issues are cited by the reviewer accept for what is termed a "minor tax issue" that was noted as corrected by the reviewer. The stakeholders demonstrate not one single issue with its business operation yet the reviewer deems it necessary to deduct one point for a minor tax issue that was cured, which was $50 in taxes owed from over 10 years ago. The applicants run very successful businesses with thousands of transactions a year without any issues, own licenses pertaining to liquor, alcohol, tobacco, construction etc... This is yet another blatant attempt to deduct points for no apparent reason and represents a gross abuse of discretion. There is no reason a full score should not be given to applicant for its stellar record of regulatory compliance across North America. Please add 1 point in this category. N. Litigation History 0 out of 2 points in this category is absurd. First, the litigation disclosure form was provided and showed no history of litigation. For a multi-million dollar company to have no litigation history is an anomaly and should be rewarded not punished erroneously. Furthermore, as part of its "experience" section, applicants attest to the fact they have no litigation history. The applicant& stakeholder's significant business history and lack of litigation history demand 2 out of 2 points in this category. 13 -73- V. CONCLUSION On behalf of the applicant, we request an immediate review of this appeal as we have raised serious concerns about the competency of this review and scoring that has missed many items that were actually supplied. VI. RELIEF REQUESTED It is clear in this case that 5273's application was wrongfully denied and that it has now been unfairly stripped of its ability to receive a license. The City's denial is clearly inappropriate and inaccurate. WHEREFORE, Appellant respectfully requests the City Clerk order the City of Lansing to reverse its decision, award 31 additional points and give applicant approval for its Lansing Medical Marijuana Provisioning Center. Respectfully submitted, Micha D. Stein,Esq 14 -74- EXHIBIT A 14 -75- N _0 T p !n d a- M m W c -0 4- > V) u'1 O Q v C 2 p O +� � r, }, r, O m E av+ t i 4n Z aJ N O C al H n v a- a, m ao +' Q > 3 o cr Q v tn a � 41 ao +' m .� a +' Q i -D m m > _ ai 3 LL a c i s ai 3 tn > c •o to •ma-, U LL > m N o o m ,n a:- O > C O (n a. to c Cin -a _ O v s m U �n r- C O O an m 'n 3cl 0 b y '� m E3 r'7 ,`; �j -> E v c oa'o v 'n n u } 3 u c� p -' E p c -O ai v er- m c T c c m 3 s `n o c ,n m _v Qf6 ^N E a ` c c � in �+"' c o, a zo3 o IIa) y +- o � O cl , " p ` m +, OQ m m o t ,_ CL vmn o > m o > 41 > c CL u " 0 a1 Q- -o - v tn coU co o C U LL. a-2 4- u N ` •C Y' Y O _..1 V— m C to .4 o O m m on E Vl W •O CU — LU a c c 'a6 •E `1 " c n c m > o f c v� M 3 .� Q E -0w C � o N +, aai 0 3 m e += m in m m U v, Q x m v� s •> v (.� O 6 u O Z +'". a' c v +. o n n x m to Q r -0 O 3 w o- m •a " O -' m a - 'n c C •--1 J N m O -O a/ a/ L C fu O 40- � L bn M >- c E L= E cu _c fII 'O c n N -0 _0 m 0 Cu > m -a o N aJ 7 a 0 E •_ t Y Q c L° n o E to Ln H ` H Q m n $ j = c ; c :: a o Ln c E CL CD - m �o O > > �' E u o �' in Y C 0 f�D C 'l7 C C M •� > O C m N aj E aJ V w CL C N C a1 al U Q1 •E C U •C \ > m o C '0 ` to - ]C O -c U m v U 3 E E v a ¢ <i* E Q m m m u J N n C Q1 N lO MI O Ln F- C C c ai C E o C c a) +� •� ' c E > •> v _ c o v W ti `n > CL u au a c � m c E > tM � m -p -o c o p Z Q Q a Y LM C C na c v 4- C 3 m ra c O ai O ca U U +' _ al O �a -Q i Q E no u CL +m., v CL CLm O C al m C O Q Q a H a=+ C U u -76- > a a- C tn c a > cn o f6 a E o 'p O` O •` a N C Q to > to Q " 1 -0 ri c cc s v 3 - a - a a m co ,n Q C:) >. c N m Mn ao tw CD O >' .0 a c 4� O 0 to fU Ln > E (u C Gap a �= 3 u a (aj 'O C H M L >- m 7 u Co co C C (9 4- ..0 E 0_ d "EC: C a a O a C 'U N C N a +' O O lu 3 :5 E 'L° o m M -a m a u O aai 0- ao a ,0 0 = cCa O (� x C j a a 0 3 a 3 v m fO �. 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O E O C LA � o V 'O 6 d Y a c a 0 a -83- ei cuO O O cn C L v C Y > a +• O N L N Y > -a CO °o 41 3 !—" a ° io m O _0 a) o- U v X Ln a, c L 1° a, E o tn 'u o o (, -C L .� a) c o, cLn c Ca a v E v o a1 C en Y Y O aJ tA f0 W m I#-- f6 L- 41 f0 L O O Y ae N aLe O 0 W Y —0 cu en L co L >. C 0 3 D ai L m > '_' v o > 'n 'n •en - L T om-+ a) O — L O ca Y •� 7 6 en - p Y E tII X L O > CO J n C vi 4-1 CO o � W 3 0 L 0 Y cco _o O Y T O N 41 v' ru E 0 .v "E .n L v 0 t a, m Y O Z O cu en L •y v X Y f0 Y � L � o v c a E cn 0 Ln 0 N O O m = O on to c u = O O o Q `� E E no v O U 0 -84- EXHIBIT A-2 23 -85- City of Lansing Provisioning Center Ranking- Total Applicant Name Possibl 5273LLC 5273LLC e Points 60015 Applicant Address --- PENNSYLVANt 60015PENNSYLVANIAAVE A AVE Marketing,Advertising Applicant provides many detailed examples of marketing,advertising,promotion,and 4 4 minor minimization(e.g.,age verified website,no ads designed for minors,social media, and Promotion branded apparel,etc). Tangible Capital Applicant indicates they will lease the 8K sq.ft.building at 6001 PA Ave.for the provisioning Investment in the City of center($84K/year in rent and investing at least$1 million in improvements),operate a Lansing 15 9 second PC at 3425 S.MLK,purchase a 39K sq.ft.building for processing($900K)and considering investing in a 110K sq.IL building for growing(several million dollars).Lacks ownership and a definitive plan investing in a grow facility. Job Creation (Integrated System) Applicant indicates about 62 new Lansingjobs and up to 120 new jobs will be created if 5 3 they pursue and open the larger grow facility.Types of jobs are detailed along and worker Overall number of jobs training program. Falls short of an optimal number of jobs and a definitive commitment to created the larger grow facility. Applicant provides proof of access to$5 million with supporting documentation(e.g.,XIB Financial Structure and letter),linking this to their business plan and anticipated operating expenses.Note that one 3 3 owner agrees to pay$70K by five business days of receiving business license to operate the Financing provisioning center(i.e.,in addition to$40K already In place from the other owner). Existing liquid assets more than cover$100,000. Plans to Integrate Facility with Other 2 2 Applicant Indicates they will integrate their provisioning center with a Class C(1,500 plant) Establishments grow operation to be located at 1121 River Road. -86- City of Lansing Provisioning Center Ranking- Applicant provides examples of organizations they would like to partner with(e.g,,DARE, community mental health,food drives)and discusses their long-term goal of spending [Charitable Plans and $25K/year to local charitable and civic organizations,plus encourage its members to Strategies 4 3 volunteer time.Falls short of optimal dollar commitment potential and lacks proof of actual payment or an executed agreement. Update 9/20/18,after further review,amount committed was found to Community mental Health Board. Claim typo and$250,000 will be donated annually Number of Jobs at the Provisioning Center Category Thresholds:1=<6 Applicant indicates the provisioning center will have at least 16 full-time salaried jobs,insufficient details;2=<6 jobs, 5 5 employees and provides a description of job titles and salaries. Falls short of the optimal sufficient details;3=6 jobs,sufficient level of details. Updated 10/11/2018 additional review,showed sufficient detail,One details;4=>6jobs insufficient details; additional point 5 =>6 jobs,sufficient/good details. Amount and Type of 2 Applicant indicates that not all provisioning center positions will pay at least$15 per hour. 1 Falls short of the optimal amount of compensation and support Compensation (PC) P� p pportde[ails. Percent of Employees Earning At Least 3 1 Applicant indicates 11 of 16(69%)provisioning center employees will earn at least $15/Hour) (PC) $15/hour. Falls short of the optimal percentage. Applicant provides projected annual budget and revenue numbers(e.g.,$1.4 million in Projected Annual Budget 1 expenses and$1.6 million in revenues)and generally describes the source of these numbers. However,the do not provide an line item details i e financial spreadsheet) and Revenue(PC) v P v ' 1'• .. showing how these numbers were derived. Lacks sufficient details. Sufficient Financial Applicant does not provide any litigation compliance verification forms for stakeholders. 5 4 Applicant proves they have more than$100K in the bank and access to a$5 million line of Resources credit from a respected lender. Applicant indicates they have at least 9 years of medical marihuana industry experience, Business Experience 5 5 plus decades of other applicable business experience(retail management,highly regulated liquor industry,etc),plus have access to an advisory board who have decades of applicable experience. Content and Sufficiency of Information;Professionalism of submitted documentation 5 3 Treasury letter for minor issue and Facility Plan letter to cure from building safety2 points including clear labeling of deducted required items -87- City of Lansing Provisioning Center Ranking- Buffering between 73measurement equate buffering but not close to residential Updated score using abetter residential zoned areas and 5 tool 9/18/18 550 ft from residential zoning which falls short of the optimal establishment distance of 1/4 mile(1320 feet)to receive full points and 1/8) mile(660 ft)for 3 points Major traffic control renovations needed Increased traffic on side S 4 Updated 9/20/18—A new measurement tool was used which showed high scores in streets will be scored lower parking,and mid-range scores in all categories of the traffic review which provides a traffic score of 4.updated 9125/18 did not receive full pts in driveways&circulation TIER 3—Does not meet minimum requirements,requires correction and/or has missing/or Entrance and exit on incomplete information.4pts traffic,Strong traffic patterns and parking UPDATED9/4/18 After discovered tPD did not view entire plan,LPD reviewed again. Here is there findings: main streets,adequate TIER 2 Review.Security plan notes alarm with panic button. No uniformed security guard parking not on residential 10 6 however a Mgt Security agent is noted.Lacks detail for security equipment specifications, off-site video storage noted,barriers to include buzzer system and waiting area.Multiple streets, Quality of safes mentioned.Security Plan Score of 2. Anew measurement tool was used which Security Plan showed high scores in parking,and mid-range scores in all categories of the traffic review which provides a traffic score of 4.Total score increased by 2 pts updated 9/25/18 did not receive full pts in driveways&circulation 4pts for traffic Pan to meet-w-RiTT— neighborhood 1 1 Have Plan [improvements made or Some improvements will need to be made,more than indicated on facility plans proposed to building 3 0 Updated 9/20/18 Using a more accurate measurement tool,it was determine that the application did not have cost for improvements for the provisioning center. Plan to minimize/eliminate 1 1 traffic plan included traffic Plan to minimize/eliminate noise 2 0 no noise plan Plan to minimize/eliminate odor 3 3 Detailed plan including three independent air filtration technologies LPD Complaints 4 4 no calls -88- City of Lansing Provisioning Center Ranking- Demo of Regulatory 4 3 Updated 9/25/18 minor compliance 1 pt deducted,no code issues Compliance Litigation History 2 0 Missing or inadequate litigation history for a stakeholder=a points Total 100 Y � y #o t+c 1, r �l M'w N"ORNIN -89- EXHIBT A-3 24 -90- Hilaq M. Barnard Attorney at Law CITY OF LANSING HEARING OFFICER DECISION RECOMMENDATION In Re: 5273,LLC Proposed Location: 6001 S. Pennsylvania Ave. Provisioning Center License Scoring and Ranking Denial 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 5273, LLC and its license application for a Medical Marihuana Provisioning Center that the license application remain denied. FACTS 5273 LLC ("Appellant") applied to the City of Lansing to operate a Medical Marihuana Provisioning Center within the city limits. This recommendation follows a timely appeal from Appellant. By letter dated July 31, 2018, Appellant was informed that its license application was denied because of its score and rank, having received a score of 65 out of 100. Appellant was informed that this score eliminated the possibility of scoring in the top twenty applicants and that 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 August 15 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 short insight statements Appellant has point deficiencies in several categories,the largest under Tangible Capital. Appellant's Position Appellant argues that its license application was wrongfully denied and that it has been"unfairly stripped of its ability to receive a license." Further that the denial was"clearly inappropriate and inaccurate." City Clerk Position The City Clerk affirms its position on the denial. In its summary, the City Clerk further iterated that factual data needed to be presented to support claims in Appellant's application. Paget of 4 -91- Hilary M. Barnard Attorney at Law The office revisited Appellant's application and did not find the missing Litigation History forms. However,found that Appellant should be awarded 2 more points for Entrance and Exit.This would make Appellant's score 67/100. No further documentation was received regarding the subjects of this appeal. APPLICABLE LAW&REASONING The issue is whether Appellant's score and rank for a Provisioning Center License for the City of Lansing was erroneously calculated resulting in license application denial. 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."I 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.' [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.' See LANSING CITY CLERK'S OFFICE,City of Lansing City Charter(as amended)at 24(2015)available at: https://www.lansingmi.gov/DocumentCenterfView/2126/City-Charter?bidld=.In this instance,the license issuance is handled with the City Clerk's office. Z City of Lansing Ordinance No. 1217 Sec. 1300.15(C). 31d. at 1300.3(E). Page 2 of 4 -92- .Hilary M. Barnard Attorney at Law 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.' 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.1,6 Capricious is "apt to change suddenly; freakish; whimsical; humorsome."7 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[.]" 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.' Further, an appellate body will generally not consider issues not raised in or ruled on by a lower review.' 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 1300.6: (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[.] The Lansing Ordinance incorporates provisions and definitions of the Medical Marihuana Facilities Licensing Act, 2016 PA 281 (as amended) ("MMFLA")so as to: `[N]ot 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."' °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). 61d 7 Id. s 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[.]") 'See Napier v.Jacobs,429 Mich.222,232-35(1987). 10 City of Lansing,Michigan Ordinance No. 1217 Sec. 1300.2(C). Page 3 of 4 -93- Hilary M. Barnard Attorney at Law Under the Lansing City Charter:11 (3-301) Acts of the city, "shall be by ordinance which: . . . amend or repeal any ordinance previously adopted . . . (3-301(c)(.6)) Objections to the form of an ordinance,which are raised for the first time after the effective date of the ordinance shall not invalidate the ordinance." Here, Appellant raises a Tangible Ca ip ta112 argument. Capital is understood to be "[m]oney or assets invested,or available for investment, in a business"13 Further,the City Clerk has articulated that Tangible Capital is rooted in a physical object.Appellant references other locations that were not included in this application. However,this application is related to this location.The tangible capital calculation did not include capital related to other facilities that are owned by Appellant. The calculation was related to the specific location of this facility. While capital exists for the organization it was not sufficiently addressed as to the location of this facility. The scoring and Appellant's arguments under tangible capital merit no further point allocation. As to Appellant's other categorical arguments,any argument related to Appellant's other facilities which are not the primary subject of this application are without merit and will not be addressed further. The bulk of Appellant's arguments are rooted in a standard of review with no statutory or procedural reference. The only referenced standard of review in regard to the application process is arbitrary and capricious. Appellant has not raised this argument and as such has not met its burden. It is not enough for an appellant to "simply announce a position or assert an error[.]"14 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."15 CONCLUSION For the foregoing reasons,it is recommended that Appellant's application for a provisioning center license remain denied. Respectfully Submitted, Hilary :Barnard,Hearing Officer See LANSING CITY CLERK'S OFFICE,City of Lansing City Charter(as amended)at 7(2015)available at: https://www.lansingmi.gov/DocumentCenterNiew/2126/City-Charter?bidld=.In this instance,the license issuance is handled with the City Clerk's office. 12 Also encompassing Appellant's financial resources argument. Capital Black's Law Dictionary(7th ed.). 14 See People v.Kevorkian,248 Mich.App.373,389(2001). 151d Page 4 of 4 -94- EXHIBIT B 15 -95- PLANNED TANGIBLE CAPITAL INVESTMENT We are committed to heavily investing in the City of Lansing and bringing significant economic development to the area. To this end,our ownership group is seeking two provisioning center licenses in the City(one at 6001 South Pennsylvania Avenue and one at 3425 South Martin Luther King Jr. Boulevard),as well as one processor license(located at 1121 River Street)and at least one 1,500 plant Class C grower license (located at 1121 River Street), with a desire to increase this investment over time. Lansing has welcomed the medical marihuana industry, and we hope to establish a significant, long-term economic relationship with the City. Concerning our provisioning center operations,we anticipate that each facility will create approximately 16 full-time,salaried jobs. As discussed herein,those jobs include: • Executive—$80,000 annual salary • Chief Operations Officer/Facility Manager 470,000 • Patient Outreach Manager-$60,000 Quality Assurance/Control Technician-$55,000 • Nurse Field Representative-$50,000 • Sanitation Specialist-$45,000 • Office Manager-$45,000 • Community Outreach and Patient Education Specialist-$40,000 • Addiction Prevention Directors-$40,000 • Inventory Control Manager-$35,000 • Order Fulfillment Representative-$34,000 • Security Guards-$30,000 x 4 • Packing Representative-$28,000 Thus, these 32 provisioning center positions would contribute approximately$1.4 million in new annual wages in the City, all of which would be subject to the City's income tax. These amounts are in addition to revenue related to property taxes,personal property taxes, application and renewal fees,and the City's share of excise tax revenue under the Medical Marihuana Facilities Licensing Act. Moreover, wherever possible, we will look to hire Lansing residents for each of -96- Ire. these positions, meaning that these wages would stay in the City and that the City's income tax revenue would be greater than if we hired non-residents. To date,we have also targeted two potential properties within the City that can house our grow and processor facilities: one is a 39,000 square foot industrial building that is currently occupied and the other is a vacant 110,000 square foot facility. On October 10, 2017, we entered into a purchase agreement for the 39,000 square foot building located at 1121 River Street in Lansing (tax parcel identification number 33-01-01-21- 279-041) for a price of$900,000. We are currently in the due diligence period with regard to this property, but intend to close shortly. As soon as we close on this property, we will submit an application for a Class C grow license and a processor license.Our intent is to invest approximately $1 million dollars in upgrading and building out this facility to accommodate one, and possibly two, Class C grower licenses, as well as a.processor license_ In undertaking this project, we are looking to partner with local contractors,architects, and engineers. To date,we have spoken to a number of Lansing-based companies and identified the following companies as those that we would retain for these projects: • Architectural—Rockwood Design,PC,East Lansing • Electrical—A/C Electric,Lansing • Flooring—Lansing Tile&Mosaic, Inc., Lansing • Mechanical—Superior Mechanical LLC,Lansing • Plumbing—Honeycutt Plumbing,Lansing In addition to the money spent on Lansing-based contractors,as a result of this project,we would create approximately 30 full-time employment positions, and would look to first hire Lansing residents. Depending upon skill,education,and experience,these positions will each pay approximately $20440 per hour in wages. This would result in approximately $1.25 million to $2.5 million per year in new wages paid in the Lansing area,in addition to increased property tax -97- revenue, application and renewal fees, and the City's share of the excise tax revenue under the Medical Marihuana Facilities Licensing Act. Additionally,if we obtain the 110,000 square foot facility,our investment in the City would be even larger. The facility is currently vacant,so we would return it to productive status,thereby increasing tax revenue to the City. Additionally, we would invest several million dollars in upgrading and retrofitting the facility to accommodate at least one, and possibly three large grow operations.Again,we would look to hire local contractors,architects,and engineers in completing this construction. As a result of procuring this larger facility, we would likely create at least 60 full-time positions, also looking to first hire Lansing residents. Again, depending upon the circumstances,these positions would pay approximately$20440 per hour. In addition to property tax revenue,application and renewal fees,and the City's share ofthe Medical Marihuana Facilities Licensing Act excise tax, this facility would generate approximately$2.5 million to$5 million in new wages in the City. Overall,with our two provisioning centers,one grower, and one processor,we will create approximately 62 new jobs in Lansing, and contribute roughly$2.65 million to $3.9 million in annual wages.Additionally,if we are successful in opening our second,larger cultivation facility, we will contribute a total of approximately 120 new jobs with Lansing-based wages totaling approximately$3.15 million to$8.9 million annually. Few municipalities in the State are as well-positioned as Lansing to benefit from investment in the medical marihuana industry, and we are committed to being a positive part of that investment. We look forward to partnering with the City to create a long-term economic relationship that positively benefits us both. -98- EXHIBIT C 16 -99- EXPECTED JOB CREATION ESTIMATES As discussed above,we are looking to make a significant investment in the City of Lansing, both in terms of job creation and economic development. Moreover, for all of our positions, we would look to hire residents of the City of Lansing wherever possible,and we are looking to offer competitive wages,salaries,and benefits to our employees. For each of our provisioning centers, we anticipate creating at least 16 full-time, salaried positions per facility,with the following titles and salaries: • Executive—$80,000 annual salary(438 per hour) • Chief Operations Officer/Facility Manager 470,000(434 per hour) • Patient Outreach Manager-$60,000(429 per hour) • Quality Assurance/Control Technician-$55,000(—$26 per hour) • Nurse Field Representative-$50,000(424 per hour) • Sanitation Specialist-$45,000 (—$22 per hour) • Office Manager-$45,000(—$22 per hour) • Community Outreach and Patient Education Specialist-$40,000($18 per hour) • Addiction Prevention Directors-.$40,OOQ(—$.18 per hour) • Inventory Control Manager-$35,000($17 per hour) • Order Fulfillment Representative-$34,000(—$16 per hour) • Security Guards-$30,000 x.4(414 per hour) • Packing Representative-$28,000(—$13 per hour) As noted above, we are applying for two provisioning center licenses in the City. This means we will create a total of 32 new jobs with annual wages of approximately $1.4 million_ Additionally, nearly 70 percent of our employees will earn more than$15 per hour in wages. Additionally, as discussed above, we currently have a purchase agreement in place for a 39,000 square foot building located at 1121 River Street in the City. We will be applying for at least one Class C(1,500 plant)license at this facility,as well as a processor license.Consequently, as discussed above, we will create at least 30 additional jobs,all of which will pay approximately $20440 per hour in wages. In total, we plan to create at least 62 new jobs in Lansing, and contribute roughly$2.65 million to$3.9 million in annual wages.Additionally,if we are successful -100- in opening our second, larger cultivation facility, we will contribute a total of approximately 120 new jobs with Lansing-based wages totaling approximately$3.15 million to$8.9 million annually. -101- EXHIBIT D 17 -102- CHARITABLE PLANS AND STRATEGIES Like all of our other businesses,we want to be good corporate citizens and good neighbors. We also understand that marihuana still has a stigma, and that, because of this, proactive and positive outreach is important.To this end,we have developed a comprehensive plan to engage in charitable activities that will benefit the Lansing medical marihuana community and the City at- large. All charity begins at home and,for us,that means investing our time,resources,and energy in our neighborhood.To this end, we are currently looking for local parks and playgrounds that we can"adopt'and maintain, whether that be landscaping,repairing or repainting equipment,or ensuring that the park is properly supported. We also wish to not only donate our time,but also our resources.To this end,we will actively look to sponsor events throughout the City of Lansing, whether that means sponsoring 5K races or golf outings. While we are not in the general vicinity of residential areas, we also want to help the residents of south Lansing.To this end, we will be organizing various events throughout the year that will help to benefit area residents. For example, we plan to organize a coat drive in order to provide needed winter clothing to many in the area Similarly, we will be using our facility as a drop-off location for a number of charitable causes, including receiving gifts for Toys for Tots near the holidays,and also operating a canned food drive for our employees and customers.Finally, we are also planning to host a Thanksgiving turkey giveaway,with the hope of giving away more than 100 frozen turkeys to area families in need. As a medical marihuana retailer, we are also very sensitive to issues related to substance abuse in the community.As a result, we are committing to donate approximately $100,000 over the next five years to the Community Mental Health Authority of Clinton, Eaton, and Ingham -103- County for its Substance Abuse Services and Corrections Mental Health programs. These donations will go to assist individuals suffering from drug and alcohol dependency in the Lansing area, and will also help individuals incarcerated in local jails to overcome substance abuse issues that may be the root cause of their criminality. Additionally, we plan on offering reduced prices to certain segments of our customers. First, we believe that marihuana is a beneficial medicine, and that it should be affordable to all who might benefit from its use. This is particularly important as insurance does not cover medical marihuana use, as it does with prescription medications. Recognizing the cost of this substance, we will offer reduced prices to individuals who are below certain income thresholds. Moreover, we will also be offering reduced prices to individuals who are veterans of the armed services.It is well-documented that many veterans who have returned from war zones suffer from Post- Traumatic Stress Disorder,and that the use of medical marihuana can greatly benefit many of these individuals.As such,in recognition of their service to our nation,we will be offering discounts to United States veterans. Finally,we are an industry that is heavily-reliant upon science and technology.To this end, we are absolutely dependent upon employees who are knowledgeable about those topics. Thus, we wish to partner with Lansing Public Schools in order to donate computer and laboratory equipment that can be used in teaching science, technology, engineering, and mathematics ("STEM")classes. -104- EXHIBIT E 18 -105- AFFIDAVIT OF STEVEN KESTO STEVEN KESTO,first being duly sworn,states: 1. [am a Michigan resident,and owner of 5273,LLC. 2. I spoke to the lawyer for 5273,LLC for our Medical Marijuana Provisioning Center application to the City of Lansing 3. As part of the application I was in charge of advising the lawyer the charitable contribution plan. 4. The lawyer made a typographical error when transcribing the amount of charitable contribution 5273, LLC will provide each year. The' figure written of "$25,000"per year is incorrect. The proper figure should have read "$250,000"per year as that was the commitment made by my client,5273,LLC. FURTHER AFFIANT SAITH NOT. I declare under oath that the above statements are true to the best my knowledge, information and belief. DATE Steven t STATE OF MICHIGAN ) )ss COUNTY OF OAKLAND ) Subscribed and sworn to Fcft AY A TOU before me on this 13ykday �C_81.ATE FS �N of August,2018 couwy, opo, o ' OSYEVIrea Oct 202p —�- _. Notary Public _ n-1typM2ounichigan, .Acting in County My Commission Expires:a4i 2R2,0 _ - - - (00175930) t -106- EXHIBIT F 19 -107- Mill MITS-01".. gOR l �l„3.f1 .w-..• ��.p t ? NO. Wig, PUMMer ON MAN ¢�L� ': - -:v�"f a •'°•�t"s =``t"x�� Ojai pm �F�,ri•''' -Z:��a. -tic::.'�-was`;�r�: •fit 77X. :s^, -fir^��•5.:i:"'c� `�Z""-a'?a�`%ii�r S t.=,} g�g��i�:S_�,St��_,••s`-,."r�� L�-.;`i"�-'j7:LL�'�'-'-`��� •sc• ems -si'b 1• City of Lansing Provisioning Center Ranking APDliranl providcg lidgatlon mmdlance wrifiatlon forms for M key tem members ! s ,tgpiont prar6 thcy hawmore than S100K hdce bank,and acegg to a 55 lhn grc d cedt fromare&,e Id knder. AW"MIK;� .theyfu at leer[9 ytart d medal maritu hdurtry eapede % s plug do de dodter apprv:able Wjjn cqp kna(reui management,hfdtly regulated liquor W.I.Y.tMi.pug haw arcen w an adV m board who have dtrxkg f rpplk.Wt eq—k— e 1$ - 7 irearwykttr/a 4—im.and Fadlhy Plan kttc w cure from bugdhtg Wary T s Good btntua 4 dim—ham rtd d.l -fl s Good plot e 10 Ti.r 1 Aa S. ity Plan spt trAMC Stmn va(fkpatemt,drfvnvayg,parking,atm n dnad,don I tab 10 P - d O 2 some dtangtr are Indkated on the floor pam wbrr tcd 1 Infra pan Indudtd o In kqu.t 'a.pan 3 0.-hvdtperdent aK rdtr d-terhndegkg L 20aE LLgrnn-1Bar N.ct-106E teput-1 rgtdul-yeNn•t g.00P oa-7 rtwaialot-a table oh-1 f paag4y rtfn mgy be Via gr;p rtr.135 04 7 mhbr uaigrue 1kI 0 h.kqualt WA yforslakdvdda n -109- EXHIBIT G 20 -110- LAND USE AND IMPACT ON SURROUNDING AREA Our facility at 6001 S. Pennsylvania Avenue is an ideal location for a medical marihuana provisioning center, and will not have a detrimental impact on the character, traffic flow, or resident safety in the surrounding area. As a threshold matter,the facility is not abutting or adjacent to any areas that are zoned for residential use.As such,there are no concerns about the proposed facility's impact on surrounding neighborhoods.Rather,the facility will be consistent with the surrounding geographic area,which, according to the Land Use Plan in the Design Lansing 2012 Comprehensive Plan (the "Comprehensive Plan") is predominantly "Suburban Commercial" and "Light Industrial." According to the Comprehensive Plan, "Suburban Commercial"areas include a"conglomeration of larger footprint retail, small strip malls, smaller freestanding retail and service uses and office buildings..."In the immediate vicinity of our facility are a bank,several automotive dealerships, a strip mall, and several additional retail and office buildings. Thus, we feel that having a provisioning center in this area is consistent with the general business aesthetic in the area,as well as the Comprehensive Plan. Moreover, we are sufficiently removed from any residential areas as to not have a detrimental impact on any housing. Finally,we will also be conducting outreach to all neighboring businesses in order to provide contact information that can be used if the business witnesses any suspicious activity in the vicinity or has a complaint related to our operations and the impact on their businesses. We strive to be good neighbors and will work closely with any aggrieved neighbor to mitigate any potential issues that may arise. The facility is currently a vacant building that was previously utilized as a retail facility known as The Teacher's Store.Having been vacant for an extended period of time,we are looking forward to returning the facility back to active use. We plan to make significant physical -111- t r improvements to the building. Over the next several years, we plan to invest approximately $1 million into renovating the existing facility in order to upgrade it to meet our specifications and safety protocols. We understand that there is always a concern related to criminal activity when a medical marihuana-related facility is located in any area. To this end, we plan to take every precaution to enact security measures that both protect our property and ensure that our facility does not have a detrimental impact on the businesses surrounding us. Aside from the extensive security measures employed within our facility—which are documented in our Security Plan—we will also employ four full-time security guards for the facility, at least one of whom will be on premises during all hours of operation. These individuals will not only inspect the interior of the building, but will regularly check the exterior of the building,parking lot,and adjacent areas for suspicious activity. The building will also have at least eight security cameras on its exterior, which will be able to record all activity nears points of ingress and egress,as well as the parking lot and rear of the facility. Finally, our building and parking lot will be well lit to discourage intruders or unauthorized access.We plan to install flood lights and motion-detecting lights around the exterior of the building, including in the rear of the facility. We believe that these extensive internal and external security measures will create a facility that is safe and secure,not just for our patients and employees,but also for the surrounding community. Additionally, another component of our security plan is to regularly interact with our neighbors and local law enforcement, including the Lansing Police Department. Each of our neighbors will receive contact information for the facility's manager,and will be instructed to call, day or night, if they observe individuals loitering near the premises or other suspicious or questionable behavior. We will also proactively engage with our neighbors to discuss any such -112- activity. Additionally, prior to commencing operation, we will invite the Lansing Police Department into our facility to meet with our manager and security team,and to do a walk-through of the premises.We will actively seek input from law enforcement on an ongoing basis with regard to facility security and potential enhancements. Finally,the facility is located on South Pennsylvania Avenue,which is a heavily-trafficked, four-lane thoroughfare with a center turn lane. As part of our business planning,we are sensitive to minimizing activity to ensure that traffic in the area is not negatively impacted by our operation. According to the Comprehensive Plan, the segment of South Pennsylvania Avenue along which our facility is located is a "corrective corridor segmento with high driveway densities and congestion." As a threshold matter, we do not believe that our facility will create traffic issues along South Pennsylvania Avenue. However, we will employ several strategies to attempt to mitigate any potential issues.First,our facility is directly adjacent to a stop on the CATA bus line, so we intend to encourage patrons to use public transportation whenever possible.Second,we will regular maintain the sidewalks adjacent to our facility in order to ensure that individuals wishing to walk or bike to our facility are able to do so.Finally,our facility parking lot has two entrances: one on South Pennsylvania Avenue and one on the adjoining side street,Andrew Jackson Drive. In order to minimize the potential for traffic accidents,and so as not to increase traffic on Andrew Jackson Avenue,we are considering closing or barricading this entrance.Thus,patrons would only enter our parking lot via South Pennsylvania Avenue,thereby minimizing the potential for traffic accidents. Additionally, our facility currently has 13 available parking spaces in the front of the building.We are exploring the option of adding additional parking spaces in the rear of the facility to be used for employees. This would allow ample parking in a safe, well-lit lot. Moreover, by -113- r' i potentially closing the parking lot entrance on Andrew Jackson Avenue, we also ensure that patrons do not use street parking, which also tends to increase traffic accidents. Overall, we believe that the commercial setting of our facility, as well as the precautions and plans that we will implement and exercise will allow our provisioning center to operate without having a detrimental impact on the surrounding area in terms of criminal activity,odor,noise,and traffic flow. -114-