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Home My WebLink About2018.11.16.MM Commission PacketLansing City Clerk’s Office Ninth Floor, City Hall, 124 W. Michigan Ave., Lansing, MI 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov City of Lansing Medical Marihuana Commission Friday, November 16, 2018 2:00 PM 2500 S Washington Avenue City Clerk Conference Room Meeting Agenda 1. Call to Order 2. Approval of the Agenda 3. Approval of Minutes 4. Public Comment on Agenda Items 5. Examples of High Scores Document 6. Commission Appeal Hearings Appeals are heard following the approved Medical Marihuana Commission Appeal Hearing Format Better Green LLC – Parcel #33-01-05-03-251-005 Green Peak Industries LLC – 2508 S Cedar Street RJOPC Investments LLC – 5924 S Pennsylvania Avenue 7. Excused Absences 8. Public Comment 9. Adjournment Chris Swope Lansing City Clerk Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 1 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 1.Marketing, Advertising and Promotion Applicant provides several marketing, advertising, and minor minimization examples. (1)State the packaging will be child-proof and (2)not include any cartoon-like images, and they will (3)not advertise in public spaces, such as billboards or bus stops, in order to avoid exposing minors. All advertisements will be through WeedMaps, opt-in SMS messaging and emails, Leafy, and relying on word-of-mouth. Would also be focusing on community education to help spread the word. Want to educate citizens, especially minors, about drugs and prevention. • 4 = More than two Marketing, Advertising and Promotion and minor minimization (MM) examples provided; with comparatively excellent detail; Beyond the minor minimization the applicant would include the demographics that they would be advertising, and marketing to, along with through details as to how the intend to advertise, and market their company. How and why the applicant is choosing this strategy and how they intended to implement it. • 2 = One MAP and MM example provided (satisfactory detail); Only one example was included with the application with details on how, and why this strategy will be utilized. Page Length of High Quality Plan Typically 4 or more pages. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 2 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 2.Tangible Capital Investment in the City of Lansing Will be purchasing several, or have already purchased, building for their provisioning center and 2 grows totaling $672,000. Will be updating and improving each building for $412,000 altogether. Provides addresses, square-footage, and purchase agreements for each building. Has information on local companies they will be using to aid in improving the buildings. States that money will coming from personal accounts and business accounts for each center • 15 = Excellent: applicant states they will own the facility or leased property is owned by member(s) of the application team, robust discussion of sister companies, capital amount, tax revenue, complete support documentation. At least $1 million in TCI; 3 points will be deducted for the following: • Investing less than $1 million in the City between this provisioning center and other businesses. • Leasing building instead of owning • No discussion of a grow or processor • Lack of detail 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. Page Length of High Quality Plan Length will vary depending on length of purchase agreements or leases. Actual TCI narrative usually 3-4 pages in length. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 3 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 3.Job Creation (Integrated System) Overall number of jobs created 25 jobs at each provisioning center with 12 being part-time at each center. 180 jobs at two grow facilities. Totaling 205 jobs between this center and grows. Grows will be 1,500 plants each. Includes information on employee benefits. (Vacation and sick days, health insurance, and bonuses). Has employee training manual and handbook. Plan to advertise about jobs specifically within Lansing. States there will be General Managers, Assistant Manager Shift Leaders, Inventory Manager, Quality Assurance Manager, and Sales Associates. • Example of Job description: GM oversees provisioning center operations, and ensuring that the company policies are being followed. Coordinates the hiring of all employees and maintains the paperwork. Works with other • 5 = More than 200 City, Region, and State (CRS) jobs, comparatively excellent detail provided about job types, local hiring priority, shifts, etc.; Constructions, tradesmen, and other temporary jobs do not count toward this total. Lists each job type, along with a description of the duties, and the salary or dollar amount per hour. • 4 = > 100 jobs, good detail, or > 200 jobs but lacking detail • 3 = 20 to 100 CRS jobs, comparatively good detail provided about jobs; If the application has through detail as shown above, but will be creating < 100 jobs. Based upon the information provided by the applicant, the City may consider whether the proposed medical marihuana establishment is definite, feasible, or speculative. Page Length of High Quality Plan Could be anywhere from 5-15 pages depending on how many different types of positions are being created. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 4 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx managers to ensure that departments are preforming to top standards, and if not works with them to bring them back up to top performance. They are expected to maintain a professional demeanor and have the ability to work in an inclusive environment. The qualifications are listed below. If hired the compensation will be a yearly salary of $50,000. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 5 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 4.Financial Structure and Financing Provides bank statements for business showing $500,000. Provides CPA attestation of net worth for $5 million. Provides proof of liquid assets worth $1 million. If needed they have access to a line of credit for $1.5 million. Already has ownership of the building. Has sufficient money for start-up costs and improvements for the building. Includes estimates from building companies to supplement their improvements. Has all costs outlined within the budget. • 3 = Description details how capital is linked to jobs, net worth, bank/other statements confirming funding availability, complete and clear support documentation; State how they will be funding all operations. Provide proof of where funding is coming from and how much is included. Can include: • Tax returns • Bank statements • CPA attestations • Net Worth Explanations on how this money will be used in conjunction with the business plan, expenses, asset liquidity and other costs. • 1 = Proof provided of capital access but not tied to business plan; Page Length of High Quality Plan 1-2 pages Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 6 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 5.Plans to Integrate Facility with Other Establishments Plan to work with a grow (states business name and location). It is listed to have 1,500 plants. • 2 = Integration with large grower facility (either > 10K sq. ft. or 1,000 plants); Must list who they will be working with, whether it be with themselves, or an outside group. Needs to have either square footage of facility or number of plants. • 1 = Integration with small grower operation (< 1,000 plants or 10K sq. ft.), OR a good plan to get product elsewhere, OR doesn’t specify the number of plants or grower facility square footage; Only state that they will integrate, but do not include business’ details. Such as name, plant amount, or square footage. Page Length of High Quality Plan About 1-2 paragraphs Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 7 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 6.Charitable Plans and Strategies Includes a letter of intent to donate 3% of all sales at the end of the year to the WWF. Includes signed letter of intent to organization. State will get involved with community projects such as food drives, DARE, coat and toy drives. Will encourage all employees to volunteer (give days off to employees). • 4 = At least one targeted charitable organization example, dollar amount $50K or more (or based on % of sales/profits), support documentation (e.g., confirmation of payment, commitment letter signed by organization); Must include either signed confirmation of payment to charity, or a signed letter of intent to donate to the organization. • 3 = At least one organization example, dollar amount between $25k and <$50k (or based on % of sales/profits), no payment confirmation or executed payment agreement; • 2 = Discussion on intent to donate to organizations, but do not include a dollar amount, and payment confirmation or agreement. Page Length of High Quality Plan Usually a few paragraphs to a 1 page, not including any letters or other official documents to show payment or agreement Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 8 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 7. Number of Jobs at the Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = < 6 jobs, sufficient details; 3 = 6 jobs, sufficient details; 4 = > 6 jobs insufficient details; 5 = > 6 jobs, sufficient/good details. State that there will be 13 total jobs at this location. 5 will be part-time employees. Lists each job type, along with a paragraph or bullet point description of the duties. The lowest paid employee will be paid $17/hour. Includes salary for managers. Includes information on employee benefits such as sick days, bonus’s, vacation days, health and dental insurance for full-time employees. Employee education plan outlining how they will teach employees to safely handle product, interact with the public, and learn about the effects of MM, including the strains they intend to have in stock. Mock shift schedule, employee handbook, and employee expectations. Specific to this center’s application. Other locations are not included. 5 = > 6 jobs, sufficient/good details. Must be at more than 6 full-time positions within that specific center. Must include: • Distinction between full-time and part time • Job titles and duties • Benefits • Salary or amount/hour • Details about training • Hiring practices 2 = < 6 jobs, sufficient details; Page Length of High Quality Plan Varies, and may be part of other materials Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 9 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 8.Amount and Type of Compensation (PC) Applicant indicates all employees will earn at least $20 per hour. Will be paid every two weeks. Included within the budget. • 2 = Higher pay and compensation detail (e.g., % earning at least $15/hour); Must be at $15/hour or above. • 1 = Lower pay and/or compensation detail; Page Length N/A 9.Percent of Employees Earning At Least $15/Hour) (PC) Applicant indicates all provisioning center employees will earn > $15/hour. • 3 = 100%; • 2 = >75% to <100%; • 1 = Up to 75% of workforce would earn at least $15/hour Page Length N/A Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 10 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 10.Projected Annual Budget and Revenue (PC) Includes several pages of projected budget. Has line items of all expenses, and sales (1.4 million in expenses, 1.8 in sales). Explain their numbers have come from previous years of owning a medical marihuana center, and having several small businesses between all stakeholders. • 2 = Response includes specific annual revenue and expense numbers for the provisioning center of interest with some level of line item detail in a clear, understandable, and logical manner; • 1 = Have outline of a budget Does not include detailed list of projected costs and gains, only give a broad overview. No line items. Does not state where they got their numbers from. Page Length Several pages of budget and Pro forma tables and at least a page of explanation. Typically will have at least a year into the future, preferred to have several. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 11 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 11.Sufficient Financial Resources Provides litigation compliance verification forms for all stakeholders. While there were some issues, they have been resolved. Proves they have well over $100,000 in the bank and over $1 million in liquid assets. • 5 = Excellent, high level of detail provided, no money owed to city/bankruptcy history, stable business financially, at least $100k net worth/in bank, litigation compliance verification forms provided for all stakeholders mentioned in the application, and proof of other assets and/or financial support source; Provides bank statement of business, CPA attestation, or any other documentation with proof of financial resources. • 3 = Satisfactory details provided with up to one litigation blemish, and litigation compliance form(s) missing; See #25 Litigation History for more detail on litigation compliance verification. Page length Varies depending on documentation given Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 12 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 12.Business Experience Five stakeholders have several years in the medical marihuana industry, totaling 12 years together. Indicates decades of other applicable experience (retail, real estate, local business management, and legal). • 5 = 10 or more years of team-combined experience in MM industry (e.g., Provisioning Center, Grower, Processor operations); Caregivers experience is discounted 25% because not commercial experience. • 4 = 7 to < 10 years MM industry experience; • 3 = 5 to < 7 years MM industry experience (or 20+ years related industry); Page Length Depend on number of stakeholders and length of their resumes. 13.Content and Sufficiency of Information; Professionalis m of submitted documentation including clear labeling of required items Clear and understandable table of contents. All information is accounted for and easily findable. Found short and long term goals in business plan. Top Score: 5 Points Clear and easy to navigate to find criteria information • Inadequate Table of Contents ( 1 pt deduction) • Inadequate Short and Long term goals ( 1 pt deduction) • Letters to cure were sent because application did not fully comply with the Lansing ordinance ( 1 pt deduction) • Incomplete information provided (1 pt deduction) Page Length Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 13 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx N/A 14.Buffering between residential zoned areas and establishment Building is 1542 ft. from residential zoning, includes fencing between their property and those around them. Has landscaping close to fencing. • 5 = Radius of 1320 ft. (1/4 mile) of the facility does not touch any residential zoning • 3 = Residential zoning does not touch the property line of the med marijuana establishment • 1 = Residential Zoning on 2 or more side of the property line By reviewing Zoning Map, and confirmed by using Google maps to determine distance. Page Length N/A Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 14 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 15.Increased traffic on side streets will be scored lower No exit of side streets, signs on driveways indicating traffic, more than enough parking for building Review by Public Service by Traffic Expert ( 5pt weight scale) • Traffic Patterns • Driveways • Adequate Parking • Circulation on/off • ADA Page Length N/A 16.(50%) Entrance and exit on main streets, adequate parking not on residential streets (50%) Quality of Security Plan Offsite video storage, uniformed security guard at entrance, security camera layout included, metal detector upon entering, panic buttons, several safes, and waiting room for patients. Includes safety training for employees Description for all equipment, and security personal Traffic Plan Review by Public Service by Traffic Expert ( 5pt weight scale) • See above, same score used twice Security Plan • TIER 1 = 5 points Well written plan, appears to meet or exceed Lansing City Ordinance requirements • TIER 2 = 2 points Meets minimum requirements, may require some correction. Examples of common missing info Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 15 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx No exit of side streets, signs on driveways indicating traffic, more than enough parking for building = 5 points • Boiler plate not customized • No off-site video storage • No or minimal description of equipment • No safe • Lack of entry barriers Based upon State requirements for a Security Plan, and is reviewed by the Lansing Police Department. Page Length of High Quality Most plans would be above 30 pages. 17.Plan to meet with neighborhood organizations, Application indicated that they are planning to meet with neighborhood organizations, business association, crime watch, or other neighborhood organizations Detailed Plan: 1 Point Page Length Typically half a page in length. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 16 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 18.Improveme nts made or proposed to building The SEV of the building is $120,000 and list the improvement budget at $500,000. They are investing 417% back into the building. Percentage of the dollar amount invested in upgrading the location in comparison to the SEV (State Equalized Value) of property 3 pt – Investing 125% over the SEV value 1 pt Investing 25%- 74% over the SEV value Usually listed with the budget and explanation of improvements included either after the budget or in the business plan. Doesn’t include furniture, or inventory Improvements made specifically to building or property that cannot be removed. Page Length: N/A 19.Plan to minimize/elimi nate traffic Closing one driveways in order to direct patrons away from heavy traffic. Including signs that direct drivers to turn a specific way when leaving in order to mitigate accidents or traffic back-ups. Detailed Plan: 1 A narrative description to reduce car traffic We did not assess building or floor plans to determine if they had a traffic plan. It had to be included in the narrative. Page Length Varies Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 17 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx 20.Plan to minimize/elimi nate noise Sound-dampening fences between them and other lots. Landscaping separating the lots Disallowing loitering outside of the building or in the parking lot. Any equipment to be used would not be creating loud noise. • Detailed Plan = 2 Points Included information about how they will limit inside AND outside noise. We did not assess building or floor plans to determine if they had a noise plan. It had to be included in the narrative. Page Length Usually about a 1-2 pages. Longer if includes estimates and specs for any equipment. 21.Plan to minimize/elimi nate odor Includes full list of equipment, what it does and how it will be implemented into the building. Has a staff training outline on how to prevent odor and how to respond to any system issues. Has scheduled air quality checks. • Detailed Plan = 3 Points Page Length Typically several pages long with lists of equipment and any supplemental information such as staff training, or odor tracking system. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 18 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx All product will be stored in vault with carbon filters. Packaging will attempt to mitigate odor. A grow is included on site, but access will be through several doors, including one air-tight. 22.LPD Complaints No calls • No calls/new build - 4 pts • 1-5 calls - 3pts Regardless of property ownership, facilities that have a history of police incident are a less desirable location for the City. Page Length N/A 23.Demo of Regulatory Compliance No tax issues, trash and grass fines but were unrelated to center. Max Points: 4 Points Review of individual and business history with Treasury, Building Safety, Code Compliance, Zoning and compliance with MMFLA. • Major tax issue = deduct 2 pts for each issue • Minor tax issue or code compliance = deduct 1 pt for each issue • Insurance submission failure=Missing more than one element=deduct 2 pts Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 19 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx • Missing 1 or more elements = deduct 1 pt Page Length N/A 24.Litigation History Litigation forms were submitted for all stakeholders, some history was disclosed. Suits involved debt collection, and landlord/tenant disputes. All cases were resolved. Full points were awarded. Example of 2 point disclosure: 2pt - All stakeholders have a complete litigation history with no or minimal issue LARA litigation form or application attestation is not sufficient. LARA is not sufficient because it does not go back far enough in history. Can include signed form that states they have no history, or signed form disclosing any issues. Does not have to be notarized or legal form. Examples of High Scores Category Mocked Up Scoring Insights Examples Comments Pg 20 S:\Clerk_Staff\Med Marihuana Commission\Packets\11-16-18 Packet\hypothetical examples and explanation for mm provisioning scoring .docx Applicant states that they were involved in a court case, (states name of case), with a previous land-lord over a rent dispute. The case was pertaining to the land-lord stating the tenant had not paid rent in full and was still owing the land-lord. The judge ruled in favor of the applicant and the case was resolved. Example of 1 point disclosure: There is no active business litigation history against the applicant or business, nor has there been in the last 10 years. Must provide something even if there is no history. Needs to be clear and straightforward information about business litigation. Page Length Varies depending on history Timeline Better Green LLC Parcel #33-01-05-03-251-005 Enterprise Drive 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 .............................................. l August 14, 2018-Appeal submitted ........................................................................... 7 September 7, 2018 -Appeal to Hearing Officer September 19, 2018 -Hearing Officer Denial letter sent.. ...................................... 18 September 19, 2018 -Hearing Officer Decision ......................................................... 20 October 1, 2018 -Score update ................................................................................... 24 October 12, 2018 -Commission Appeal submitted .................................................. .31 October 19, 2018 -Commission Hearing date letter sent ........................................ 33 stamJ)s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0884 0830 62 Priority Mail 2-DAY with USPS TRACKING #• Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 oz Print Dale: 07/31/2018 Mailing Date: 07/31/2018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 Better Green LLC C/O Gavin Misher 187 Noble Rd Williamston Ml 48895-9759 USPS Postmar1< Here 'Regular Priority Mail 2-DAY Service postage rates apply. There is no tea tor Delivery Confirmation'" service on Priorily Mail services with use ot lhis electronic shipping label. Postmark required it tee refund requested. Delivery information is not available by phone tor 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 ii 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 cler1< 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- :=.-:-:-:--. -... ::--- July 31, 2018 Better Green LLC c/o Gavin Mishler 187 Noble Road Williamston, Ml 48895 Chris Swope Lansing City Clerk Dear Provisioning Center Applicant, The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 66 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 parcel 33-01-05-03-251-005 on Enterprise Drive. 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. Lansing City Clerk's Office Ninth Floor, City Hall, 124 W Michigan Ave, Lansing, Ml 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov -2- -----·---- Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of 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, Ml 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 u~I IC R Applicant Name Possible BETIER GREEN LLC Points GREE •111 r Applicant Address PARC PARCEL 33-01-05-03-251-005 ENTERPRISE --EL33- ------Scoring Insights Applicant provides a significant number of detailed marketing, Marketing, Advertising and 4 2 advertising, and promotion examples (e.g., social media, website, Promotion promotions, etc.) but does not address minor minimization at all. Lacks minor minimization examples and details. Applicant indicates they are leasing Parcel 1133 for a provisioning center for $130K (leasing from own company Pure Quality Tangible Capital Investment Consulting) and investing nearly $440K for initial capital investment in the City of Lansing and fixed costs. Will also seek licenses and has purchased land for {Investment in applicants 15 9 cultivation and processing facilities, and intends to build two 27K other provisioning centers sq. ft. buildings for grow operations. However, they do not provide was not included in score) a clear narrative regarding the tangible capital investment associated with the integrated companies. Lacks details and an optimal capital dollar amount. Job Creation Applicant indicates 131 jobs will be created by the end of year 2 at (Integrated System) the provisioning center, grow, and processing operations, but Overall number of jobs 5 3 doesn't provide much detail (other than titles) regarding these created positions. Lacks sufficient detail and falls short of the optimal number of jobs. Applicant provides net worth statements demonstrating combined net worth of $1.2 million of which cash reserves are only about Financial Structure and 3 $38K. It is not clearly described how the initial investment cost of Financing 1 $439K is going to be covered. Lacks sufficient details about how capital will be accessed plus about how capital is tied to the business plan. Plans to Integrate Facility 2 2 Applicant indicates they plan to integrate their provisioning center with Other Establishments with two -27K sq. ft. buildings designated for grow operations. -4- ------------- City of Lansing Provisioning Center Ranking Applicant generically describes they will partner with local organizations to sponsor community events like softball games, Charitable Plans and 4 beautification efforts, etc. and reach out to veterans groups and Strategies 1 others. Lacks the names of any organizations they intend to target, any dollar amounts they intend to give, and 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 create construction < 6 jobs, sufficient details; 3 5 4 jobs and 10 full-time and part-time positions. Describes job titles, = 6 jobs, sufficient details; 4 qualifications, etc. Lacks sufficient details. = > 6 jobs insufficient details; 5 = > 6 jobs, sufficient/good details. Amount and Type of Applicant indicates the provisioning center will create 10 full-time Compensation (PC) 2 2 and part-time positions with each PC employee earning between $15.25 and $25/hour, and provides strong support details. Percent of Employees Applicant indicates all 10 provisioning center employees will earn Earning At Least $15/Hour) 3 3 (PC) at least $15/hour. Projected Annual Budget and Applicant provides detailed projected annual budget and revenue Revenue (PC) 2 2 data (e.g., $1.67 million in expenses and $2 million in revenues during 2018) that are understandable. Applicant does not provide litigation compliance verification for all key team members (I.e., only Gavin Mishler and Lonnie Goodnoe). Applicant provides net worth statements demonstrating combined Sufficient Financial Resources 5 3 net worth of $1.2 million of which cash reserves are only about $38K. It is not clearly described how the initial investment cost of $439K is going to be covered. Lacks an optimal amount of clear details Applicant indicates their team has decades of medical marlhuana industry experience as caregivers but not much in terms of working Business Experience 5 4 at provisioning centers, grow operations, or processing operations. They also have many years of general business management and operations experience. Lacks the optimal amount of applicable business experience. -5- City of Lansing Provisioning Center Ranking Content and Sufficiency of Information; Professionalism of submitted documentation 5 3 inadequate Table of Contents, unorganized and hard to find things including clear labeling of required items Buffering between residential zoned areas and 5 5 New build establishment Increased traffic on side 5 2 On street parking streets will be scored lower Entrance and exit on main TIER 3-Does not meet minimum requirements, requires streets, adequate parking 10 4 correction and/or has missing/or incomplete information. 4pts not on residential streets, traffic, Strong traffic pattenrs, driveways, and parking. Inadequate Quality of Security Plan cirrculation. Plan to meet with 1 1 Have Plan neighborhood organizations Improvements made or 3 3 improvements reflected in plans proposed to building Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to minimize/eliminate 2 0 inadequate noise plan noise Plan to minimize/eliminate 3 2 Charrcoal filtration, plan to do all jobs that could produce odor in odor sealed room LPD Complaints 4 4 New build/biz Demo of Regulatory 4 4 no tax history Compliance Litigation History 2 2 Clear history Total 100 66 -6- August 13, 2018 Chris Swope Lansing City Clerk City of Lansing, MI 124 W. Michigan Avenue, 9111 Floor Lansing, MI 48933-1695 (517) 483-4131 Dear Clerk and Staff; As per your Jul 31, 2018 letter of denial to my client, Better Green, LLC, I am writing you to appeal the score and denial of Better Green's application for a City of Lansing medical marihuana license. According to the language of your letter, the applicant has a right to an appeal within 14 days upon receipt of the letter by filing a written statement to your office. Additionally, pursuant to the City of Lansing, Michigan Ordinance 1217 § 1300.15(C) states, "Any applicant aggrieved by the denial or revocation of a license or adverse decision under this chapter may appeal to the clerk, who shall appoint a hearing officer to hear and evaluate the appeal and make a recommendation to the clerk." My client wishes to exercise their opportunity to appeal their score and denial. The applicant, Better Green, believes that their application's score should be reviewed, because the City of Lansing's scoring analysis of Better Green's application was arbitrarily underscored. Also, the City of Lansing's scoring criteria, which applications were based did not clearly express how an application was to be adequately scored. I. BASIS OF APPEAL Better Green's appeal is based on the following areas of discussion: 1. Better Green should be granted more point scoring in several key areas of their application that were overlooked. 2. Lansing City Ordinance 1217 §1300.06 License Application Evaluation was vague. 3. Due to License Application Evaluation's vagueness, the City Clerk's scoring method was arbitrary and capricious. 1 -7- II. LAW Lansing City Ordinance 1217 § 1300.6 License Application Evaluation: 1300.06. -License application evaluation. (a) The City Clerk shall assess, evaluate, score and rank all applications submitted according to the provisions of this chapter. No application shall be accepted for assessment, evaluation, scoring, and ranking unless such application contains the approvals required by Section 1300.05. (b) In its application assessment, evaluation, scoring, and ranking, deliberations, the Clerk shall assess, evaluate, score, and rank each application based upon a scoring and ranking procedure developed by the Clerk consistent with the requirements, conditions, and provisions of this chapter in each of the categories set forth below in this subsection. Overall scoring and ranking shall be conducted and applied by the Clerk on the basis of assigned points from zero points to 100 points with the lowest overall total score as zero points and the highest possible total score being 100 points. (1) The content and sufficiency of the information contained in 1300.0S(b) (12) and (23); the maximum number of scoring points in this category shall be 50 points. (2) Whether the proposed establishment will be consistent with land use for the surrounding neighborhood and not have a detrimental effect on traffic patterns and resident safety. The maximum number of scoring points in this category shall be 20 points. (3) Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood. The maximum number of scoring points in this category shall be ten points. (4) Whether the applicant or any of its stakeholders have a record of acts detrimental to the public health, security, safety, morals, good order, or general welfare prior to the date of the application; whether the applicant or any of its stakeholders have previously operated an illegal business of any kind, including any violation of City medical marihuana moratoriums. The maximum number of scoring points in this category shall be ten points. (5) Whether the applicant has reasonably and tangibly demonstrated it possesses sufficient financial resources to fund, and the requisite business experience to execute, the submitted business plan and other plans required by Section 1300.5. The maximum number of scoring points in this category shall be ten points. 1300.05. -License application submission, et all. The City of Lansing Clerk's Medical Marihuana Provisioning Centers Scoring Criteria, created by the City Clerk. Medical marihuana provisioning center applications was scored on the basis of this criteria. Administrative Procedure Act 5 U.S.C. § 706(2)(A) -8- 2 (2) hold unlawful and set aside agency action, findings, and conclusions found to be - (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; Natural Resources. v. US., 966 F.2d 1292, 97, (9th Cir.'92), arbitrary and capricious is defined as, absence of a rational connection between the facts found and the choice made. III. DISCUSSION The City Clerk arbitrarily underscored Better Green's application as applied to § 1300.6 and its scoring criteria in the following areas: A. Marketing, Advertising and Promotion 1300.05. -License application submission (b)(12)(iii) A copy of the proposed business plan for the establishment, including, but not limited to, the following: A proposed marketing, advertising, and business promotion plan, including plans to minimize the exposure of marketing or promoting marihuana products to minors; The Clerk's denial states that the applicant provides significant marketing details, "but does not address minor minimization at all. However, Better Green provided "Plans to Minimize Exposure to Minors", (Exhibit A). The Clerk's statement that applicant "does not address minor minimization at all" is not substantiated. Pursuant to the Lansing Ordinance 1300.5 § (b)(l2)(iii) an applicant is to submit a business plan that includes a proposed marketing and advertising plan, including plans to minimize exposure of marketing or promoting marihuana products to minors. Better Green's business plan includes a detailed marketing plan and directly following the marketing plan included plans to minimize exposure to minors. The plans detail that the location is not located near a residential community; that Better Green will not engage in marketing and advertising campaigns to minor or to attract minors, and that Better Green is located in an industrial community. Section 1300.5 does not express that the applicant has to provide examples or major details. The Clerk's statement that the applicant's plan lacks minor minimization examples and details is arbitrary. Section 13005 § (b)(l2)(iii) does not require examples, nor does not express how detailed the plans should be. Therefore, the denial on such basis are truly arbitrary. Better Green provided a plan to minimize exposure to minors as required by 1300.5. B. Tangible Capital Investment in the City of Lansing: 1. Pursuant to § 1300.5(b )(l 2)(iv): -9- 3 iv. Planned tangible capital investment in the City, including detail related to the number and nature of applicant's proposed medical marihuana establishments in the City and whether the locations of such establishments will be owned or leased; further, if multiple licenses are proposed, an explanation of the economic benefits to the City and job creation, if any, to be achieved through the award of such multiple licenses. Supporting factual data shall be included with the response to this subsection ... The City Clerk admitted in Better Green's scoring detail that Better Green has integrated plans that include the investment of $440,000 for a fixed capital investment, and that they will be indirect owners of the property. However, the Clerk stated that Better Green does not provide a clear narrative regarding the tangible capital investment associated with the integrated companies. §1300.5(b)(12)(iv) says that the applicant is to include details related to the number and nature of the applicant's proposed establishments and whether the location of such established will be owned or leased. Here, the Clerk admits that Better Green intends to lease property owned by themselves. Section 1300.5 requires that the applicant provide a planned tangible capital investment, here, Better Green provided details of their plans of investing approximately $440,000 in initial capital investments (Exhibit B). Moreover, Better Green explicitly detailed plans to seek multiple licenses that includes grow and processing facilities. Pursuant to § 1300.5(b )(12)(iv), Better Green provided supporting factual data to substantiate their detailed plans. Better Green's members provided a Certified Public Accountant's attestations supporting its financial worth of a $1 million to substantiate their detailed plans. The Clerk arbitrarily underscored Better Green's plans stating that their application lacked sufficient details and an "optimal capital investment amount". §1300.5(b)(12)(iv) does not include language of a "optimal capital investment amount". The Clerk arbitrarily applied language that was not included in§ 1300.S(b). Better Green's application provided explicit details for their tangible capital investments as required by the ordinance, therefore, to merely grant Better Green 9 out of 15 points was arbitrary and capricious. Natural Resources. v. US, 966 F.2d 1292, 97, (9th Cir.'92), arbitrary and capricious is defined as, absence of a rational connection between the facts found and the choice made. In this matter, the Clerk's statement that Better Green's tangible capital investment plan lacked sufficient detail and an optimal capital investment amount is not a reasonable rationale of§ 1300.5(b )(12)(iv). 4 -10- The ordinance did not provide any language supporting the Clerk underscoring an application based on "optimal capital investment amount''. Better Green provided details and supporting data for their tangible capital investment, as required by§ 1300.5(b)(12)(iv). Therefore, Better Green's application should be granted the full 15 points for their tangible investment plans. C. Job Creation Pursuant to §1300.5(b)(l2)(iv), an applicant is to include details, an explanation, and supporting factual data of economic benefits to the City and job creation. The Clerk admits that Better Green provided plans to create 131 jobs by the end of year 2 of their operation, but provides little job plan details other than titles. Better Green, specifically, detailed its job creation plan detailing each job, the duties, and the requirements. (Exhibit C) and long and short-term employment goals (Exhibit D). Moreover,§ 1300.5(b)(l2)(iv), states that the applicant is to include an explanation, supporting details and factual data, and Better Green included these details within its financial projections of 24 months. The Clerk arbitrarily stated that Better Green's job creation plan falls short of an optimal number of jobs, but§ 1300.5(b)(l2)(iv) includes no such language. The Clerk arbitrarily granted Better Green 3 point out of 5 points for job creation. Better Green provided the extensive job details and showed they intend to created 131 jobs, as required by §1300.5(b)(l2)(iv). Better Green's plans of employing 131 individuals is nothing but optimal. The Clerk's statement that Better Green falls short of the optimal number of jobs is suspicious or dubious. For the Clerk to reduce 131 jobs as falling short of an optimal number of jobs means that the City of Lansing previously established an "optimal number of jobs" and did not inform applicants, so that they may plan for the number. § l 300.5(b )(l 2)(iv) does not provide language stating that an applicant is to provide any certain number of jobs. Thus, the statement that Better Green's plans fall sho11 of the optimal number is arbitrary, if 131 jobs are optimal. Thus, Better Green's application should be granted the full 5 points for their job creation plan. D. Financial Structure The City Clerk stated that Better Green may have $1.2 million of net worth, but only have $30,000 in reserved cash. Therefore, it's unclear how Better Green will cover the tangible -11- 5 capital investment of $439,000. Better Green included explicit financial structures and personal worth in its financial plan (Exhibit E, F). Pursuant to § l 300.5(b) (12) (vii), an applicant is to include financial structure and financing of the proposed medical marihuana establishment(s). Here, Better Green provided substantial financial data of over $1.2 million in net wo1ih. § 1300.5(b) (12) (vii) does not state that an applicant must detail how their net worth would be allocated to cover the capital investment. Therefore, the Clerk's statement stating that Better Green failed to explain how to cover the capital investment was not related to the ordinance. The Clerk stated that Better Green lacked details as to how their personal capital would be tied to the business plan. However, § 1300.5(b) (12) (vii) does not require that an applicant state whether personal capital will be applied to the business plan. According to§1300.5(b) (12) (vii), the applicant is to include a financial structure and financing of the establishment. Better Green's application included exclusive financial plans for it establishment (Exhibits E, F). § 1300.6 (5) requires that the applicant has reasonably and tangibly demonstrating it possesses sufficient financial resources to fund, and the requisite business experience to execute, the submitted business plan and other plans required by Section 1300.5. Here, Better Green has provided net worth and assets of approximately $1.2 million. Better Green's exhibited that they bring multiple years as business owners as requisite business experience. This evidence detailed that Better Green has the reasonable and tangible means to execute it financial structure and financing of it proposed establishment. Here, the City Clerk arbitrarily limited Better Green's points to 3 out of 4, whereas, Better Green should be granted all 3 points. E. Charitable Plans and Strategies The Clerk admitted that Better Green included plans to pminer with local organizations and sponsor community events, as well as other community involvement. However, the Clerk stated that Better Green lacked names of any organizations, the actual dollar amounts they intend to I donate, and provided not proof of actual payments or executed agreements. No such requirement of an actual payment or executed agreement is stated in§ 1300 at all. Clearly, the Clerk's statement and underscoring of Better Green's application is arbitrary and capricious. 6 -12- Pursuant to §1300.5(b)(12)(x), an applicant is to include community outreach/education plans and strategies. Here, Better Green provided extensive Charitable plans (Exhibit G). If the Clerk required executed agreements, proof of actual payments or the intended names of groups, it should have stated in §1300.5(b)(12)(x), but it wasn't. The Clerk's statement has no rational connection to the relevant facts or law. Therefore, the Clerk's statement is arbitrary and capricious. Nonetheless, the Clerk merely granted Better Green 1 out of the 4 available points, referring to the lack of an actual payment or executed agreement. However, § 1300.S(b )(12)(x) does not require an applicant to make a payment nor execute an agreement prior to an application for a license. Therefore, Better Green should have been granted the full allowable 4 points. F. Sufficient Financial Resources The Clerk repeated the applicant's underscoring for Sufficient Financial Resources, as it did for Financial Structure and Financing. The Clerks states that applicant lacks an optimal amount of clear details of its intention to apply its net worth to cover the initial capital investment. As stated above, Better Green included an explicit financial structure and personal worth in its financial plan (Exhibit E, F). As stated above, § 1300.6(b) (5) the applicant must reasonably and tangibly demonstrate it possesses sufficient financial resources to fund, and the requisite business experience to execute, the submitted business plan. Here, Better Green has provided net worth and assets of approximately $1.2 million. This evidence detailed that Better Green has the reasonable and tangible means to execute its financial structure and financing of it proposed establishment. Better Green has shown that its members have years of business experience. Better Green developed its net worth as construction operators, and intentionally did not operate an illegal cannabis dispensary, like others in the City of Lansing. They earned their wealth honestly. They did not wish to be lawbreakers as a means of financial resources. The Clerk irrationally disregarded Better Green's financial plan, and underscored Better Green's application, only granting 3 points out of 5 points. Thus, Better Green should be granted the entire 5 points. G. Business Experience The Clerk stated that Better Green's plan lacked the optimal amount of applicable business experience. As a result of this analysis, the Clerk granted Better Green 4 points out of 5 points. -13- 7 However, § 1300.S(b )(8) states the application should provide a resume that includes whether the individual and each stakeholder has any relevant experience with medical marihuana or a related industry. The Clerk admits that the applicant's owners have over 10 years of medical marihuana experience, as required by §1300.5(b)(8). It is true that Better Green did not own or operate an illegal cannabis dispensary as experience for its application. Nonetheless, § 1300.S(b )(8) merely requires that an applicant include details of its relevant experience with medical marihuana or a related industry. Here, in its Executive Summary (Exhibit H), Better Green included information that the owners have previous successful business experiences with many years of possessing medical marihuana cards. Admittedly, Better Green did not include litigation compliance verification for the members wives with its application, but only Lonnie and Gavin are the applicants, not the spouses. The Clerk admits that they have I 0 plus years of medical marihuana and business experience. Therefore, the Clerk's granting of merely 4 points of the available 5 points was clearly arbitrary. H. Content and Sufficiency of Information; Professionalism of submitted documents .... The Clerk states that Better Green's application had an inadequate Table of Contents, which made it had to find things, and granted Better Green's application 3 points out of 5 points. Better Green admits that the table of contents were troublesome, that is because at the time of submission the application was in a spiral binder. At that moment, the Clerk stated that the spiral binder was improper, so that items had to be removed in order to be separately entered into a different kind of binder removing items from the spiral binder, disorientating the table of contents. Moreover, these rules are not part of the Lansing Ordinance 1217 § 1300. The Clerk did not express, directly or indirectly, that Better Green's table of contents were inadequate. Quite the contrary, Better Green's application included the required documents, as a complete plan, and was professionally prepared. Additionally, the Clerk provided no standard for a professional submission of an application. Better Green's application included the table of contents. Therefore, the Clerk's granting of merely 3 out of 5 points was not rational to the relevant facts. I. Increased traffic on side streets will be scored lower. -14- 8 The Clerk stated that Better Green's location had on street parking, thus the Clerk granted merely 2 out of the available 5 points. However, Better Green's facility is located in an industrial park with a parking lot, whereas, street parking is unnecessary. Clearly, the Clerk's underscoring of Better Green's application for traffic is not rational to the relevant facts, thus arbitrary. Pursuant to §1300.6(b)(2) the applicant's plan should not have a detrimental effect on traffic patterns and resident safety. Here, C&A Engineers provided Better Green a plan that details that its establishment is not located on a main thoroughfare or side-street. Better Green is located in an industrial park, therefore it should not detrimentally effect traffic patterns or resident safety. Plus, the engineer's Site plans (Exhibit I) shows a parking lot for customers. Street parking is allowed on Enterprise Drive prior to Better Green's application, but Better Green has its own parking lot. Therefore, Better Green's establishment will not have a detrimental effect on traffic patterns. Clearly, the Clerk overlooked Better Green's Site plan when they underscored Better Green's application related to traffic. Therefore, Better Green should be granted all of the 5 points available for its traffic plan. J. Entrance and Exit on main streets, adequate parking not on residential streets .... The Clerk stated that Better Green provided traffic, traffic patterns, driveway and parking plans. Better Green provided a detailed engineer's site plan that were drawn to scale (Exhibit J). Within Better Green's plans the scale drawings display the required parking illustrations. However, the Clerk states that the Tier 3 drawings did not meet the requirements. Better Green never received any notice of documents missing or that any of their documents were inadequate. If so, they would have corrected them. If the Clerk was aware that Better Green's application was incomplete, Better Green's application should not have been accepted, or they should have been given notice. The Clerk arbitrarily underscored Better Green's plan by granting merely 4 out of the 10 available points. K. Plans to minimize traffic/noise The Clerk states that the Better Green's plans to minimize traffic and noise are inadequate. However, the Clerk admits that Better Green provided traffic plans. Additionally, Better Greens location is in an industrial park at the end of the block with an acre of space to reduce traffic 9 -15- issues. Pursuant to §1300.6(b)(3) the applicant's application must include plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood. Better Green's Site plans show that its location is in an industrial zone at a dead-end, thus, minimizing traffic. Additionally, Better Green's location will not have noise impact. The C&A Engineer's site plans (Exhibit I) shows that Better Green's location is a stand alone building at the end of the street. The industrial park includes several heavy industrial companies, that are noisy. Whereas, Better Green is a retail operation, which would not impact the surrounding industrial park neighborhood. The Clerk arbitrarily denied Better Green points for plans to eliminate traffic and noise. L. Plan to minimize odor The Clerk admits that Better Green's plans provide charcoal filtration and plans to reduce odor by conducting jobs in sealed rooms. However, did not grant Better Green 3 of the available 3 points. Pursuant to §1300.6(b)(3), an applicant is to include plans to eliminate or minimize odor effects on the surrounding neighborhood. Better Green's establishment is not located in a neighborhood. Clearly, Better Green's establishment would not affect the neighborhood with odors. Plus, the medical marihuana products will be delivered to Better Green prepackaged and Better Green will distribute the products in a package. There will be no manufacturing at Better Green's provisioning center. As a result, Better Green should not have an odor emission. The Clerk should grant Better Green the entire 3 points available for minimizing odor. IV. LANSING CITY CLERK'S MEDICAL MARIHUANA PROVISIONING CENTER SCORING CRITERIA The Clerk issued a Medical Marihuana Provisioning Centers Scoring Criteria sheet, so that applicants will be notified of the scoring evaluation. Although, the scoring criteria details how points will be assessed to each section of an application plans, but the details are vague. The Clerk's scoring of Better Green's application made statements like: "falls short of optimal number of jobs", 'optimal capital investment", "proof of any actual payment or executed -16- 10 -----·-----------,--,,.---.,..,.,.-~----.,.,-----:---------------- agreement". There is not legal reference to such discretion. Neither Lansing Ordinance 1217 § 1300 nor the Medical Marihuana Provisioning Centers Scoring Criteria sheet have language that requires an applicant of those standards. Those statements by the Clerk to underscore an application is arbitrary, on its face. Additionally, the standard for which applications are judged was also vague. The Clerk stated that the scoring of applications will be on a curve, and the curve will be set by the highest score. However, pursuant to § 1300.06(B), the Clerk is to assess, evaluate, score, and rank each application with zero being the lowest possible score and 100 being the highest. Nonetheless, the Clerk intends to base scores on a curve. Such evaluation is arbitrary and capricious. There currently are multiple applications that are being appealed for low scores, and other reasons. As applicants appeal denials, and some reversals maybe granted, it is umeasonable that the Clerk make statements that an applicant's score eliminates their possibility to score in the top twenty. Unless, the top twenty have been prematurely selected prior to the final scoring of all applications, including those in appeal. Better Green's application should not be denied, until after appeals have been exhausted, because the curve may be changed. Therefore, Better Green's denial should be reversed at this moment. V. CONCLUSION Pursuant to the Lansing Ordinance 1217 § 1300(5) and (6), Better Green submitted an application that was required by law. The Clerk's assessment of Better Green's application was arbitrarily beyond the scope of§ 1300(5) and (6). The Clerk's assessment evaluated Better Green's application by applying language that was not in the law. In review of the Better Green's application, included details for financing, site plans, along with other plans. I believe that the Clerk overlooked much of the details of Better Green's plans. Due to the Clerk's assessment of Better Green's application that was beyond the scope of the law, the Clerk's scoring of Better Green's application was arbitrary and capricious. Therefore, Better Green request the point increase and a reversal of its denial. 11 -17- stamps endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0572 8788 40 Priority Mail 2-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 oz Print Date: 0911912018 Mailing Date: 09/1912018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 Better Green LLC Clo Gavin Mishler 187 Noble Road Williamston Ml 48895-9759 USPS Postmark Here 'Regular Priority Mail 2-DAY Service postage rates apply. There is no fee ror Delivery Confirmation"' service on Priority Mail services with use of this electronic shipping label. Postmar1< 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. I co ~ September 19, 2018 Better Green LLC c/o Gavin Mishler 187 Noble Road Williamston, Ml 48895 Dear Provisioning Center Applicant, Chris Swope Lansing City Clerk 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 the parcel 33-01-05-03-251-005 on Enterprise Drive. I have determined your appeal is denied. The Scoring and Ranking denial is affirmed based on the Hearing Officer recommendation and the applicant's file with the addition of one point based on our internal review. You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk's Office. The Medical Marihuana Commission Appeal will become a matter of public record. The Commission's review of 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. 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, 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. Michigan Ave., Lansing, Ml 48933-1695 517-483-4131 _19 _.377-0068 FAX www.lansingmi.gov/cler" vity.clerk@lansingmi.gov Hilary M. Barnard Attorney at Law In Re: Better Green, LLC CITY OF LANSING HEARING OFFICER DECISION RECOMMENDATION Proposed Location: 33-01-05-03-251-005 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 BETTER GREEN, LLC and its license application for a Medical Marihuana Provisioning Center that the license application remain denied. FACTS BETTER GREEN, 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 66 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 July 31 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 including Tangible Capital, Charitable Plans, and Entrance and Exit on Main Streets. Appellant's Position Appellant argues that Appellant's application was arbitrarily underscored. And states that its basis of appeal are (1) Appellant should be granted more point scoring in areas that were overlooked; (2) the City Ordinance is vague; and (3) Due to the vague ordinance the scoring is arbitrary and capricious. City Clerk Position The City Clerk affirms its position on the denial, however it stated that Appellant should receive one additional point in Marketing and Advertising. The strategy for this was not in the marketing Page 1 of5 -20- ---·-··------ Hilary M. Barnard Attorney at Law plan. The City Clerk iterates that this will make Appellant's score "68 out of 100,"1 but still too low to make Appellant a scorer in the top-twenty applicants. 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."2 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 thitiy (30) days from the clerk's decision.3 * * * [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.4 1 The mathematical error exists on the part of the City Clerk's summary. Based on the office's argument, one additional point would make Appellant's score 67 not 68. 2 See LANSING CITY CLERK'S OFFICE, City of Lansing City Charter (as amended) at 24(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. 3 City of Lansing Ordinance No. 1217 Sec. l 300. J 5(C). 4 id at l 300.3(E). Page 2 of5 -21- -------------------------------- 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.5 Arbitrary and caphcious have generally accepted meanings.6 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."7 Capricious is "apt to change suddenly; freakish; whimsical; humorsome."8 The burden is on the party attacking to affirmatively prove the arbitrary and unreasonable decision.9 This is not to say that a local body may "abrogate constitutional restraints."10 Whether an applicant can submit supplemental materials on appeal, the Lansing Ordinance in Section 1300.S(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.11 Further, an appellate body will generally not consider issues not raised in or ruled on by a lower review.12 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, review of an application will consider: (B)(2) Whether the proposed establishment will be consistent with land use for the surrounding neighborhood and not have a detrimental effect on traffic patterns and resident safety .... (3) Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood[.] ... (5) whether the applicant has reasonably and tangibly demonstrated it possesses sufficient financial resources to fund, and the requisite business experience to execute, the submitted business plan and other plans required[.] * * * 5 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. 6 See Bundo v. Walled Lake, 395 Mich. 679, 703 (1976) (citing United States v. Carmack, 329 U.S. 230, 243 (1946). 7 Id. B Id. 9 See e.g., Kropfv. Sterling Heights, 391 Mich. 139, 154 (1974) (citing Janesick v. City of Detroit, 337 Mich. 459 (1953)). 10 Id. at 162. 11 See e.g., MCR 7.105(8)(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[.]") 12 See Napier v. Jacobs, 429 Mich. 222, 232-35 (1987). Pal!e 3 of 5 -22- -----------------· -------~------------ Hilary M. Barnard Attorney at Law (D) In the event that there are more applicants for provisioning center licenses who meet the minimum requirements set forth in 1300.6(8) 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[.] * * * (IX) [I]f a medical marihuana grower facility(ies) are proposed, plans to integrate such facility(ies) with other proposed medical marihuana establishments[.] 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.' 13 Under the Lansing City Charter: 14 (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 Capital1 5 argument. Capital is understood to be "[m]oney or assets invested, or available for investment, in a business"16 Further, the City Clerk has articulated that Tangible Capital is rooted in a physical object. The scoring insight details the portions of Appellant's application that relate to the scoring criteria. Appellant's application provided little details as to the allocation of the capital, and how capital is to be allocated by proposed additional businesses. It is not enough for an appellant to "simply announce a position or assert an error[.]"17 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."18 Appellant cites the Administrative Procedure Act, 5 U.S.C. § 551 et seq. and a Ninth Circuit case 13 City of Lansing, Michigan Ordinance No. 1217 Sec. 1300.2(C). 14 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?bidid=. In this instance, the license issuance is handled with the City Clerk's office. 15 Also encompassing Appellant's financial resources argument. 16 Capital, Black's Law Dictionary (7th ed.). 17 See People v. Kevorkian, 248 Mich. App. 3 73, 389 (2001 ). 1s Id. Pa!l:e 4 ofS -23- Hilary M. Barnard Attorney at Law regarding standard of review. Federal laws and regulations are not binding authority on Michigan courts interpreting Michigan statutes.19 Thus, Appellant's argument utilizing non-applicable authority is misplaced. There is no basis to provide additional points in this category Under Charitable Plans and Strategies, the ranking sheet indicates that Appellant's score demonstrated that Appellant would partner with local organizations to sponsor community events. It did not provide any details as to what organizations, dollar amounts, or coherent details. records. Merely stating that Appellant "will do X" is not illustrative of Appellant's plans. There is no provided basis or argument to merit more points in Appellant's score. As to Appellant's arguments regarding the ordinance, they are directed to the wrong forum. The scope of this appeal is not to address deficiencies of an ordinance. Any deficiencies or issues with the ordinance itself are not within the purview of the City Clerk's office to correct. The scoring criteria themselves have been available to the public since prior to the application deadline. Also, this appeal is the incorrect forum to address issues or concerns. Instead of pointing to section of Appellant's application, Appellant has tried to build its appeal by attacking the system. This Hearing Officer sees no value in an ad hominem attack in this appeal,20 further lacks the authority to address it.21 CONCLUSION For the foregoing reasons, it is recommended that Appellant be awarded I (one) more points in its scoring. However, seeing as this total would create a total score of 671100, Appellant still would not meet the threshold for scoring in the top twenty applicants. Therefore, it is recommended that Appellant's application for a provisioning center license remain denied. Respectfully Submitted, 19 Penden v. City of Detroit, 470 Mich. 195, 217 (2004). 20 See e.g., People v. Coones, 216 Mich. App. 721, 734 ( 1996) (O'Connell, J., concurring) (noting that a contemptuous ad hominem attack is not a proper part of vigorous advocacy). 21 It should also be noted that in other sectors of Michigan law, if an administrator has discretionary authority, an administrator's decision will be upheld if it is the result of a deliberate and principled reasoning process. A decision is not arbitrary and capricious it is rational in light of applicable provisions. See e.g., Hillsdale Cmty. Health Ctr. v. Pioneer State Mutual Ins. Co., slip op. * 11 (Sept. 8, 2009) (unpublished opinion). Page 5 of5 -24- stamDs endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0902 3298 68 Priority Mail 2-DAY with USPS TRACKING#• Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: 10/0112018 Mailing Date: 10/0112018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 Better Green LLC C/O Gavin Misher 187 Noble Rd Williamston Ml 48895-9759 USPS Postmark Here 'Regular Priority Mail 2-DAY Service postage rates apply. Thora is no lea for Dalivary Confirmation"' service on Priority Mail services with use of this electronic shipping label. Postmarl< 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. I LD N I ------ September 26, 2018 Better Green LLC clo Gavin Mishler 187 Noble Road Williamston, Ml 48895 Chris Swope Lansing City Clerk Re: Parcel # 33-01-05-03-251-005 Enterprise Dr. Dear Provisioning Center Applicant, Based upon your appeal and due diligence by the City Clerk office to ensure the most accurate and appropriate scoring, please find enclosed an updated score sheet related to your application for licensure. The attached revised sub-scores are based on the criteria posted on https://www.lansingmi.gov/167 4/Medical-Marijuana-Application-lnformatio and a brief summary of determining factors for each sub-score. The Lansing City Ordinance section 1300.6 discusses the Provisioning Center license application evaluation. Your score which is 69 out of 100, eliminates the possibility of scoring in the top twenty. Therefore, your application for licensure remains denied. You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk's Office. This letter supersedes your previous denial letter, and re-starts the thirty (30) day appeal period. The Medical Marihuana Commission Appeal will become a matter of public record. The Commission's review of an appeal shall not be de nova. The Commission shall only overturn, or modify, a decision or finding of the Clerk if it finds $UCh 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. Lansing Cih1 r.1~rk's Office Ninth Floor, City Hall, 124 W Mi-26-n Ave, Lansing, Ml 48933-1695 517-483-4131 517-377-0068 FAX Chapter 1300 provides that should an applicant not receive a license, one-half of the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of the temporary operation are satisfied. Sincerely, Chris Swope, Master Municipal Clerk Lansing City Clerk CC: City of Lansing Law Department Lansing Citv Clerk's Office Ninth Floor, City Hall, 124 W M-27 _in Ave, Lansing, Ml 48933-1695 517-483-4131 o 11-377-0068 FAX ------------- City of Lansing Provisioning Center Ranking 9/25/2018 Total Applicant Name Possible BETTER GREEN BETIER GREEN LLC LLC Points PARCEL 33-01- Applicant Address ---05-03-251-005 PARCEL 33-01-05-03-251-005 ENTERPRISE <NTOl>Dl>IC< Applicant provides a significant number of detailed marketing, advertising, and promotion Marketing, Advertising and examples (e.g., social media, website, promotions, etc.) but does not address minor 4 3 minimization at all. lacks minor minimization examples and details. Update 9/6/2018 Promotion Upon further review, the applicant does state their strategy to mitigate advertisements targeting minors. However, it was not in their marketing plan. One additional point was added to their score. Tangible Capital Investment Applicant indicates they are leasing Parcel #33 for a provisioning center for $130K (leasing in the City of Lansing from own company Pure Quality Consulting) and investing nearly $440K for initial capital investment and fixed costs. Will also seek licenses and has purchased land for cultivation 15 9 and processing facilities, and intends to build two 27K sq. ft. buildings for grow operations. However, they do not provide a clear narrative regarding the tangible capital investment associated with the integrated companies. lacks details and an optimal capital dollar amount. Job Creation (Integrated System) Applicant indicates 131 jobs will be created by the end of year 2 at the provisioning 5 3 center, grow, and processing operations, but doesn't provide much detail (other than Overall number of jobs titles) regarding these positions. Lacks sufficient detail and falls short of the optimal created number of jobs. Financial Structure and Applicant provides net worth statements demonstrating combined net worth of $1.2 3 1 million of which cash reserves are only about $38K. It is not clearly described how the Financing initial investment cost of $439K is going to be covered. Lacks sufficient details about how capital will be accessed plus about how capital is tied to the business plan. Plans to Integrate Facility 2 2 Applicant indicates they plan to integrate their provisioning center with two -27K sq. ft. with Other Establishments buildings designated for grow operations. Applicant generically describes they will partner with local organizations to sponsor Charitable Plans and community events like softball games, beautification efforts, etc. and reach out to 4 1 veterans groups and others. Lacks the names of any organizations they intend to target, Strategies any dollar amounts they intend to give, and proof of actual payment or an executed agreement. -28- City of Lansing Provisioning Center Ranking 9/25/2018 Number of Jobs at the Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = < 6 jobs, 5 4 Applicant indicates the provisioning center will create construction jobs and 10 full-time sufficient details; 3 = 6 jobs, and part-time positions. Describes job titles, qualifications, etc. Lacks sufficient details. sufficient details; 4 = > 6 jobs insufficient details; 5 = > 6 jobs, sufficient/good details. Amount and Type of Applicant indicates the provisioning center will create 10 full-time and part-time positions Compensation (PC) 2 2 with each PC employee earning between $15.25 and $25/hour, and provides strong support details. Percent of Employees Earning At Least $15/Hour) 3 3 Applicant Indicates all 10 provisioning center employees will earn at least $15/hour. (PC) Projected Annual Budget 2 2 Applicant provides detailed projected annual budget and revenue data (e.g., $1.67 million and Revenue (PC) in expenses and $2 million in revenues during 2018) that are understandable. Applicant does not provide litigation compliance verification for all key team members (i.e., only Gavin Mishler and Lonnie Goodnoe). Applicant provides net worth statements Sufficient Financial Resources 5 4 demonstrating combined net worth of $1.2 million of which cash reserves are only about $38K. It is not clearly described how the initial investment cost of $439K is going to be covered. Lacks an optimal amount of clear details Additional point awarded for providing full stakeholder litigation history Applicant indicates their team has decades of medical marihuana industry experience as Business Experience 5 4 caregivers but not much in terms of working at provisioning centers, grow operations, or processing operations. They also have many years of general business management and operations experience. Lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism of submitted documentation 5 3 inadequate Table of Contents, unorganized and hard to find things like minor miniminization, odor and noise plan including clear labeling of required items -29- City of Lansing Provisioning Center Ranking 9/25/2018 Buffering between residential New build Updated score using a better measurement tool zoned areas and establishment 5 4 9/18/18 Updated 917 ft from residential zoning which is between 1/8 mile and 1/4 mile. Increased traffic on side streets 5 On street parking.Updated 9/24/18 Traffic and Parking score highest in all catorgories will be scored lower 4 except poor traffic circulation. 4 points Entrance and exit on main streets, adequate parking TIER 3 Opts -Security plan Does not meet minimum requirements, requires correction not on residential streets, 10 4 and/or has missing/or incomplete Information. 4pts traffic, Strong traffic pattenrs, driveways, and parking. Inadequate cirrculation. Quality of Security Plan Plan to meet with neighborhood organizations 1 l Have Plan Improvements made or Improvements reflected In plans Updated 9/21/18 Using a more accurate measurement proposed to building 3 3 tool, $199,100 of Improvements to the building, landscaping & parking lot which Is 306% of the SEV of $65,100 Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to minimize/eliminate 2 noise 0 inadequate noise plan Plan to minimize/eliminate 3 2 Charcoal filtration, and plan to do all tasks that could produce odor in a sealed room odor LPD Complaints 4 4 New build/no history of complaint Demo of Regulatory 4 4 no tax history or code violations updated 9/25/18 no change Compliance Litigation History 2 2 Clear history Total 100 69 -30- October 12, 2018 Chris Swope Lansing City Clerk City of Lansing, MI 124 W. Michigan Avenue, 9th Floor Lansing, MI 48933-1695 (517) 483-4131 Dear Clerk and Staff; As per your September 19, 2018 letter of denial to Better Green, LLC, known as parcel 33-01- 05-03-251-005 on Enterprise Drive, I am writing you to inform your that Better Green request a Medical Marihuana Commission appeal hearing date regarding their score and denial of a Lansing Provisional Facility application for a City of Lansing medical marihuana license. Pursuant to the City of Lansing, Michigan Ordinance 1217 § 1300.15(C) states, "Any applicant aggrieved by the denial or revocation of a license or adverse decision under this chapter may appeal to the clerk, who shall appoint a hearing officer to hear and evaluate the appeal and make a recommendation to the clerk .... The clerk's decision may be further appealed to the 1 commission if applied for in writing to the commission no later 2 than thirty (30) days from the clerk's decision. The review on 3 appeal of a denial or revocation or adverse action shall be by 4 the commission pursuant to section 1300.3 ." My client wishes to exercise its opportunity to appeal the score and denial. The applicant, Better Green, LLC, believes that the application's score should be reviewed, because the denial was arbitrary and capricious. Also, the City of Lansing's scoring criteria, which applications were based on, was vague and did not clearly express how an application was to be adequately scored. Better Green will be represented by Attorney R. Vincent Green for oral arguments at the commission appeal hearing. ' Better Green, LLC, appreciates the opportunity to raise issues of concern with the Lansing Medical Marihuana Commission. If you have any questions, please contact me at (517) 230- 1841. Thank you, Brant A. Johnson Brant A. Johnson & Associates, LLC 2875 Northwind Drive, #130 ·East Lansing-31-18823 • 517.230.1841 • jonberi@aol.com 2875 Northwind Drive #130 East Lansing, MI 48823 (517) 230-1841 -32- 2 p US POSTAGE & FEES PAID PRIORITY MAIL FLAT-RATE ENVELOPE Com Pis Price 1!1111111111 06250007592515 7933081 FROM4B933 st:::fg1a 10/19/2018 PRIORITY MAIL 2-DAY™ Chris Swope 0020 Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 IR®Jl SHIP TO: Better Green LLC Clo Gavin Mishler 187 Noble Road Williamston Ml 48895-9759 USPS TRACKING # 1111111 111 I 9405 5116 9900 0398 0506 42 I stamDs endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0398 0506 42 Priority Mail 2-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: 10/1912018 Mailing Date: 10/1912018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 Better Green LLC Clo Gavin Mishler 187 Noble Road Williamston Ml 48895-9759 USPS Postmark Here "Regl.dar 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 label. Postmar1< reqt.ired 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. I C") C") I October 19, 2018 Better Green LLC c/o Gavin Mishler 187 Noble Road Williamston, Ml 48895 Dear Provisioning Center Applicant: Chris Swope Lansing City Clerk Your appeal before the City of Lansing Medical Marihuana Commission will be held during the regularly scheduled meeting of the Commission on Friday, November 16, 2018, at2:00 PM in the City Clerk Conference Room in the City Clerk Election Unit located at 2500 S Washington Avenue in Lansing. The entrance with ample parking is at the back of the building. Per Lansing City Ordinance 1300.3(e), the Commission's review of the appeal shall not be de novo. The Medical Marihuana Commission Appeal will become a matter of public record. 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. The presentation timeline used by the Commission during the meeting for your appeal presentation is enclosed. No additional materials may be submitted for review. Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all . appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Sincerely, Chris Swope, Master Municipal Clerk Lansing City Clerk Lansing City Clerk's Office Ninth Floor, City Hall, 124 W Mi -'-'-·n Ave, Lansing, Ml 48933-1695 517-483-4131 -34-377-0068 FAX Timeline Green Peak Industries LLC 2508 S Cedar Street Lansing, Michigan 48910 December 15, 2017 -Application submitted December 21, 2017 -Department review of applications begins August 3, 2018 -Scoring and Ranking denial letter sent.. ......................................... 1 August 17, 2018-Appeal submitted ............................................................................ 7 October 4, 2018 -Appeal to Hearing Officer October 18, 2018 -Hearing Officer Denial letter sent .............................................. 19 September 19, 2018 -Hearing Officer Decision ......................................................... 22 October 1, 2018 -Score update ................................................................................... 24 October 19, 2018 -Commission Appeal submitted ................................................... 27 October 19, 2018 -Commission Hearing date letter sent ........................................ 28 stamJ)s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0851 8113 22 Priority Mail 3-DAY with USPS TRACKING#• Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 oz Print Date: 08/0312018 Mailing Date: 08/03/2018 From: To: Chris Swope Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 Green Peak Industries LLC 500 E Michigan Avenue Suite 202 Lansing Ml 48912-1185 USPS Postmark Here "Regular Priority Mail 3-DAY Service postage rates apply. There is no fee for Delivery Confinnation TM service on Priority Mail services with use of this electronic shipping label. 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 canier, 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. I ...--i August 3, 2018 Green Peak Industries 500 E Michigan, Suite 202 Lansing, Ml 48912 Dear Provisioning Center Applicant, Chris Swope Lansing City Clerk The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 74 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 2508 S. Cedar St. You have the right to appeal this denial of licensure within 14 days of the date of this letter by filing with the City Clerk's Office a written statement setting forth fully the grounds for the appeal pursuant to Chapter 1300.1 S(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, Ml 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/cler' -;ity.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, Ml 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/cler'· ~ity .clerk@lansingmi.gov -3- City of Lansing Provisioning Center Ranking Total GREEN PEAK Applicant Name Possible INDUSTRIES GREEN PEAK INDUSTRIES UC Points UC Applicant Address 2508 S. CEDAR 2508 S. CEDAR ST. --ST. ---Scoring insights Marketing, Advertising and Applicant provides several examples relating to their proposed marketing, advertising, promotion and 4 3 minimizing exposure to minors (e.g., no marihuana leaves on any exterior signage, no cartoons, toys, Promotion colors, shapes, liib4els, packaging, etc., that would appeal to minors.). Lacks optimal c~eral marketing, advertising, and promotion examples. Applicant Indicates they Intend to open three provisioning centers In Lansing with $1.75 million to be Invested in 1) 14K sq. fL retall location at 2508 S. Cedar St., under purc:hase contract for $SSOk and plan to Tangible Capital Investment Invest another $200K for renovations; 2) 5,000 sq. ft. building at 1200 Marquette, 12+month lease with $1,500/month In rent, $2SOK In expected renovations; and 3) 3,600 sq. ft. building at 700 N. PA Ave., under in the City of Lansing purchase contract, $7SOK expected investment). Also Indicates Intent to open 4 additional PCs outside (Investment in applicants 15 u Lansln1 area with a planned TO of $6SOK each (I.e., $2.6 million). Ultimately 17 PCs across Ml by 2022. Through affiliate real estate development entity (Allmac LLC) applicant owns 140 aaes In Windsor other provisioning centers Township designated for a marlhuana Industrial park (to include a SOK sq. ft. complex lnduding company was not included in score) HO.. cultivation facility (multiple dass C licenses) and processing operation). Also plans to Invest $5 mlll/on In a solar power farm (In partnership with Lansing BWL). Applicant's ownership group hu Invested $4 million In TC to date and states thev have access to> $20 million (no proof provided). Lacks provisioning center ownership (1200 Marquette St.). Job Creation Applicant lndlc<11tes roughly 160 Jobs will be Initially be cruted at the three Lansing provisioning centers, (Integrated System) cuttfvatlon, and processing operations (130 at cultivation and processing and> 30 at the PCs). An Overall number of jobs 5 5 additional 44 jobs will be created at the four PCs outside the Lansing area and appUcant plans to Increase the total employees to> 300 within three years. Details local hiring, targeting veteran community, created employee training, benefits, and lists titles. Applicant Indicates they are a self-funded enterprise with sufficient Internal capital to fund all necess.iry TO, preliminary operating losses, and other start-up costs necessary to establish Its PC, cultivation, and Financial Structure and processing operations In Ml. Provides CPA -attested proof of $2.16 million in their business checking 3 2 account and minimum net worth of $100K ($2.1 million total). However, even though applicant states they Financing have access to $20 mill/on they provide no acttlal proof of suffldent resources to cover the stated $4.35 mUllon cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house thefr HQ, cultivation, and processfn1 operations. Lacks sufficient detalls. Plans to Integrate Facility 2 2 Applicant Indicates the provisioning center will lnte11'1ite with a SOK sq. ft. complex indudln1 the company with Other Establishments HQ, cultivation facility (with multiple Cass C crow licenses) and processing operation. Applicant Indicates they will seek to team with schools like Ml State U. to encourage internships and real- Charitable Plans and work opportunities for students. Also Indicates thev have established a Veteran Business Grant Fund (with 4 3 a percent<11ge of company funds to be used to award grants) and will focus on druc abuse education. Will Strategies also pay each employtt up to 20 hours each year for volunteer time. l.3dcs proof of any adual payment or executed agreement. Number of Jobs at the Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = < 6 jobs, sufficient details; 3 5 5 Applicant indicates 11 Jobs will be aeated at the provisioning center and provides details about local hiring, targeting the veteran community, employee traininc, benefits, and llsts titles. = 6 jobs, sufficient details; 4 = > 6 jobs insufficient details; 5 = > 6 jobs, sufficient/good details. Amount and Type of 2 2 Applicant Indicates all PC employees will earn at least $15 per hour and provides strong support dt!!talls. Compensation (PC) -4- City of Lansing Provisioning Center Ranking Percent of Employees Earning At Least $15/Hour) 3 3 Applicant lndic.1tcs all provisioning center employees will cam at least $15/hour. (PC) ' Projected Annual Budget Applicant provides detailed projected annual budget and revenue data (e.g., $1.28 mllllon In eKpenses and and Revenue (PC) 2 2 $458.3K In cross ~les in 2018 and $2.53 million in expenses and $2.75 million In gross sales In 2019) that are understandable. Applicant does not provide litlgation compliance verification forms for all key team members. Applicant provides CPA -attested proof of $2.16 million In their business checklnc account and minimum net worth Sufficient Financial Resources 5 3 of $100K ($2.1 million total). However, even though applicant states they have access to $20 million they provide no adual proof of sufficient resources to cover the stated $4.35 million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HO. cultivation, and processing operations. Lacks sufficient detalls. Applicant Indicates they have a few years of medic.al marihuana pro\Jislonlng center planning experience Business Experience 5 3 and decades of other applicable experience (e.g., healthcare, retail, real estate, legal, finance, etc.). lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism of submitted documentation 5 4 Poor Table of Contents including clear labeling of required items Buffering between residential zoned areas and 5 4 Inadequate fendng but good distance from homes establishment Increased traffic on side 5 streets will be scored lower 3 Use of Lincoln Issue Entrance and exit on main streets, adequate parking 10 4 TIER 3 -Does not meet minimum requirements, requires correction and/or has missing/or lncomplde not on residential streets, Information. 4pts traffic Strong paricing and drrculatlon Quality of Security Plan Plan to meet with 1 neighborhood organizations 1 meet wfth community leaders Improvements made or 3 proposed to building 3 Planned Improvements Plan to minimize/eliminate 1 0 Inadequate traffic plan traffic Plan to minimize/eliminate 2 0 Inadequate noise plan noise Plan to minimize/eliminate 3 3 Very detalled: Photohydro-lonlzatJon unit.1ermlcfdal UV li&ht rays, carbon filters, complaint tracking. staff odor training LPD Complaints 4 3 1 assault report·2 B&E alarms, 3 cals Demo of Regulatory 4 4 no taK Issues Comoliance Litigation History 2 0 no lit history on stakeholders, supposed to be em1ll seperatedly, no record of It sent Total 100 74 -5- .' \ '\ / \. \ . ; ,'. · .... ~ August 17, 2018 Lansing City Clerk's Office, City Hall 124 W. Michigan Ave., Ninth Floor Lansing, MI 48933-1695 Dear Clerk Swope: GREEN PEAK INNOVATIONS™ Green Peak Industries, LLC (GPI) received the correspondence dated August 3, 2018 that provided notice of denial for our provisioning center license application for our 2508 South Cedar Street location. Pursuant to Chapter 1300.lS(c) GPI is exercising its right to appeal this decision and believes the application was inaccurately scored on several elements. Specifically, GPI believes there are ten (10) elements in the scoring criteria where our application should have received more points than were awarded. The scoring criteria elements and supporting arguments from materials submitted during the application are as follows: 1) Lansing Scoring Criteria: Tangible Capital Investment in the City of Lansing (Investment in applicants other provisioning centers was not included in the score) Points Awarded: 12 out of 15 possible points Scoring Insights: Applicant indicates they intend to open three provisioning centers in Lansing with $1. 75 million to be invested in I) 5,000 sq. ft. building at 1200 Marquette, 12-month lease with $1,500/month in rent, $250K in expected renovations; 2) 2508 S. Cedar (provided details mixed up with other PC locations); and 3) 3,600 sq. ft. building at 700 N. PA Ave., under purchase contract, $750K expected investment). Also indicates intent to open 4 additional PCs outside Lansing area with a planned TCI of $650K each (i.e., $2.6 million). Ultimately 17 PCs across MI by 2022. Through affiliate real estate development entity (Alimac LLC) applicant owns 140 acres in Windsor Township designated for a marihuana industrial park (to include a SOK sq. ft. complex including company HQ, cultivation facility (multiple Class C licenses) and processing operation). Also plans to invest $5 million in a solar power farm (in partnership with Lansing BWL). Applicant's ownership group has invested $4 million in TCI to date and states they have access to > $20 million (no proof provided). Lacks provisioning center ownership (1200 Marquette St). GPI Appeal Consideration: Under Section I 300.5(12)(IV) the applicant is required to include detail related to the number of proposed medical marijuana establishments and the economic benefit to the City. GPI submitted provisioning center license applications at three locations in Lansing. As part of each application, GPI provided a comprehensive business plan, which detailed the tangible capital investment at each location and a -6- 1 comprehensive look at the total potential capital investment across all GPI applications, including in the Greater Lansing Area. The scoring criteria notes that the "investment in applicants other provisioning centers was not included in the score." However, the first sentence of the scoring insights states "applicant indicates they intend to open three provisioning centers in Lansing with $1.75 million to be invested" which appears to be contradictory. As a result, GPI is unable to decipher how the business plan presented for the provisioning center proposed at 2508 South Cedar was evaluated on the merits of that location. The description of the scoring criteria element posted on the City of Lansing website describes it as "economic benefit to the City of the business plan, real property ownership, grower and/or processor facilities in the City." As required under Sections l 300.5(12)(IV)(V)the business plan presented for the 2508 South Cedar location demonstrated a total economic impact of over $9 million. GPI showed $550,000 to purchase the building from the current owner, which would satisfy the "real property ownership" element, and an additional $200,000 capital investment to remodel the building for use as a provisioning center. The 2508 South Cedar business plan showed the creation of eleven (11) new jobs totaling more than $400,000 in payroll annually and an estimate of more than $8.5 million in future state local and property taxes. Additionally, and although not required for the South Cedar application, the GPI business plan for that location included the sale of products cultivated and processed at our locally licensed and State Pre-Qualified facility located within Harvest Park in Windsor Township. As acknowledged in the scoring insights, GPI's related real estate entity Alimac, LLC, developed Harvest Park after a $2.5 million land investment and partnered with the Lansing Board of Water of Light (B WL) to be its exclusive utility provider. It has been publicly reported' that the GPI agreement with BWL will make Harvest Park their second largest customer behind only General Motors. In the business plan submitted as part of the application for 2508 South Cedar, GPI estimated Harvest Park will generate more than $200 million for BWL. Since BWL is owned by the City of Lansing there is not another applicant that can demonstrate a bigger capital investment in the city than GPI. Also, the projected numbers above discount the additional city investment that will be produced through the ancillary businesses that are committed to Harvest Park. Those companies will seek direct investment in city real estate, infuse the local economy with capital, employ hundreds of people and immediately impact the city's growth. 2) Scoring Criteria: Financial Structure and Financing Points Awarded: 2 out of 3 possible points Scoring Insights: Applicant indicates they are a self-funded enterprise with sufficient internal capital to fund all necessary TCI, preliminary operating losses, and other start-up costs necessary to establish its PC, cultivation, and processing operations in Ml. Provides 1 Evans, Maxwell. "Growth Spurt: Planning for Lansing Industrial Marijuana Farms Accelerates." City Pulse 8 February 2018: Page 5. Print. -7- 2 CPA -attested proof of $2.16 million in their business checking account and minimum net worth of $1 OOK ($2.1 million total). However, even though applicant states they have access to $20 million they provide no actual proof of sufficient resources to cover the stated $4.35 million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ, cultivation, and processing operations. Lacks sufficient details. GPI Appeal Consideration: Under Section I 300.5(12)(VII) which required demonstration of financial structure and financing of the proposed Lansing medical marijuana establishments, GPI's business plan stated it would require a total of $1, 750,000 to purchase/lease property and remodel the buildings at 2508 South Cedar, 700 North Pennsylvania and 1200 Marquette Street for use as a provision centers. GPI also demonstrated the payroll for all employees would be approximately $1,200,000 annually. The annual payroll numbers presuppose that staffing will increase over time and subsequently, payroll costs will increase, as revenue increases. As the business plan financial pro-forma for each location reflects, there will be solid revenue and operating income produced in a relatively short period of time. Even under the assumption that GPI generated zero revenue for more than a year and employed all anticipated staff (which would be fiscally irresponsible) the total capitalization required to fund the provisioning center operations at the three locations would be $2.95 million. As noted in the scoring insights, GPI sufficiently attested to funds of $2.16 million in its business account, which when operating diligently would be more than adequate to fund the operation. Based on the scoring insights, it appears GPI was not awarded full points due to factors unrelated to the business operations proposed at the three Lansing locations. It appears GPI was penalized for other elements of our company business plan, including the financing of our headquarter production facility in Windsor Township (which is controlled and financed by our real estate entity Alimac) and our stated objection to open up to seven (7) provisioning centers in the Greater Lansing Area. While this speaks to the level of economic development GPI hopes to generate for the Lansing Area, these are not relevant to the accurate evaluation of the application for the Lansing provisioning centers. Furthermore, even if these other facilities outside of the City of Lansing were relevant to the application in question, GP! accurately stated it has access to $20 million of capital. The scoring insight appears to penalize GPI for not providing "adequate proof' to the claim, but page five (5) of seven (7) on the City of Lansing application requires a notarized attestation that reads "I swear that the statements made in this application, including all attachments thereto, are true." GPI satisfied the financial requirements of the application and was not required to provide proof of additional capital available for investment by GPI. 3) Scoring Criteria: Charitable Plans and Strategies Points Awarded: 3 out of 4 possible points Scoring Insights: Applicant indicates they will seek to team with schools like MI State U. to encourage internships and real-work opportunities for students. Also indicates they -8- 3 have established a Veteran Business Grant Fund (with a percentage of company funds to be used to award grants) and will focus on drug abuse education. Will also pay each employee up to 20 hours each year for volunteer time. Lacks proof of any actual payment or executed agreement. GPI Appeal Consideration: Under Section I 300.5(12)(XI) applicant was required to describe charitable plan and strategies, whether fiscally or through volunteer work. GPI provided a detailed section within its business plan specifically devoted to "Community Outreach and Charitable Plans." Based on the scoring insights it appears GPI was penalized due to a lack of "proof." Since GPI is not a licensed company and is not operational, there is no way to demonstrate our current charitable activities. GPl's provisioning center application more than adequately detailed our "fiscal and/or volunteer work". 4) Scoring Criteria: Sufficient Financial Resources Points Awarded: 3 out of 5 possible points Scoring Insights: Applicant does not provide litigation compliance verification forms for all key team members. Applicant provides CPA -attested proof of $2.16 million in their business checking account and minimum net worth of $1 OOK ($2.1 million total). However, even though applicant states they have access to $20 million they provide no actual proof of sufficient resources to cover the stated $4.35 million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ, cultivation, and processing operations. Lacks sufficient details. GPI Appeal Consideration: The scoring criterion describes this element as "financial forms including debt, bankruptcy, insolvency, tax compliance tax returns and CPA attested, active bank/financial statement." The first sentence in the scoring insights penalizes GPI for not providing litigation compliance verification forms, which has its own scoring element found elsewhere in the criteria Similar to the criteria on "Financial Structure and Financing" the scoring insights appear to penalize GPI for factors unrelated to the business operation proposed at the three Lansing provisioning centers. The scoring insights state that the attested proof of $2.16 million in the GPI business checking account is inadequate to fund the stated $4.35 million necessary to operate seven (7) provisioning centers. However, GPI clearly stated it was a business objective to grow their company to the goal of seven (7) provisioning center locations in the Greater Lansing region as surrounding municipalities adopt the required ordinances. Theoretically, these expanded locations would be funded by GPl's licensed medical marihuana businesses in approved locations within the City of Lansing or in other jurisdictions with the required ordinances. Additionally, GPI accurately stated it has access to $20 million of capital outside of company revenue projections or performance. The scoring insight appears to penalize GPI for not providing "adequate proof' to the claim, but page five (5) of seven (7) on the City of Lansing application requires a notarized attestation that reads "I swear that the 4 -9- statements made in this application, including all attachments thereto, are true." GPI can satisfy adequate proof of funds if the City deems the sworn statement insufficient confirmation of available funds. The scoring insights also question the funding of the 50k square foot production facility and headquarters in Windsor Township. GPI clearly states in its application business plan that the purchase of Harvest Park and the construction of its facility within Harvest Park was facilitated by its related real estate entity Alimac, LLC. The application did not require GPI to disclose financial resources that were already deployed in other jurisdictions for its business objectives. 5) Scoring Criteria: Business Experience Points Awarded: 3 out of 5 possible points Scoring Insights: Applicant indicates they have a few years of medical marihuana provisioning center planning experience and decades of other applicable experience (e.g., healthcare, retail, real estate, legal, finance, etc.). Lacks the optimal amount of applicable business experience. GPI Appeal Consideration: GPI is led by a team of business owner-operators and professionals with more than 80 years of demonstrated success in hyper competitive industries and consumer product categories. Our executive team has a proven record of creating thousands of jobs locally and globally while headquartered in Lansing or the Greater Lansing Area. The companies operated by GPI's executive team created over $300 million in equity value while adhering to the highest level of regulatory compliance. The historical success of GPI's executive team was partly based on the ability to recognize, employ and develop best-in-class personnel. They continually differentiated their past organizations from competing businesses by hiring subject matter experts to lead their respective areas of responsibility. GPI's business plan includes an organizational chart that substantiates the executive teams plan to continue along that path. As GPI becomes operational, individuals with extensive industry experience in all facets of medical marijuana provisioning centers will be hired. The scoring criteria states that GPI "lacks the optimal amount of applicable business experience" while indicating that our executive team has "decades of other applicable experience in healthcare, retail, real estate, legal, finance, etc." These statements contradict themselves and appear to penalize GPI for lacking medical marihuana provisioning center experience, which was an unlicensed and technically unlawful activity prior to the MMFLA. Moreover, GPI clearly stated it fortified its substantial existing, applicable business experience by extensively researching other legal medical marihuana markets and operators, along with plans to hire individuals with provisioning center experience. 6) Scoring Criteria: Content and Sufficiency of Information; Professionalism of submitted documentation including clear labeling of required items 5 -10- Points Awarded: 4 out of possible 5 Scoring Insights: Poor Table of Contents GPI Appeal Consideration: GP! organized its application and supplemental documentation into a tabbed three-ring binder. The front of the binder included a cover letter that clearly delineated the materials found in each tab and the requirements of the ordinance it satisfied by section. One of the tabs was designated to GPI's provisioning center operating plan with a full table of contents by page, which covered elements required in the ordinance but not considered in the scoring criteria. Additionally, when GPI submitted its application to the Lansing City Clerk, it was reviewed for the required application elements and handwritten notes were then included for further clarification on where the materials could be located within the organized binder. 7) Scoring Criteria: Buffering between residential zoned areas and establishment Points Awarded: 4 out of 5 possible points Scoring Insights: Inadequate fencing but good distance from homes GPI Appeal Consideration: The location of 2508 South Cedar is zoned F-commercial and the zoning is consistent with the surrounding land uses. The property directly adjacent to the west of 2508 South Cedar is zoned D-1-professional office. The D-1 professional office does allow for residential as a use by right but the properties are separated by a substantial parking lot along with an existing fence and shrub line. The property at 2508 South Cedar clearly meets the requirements in 1300.13 "Location, buffering, dispersion and zoning requirements for medical marihuana provisioning centers." Additionally, neither 1300.13 nor 1300.9 "Minimal operational standards of a medical marihuana provisioning center" require a fence around the property. 8) Scoring Criteria: Increased traffic on side streets will be scored lower Points Awarded: 3 out of 5 possible points Scoring Insights: Use of Lincoln issue GPI Appeal Consideration: As noted in the scoring insights for the "buffering between residential areas and establishment," the building located at 2508 South Cedar is a "good distance from homes." The property also features ample parking spaces with multiple options for lot entrances and exits. South Cedar is a major roadway within the City of Lansing and MOOT reports a traffic count volume of 14,013 per day. By comparison, the traffic count for Lincoln Avenue ranges between 500-1000 per day. Based on these publicly reported traffic counts, GPI understood that almost all traffic would arrive to the 2508 South Cedar location traveling north or south on Cedar Street and would be on Lincoln Avenue for less than I 00 feet and negligible time before entering the facilities existing, sizeable parking lot. Traffic wi II not increase through Lincoln A venue since it 6 -11- does not connect Cedar Street to another major roadway within the City of Lansing and the I 00-foot entry point connects with commercial businesses and not the local neighborhood. 9) Scoring Criteria: Entrances and exit on mam streets, adequate parking not on residential streets, Quality of Security Plan Points Awarded: 4 out of I 0 possible points Scoring Insight: TIER 3 -Does not meet minimum requirements, requires correction and/or has missing/or incomplete information. 4pts traffic. Strong parking and circulation. GPI Appeal Consideration: As stated in the appeal consideration on the scoring element for "increased traffic on side streets," the property located at 2508 South Cedar will not increase traffic on Lincoln A venue. The main entrances and exits to the parking lot are located immediately off of Cedar Street with an additional exit from the parking lot onto Cedar Street located on the south of the building. The size of the parking lot, along with the multiple entrances and exits provided "strong parking and circulation" as noted in the scoring insight. 1300.09(14) requires "a description of the security plan for the medical marihuana establishment, including, but not limited to, any lighting, alarms, barriers, recording/monitoring devices, and/or security guard arrangements proposed for the establishment and the premises. The security plan must contain the specific details of each piece of security equipment. Each medical marihuana establishment must have a security guard present during business hours or alternative security procedures shall be proposed in the business plan." GPI clearly satisfied the requirement of I 300/09(14) with its submitted security plan that provided descriptions of all surveillance systems, alarms, and access control measures to be deployed at 2508 South Cedar. Within the security plan, GPI also provided the specific details, capabilities and functions of every surveillance or security element, including the IT server, backup power, specific cameras and camera types, alarm key pads, motion detectors, door contacts, and panic buttons. Accompanying the description of the security and surveillance systems was a floor plan, which indicated the exact placement of these elements within the facility. Additionally, GPI indicated within its business plan and company organization chart that it would hire multiple security guards per store who would be present during the hours of operations. These details were provided in the submitted business plan and the provisioning center operation plan, which included other security or emergency response procedures by all employees. 10) Scoring Criteria: LPD Complaints Points Awarded: 3 out of 4 possible points 7 -12- Scoring Insights: I assault report - 2 B&E alarms, 3 calls GPI Appeal Consideration: GPI does not cmTently operate a business at 2508 South Cedar and indicated in its application it has an accepted purchase agreement on the property. The LPD complaints cited in the scoring insights were related to the business that operated in 2508 South Cedar previously and not the result of any GPI related business, activity or involvement in any manner. Conclusion GPI believes the content provided in our appeal consideration adequately addresses the lower scoring insights as it relates to Tangible Capital Investment in the City of Lansing, Financial Structure and Financing, Charitable Plans and Strategies, Sufficient Financial Resources, Business Experience, Content and Sufficiency of Information, Buffering Between Residential Zones, Increased Traffic on Side Streets, Entrance and Exits on Main Streets with Adequate Parking, Security Plan, and LPD Complaints. GPI maintains that if the criteria were accurately scored, it would have been rewarded full points in all categories under appeal and would result in a final score of 94 out of I 00 possible points. GPI further believes the content provided will clarify and alleviate any concerns the Hearing Officer may have in recommending GPI as a recipient of a provisioning center license for the 2508 South Cedar Street location. The GPI team has a proven track record as successful business operators and will bring their established level of professionalism to Lansing's newly regulated medical marihuana industry. eral Counsel G een Peak Industries, LLC 8 -13 - Medical Marihuana Application: Green Peak Industries, 2508 S Cedar St Internal Notes 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 including explanation of economic benefits to the City and job creation to be achieved through the award of multiple licenses. Based upon the information provided by the applicant, the City may consider whether the proposed medical marihuana establishment is definite, feasible, or speculative. Buffering After further review it was found that the Provisioning Center is 300 feet away from a residential zone. This falls short of the ideal X mile to receive full points. Because of this, 1 point has been deducted. Increased traffic on side streets will be scored lower Upon further review, high scores in most categories with inadequate review of driveway safety and traffic patterns. Score of 4 out of 5 points Improvements made or proposed to building Upon further review it was found that after comparing the SEV of the location of $414, 700 in conjunction with the planned improvements of $200,000, 48% of the value was going to be put back into the building. For this the score has been reduced to one point because it falls short of the optimal investment of 125% of SEV (3 points) and is under 75% of SEV investment (2 points). -14- City of Lansing Provisioning Center Ranking 10/2/2018 Total GREEN Applicant Name Possible PEAK INDUSTRI GREEN PEAK INDUSTRIES Points ES Applicant Address 700 N. PA ---700 N. PA AVE. AVE. Marketing, Advertising Applicant provides several examples relating to their proposed marketing, advertising, 4 3 promotion and minimizing exposure to minors (e.g., no marihuana leaves on any exterior and Promotion signage, no cartoons, toys, colors, shapes, labels, packaging, etc., that would appeal to minors.). Lacks optimal general marketing, advertising, and promotion examples. Applicant indicates they intend to open three provisioning centers in Lansing with $1.75 million to be invested in 1) 3,600 sq. ft. building at 700 N. PA Ave., under purchase contract, $7SOK expected investment; 2) 14K sq. ft. retail location at 2508 S. Cedar St., under purchase contract for $SSOK and plan to invest another $200K for renovations; Tangible Capital and 3) S,000 sq. ft. building at 1200 Marquette, 12-month lease with $1,SOO/month in rent, $2SOK in expected renovations. Also indicates intent to open 4 additional PCs Investment in the City of 15 12 outside Lansing area with a planned TCI of $6SOK each (i.e., $2.6 million). Ultimately 17 Lansing PCs across Ml by 2022. Through affiliate real estate development entity (Alimac LLC) applicant owns 140 acres in Windsor Township designated for a marihuana industrial park (to include a SOK sq. ft. complex including company HQ, cultivation facility (multiple Class C licenses) and processing operation). Also plans to invest $5 million in a solar power farm (in partnership with Lansing BWL). Applicant's ownership group has invested $4 million in TCI to date and states they have access to> $20 million (no proof provided). Lacks provisioning center ownership (1200 Marquette St.). Job Creation Applicant indicates roughly 160 jobs will be initially be created at the three Lansing (Integrated System) provisioning centers, cultivation, and processing operations (130 at cultivation and 5 s processing and > 30 at the PCs). An additional 44 jobs will be created at the four PCs Overall number of jobs outside the Lansing area and applicant plans to increase the total employees to> 300 created within three years. Details local hiring, targeting veteran community, employee training, benefits, and lists titles. Applicant indicates they are a self-funded enterprise with sufficient internal capital to fund all necessary TCI, preliminary operating losses, and other start-up costs necessary to Financial Structure and establish its PC, cultivation, and processing operations in Ml. Provides CPA -attested 3 2 proof of $2.16 million in their business checking account and minimum net worth of Financing $100K ($2.1 million total). However, even though applicant states they have access to $20 million they provide no actual proof of sufficient resources to cover the stated $4.3S million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ, cultivation, and processing operations. Lacks sufficient details. -15- City of Lansing Provisioning Center Ranking 10/2/2018 Plans to Integrate Applicant indicates the provisioning center will integrate with a SOK sq. ft. complex Facility with Other 2 2 including the company HQ, cultivation facility (with multiple Class C grow licenses) and Establishments processing operation. Applicant indicates they will seek to team with schools like Ml State U. to encourage Charitable Plans and internships and real-work opportunities for students. Also indicates they have 4 3 established a Veteran Business Grant Fund (with a percentage of company funds to be Strategies used to award grants) and will focus on drug abuse education. Will also pay each employee up to 20 hours each year for volunteer time. Lacks proof of any actual payment or executed agreement. Number of Jobs at the Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = < 6 jobs, Applicant indicates 11 jobs will be created at the provisioning center and provides details sufficient details; 3 = 6 jobs, sufficient 5 s about local hiring, targeting the veteran community, employee training, benefits, and lists details; 4 = > 6 jobs insufficient titles. details; S = > 6 jobs, sufficient/good details. Amount and Type of 2 2 Applicant indicates all PC employees will earn at least $1S per hour and provides strong Compensation (PC} support details. Percent of Employees Earning At Least 3 3 Applicant indicates all provisioning center employees will earn at least $1S/hour. $15/Hour) (PC) Projected Annual Applicant provides detailed projected annual budget and revenue data (e.g., $7SOK in 2 2 expenses and $0 in gross sales in 2018 and $2.3 million in expenses and $2.S million in Budget and Revenue (PC) gross sales in 2019 that are understandable. Applicant does not provide litigation compliance verification forms for all key team members. Applicant provides CPA -attested proof of $2.16 million in their business Sufficient Financial checking account and minimum net worth of $100K ($2.1 million total). However, even 5 3 though applicant states they have access to $20 million they provide no actual proof of Resources su.fficient resources to cover the stated $4.3S million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ, cultivation, and processing operations. Lacks sufficient details. Applicant indicates they have a few years of medical marihuana provisioning center Business Experience 5 3 planning experience and decades of other applicable experience (e.g., healthcare, retail, real estate, legal, finance, etc.). Lacks the optimal amount of applicable business experience. -16- City of Lansing Provisioning Center Ranking 10;2;201s Content and Sufficiency of Information; Professionalism of submitted documentation 5 4 Inadequate Table of Contents Treasury Letter sent 1 point deducted including clear labeling of required items Buffering between inadequate plan Updated score using a better measurement tool 9/18/18 residential residential zoned areas and 5 1 zoning on the north and east side ofproperty which falls short of the optimal distance of establishment 1/4 mile (1320 feet) to receive full points. Increased traffic on side 5 inadequate plan provided. New build Updated 9/25/18 high scores in most categories-4 streets will be scored lower inadequate In driveways 4pts (change in score) Entrance and exit on main streets, adequate Strong taffic patterns, parking and cirrculation. Minor traffic issues. Tier 1 Spts A+ 10 10 Security Plan, Updated 9/25/18 high scores in most categories-inadequate in driveways parking not on 4pts residential streets, Plan to meet with neighborhood 1 l meet with community leaders nn:r::ini?::itinnc: Improvements made or 3 0 Planned improvements Updated 9/24/18 using a more accurate measurement tool, $0 proposed to building was listed under renovations in their plan. Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to 2 0 inadequate or no noise plan minimize/eliminate noise Plan to 3 Very detailed: Photohydroionization unit, germicidal UV light rays, carbon filters, 3 minimize/eliminate odor complaint tracking, staff training -17- City of Lansing Provisioning Center Ranking 10/2/2018 LPD Complaints 4 4 new build Demo of Regulatory 4 Compliance 4 no tax issues, no code issues Updated 9/25/18 Litigation History 2 0 no lit history on stakeholders, supposed to be email seperatedly, no record of it sent Missing litigation history for any stakeholder=O points Total 100 76 --- -18- stam~s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0392 5410 30 Priority Mail 3-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: 10/1812018 Mailing Date: 10/1812018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 Green Peak Industries LLC 500 E Michigan Avenue Suite 202 Lansing Ml 48912-1185 USPS Postmark Here 'Regular Priority Mail 3-DAY Service postage rates apply. There is no fee for Delivery Confirmation"' service on Priority Mail services with use of this electronic shipping label. Postmar1< 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 yoor mail carrier, or presented to a clerk at yoor local Post Office. 4. Each confirmation number is unique and can be used only once - DO NOT PHOTOCOPY. 5. Yoo must mail this package on the "mail date" that is specified on this label. I 01 .-i October 18, 2018 Green Peak Industries, LLC 500 E Michigan Avenue Suite 202 Lansing, Ml 48912 Dear Provisioning Center Applicant, Chris Swope Lansing City Clerk 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 2508 S Cedar Street. I have determined that 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. 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 including explanation of economic benefit to the City and job creation to be achieved through the award of multiple licenses. Based upon the information provided by the applicant, the City may consider whether the proposed medical marihuana establishment is definite, feasible, or speculative. You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk's Office. The Medical Marihuana Commission Appeal will become a matter of public record. The Commission's review of the appeal shall not be de nova. 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. Lansing City Clerk's Office Ninth Floor, City Hall, 124 W. Mi_20 _ n Ave., Lansing, Ml 48933-1695 517-483-4131 _ .. -377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of the temporary operation are satisfied. Sincerely, 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. Mi1 21 1 Ave., Lansing, Ml 48933-1695 517-483-4131 --377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov MEMO To: Chris Swope Lansing City Clerk From: Mary Kay Scullion (P36237) Re: Application of Green Peak Industries, LLC 500 E. Michigan Ave., Suite 202 Lansing, Ml 48912-1185 Date: October 18. 2018 Introduction and Background The Application by Green Peak Industries LLC to operate a provisioning center at 2508 S. Cedar St., Lansing, Ml 48910 was determined to score 74of100 points. After an internal review of the original scoring by the Lansing City Clerk's Office. It was determined to have a score of 76 points which was still too low to qualify in the top 20 for licensing purposes. Subsequent to the rescoring Green Peak Industries LLC appealed the scoring. Applicable Law It is important to keep in mind when reviewing applications and Appeals that there is a full range of legislative and executive statutes/ordinances which are applicable to the licensing of marijuana facilities in the City of Lansing: Executive Order 2017-02, Chapter 1300 of the Lansing City Code, Michigan's Medical Marijuana Act, the Department of Licensing and Regulatory Affairs Rules, and applicable federal law must all be taken into account as part of the regulatory scheme. The importance of the State's regulatory scheme to the City of Lansing is inescapable to the extent that in the preamble to the Ordinance it states that the facilities will be regulated to the extent permissible under State and Federal Law, as well as Chapter 1300 of the City of Lansing Ordinances. These provisions when read together make the case for a multiplicity of layers of regulation which are intended to operate concurrently to the extent there is no applicable preemption provision. One cannot lose sight of the fact that "All activities related to medical marijuana ... [including a medical marijuana provisioning center] ... shall be in compliance with the rules of the Medical Marijuana Licensing Board, the rules of the Michigan Department of Licensing and Regulatory Affairs ... [and] the rules and regulations of the City, the MMMA, MMFLA and the MTA." 1300.02(d) [emphasis added] Analysis While Green Peak has made a major investment in Windsor Park to develop a 140 acre industrial park for the cultivation of marijuana, the benefit of the investment will accrue to The Board of Water and Light and Eaton County communities, not the City of Lansing. A second potential problem involved Green Peak's accumulation of investments based on total number of business licenses being sought in the City of Lansing, not each individually, at least as it is written in the appeal. As a result of the manner in which financial data are applied to operational and/or proposed -22- businesses. It appears to be undercapitalized .. This approach makes assessment of the true impact difficult to accurately assess. The idea of teaming with Michigan State University appears on its face to be sound, however, the fact of the matter is that Michigan State University may well be prohibited from co-operating on internships with marijuana licenses have not yet been legalized by federal law. ~:,~m.mendatio,.~: A~ication be denied. · C£~~ o / ) ~M~:~~ay~~-~ ~- -23- City of Lansing Provisioning Center Ranking - Applicant Address Marketing, Advertising and Promotion Tangible Capital Investment in the City of Lansing Job Creation (Integrated System) Overall number of jobs created Financial Structure and Financing Plans to Integrate Facility with Other Establlshments Charitable Plans and Strategies Total Possibl e Points --- 4 GREEN PEAK INDUS TRIES 2508 s. 3 GREEN PEAK INDUSTRIES LLC 2508 S. CEDAR ST. Applicant provides several examples relating to their proposed marketing, advertising, promotion and minimizing exposure to minors (e.g., no marihuana leaves on any exterior signage, no cartoons, toys, colors, shapes, labels, packaging, etc., that would appeal to minors.). Lacks optimal general marketing, advertising, and promotion examples. Applicant indicates they intend to open three provisioning centers in Lansing with $1.75 million to be invested in 1) 14K sq. ft. retail location at 2508 S. Cedar St., under purchase contract for $SSOK and plan to invest another $200K for renovations; 2) 5,000 sq. ft. building at 1200 Marquette, 12-month lease with $1,SOO/month in rent, $250K in expected renovations; and 3) 3,600 sq. ft. building at 700 N. PA Ave., under purchase contract, $7SOK expected investment). Also indicates intent to open 4 additional PCs outside Lansing area with a planned TCI of $6SOK each (i.e., $2.6 million). Ultimately 17 PCs across Ml by 2022. Through affiliate real estate development entity (Alimac LLC) applicant owns 140 acres in 15 lS Windsor Township designated for a marihuana industrial park (to include a SOK sq. ft. complex including company HQ. cultivation facility (multiple Class C licenses) and processing operation). Also plans to invest $S million in a solar power farm (in partnership with Lansing BWL). Applicant's ownership group has invested $4 million in TCI to date and states they have access to> $20 million (no proof provided). Lacks provisioning center ownership (1200 Marquette St.). 5 3 2 4 5 2 Updated 10/11/18 assume that City of Lansing will receive over $2SO,OOO in direct revenue from Windsor Twp Grow facility which increases TCI to over $1 million Applicant indicates roughly 160 jobs will be initially be created at the three Lansing provisioning centers, cultivation, and processing operations (130 at cultivation and processing and> 30 at the PCs). An additional 44 jobs will be created at the four PCs outside the Lansing area and applicant plans to increase the total employees to > 300 within three years. Details local hiring, targeting veteran community, employee training, benefits, and lists titles. Applicant indicates they are a self· funded enterprise with sufficient internal capital to fund all necessary TCI, preliminary operating losses, and other start-up costs necessary to establish its PC, cultivation, and processing operations in Mi. Provides CPA· attested proof of $2.16 million in their business checking account and minimum net worth of $100K ($2.1 million total). However, even though applicant states they have access to $20 million they provide no actual proof of sufficient resources to cover the stated $4.3S million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ. cultivation, and processing operations. Lacks sufficient details. Applicant indicates the provisioning center will integrate with a SOK sq. ft. complex 2 including the company HQ. cultivation facility (with multiple Class C grow licenses) and processing operation. 3 Applicant indicates they will seek to team with schools like Ml State U. to encourage internships and real-work opportunities for students. Also indicates they have established a Veteran Business Grant Fund (with a percentage of company funds to be used to award grants) and will focus on drug abuse education. Will also pay each employee up to 20 hours each year for volunteer time. Lacks proof of any actual payment or executed agreement. -24- City of Lansing Provisioning Center Ranking - Center Category Thresholds: l = < 6 jobs, insufficient details; 2 = < 6 jobs, sufficient details; 3 = 6 jobs, sufficient Applicant indicates 11 jobs will be created at the provisioning center and provides details details; 4 = > 6 jobs Insufficient 5 5 about local hiring, targeting the veteran community, employee training, benefits, and lists details; 5 = > 6 jobs, sufficient/good titles. details. Amount and Type of Compensation (PC) 2 2 Applicant indicates all PC employees will earn at least $15 per hour and provides strong support details. Percent of Employees Earning At Least $15/Hour) (PC) 3 3 Applicant indicates all provisioning center employees will earn at least $15/hour. Projected Annual Budget and Revenue (PC) Applicant provides detailed projected annual budget and revenue data (e.g., $1.28 million 2 2 in expenses and $458.3K in gross sales in 2018 and $2.53 million In expenses and $2.75 million In gross sales in 2019) that are understandable. Applicant does not provide litigation compliance verification forms for all stakeholders. Applicant provides CPA -attested proof of $2.16 million in their business checking account Sufficient Financial Resources and minimum net worth of $100K ($2.1 million total). However, even though applicant 5 3 states they have access to $20 mill ion they provide no actual proof of sufficient resources to cover the stated $4.35 million cost of the 7 PCs and the undisclosed amount for the SOK sq. ft. facility to house their HQ, cultivation, and processing operations. Lacks sufficient details. Business Experience Applicant Indicates they have a few years of medical marihuana provisioning center 5 3 planning experience and decades of other applicable experience (e.g., healthcare, retail, real estate, legal, finance, etc.). lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism of 5 4 Inadequate Table of Contents Treasury Letter sent l point deducted submitted documentation including clear labeline of reouired items Buffering between residential zoned inadequate fencing but good distance from homes Updated score using a better areas and establishment 5 3 measurement tool 9/18/18 300 ft from residential zoning which falls short of the optimal distance of 1/4 mile (1320 feet) to receive full points. Increased traffic on side streets will be 5 4 Use of Lincoln issue Updated 9/25/18 high scores in most categories inadequate in scored lower driveways and traffic patterns. (change in score) -25- City of Lansing Provisioning Center Ranking - Entrance and exit on main streets, TIER 3 Opts -Does not meet minimum requirements, requires correction and/or has adequate parking not on residential 10 4 streets, Quality of Security Plan missing/or incomplete information. 4pts traffic Strong parking and circulation Plan to meet with neighborhood 1 1 meet with community leaders organizations, Planned improvements Updated 9/24/18 using a more accurate measurement tool,$ Improvements made or proposed to 3 1 200,000 of planned renovations which is 48% of the SEV of $414, 700 which falls short of building the optimal investment of 125% of SEV (3 points) and Is under 75% of SEV investment (2 points). Plan to minimize/eliminate traffic 1 0 inadequate traffic plan Plan to minimize/eliminate noise 2 0 inadequate or no noise plan Plan to minimize/eliminate odor 3 3 Very detailed: Photohydro-ionlzation unit, germicidal UV light rays, carbon filters, complaint tracking, staff training LPD Complaints 4 3 1 assault report - 2 B&E alanns, 3 calls (1-5 calls drops score to 3pts) Demo of Regulatory Compliance 4 4 no tax issues, Updated 9/25/18 3 expired electrical permits-not related to a dispensary. No deduction. Litigation History 2 0 no lit history on stakeholders, supposed to be email seperatedly, no record of it sent, Missing litigation history for any stakeholder= 0 points ICF 55 - Total Score 100 75 -26- Biehler, Deb From: Sent: To: Cc: Subject: Good Morning, Joe Neller <jneller@gpimichigan.com> Friday, October 19, 2018 11:08 AM Biehler, Deb Clerk, City; Jackson, Brian; Jeff Donahue Re: Provisioning Center Application Update Green Peak Innovations would like to appeal this communication to the Medical Marihuana Commission. Please let us know if there is anything else needed to initiate the hearing. We look forward to the next steps in the process. Thank you, Joe JOE NELLER ; EVP, GOVERNMENT AFFAIRS & BUSINESS DEVELOPMENT 1669 E. Jolly Road, Lansing, MI 48910 \.: 517.648.0328 GreenPeakinnovations.com Confid entiality l\lotice : The co ntents of this email message an d any attachments are intended so lely for the addressee(s) and may conta in co nfide ntial and/or pri vileged infom1ation and may be lega lly protected from disclos ure. If you are not the in tended recipient of this message or their agent, or if this message has been aclclress2cl to you in en·or, please immediately alert the sende1· by reply email a11 d then delete this message and any attachments. If you are not the intended recipient, you are hereby notified that any use, dissem ination, copying, or storage of this message 01· its attachments is strictly prohibited On Aug 3, 2018, at 2:29 PM, Biehler, Deb <Deb.Biehler@lansingmi.gov> wrote: <65 Green Peak 2508 S Cedar St Final Score.pdf> -27- I! t 't ~ ii :! 0 ' 0 ii c F ii ~ 't ) 11 p US POSTAGE & FEES PAID PRIORITY MAIL FLAT-RATE ENVELOPE ComPlsPrice 111111~1~1~1111111 06250009993649 7933081 FROM48933 stal'T'QS endlcla 10/1912018 PRIORITY MAIL 3-DAY™ Chris Swope 0020 Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 [C076[ SHIP TO: Green Peak Industries LLC 500 E Michigan Avenue Suite 202 Lansing Ml 48912-1185 USPS TRACKING# II 11111 11 111 9405 5116 9900 0398 1238 89 stamps endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0398 1238 89 Priority Mail 3-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: 10/1912018 Mailing Date: 10/1912018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 Green Peak Industries LLC 500 E Michigan Avenue Suite 202 Lansing Ml 48912-1185 USPS Postmark Here 'Regular Priority Mail 3-DAY Service postage rates apply. There is no lee for Delivery Confirmation"' service on Priority Mail services with use of this electronic shipping label. Postmar1< 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. I co N I October 19, 2018 Green Peak Industries LLC 500 E Michigan Ave Suite 202 Lansing, Ml 48912 Dear Provisioning Center Applicant: Chris Swope Lansing City Clerk Your appeal before the City of Lansing Medical Marihuana Commission will be held during the regularly scheduled meeting of the Commission on Friday, November 16, 2018, at2:00 PM in the Conference Room in the City Clerk Election Unit located at 2500 S Washington Avenue in Lansing. The entrance, with ample free parking, is at the back of the building. Per Lansing City Ordinance 1300.3(e), the Commission's review of the appeal shall not be de nova. The Medical Marihuana Commission Appeal will become a matter of public record. 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. The presentation timeline used by the Commission during the meeting for your appeal presentation is enclosed. No additional materials may be submitted for review. Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Sincerely, Chris Swope, Master Municipal Clerk Lansing City Clerk Lansing City Clerk's Office Ninth Floor, City Hall, 124 W Mi 29 n Ave, Lansing, Ml 48933-1695 517-483-4131 ---377-0068 FAX www. lansingm i. gov/clerk city.clerk@lansingm i. gov Timeline RJOPC Investments LLC 5924 S Pennsylvania Avenue Lansing, Michigan 48910 December 14, 2017 -Application submitted December 21, 2017 -Department review of applications begins August 1, 2018 -Scoring and Ranking denial letter sent ........................................... 1 August 15, 2018 -Appeal submitted by applicant's attorney ................................... 7 August 21, 2018-Appeal to Hearing Officer September 19, 2018 -Hearing Officer Denial letter sent.. ....................................... 27 September 19, 2018 -Hearing Officer Decision ......................................................... 29 October 1, 2018 -Score update letter sent ................................................................ 35 October 18, 2018 -Commission Appeal submitted ................................................... 41 October 19, 2018 -Commission Hearing date letter sent ......................................... 61 ,~, stami;>s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0888 3981 62 Priority Mail 2-DAY with USPS TRACKING#• Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 oz Print Date: 08/01/2018 Mailing Date: 08/01/2018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills Ml 48334-2557 USPS Postmark Here 'ReglJar Priolity Mail 2-DAY Service postage rates apply. There is no lee for Delivery Confinnation tu service on Priolity Mail services with use of !his electronic shipping label. Pos!mar1< req<.ired ii lee refund requested. Delivery inlonnation is no! available by phone lor 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. I ~ August 1, 2018 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills, Ml 48334 Dear Provisioning Center Applicant, Chris Swope Lansing City Clerk The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 61 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 5924 S 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, Ml 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, Ml 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 l\JUI" Applicant Name Possible c RJOPC INVESTMENTS INVES Points l""•~CIU Applicant Address 5924 5924 S. PA AVE. --S.PA ------Scoring Insights Applicant provides marketing, advertising, promotion, and Marketing, Advertising and minor minimization examples (e.g., will provide superb, Promotion safe, welcoming, and compassionate service, website age 4 3 verified, won't sell products in shapes appealing to kids, labels saying intended for use by 18 and older, etc.). Lacks an optimal amount of general marketing, advertising, and promotion examples and details. Applicant indicates the 1,923 sq. ft. provisioning center building at 5924 S. PA Ave. is owned by RJO Investments Tangible Capital Investment (purchased for $ZOOK) who has the same members as in the City of Lansing RJOPC Investments (who are leasing property for $2K per (Investment in applicants month). Also intend to operating a processing facility at other provisioning centers 15 12 5920 S. PA Ave (adjacent lot), will seek to integrate with a was not included in score) grow facility at 913 Beech St. (Oasis Wellness Ctr.). Intend to invest -$SOOK to remodel these properties. Also, several team members (Putrus and Somo) are affiliated with RODA Investments who are seeking to operate a provisioning center at 4929 S. Cedar St. Suite 1. Lacks an optimal amount of tangible capital investment. Job Creation (Integrated System) Applicant indicates 30 to 60 full-time positions will be Overall number of jobs created in Lansing at the proposed operations. Passing created 5 2 reference is made to local hiring and employee training. Lacks sufficient details and falls short of an optimal number of jobs. Applicant indicates they will fund its startup costs largely through personal savings of its founders. Provide CPA Financial Structure and attested statement that RJOPC has access to $326.9K in Financing liquid capital Including bank statement evidence that one member (Gumma) has $113.GK in checking/savings 3 2 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Plans to Integrate Facility Applicant indicates they will seek to integrate the with Other Establishments 2 1 provisioning center with a grow facility at 913 Beech St. but do not provide any details regarding the sq. ft. or number of plants that will be grown there. -4- City of Lansing Provisioning Center Ranking Charitable Plans and Applicant indicates they will work with local charities like Strategies New World Flood to assist in doing good works in the 4 1 Lansing community. Lacks sufficient details, a dollar commitment amount, and proof of any actual payment or executed agreement . ..... unae1 01 .1uu;, al L11t: Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = Applicant indicates 10 to 20 full-time positions will be < 6 jobs, sufficient details; 3 = 6 jobs, sufficient details; 4 s 4 created in Lansing at the provisioning center. Passing = > 6 jobs insufficient details; reference is made to local hiring and employee training. 5 = > 6 jobs, sufficient/good Falls short of an optimal level of details. details. Amount and Type of Applicant indicates all PC employees will earn at least $15 Compensation (PC) 2 1 per hour but does not provide an optimal amount of support details. Percent of Employees Earning At Least $15/Hour) Applicant indicates all provisioning center employees will (PC) 3 3 earn at least $15/hour. Projected Annual Budget and Applicant provides detailed projected annual budget and Revenue (PC) revenue data (e.g., $1.0 million in expenses and $1.38 million in gross revenues during year 1) but there is a 2 1 disconnect regarding monthly rent payments as the financial tables indicate $0 and the commercial lease agreement indicates $2K per month. Lacks consistent details. Applicant provides litigation compliance verification forms for all key team members. Applicant provides CPA attested statement that RJOPC has access to $326.9K in liquid capital including bank statement evidence that one Sufficient Financial Resources member {Gumma) has $113.GK in checking/savings 5 4 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Applicant indicates they have decades of applicable Business Experience business experience {e.g., marketing, retail, architecture, 5 3 etc.). However, they do not reflect any medical marihuana industry experience. Lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism Inadequate Table of Contents, org chart. inadequate plan of submitted documentation 5 2 including clear labeling of for com outreach. inadequate goals required items -5- City of Lansing Provisioning Center Ranking Buffering between residential zoned areas and 5 3 Bordered by other buildings; apartments establishment Increased traffic on side 5 streets will be scored lower 5 No issues Entrance and exit on main Minimium requirement for Sec plan, TIER 2, 5 pt traffic streets, adequate parking not on residential streets, 10 7 plan, Strong traffic patterns , driveways, parking and Quality of Security Plan cirrculation. Plan to meet with neighborhood organizations 1 0 inadequate plan Improvements made or 3 1 If approved, extensive renovations planned proposed to building Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to minimize/eliminate 2 0 inadequate noise plan noise Plan to minimize/eliminate 3 0 inadequate odor plan odor LPD Complaints 4 3 1 unwanted call - 1 child neg - 1 other, 5 calls Demo of Regulatory 4 1 Major Tax Compliance Litigation History 2 2 clear history Total 100 61 -6- CLARI( HILL Jason R. Canvasser T 313.965.8257 F 313.309.6857 Email: jcanvasser@clarl<hlll.com VIA HAND-DELIVERY Lansing City Clerk August 14, 2018 Clar!< Hill PLC 500 Woodward Avenue Suite 3500 Detroit, Ml 48226 T 313.965.8300 F 313.965.8252 clarkhlll.com 1·· .. -·:· .. . . : : ··- r ... .i t.:.:J ·--· :!.':I •' ... r-·~ ' ., [.J! .... ~ .. } !'-) Attn: Mr. Chris Swope 124 W Michigan A venue 9th Floor of City Hall Lansing, MI 48933 ·-· C,i~I Re: Appeal of Denial of Medical Marihuana Provisioning Center Application for RJOPC Investments LLC d/b/a Terra Collective Dear Mr. Swope, Clark Hill PLC is legal counsel to RJOPC Investments LLC d/b/a Terra Collective ("RJOPC"). On August 1, 2018, RJOPC received notice via electronic mail that the City Clerk denied its application for licensure with the City of Lansing. The Clerk's decision was based upon RJOPC obtaining a score of 61 points out of a possible I 00 points determined by the criteria set forth under Section 1300.6. In the denial, the Clerk stated that the score "eliminates the possibility of scoring in the top twenty," which, under Section 1300.06(c)(l), is the maximum number of provisioning center licenses allowed under Phase One of the City's application process. A copy of the scoring criteria provided with the denial is attached as Exhibit 1. A copy of the scoring criteria provided by the City to RJOPC prior to the filing of its Application on December 14, 2017 is also attached as Exhibit 2. The scoring criteria provided prior to the application deadline varies significantly from the scoring criteria used by the Clerk to rank RJOPC's application. We have carefully reviewed the scoring criteria ofRJOPC provided by the City Clerk and it is apparent that many points were improperly withheld from RJOPC's final score. In accordance with Section 1300.15(c), this correspondence shall serve as RJOPC's written appeal of the City Clerk's denial for the reasons more fully stated below. Please appoint a hearing officer to hear and evaluate this appeal and make a recommendation for approval to the Clerk. 220101956.1 -7- RJOPC Investments LLC August 14, 2018 Page 2 j"• P • "• : .. !"'···"' c.:~ '~:.-:i -::·.·~ i_, ) (. .··~ ) A. Marketing, Advertising and Promotion ('"., :·<.'! : .. i ! •···. ·-. c•:.r . ' Applicant provides marketing, advertising, promotion, and Marketing, Advertising and minor minimization examples (e.g., will provide superb, Promotion safe, welcoming, and compassionate service, website age 4 3 verified, won't sell products in shapes appealing to kids, labels saying Intended for use by 18 and older, etc.). Lacks an optimal amount of general marketing, advertising, and promotion examples and details. Section 1300.5(B)(12)(iii) requires applicants to submit: "A proposed marketing, advertising, and business promotion plan, including plans to minimize the exposure of marketing or promoting marihuana products to minors." RJOPC's business plan clearly, distinctly, and succinctly meets all of these requirements. RJOPC's business plan outlines: (1) how RJOPC intends to come up with its price points for its products to stay competitive; (2) how it intends to promote its business-i.e. as a friendly, knowledgeable, and caring member of the community; (3) how it intends to advertise-i.e. through its website and through word of mouth referrals; and (4) provides concrete examples as to how RJOPC will minimize exposure and marketing of product to minors. RJOPC should have received 4 out of 4 points in this category. B. Tangible Capital Investment in the City of Lansing Applicant indicates the 1,923 sq. ft. provisioning center building at 5924 S. PA Ave. is owned by RJO Investments Tangible Capital Investment (purchased for $20DK} who has the same members as in the City of Lansing RJOPC Investments (who are leasing property for $2K per (Investment in applicants month). Also intend to operating a processing facility at other provisioning centers 15 12 5920 S. PA Ave (adjacent lot), will seek to integrate with a was not included in score) grow facility at 913 Beech St. (Oasis Wellness Ctr.}. Intend to invest -$SOOK to remodel these properties. Also, several team members (Putrus and Somo) are affiliated with RODA Investments who are seeking to operate a provisioning center at 4929 S. Cedar St. Suite 1. Lacks an optimal amount of tangible capital investment. Section 1300.05(b)(12)(iv) required the application to provide RJOPC's planned tangible capital investment to the City of Lansing. In the denial letter, the Clerk stated that RJOPC "lacks an optimal amount of tangible capital investment." However, this Section does not require a minimum capital investment. Nevertheless, RJOPC identified approximately $500,000 of CLARK HILL -8- 220101956.1 .. ., .. , j .... ' ! i-Tl -------.. i .. , ·1 .... : ..... . • · ... ' •::·; •., l ~· :·, ·, .... c·· LJ ".i ,.·-·· ... RJOPC Investments LLC August 14, 2018 ..... -. ... ·._ . .' , .. , . '. . ~ Page 3 c·_. . .... , r·. i···J "· : investments proposed in the City of Lansing. RJOPC satisfies the requirements ~·~ Sf(£_l:ion 1300.05(b)(l2)(iv) and should have been awarded 15 out of 15 points in this category. -· C. Job Creation Job Creation (Integrated System) Applicant indicates 30 to 60 full-time positions will be Overall number of jobs created in Lansing at the proposed operations. Passing created 5 2 reference is made to local hiring and employee training. Lacks sufficient details and falls short of an optimal number of jobs. Section 1300.05(b)(12)(v) required the application to include RJOPC's "expected job creation from the proposed medical marihuana establishment(s)." Accordingly, RJOPC submitted within its business plan an employee hiring, training, and compensation plan, under which RJOPC anticipated between 30-60 employee positions to be created by the approval of RJOPC's application. The Ordinance does not require a minimum number of jobs to be created and does not require any more detail than what was provided. Nevertheless, RJOPC laid out a clear plan relative to the planned creation of jobs and should have been awarded 5 out of 5 points in this category. D. Financial Structure Applicant indicates they will fund its startup costs largely through personal savings of its founders. Provide CPA Financial Structure and attested statement that RJOPC has access to $326.9K in liquid capital including bank statement evidence that one Financing member (Gumma) has $113.6K in checking/savings 3 2 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Section 1300.05(b)(12)(vii) required the application to include "Financial Structure and Financing of the proposed medical marihuana establishment(s)." Although RJOPC identified plans for potential others and related ventures, it only submitted a single application. The fact that there "is still concern about proven financial resources being spread too thin" is without merit since RJOPC clearly provided proof of adequate funds for the subject venture. RJOPC should have been awarded 3 out of 3 points in this category. CLARK HILL -9- 220101956.1 RJOPC Investments LLC August 14, 2018 Page4 E. Plans to Integrate Facility with Other Establishments " ' .. ' Plans to Integrate Facility Applicant indicates they will seek to integrate the with Other Establishments provisioning center with a grow facility at 913 Beech St. but 2 1 do not provide any details regarding the sq. ft. or number of plants that will be grown there. Section 1300.05(b)(12)(ix) provides that "if a medical marihuana grower facility(ies) are proposed, plans to integrate such facility(ies) with other proposed medical marihuana establishments and a statement whether the medical marihuana grower facility will grow 1,000 plants or more and the square footage of the building(s) housing such grower facility, and if so, will the facility contain more than 10,000 square feet of space." RJOPC is not applying for a license to operate a grower facility. However, RJOPC did include information regarding its plans to integrate with a grower licensee at Oasis Wellness Center of Lansing 4, LLC and a processor licensee at RJOX Investments, LLC. Because RJOPC is not applying for a license to operate a grow facility, it was not required to provide details relative to square footage or the number of plants to be grown elsewhere. RJOPC should have received 2 out of 2 points in this category. F. Charitable Plans and Strategies Charitable Plans and Applicant indicates they will work with local charities like Strategies New World Flood to assist in doing good works in the 4 1 Lansing community. Lacks sufficient details, a dollar commitment amount, and proof of any actual payment or executed agreement. Section 1300.05(b)(12)(xi) requires RJOPC to provide its "charitable plans and strategies, whether fiscally or through volunteer work." RJOPC included, as part of its submission, its proposed community efforts, including its plans to work with, among others, Todd Duckett's World Flood to assist in their mission work. RJOPC was awarded 1 of 4 points in this category, despite providing examples of volunteer-work, fiscal contributions, and employee promotions of community engagement. The scoring criteria stated that RJOPC "lacks a dollar commitment amount and proof of any actual payment or executed agreements." However, dollar commitment amounts, proof of payment and/or executed agreements are not part of the requirements set forth in Section CLARK HILL -10- 220101956.l :.·. ; ···.·: I ... RJOPC Investments LLC August 14, 2018 ! ! : Page 5 , .. ... .... ' i I: 1300.05(b)(12)(xi), nor were they required under the scoring criteria provided to RJO~C priqr to1 :·.) submitting its Application. RJOPC should be awarded the 4 out of 4 points in the categ6cy. ·-.--~ : . . "-'-' G. Number of Jobs at the Provisioning Center l'IUffiUt::I OT JuuS ar Liit:: Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = Applicant indicates 10 to 20 full-time positions will be < 6 jobs, sufficient details; 3 = 6 jobs, sufficient details; 4 5 4 created in Lansing at the provisioning center. Passing = > 6 jobs insufficient details; reference is made to local hiring and employee training. 5 = > 6 jobs, sufficient/good Falls short of an optimal level of details. details. Section 1300.05(b)(23) requires RJOPC to provide an estimate of the number and type of jobs that the medical marihuana establishment is expected to create. RJOPC's application provided that 10-20 full-time positions would be created at the provisioning center. The Ordinance does not require a minimum number of jobs to be created or require any level of detail to be provided. Nevertheless, RJOPC's business plan lays out a full organizational chart, along with providing a management team description and staffing plan. RJOPC should have been awarded 5 out of 5 points. H. Amount and Type of Compensation Amount and Type of Applicant indicates all PC employees will earn at least $15 Compensation (PC) 2 1 per hour but does not provide an optimal amount of support details. Section 1300.05(b)(23) requires that RJPOC include, in addition to other items, "the amount and type of compensation expected to be paid" for the jobs anticipated in its provisioning center. RJPOC included the amount and type of compensation it anticipated for its employees. Specifically, RJPOC will pay its employees at least $15.00 an hour. The scoring criteria completed to rank RJOPC states that, RJOPC "does not provide an optimal amount of support details." Section 1300.05(b)(23) does not include any information as to an "optimal amount of support details," nor is this included in the scoring criteria provided to RJOPC prior to filing its Application. RJOPC included the amount and type of compensation for its employees, which was the requirement for this category, and as such, should have received 2 out of 2 points in this category. CLARK I-l.ILL -11- 220101956.1 RJOPC Investments LLC August 14, 2018 Page 6 r -· ,. ( ... ... . r~> L:. .) .. -., ... .. ( j i •.: , .. .. I -() I . : .~'i) -' I. Projected Annual Budget and Revenue ! .. '· ; r;? I _, . . ~ --- Projected Annual Budget and Applicant provides detailed projected annual bu_dget afi'd Revenue (PC) revenue data (e.g., $1.0 million in expenses and $1.38 million in gross revenues during year 1) but there is a 2 1 disconnect regarding monthly rent payments as the financial tables indicate $0 and the commercial lease agreement indicates $2K per month. Lacks consistent details. Section 1300.05(b)(23) requires that RJPOC include, among other items, a projected annual budget and revenue for the establishment. RJOPC complied with this provision by providing a detailed Profit and Loss Statement in its business plan. It appears that the Clerk deducted a point regarding a discrepancy in the lease payments. The members of RJOPC also own the membership interests in the landlord entity and this discrepancy can be easily remedied. Regardless, the subject amount is de minimus in regards to the total proposed operating expenses. RJOPC should have received 2 out of2 points in this category. J. Sufficient Financial Resources Applicant provides litigation compliance verification forms for all key team members. Applicant provides CPA attested statement that RJOPC has access to $326.9K in liquid capital including bank statement evidence that one Sufficient Financial Resources member (Gumma} has $113.6K In checking/savings 5 4 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Section 1300.06(8)(5) provides, inter alia, that the Clerk may consider whether RJOPC possesses sufficient financial resources to fund the submitted plan. RJOPC is only applying for a provisioning license and clearly demonstrated sufficient funds in that regard. Any potential or contemplated ventures should be disregarded and not considered as part of this category. As such, RJOPC should have received 5 out of 5 points in this category. CLt-\RK HILL -12- 220101956.1 ' ; i \ i J .' RJOPC Investments LLC August 14, 2018 Page 7 ·' i·<> ".) J ·- ! .. _; i ' ' ·--' '·-·' K. Business Experience c.· : f'-i ' - ~ .. ( .... ;··~-~) . ·-I ..... , Applicant indicates they have decades of appfJc~ble~ ~~ Business Experience business experience (e.g., marketing, retail, architecture, 5 3 etc.). However, they do not reflect any medical marihuana industry experience. Lacks the optimal amount of applicable business experience. Section 1300.06(B)(5) provides, inter alia, that the Clerk may consider RJOPC 's requisite business experience as part of RJOPC's application. Although the Clerk recognized the members of RJOPC have "decades of applicable business experience" including retail experience, the Clerk noted that RJOPC lacks medical marihuana industry experience. However, RJOPC members Omar Putrus and Ronnie Somo previously operated RODA Investments LLC under Emergency Rule 19 and the City was aware of this fact. As such, RJOPC has relevant and applicable business experience. RJOPC should have received 5 out of 5 points in this category. L. Content and Sufficiency of Information Content and Sufficiency of Information; Professionalism Inadequate Table of Contents, org chart. inadequate plan of submitted documentation 5 2 including clear labeling of for com outreach. inadequate goals required items RJOPC provided over 400 pages of documents to the City of Lansing in a bound, labeled, and tabbed folder. RJOPC's application had a Table of contents and met all of the requirements of the City's Ordinance. RJOPC should have received 5 out of 5 points in this category. M. Buffering Between Residential Zoned Areas and Establishment Buffering between residential zoned areas and 5 3 Bordered by other buildings; apartments establishment As part of the application requirements under Section 1300.05(b)(l 7), RJOPC included a location area map, which displayed the establishment and surrounding areas. As part of the denial, the Clerk identified that the property is "[b ]ordered by other buildings; apartments." The spacing in proximity to other buildings and apartments is not relevant. Moreover, there is a fence separating the space from neighboring properties and a privacy fence will be constructed CLARK HILL . -13 - 220101956.1 ... __ , i , .... , ::: . .:1 -.. ' .. ) RJOPC Investments LLC ' ... : .. .. , i . ~ ' .. August 14, 2018 ; , ..... · .. ) Page 8 ' .. r_:; ' ..... ' : -·--·,:: -..: . .. r . I upon approval. RJOPC meets all spacing and buffering requirements and therefore, sb,quld liav~. · .. ; received 5 out of 5 points in this category. \ ,·1 r:? · .. - .. .. •.i.) N. Entrance and Exit on Main Streets, Parking, and Security Plan Entrance and exit on main Minimium requirement for Sec plan, TIER 2, 5 pt traffic streets, adequate parking not on residential streets, 10 7 plan, Strong traffic patterns, driveways, parking and Quality of Security Plan cirrculation. Section 1300.06(B)(2) provides, inter alia, that the Clerk may consider whether the proposed establishment will have a detrimental effect on traffic patterns. Simply, the Clerk did not find any reason that this requirement will not be satisfied. To the contrary, the Clerk found that the minimum requirements were met. Moreover, the security plan provided meets all State requirements. Further, the security plan was composed by Identify, Inc. and Century Research Group, LLC -companies that have handled security for major events and venues with complicated security concerns, including, without limitation, Super Bowl XL at Ford Field in Detroit, Comerica Park, the Fox Theatre, Joe Louis Arena, and Cobo Hall. The expertise and quality of the plan presented by these groups on behalf of RJOPC met and exceeded all requirements. Therefore, the Clerk should have awarded 10 out of I 0 points in this category. 0. Plan to Meet with Neighborhood Organizations Plan to meet with 1 neighborhood organizations 0 inadequate plan This location is in a heavily commercial area, which should minimize, if not eliminate, any impact on residential neighborhoods and this fact was provided for in the Application. Furthermore, RJPOC indicated that it is cognizant of being a good neighbor. RJPOC intends to send representatives to meet with various community organizations to provide awareness of the services it will provide, to spread awareness, and to educate these organizations regarding the services and resources provided by RJOPC. As such, I out of 1 points should have awarded in this category to RJOPC. P. Improvements Made or Proposed to Building Improvements made or proposed to building CLARK HILL 220101956.1 3 1 If approved, extensive renovations planned -14- RJOPC Investments LLC August 14, 2018 Page 9 ,. ' . ,\ { > r-.:: •'."J ... ·:· _ .. ·· 1 •• ) The Clerk recognized that there will be extensive renovations made to the; pr9pose.~;f~ building if RJOPC's application was approved. Section 1300.06(B)(3) allows t}].e. crerk to': consider whether "significant physical improvements" will be made. Since the Cler~ ,(oufid that"' this factor was met, 3 out of 3 points should have been awarded. ~·.· :: ::,; Q. Plan to Minimize/Eliminate Traffic Plan to minimize/eliminate traffic 1 0 inadequate traffic plan The scoring of this category is inconsistent with the fact that RJOPC scored a 5 out of 5 with a finding that there are no issues pertaining to traffic based on its location. As such, RJOPC should have received 1 out of 1 points in this category. R. Plan to Minimize/Eliminate Noise Plan to minimize/eliminate noise 2 0 inadequate noise plan RJOPC's security plan and proposed buildout clearly establish that a limited number of patients will be present in the facility at any point in time. As RJOPC is not housing a grow or processor facility there will be little if any noise emanating from the facility. RJOPC expects that its facility will have a noise level comparable to other retail stores of similar size, which does not make it a public nuisance or concern of any kind. As such, RJOPC should have received 2 out 2 points in this category. S. Plan to Minimize/Eliminate Odor Plan to minimize/eliminate odor 3 0 inadequate odor plan RJOPC's submitted facility sanitation plan, security plan, and employee training and education plan adequately detail and ensure that odor will not be an issue. RJOPC is not seeking to cultivate marihuana on site, so the only possible odor that would be from product on site. Bureau of Medical Marihuana Regulation Emergency Rules 35 and 39 already requires that provisioning centers store all products for sale in a sealed container. RJOPC indicated repeatedly throughout its application that it will comply with all applicable laws and regulations governing the industry. As a result, its application adequately demonstrated no reason for odor to be a concern and RJOPC should have received 3 out of 3 points in this category. CLARK HILL -15- 220101956.1 RJOPC Investments LLC August 14, 2018 Page 10 T. LPD Complaints LPD Complaints 4 3 -..... .... • . . --. . \ ' ··, ... (i1 ... ,._, •:"I .· . ·. \.i,.") ...... 1 unwanted call - 1 child neg - 1 other, 5 calls There is no basis for attributing any of these LPD complaints to RJOPC. RJOPC, which was formed in December 2017, is not open for business. There are no members of the public permitted on or near its premises at this time. RJOPC is not open to the public (and.has not been open prior to the filing of its application) and has no knowledge of any police calls or responses to the property, these LPD complaints should not be attributed to RJOPC. ,As such, RJOPC should have received 4 out of 4 points in this category. U. Demo of Regulatory Compliance Demo of Regulatory Compliance 4 1 Major Tax The reason cited "Major Tax" lacks any details for RJOPC to be able to effectively respond to any specific concerns or issues. Mr. Somo and Mr. Putrus were made aware of balances owed to the treasury department and immediately corrected the situation. The total amount of the deficiency was immediately corrected within forty-eight ( 48) hours or less of receipt of notice. RJOPC has no tax issues and has never had to file taxes. RJOPC should have received 4 out of 4 points in this category. Based on the foregoing, RJOPC's denial should be overturned and RJOPC should be awarded a provisioning center by the City of Lansing. If you have any questions or need additional information, do not hesitate to contact me. ,.·;-.····-:-'''" Encl. cc: Mr. John Fraser, Esq. (via email) CL~RKHILL -16- 220101956.1 EXHIBIT A r ~-, -17- City of Lansing Provisioning Center Ranking Total KJUI' Applicant Name Possible c RJOPC INVESTMENTS Points INVES '-··~·· Applicant Address 5924 5924 S. PA AVE. -S.PA --Scoring Insights Applicant provides marketing, advertising, promotion, and Marketing, Advertising and minor minimization examples (e.g., will provide superb, Promotion safe, welcoming, and compassionate service, website age 4 3 verified, won't sell products In shapes appealing to kids, ., I ; ·: ..' ( ... i :· .j . ~ labels saying intended for use by 18 and older, etc.). Lacks an optimal amount of general marketing, advertising, and i: promotion examples and details. ' ' Applicant indicates the 1,923 sq. ft. provisioning center building at 5924 S. PA Ave. is owned by RJO Investments Tangible Capital Investment (purchased for $200K) who has the same members as In the City of Lansing RJOPC Investments (who are leasing property for $2K per (Investment in applicants month). Also intend to operating a processing facility at other provisioning centers 15 12 5920 S. PA Ave (adjacent lot), will seek to Integrate with a was not Included in score) grow facility at 913 Beech St. (Oasis Wellness Ctr.). Intend to Invest -$500K to remodel these properties. Also, several team members (Putrus and Somo) are affiliated with RODA Investments who are seeking to operate a provisioning center at 4929 S. Cedar St. Suite 1. Lacks an optimal amount of tangible capital investment. Job Creation (Integrated System) Applicant indicates 30 to 60 full-time positions will be Overall number of jobs created in Lansing at the proposed operations. Passing created 5 2 reference is made to local hiring and employee training. Lacks sufficient details and falls short of an optimal number of jobs. Applicant Indicates they will fund its startup costs largely through personal savings of its founders. Provide CPA Financial Structure and attested statement that RJOPC has access to $326.9K in Financing liquid capital including bank statement evidence that one member (Gumma) has $113.GK in checking/savings 3 2 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Plans to Integrate Facility Applicant indicates they will seek to integrate the with Other Establishments 2 provisioning center with a grow facility at 913 Beech St. but 1 do not provide any details regarding the sq. ft. or number of plants that will be grown there. -18- City of Lansing Provisioning Center Ranking Charitable Plans and Applicant indicates they will work with local charities like Strategies New World Flood to assist in doing good works in the 4 1 Lansing community. Lacks sufficient details, a dollar ;-.. '!' .. ··=· .;:·:) ·' commitment amount, and proof of any actual payment or .. 0 .. ... .. ' executed agreement. : .. ; ; .. \:. ) ; 11•u111u"r or Juu> at "'" Provisioning Center : .. ·' r~···) ., ·, (.. ; .. Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = Applicant indicates 10 to 20 full-time positions will be < 6 jobs, sufficient details; 3 = 6 jobs, sufficient details; 4 5 4 created in Lansing at the provisioning center. Passing = > 6 jobs insufficient details; reference is made to local hiring and employee training. 5 = > 6 jobs, sufficient/good Falls short of an optimal level of details. .. ·:'J -· ~ " •, ... I .. .. . '· ,-.. .. -· . '-,~ i :-~ ) t.0 details. Amount and Type of Applicant indicates all PC employees will earn at least $15 Compensation (PC} 2 1 per hour but does not provide an optimal amount of support details. Percent of Employees Earning At Least $15/Hour) Applicant indicates all provisioning center employees will (PC) 3 3 earn at least $15/hour. Projected Annual Budget and Applicant provides detailed projected annual budget and Revenue (PC) revenue data (e.g., $1.0 million in expenses and $1.38 million in gross revenues during year 1) but there is a 2 1 disconnect regarding monthly rent payments as the financial tables indicate $0 and the commercial lease agreement indicates $2K per month. Lacks consistent details. Applicant provides litigation compliance verification forms for all key team members. Applicant provides CPA attested statement that RJOPC has access to $326.9K in liquid capital including bank statement evidence that one Sufficient Financial Resources member (Gum ma) has $113.6K In checking/savings 5 4 accounts. Applicant also states if there is any concern about funding availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread too thin. Applicant indicates they have decades of applicable Business Experience business experience (e.g., marketing, retail, architecture, 5 3 etc.). However, they do not reflect any medical marihuana industry experience. Lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism inadequate Table of Contents, erg chart. inadequate plan of submitted documentation 5 2 including clear labeling of for com outreach. inadequate goals required items -19- City of Lansing Provisioning Center Ranking Buffering between residential zoned areas and 5 3 Bordered by other buildings; apartments establishment Increased traffic on side 5 5 No Issues streets will be scored lower Entrance and exit on main Minimium requirement for Sec plan, TIER 2, 5 pt traffic streets, adequate parking not on residential streets, 10 7 plan, Strong traffic patterns , driveways, parking and Quality of Security Plan cirrculation. Plan to meet with neighborhood organizations 1 0 inadequate plan Improvements made or 3 1 If approved, extensive renovations planned proposed to building Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to minimize/eliminate 2 0 inadequate noise plan noise Plan to minimize/eliminate 3 0 inadequate odor plan odor LPD Complaints 4 3 1 unwanted call - 1 child neg - 1 other, 5 calls Demo of Regulatory 4 1 Major Tax Compliance Litigation History 2 2 clear history Total 100 61 1·· ·~ , ... :··; ~ ( . -~ ... , >.) .. -20- EXHIBITB ····. i"•.,) 1: .. ::1 (.1:1 ' -·-; ' ... (. -' i { ·~. ; V i I ... (''! .... ' -.. '· ·-.. I i f\} ' . ··~ f 'i-; ~:) \.{\ -21- FINAL Medical Marijuana Provisioning Centers Scoring Criteria Criteria Business Plan & Job Creation Ownership structure Organizational chart Content and Sufficiency of Information; Worker Training Program Short term and long term Professionalism of submitted documentation including clear labeling goals and objectives Community outreach & of required items education Marketing, advertising, Minimization of exposure to minors promotion Economic benefit to the City of the Tangible capital investment business plan, real property ownership, in the City of Lansing grower and/or processor facilities in the City Overall number of jobs created within Job creation the City of Lansing (highest), Lansing region, and Michigan (lowest) Net worth/capitalization sufficient for business plan as evidenced by Financial Structure and notarized CPA attestation, financial Financing institution statements, or the equivalent. Plans to integrate grower facility with other establishments Charitable plans and Commitment to fiscal and/or volunteer strategies work Number of jobs at the provisioning center Amount and type of compensation Job creation Percent of employees earning over $15 per hour Projected annual budget and revenue Total -Business Plan/Job Incomplete plan will get zero points Creation Maximum Points 5 4 15 5 ' ··-: ;. .. .. --3 ·' •' .. ( ( .. ·-··--. --· .. ;_:-·~- 2 ~~,-~ -.... "l . . -.. -. 4 5 2 3 2 so "' ·' ·:.• L: ... 1·_, - ,. . .. - -"J -· .. ,, . .. I November 13, 2017 ~ , I .. I ·· ~ • 1 I'; , ...... 1 '··~ .. · S:\Clerk_Staff\Licenses\Medical Marihuana\-22-iarihuana Licensing 2017\Provisioning Center License Application Scoring v4.xlsx FINAL November 13, 2017 Medical Marijuana Provisioning Centers Scoring Criteria Maximum Criteria Points Financial Stability & Experience Financial forms including debt, Sufficient Financial bankruptcy, insolvency, tax compliance 5 Resources tax returns and CPA attested, active bank/financial statements. History of success in operating business or businesses, years of operation, Business Experience relevant business experience, other 5 commercial licenses, medical certifications and/or licenses Total -Financial Stability & 10 Experience S:\Clerk_Staft\Licenses\Medical Marihuanai-23-larihuana Licensing 2017\Provisioning Center License Application Scoring v4.xlsx FINAL November 13, 2017 Medical Marijuana Provisioning Centers Scoring Criteria Criteria Maximum Points Land Use Impact on neighborhood Buffering between residential zoned areas and establishment 5 Traffic pattern(s) Increased traffic on side streets will be scored lower 5 Entrance and exit on main streets, Resident safety adequate parking not on residential 10 streets, Quality of Security Plan Total -Land Use 20 ,-......_:. . . -;_.; . .. , .. ' I ( " ... -.. · '-· i .. • . l ; ~ .. ' ., I . J p ··; .. i -V) S:\Clerk_Staff\Licenses\Medical Marihuanal-2 4-1arihuana Licensing 2017\Provisioning Center License Application Scoring v4.xlsx FINAL November 13, 2017 Medical Marijuana Provisioning Centers Scoring Criteria Criteria Maximum Points Outreach Plan to meet with neighborhood organizations, business association, Planned outreach crime watch, and other neighborhood 1 organizations to provide contact information for questions, concerns, etc. Improvements made or 3 proposed to building Plan to minimize/eliminate 1 traffic Plan to minimize/eliminate 2 noise Plan to minimize/eliminate 3 odor Total -Outreach 10 .·, ··-· •' . ·' . ... .. :~ ,.·; \.:·J S:\Clerk_Staff\Licenses\Medical Marihuana' _ 25-larihuana licensing 2017\Provisioning Center license Application Scoring v4.xlsx FINAL Medical Marijuana Provisioning Centers Scoring Criteria Criteria Maximum Points Applicant/Stakeholder History Applicant/stakeholders Lansing Police D complaints/incidents 4 record of acts detrimental Demonstration of regulatory to security, safety, morals, 4 good order, general welfare compliance Business litagation history 2 Total -Will get zero points if found to have Applicant/Stakeholder violated 2016 Ordinance #1202 10 History Moratorium. If information found in the application or review is determined to make the applicant ineligible for approval by the State of Michigan, then the application would be removed from consideration. ,-··: i··r: November 13, 2017 c ·: ~·-·:. ~ ... _:-~:: -· :·, ' ... . . ·· ·:··:··: :··.,'; S:\Clerk_Staff\Licenses\Medical Marlhuana\-26-arihuana Licensing 2017\Provisioning Center License Application Scoring v4.xlsx stamps endicia Shipping Label Receipt Delivery Confirmation TM Service Number: 9405 5116 9900 0572 8945 12 Priority Mail 2-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 oz Print Date: 09/19/2018 Mailing Date: 09/1912018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills Ml 48334-2557 USPS Postmar1< Here 'Regular Priority Mail 2-DAY Service postage rates apply. There is no fee for Delivery Confirmation•• service on Priority Meil services with use of this electronic shipping label. Postmarl< 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 cler1< 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. I r-... N I September 19, 2018 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills, Ml 48334 Chris Swope Lansing City Clerk Dear Provisioning Center Applicant, I have reviewed the report, recommendation of the hearing officer, and the relevant portions of the application 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 5924 S Pennsylvania Ave. I have determined your appeal is denied, however no additional points are to be awarded. The charitable plan lacks dollar commitment, any detail, or evidence of an executed agreement. You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk's Office. The Medical Marihuana Commission Appeal will become a matter of public record . The Commission's review of an appeal shall not be de nova. The Commission shall only overturn, or modify, a decision or finding of the Clerk if it finds such decision or finding to be arbitrary or capricious and not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or finding. Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017- 02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of the temporary operation are satisfied. Sincerely, 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. Michigan Ave .. Lansing, Ml 48933-1695 517-483-4131 377-0068 FAX www.lansingmi.gov/cler.~ 28_~ty.clerk@lansingmi.gov Hilary M. Barnard Attorney at La\v In Re: RJOPC Investments, LLC CITY OF LANSING HEARING OFFICER DECISION RECOMMENDATION 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 RJOPC INVESTMENTS, LLC and its license application for a Medical Marihuana Provisioning Center that the license application remain denied. FACTS RJOPC INVESTMENTS, LLC ("Appellant") applied to the City of Lansing to operate a Medical Marihuana Provisioning Center within the city limits. This recommendation follows an appeal from Appellant dated August 14, 2018, received by the City Clerk's office August 15, 2018. By letter dated August 1, 2018, Appellant was informed that its license application was denied because of its score and rank, having received a score of 61 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 I 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 The largest deficiencies on Appellant's ranking sheet are Job Creation/Overall No. of Jobs where Appellant earned a 2 out of possible 5; a 1 out of 4 in Charitable Plans and Strategies; a 2 out of 5 in Content and Sufficiency of Information; 7 points of possible I 0 in Entrance and Exit on Main Streets; Os in Plan to minimize traffic/noise/odor; and a 1 out of 4 in Demo of Regulatory Compliance. Appellant's Position Appellant argues in its appeal letter through counsel that after its review, "many points were improperly withheld"1 from its scqre. Appellant requests the appointment of a hearing officer and that the included materials be considered in its appeal of the City Clerk's decision. With its letter, 1 Appellant's Appeal of Denial *I. Page I of 6 -29- H ilary M. _Barnard Attorney at Law Appellant included exhibits of its ranking sheet, and the medical marijuana provisioning centers scoring criteria.2 No further documentation was received from Appellant 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."3 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 repo1t 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.4 * * * [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.5 2 The scoring criteria availed to the public before the application deadline can be found at: https://www.lansingmi.gov/DocumentCenter/View/4600/-Med-Marijuana-Provisioning-Center-License- Application-Scoring-Criteria-v4. 3 See LANSING CITY CLERK'S OFFICE, City of Lansing City Charter (as amended) at 24(2015) available at: https://www.lansingmi.gov/DocumentCenter/View/2 ! 26/City-Charter?bidld=. In this instance, the license issuance is handled with the City Clerk's office. 4 City of Lansing Ordinance No. 1217 Sec. 1300.1 S(C). 5 Id. at l 300.3(E). Page 2 of6 -30- H ilary M. Barnard Attorney at Law The arbitrary or capricious standard of review is the commission's review and is adopted by this Hearing Officer.6 Arbitrary and capricious have generally accepted meanings.7 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."8 Capricious is "apt to change suddenly; freakish; whimsical; humorsome."9 Under the City of Lansing Ordinance No. 1217 Section 1300.6, review of an application will consider: (8)(2) Whether the proposed establishment will be consistent with land use for the surrounding neighborhood and not have a detrimental effect on traffic patterns and resident safety .. . . (3) Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood[.] (emphasis added) (8)(3) Planned outreach on behalf of the proposed establishment, and whether the applicant or its stakeholders have made, or plan to make, significant physical improvements to the building housing the medical marihuana establishment, including plans to eliminate or minimize traffic, noise, and odor effects on the surrounding neighborhood[.] (emphasis added) (8)(4) Whether the applicant or any of its stakeholders have a record of acts detrimental to the public health, security, safety, morals, good order, or general welfare prior to the date of the application; whether the applicant or any of its stakeholders have previously operated an illegal business of any kind, including any violation of Lansing medical marihuana moratoriums. * * * (D) In the event that there are more applicants for provisioning center licenses who meet the minimum requirements set forth in 1300.6(8) 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[.] 6 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. 7 See Bunda v. Walled Lake, 395 Mich. 679, 703 (1976) (citing United States v. Carmack, 329 U.S. 230, 243 (1946). s Id. 9 Id. Page 3 of6 -31- Hilary NL Barnard Attorney at Law ----·----------·-------· Pursuant to Section 1300.5, in its application an applicant is to include in its business plan: (12)(V) Expected job creation from the proposed medical marihuana establishment(s) ... (X) Community outreach/education plans and strategies [and] (XI) [ c ]haritable plans and strategies, whether fiscally or through volunteer work. The Lansing Ordinance incorporates provisions and definitions of the Medical Marihuana Facilities Licensing Act, 2016 PA 281 (as amended) ("MMFLA") so as to: "not limit an individual's or entity's rights under the [Michigan Medical Marihuana Act (MMMA)], MMA or the [Michigan Tracking Act (MTA)]" and drafters intended that "these acts supersede [the] ordinance where there is a conflict. "10 A Lansing applicant must then comply with the MMFLA.11 Pursuant to Sec. 402 of the MMFLA, in evaluating an applicant for licensure, an applicant's history of "noncompliance with any regulatory requirements in this state or any other jurisdiction" will be considered.12 Here, Appellant argues its score is inappropriate under Job Creation.13 The ranking sheet indicates that it lacks sufficient details and falls short of an optimal number. While a minimum is not established, Appellant needs to demonstrate that the point allocation decision is arbitrary and capricious. Here, Appellant has not provided an argument to justify a change under the applicable standard of review. Under Charitable Plans and Strategies, Appellant argues that it included materials in its submission including inter aba plans to assist in mission work with New World Flood. The ranking sheet indicates that sufficient details were lacking, such as a dollar commitment amount or proof of agreement or payment. In this category, Appellant should be allocated 1 additional point. It would be unreasonable to assume volunteer work with a charity would be documented ahead of time, however, documentation for business charity is available via tax returns or business records. These could have been provided to merit full points. Appellant's score in this category should be 2 out of 4. Appellant raises a Tangible Capital argument. Capital is understood to be "[m]oney or assets invested, or available for investment, in a business"14 While capital exists for the organization it was not sufficiently addressed as to the economic benefit to the city. From the materials provided, there is not a sufficient reason indicating that the original scoring is not correct. The scoring and Appellant's arguments under tangible capital merit no further point allocation. 1° City of Lansing, Michigan Ordinance No. 1217 Sec. l 300.2(C). 11 Id at Sec. 1300.2(0). 12 MMFLA, MCL § 333.27402(3)(g). JJ This paragraph also considers Appellant's argument under "Number of Jobs at the Provisioning Center" on page 5 of its appeal letter. 14 Capital, Black's Law Dictionary (7th ed.). Page 4 of6 -32- Hilary Mo .Barnard Attorney at Law Entrance and Exit on Main Streets etc. is addressed by Appellant. In Appellant's application and intake form there is no indication of the plan Appellant references in its argument. It is possible that Appellant forgot to include this in its original materials, but there was no such document aligning with Appellant counsel's assertion. Under plans to minimize/eliminate traffic, noise & odor, the scoring sheet reflects that no plan was included within Appellant's application. This requirement is explained as a factor for consideration under Section l 300.6(B)(2). There is no basis to award additional points for a traffic plan. As to noise and smell, it is reasonable to presume that a retail establishment will have noise generated from heating/air conditioning units and from clients coming to and from the establishment. This is not adequately addressed by Appellant, and no further points can be awarded. Marihuana also carries with it an inherent odor. It is not enough for an appellant to "simply announce a position or assert an error[.)"15 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."16 Here, Appellant says that there will be nothing outside other retail stores, this answer lacks sufficient detail, nor does it change the initial application's included materials. Again, Appellant has not overcome a standard ofreview to merit a change in the points originally given. As to Regulatory Compliance, Appellant states it has corrected the issue, but did not provide either with application or this appeal letter any documentation or evidence of this correction. Regulatory issues are considered as part of an application per the MMFLA and as Lansing has incorporated the MMFLA in its Ordinance. Appellant indicates that it has never had to file taxes, but also indicates in the letter that it has a long history of business. This is suspicious to this Hearing Officer, and while the purview of the Treasury and its processes is outside the scope of this appeal, balances owed to the state of Michigan indicate a lack of compliance. There is no reason to merit additional points in this category. Implying that Appellant should be awarded full points in every category because Appellant provided information demonstrates Appellant does not understand that its application was lacking in sufficient detail in many categories to award more points than already given. There does not appear to be decisions that are arbitrary or capricious given the documentation provided on this file. 15 See People v. Kevorkian, 248 Mich. App. 373, 389 (2001). 16 Id. Page 5 of6 -33- Hilary M Barnard Attorney nt Law CONCLUSION For the foregoing reasons, it is recommended that Appellant be awarded I (one) more point in its scoring. However, seeing as this total would create a total score of 621100, Appellant still would not meet the threshold for scoring in the top twenty applicants. Therefore, it is recommended that Appellant's application for a provisioning center license remain denied. Respectfully Submitted, Page 6 of6 -34- stami::.>s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0902 3984 37 Priority Mail 2-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: 10/0112018 Mailing Date: 10/0112018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills MI 48334-2557 USPS Postmark Here 'Regular Priority Mail 2-DAY Service postage rates apply. There is no fee for Delivery Confirmation"' service on Priority Mail services with use or this electroric shipping label. Postmark required ii lee refund requested. Delivery information is not available by phone for the electronic opllon. 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. I L() CV) I October 1, 2018 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills, Ml 48334 Chris Swope Lansing City Clerk Re: 5924 S. Pennsylvania Avenue Location Dear Provisioning Center Applicant, Based upon the due diligence by the City Clerk office to ensure the most accurate and appropriate scoring please find enclosed a score sheet relating to your application for licensure. The attached sub-scores are based on the criteria posted on https://www.lansingmi.gov/1674/Medical-Marijuana-Application-lnformatio and a brief summary of determining factors for each sub-score. The Lansing City Ordinance section 1300.6 discusses Provisioning Center license application evaluation. Your score of 62 out of 100 eliminates the possibility of scoring in the top twenty. Therefore, your application for licensure remains denied . You have the right to appeal this denial of licensure to the Medical Marihuana Commission within thirty (30) days of the date of this letter by filing a written statement to the Commission with the City Clerk's Office . This letter supersedes your previous denial letter, and re-starts the thirty (30) day appeal period. The Medical Marihuana Commission Appeal will become a matter of public record . The Commission's review of an appeal shall not be de nova. 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. Lansing City Clerk's Office Ninth Floor, City Hall, 124 W Michigan Ave, Lansing, Ml 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/clerk r.ity.clerk@lansingmi.gov -36- Chapter 1300 provides that should an applicant not receive a license, one-half of the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Operations may resume only if your appeal is granted and the requirements of 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, Ml 48933-1695 517-483-4131 517-377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov -37- City of Lansing Provisioning Center Ranking 9/25/2018 Total Applicant Name Possible RJOPC RJOPC INVESTMENTS INVESTMENTS Points Applicant Address ---5924 S. PA AVE. 5924 S. PA AVE. Applicant provides marketing, advertising, promotion, and minor minimization examples Marketing, Advertising and (e.g., will provide superb, safe, welcoming, and compassionate service, website age 4 3 verified, won't sell products in shapes appealing to kids, labels saying intended for use by Promotion 18 and older, etc.). lacks an optimal amount of general marketing, advertising, and promotion examples and details. Tangible Capital Investment Applicant indicates the 1,923 sq. ft. provisioning center building at 5924 S. PA Ave. Is owned by RJO Investments (purchased for $200K) who has the same members as RJOPC in the City of Lansing Investments (who are leasing property for $2K per month). Also Intend to operating a 15 12 processing facility at 5920 5. PA Ave (adjacent lot), will seek to integrate with a grow facility at 913 Beech St. {Oasis Wellness Ctr.). Intend to invest -ssooK to remodel these properties. Also, several team members (Putrus and Somo) are affiliated with RODA Investments who are seeking to operate a provisioning center at 4929 S. Cedar St. Suite 1. Lacks an optimal amount of tangible capital Investment. Job Creation (Integrated System) Applicant indicates 30 to 60 full-time positions will be created In Lansing at the proposed 5 2 operations. Passing reference is made to local hiring and employee training. Lacks Overall number of jobs sufficient details and falls short of an optimal number of jobs. created Applicant indicates they will fund its startup costs largely through personal savings of its founders. Provide CPA attested statement that RJOPC has access to $326.9K in liquid Financial Structure and capital including bank statement evidence that one member (Gumma) has $113.GK in 3 2 checking/savings accounts. Applicant also states If there is any concern about funding Financing availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is stlll concern about proven financial resources being spread too thin. Plans to Integrate Facility Applicant indicates they will seek to integrate the provisioning center with a grow facility 2 1 at 913 Beech St. but do not provide any details regarding the sq. ft. or number of plants with Other Establishments that will be grown there. Charitable Plans and Applicant indicates they will work with local charities like New World Flood to assist in 4 1 doing good works in the Lansing community. Lacks sufficient details, a dollar Strategies commitment amount, and proof of any actual payment or executed agreement. -38- City of Lansing Provisioning Center Ranking 9/25/2018 Number of Jobs at the Provisioning Center Category Thresholds: 1 = < 6 jobs, insufficient details; 2 = < 6 jobs, Applicant indicates 10 to 20 full-time positions will be created in Lansing at the sufficient details; 3 = 6 jobs, 5 4 provisioning center. Passing reference is made to local hiring and employee training. Falls short of an optimal level of details. sufficient details; 4 = > 6 jobs insufficient details; 5 = > 6 jobs, sufficient/good details. Amount and Type of 2 1 Applicant indicates all PC employees will earn at least $15 per hour but does not provide Compensation (PC} an optimal amount of support details. Percent of Employees Earning At Least $15/Hour) 3 3 Applicant indicates all provisioning center employees will earn at least $15/hour. (PC} Projected Annual Budget Applicant provides detailed projected annual budget and revenue data (e.g., $1.0 million 2 1 in expenses and $1.38 million in gross revenues during year 1) but there is a disconnect and Revenue (PC} regarding monthly rent payments as the financial tables indicate $0 and the commercial lease agreement indicates $2K per month. Lacks consistent details. Appucam provmes 11t1gat1on compuance vermcat1on rorms ror au Key team memoers. Applicant provides CPA attested statement that RJOPC has access to $326.9K in liquid Sufficient Financial capital including bank statement evidence that one member (Gumma) has $113.6K in 5 4 checking/savings accounts. Applicant also states if there is any concern about funding Resources availability they will produce, upon request, promissory notes or other legal documents needed to evidence immediate availability of funds to RJOPC. Given there are four described ventures, there is still concern about proven financial resources being spread ''"'" Applicant indicates they have decades of applicable business experience (e.g., marketing, Business Experience 5 3 retail, architecture, etc.). However, they do not reflect any medical marihuana industry experience. Lacks the optimal amount of applicable business experience. Content and Sufficiency of Information; Professionalism of submitted documentation 5 2 Inadequate Table of Contents, org chart. inadequate short term and long term plan for com outreach. inadequate short term and long term goals including clear labeling of required items Buffering between residential Bordered by other buildings; apartments zoned areas and establishment 5 2 Updated score using a better measurement tool 9/18/18 borders residential zoning on the west side -39- City of Lansing Provisioning Center Ranking 9/25/2018 Increased traffic on side streets 5 No issues Updated 9/24/18 score using a better measurement tool, Traffic and Parking will be scored lower 5 Review scored highest in most catergories. 5 points. No change Entrance and exit on main streets, adequate parking 10 7 Minimium requirement for Sec plan, TIER 2 2 pts, 5 pt traffic plan, Strong traffic not on residential streets, patterns, driveways, parking and circulation. Quality of Security Plan Plan to meet with 1 0 inadequate plan neighborhood organizations Improvements made or If approved, extensive renovations planned 3 2 Updated 9/24/18 using a more accurate measurement tool $147, 050 of improvements proposed to building which is 114% of the SEV of $129,200 Plan to minimize/eliminate 1 0 inadequate traffic plan traffic Plan to minimize/eliminate 2 0 inadequate noise plan noise Plan to minimize/eliminate 3 0 inadequate odor plan odor LPD Complaints 4 3 1 unwanted call -1 child neg-1other, 5 calls Demo of Regulatory 4 2 Updated 9/25/18 Major Tax 2 pts deducted, no code issues Comoliance Litigation History 2 2 clear history Total 100 62 - -40- MICKS. GREWAL, SR. DAVIDS. MITTLEMAN JOSEPH W. POPRAWA SCOTT WETDENFELLER NOLAN L ERICKSON October 18, 2018 GREW AL LAWPLLC -------------~ ATTORNEYS AT LAW VIA E-MAIL AND HAND DELIVERY Lansing Medical Marihuana Commission C/O Deb Biehler, Lansing City Clerk's Office 124 W. Michigan Ave., 9th Floor Lansing, Ml 48933 E: deb.biehler@lansingmi.gov Re: Medical Marihuana Provisioning Center Application for RJOPC Investments LLC d/b/a Terra Collective 5924 S. Pennsylvania Avenue, Lansing, MI 48911 Dear Ms. Biehler, RAOUL GRAHAM LEON M. WALSH, JR. ASHLEEN. LYNN JOHN W f.D ~ <:r-D JONATHAN D. BROWN Attached please find RJOPC Investments LLC's written statement of appeal to the Medical Marihuana Commission. Please file and forward to the Commission. If you have any questions or concerns, please do not hesitate to contact me. John W. Fraser Grewal Law PLLC Enclosures LANSING• GRAND RAPTDS • DETROIT• NORTHVILLE •NATIONWIDE 2290 SCIENCE PKWY, OKEMOS, Ml 48864 TELEPHONE: (.517)393-3000 -f>ACSIMILE: (517) 393-3003 prolectyour nglus -41- CITY OF LANSING MEDICAL MARIHUANA COMMISSION IN THE MATTER OF THE MEDICAL MARIHUANA PROVISIONING CENTER APPLICATION OF RJOPC INVESTMENTS LLC, Applicant-Appellant. Manvir S. Grewal (P48082) John W. Fraser (P79908) Jonathan D. Brown (P81891) Grewal Law PLLC Attorneys for Applicant-Appellant 2290 Science Parkway Okemos, MI 48864 Ph.: (517) 393-3000 Fax: (517) 393-3003 E: jfraser@4grewal.com W: www.4grewallaw.com Proposed Address: 5924 S. Pennsylvania Avenue Written Statement of Appeal APPLICANT-APPELLANT RJOPC INVESTMENTS LLC'S WRITTEN STATEMENT OF APPEAL PURSUANT TO LANSING ORDINANCE§§ 1300.15(C) & 1300.03(e) 1 -42- STATEMENT OF JURISDICTION On August 1, 2018, RJOPC received notification from the Lansing City Clerk's Office that its application for a license to operate a medical marihuana provisioning center in the City of Lansing had been denied. Lansing Ordinance§ 1300.lS(C) provided RJOPC with the opportunity to appeal this denial to a hearing officer by submitting "a written statement setting forth fully the grounds for the appeal" within 14 days of the denial. RJOPC's written statement of appeal and was timely filed within 14 days. On September 19, 2018, RJOPC received written notice that its appeal had been denied. This written statement of appeal to the Medical Marihuana Com.tnission has been made within 30 days and is therefore timely and within the Commission's jurisdiction.§§ 1300.03(e), 1300.lS(c). INTRODUCTION AND STATEMENT OF RELEVANT FACTS Applicant-Appellant RJOPC Investments LLC ("RJOPC") is a Michigan limited liability company that seeks to operate a medical marihuana provisioning center in the City of Lansing pursuant to Lansing Ordinance Chapter 1300 and the Medical Marihuana Facilities Licensing Act ("MMFLA"), MCL 333.27101 et seq at 5924 S. Pennsylvania Avenue in the City of Lansing. The members of RJOPC are John Gumma, Omar Putrus, and Ronnie Somo. Shortly following the enactment of the MMFLA in September of 2016, the members of RJOPC decided to enter into a business venture to pursue a license under the MMFLA to operate a provisioning center. Mr. Somo was living in Lansing at the time and had been working with Tru Releaf dispensary at 4929 S. Cedar Street in Lansing. RJOPC's members decided upon Lansing as the location to pursue their business venture for a number of reasons, including: (1) Mr. Somo was already living in Lansing; (2) the City of Lansing had historically been a municipality that had supported medical marijuana-based initiatives and industries; and (3) Lansing's unique geographic location-being centrally located witl1 access to 3 major interstate highways. 2 -43- In anticipation of embarking on this business venture, RJOPC's members began aggressively looking for real property that would be suitable for their business needs. After nearly a year of searching, Messrs. Gumma, Putrus, and Somo found a location that they believed would fit their needs. They formed RJO Investments LLC in August of 2017 to serve as their real estate management company for the property, and RJO Investments LLC purchased a parcel of real property in the City of Lansing that consisted of two neighboring buildings located respectively at 5920 and 5924 S. Pennsylvania Avenue (hereinafter "the Real Property") for the purchase price of $200,000.00. The Real Property had previously been a laundromat and a small engine repair shop and retail store. Both of these buildings had not been particularly well-maintained, as the previous businesses had failed. RJOPC's members envisioned converting the laundromat at 5924 S. Pennsylvania Avenue into a medical marihuana provisioning center and turning the small engine repair shop at 5920 S. Pennsylvania Avenue into a medical marihuana processing facility. RJOPC's members knew that it would take a considerable capital investment to develop the Real Property to fit their vision, but they had the capital, team, and determination to pursue their goal. RJOPC's members promptly began work to redevelop the Real Property. On December 14, 2017, RJ OPC, through its counsel Grewal Law PLLC, timely hand filed its application for a license to operate a medical marihuana provisioning center in the City of Lansing. The application spanned more than 400 pages and was professionally bound and tabbed in a binder with a table of contents clearly indicating which tabs met which specific requirements delineated in Lansing Ordinance No. 1217. On August 1, 2018-230 days after RJOPC submitted its application-the Lansing City Clerk informed RJOPC that its application for medical marihuana provisioning center license had been denied because its "score of 61 out of 100 eliminates the possibility of scoring in the top twenty." Further, the City Clerk advised, "Appeals are limited to materials provided during the application 3 -44- process. No new application material will be considered on appeal." The Lansing City Clerk's decision to prohibit applicants from submitting additional materials at the first stage of appeals also constituted an abuse of discretion or was arbitrary or capricious, as it was contrary to Lansing's authorizing medical marihuana facilities ordinance. In light of this fact, the Commission should reverse and remand the decision of the City Clerk to uphold the denial of its application and permit RJOPC to resubmit its written statement of appeal with any additional materials for a new appeal to a hearing officer. Additionally, the City Clerk provided no indication of what the supposed threshold score would be to score in the top twenty. The City Clerk has not provided any indication as to how it determined a threshold score for denying an application based on points without scoring all of the applications and determining which applications have scored in the top twenty. This very approach evinces that the City Clerk's reviewal of medical marihuana provisioning center applications has been undertaken in a manner that is (1) based upon an unlawful procedure resulting in material prejudice to RJOPC; (2) in violation of Lansing Ordinance No. 1217; (3) in violation of the Constitution of the United States and the Michigan Constitution due in part to the fact that the City Clerk's office has not processed all applications in the same manner; and (4) the City Clerk's scoring of the applications has not been done in a consistent objective manner, as evidenced by similar applications receiving dramatically different scores even within the same categories of consideration. In fact, as of the filing of the instant written statement of appeal, the City Clerk has still not selected the top 20 applicants to be awarded licenses. As a result, RJOPC's denial must be overturned, its application must be re-scored in accordance with the reasons put forth below, and its application must be returned to pending status. STANDARD OF REVIEW In § 1300.03(e), City Council specifically established the scope and standard of review for appeals to the Commission as follows: The Commission shall review and decide all appeals that are forwarded to it by the City Clerk under this chapter. The Commission's review of an appeal shall not be de 4 -45- 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. Lansing Ordinance§ 1300.03(e). LAW AND ARGUMENT I. THE CITY CLERK'S DECISION TO REFUSE APPLICANTS TO SUPPLEMENT THEIR APPLICATION MATERIALS IN THE APPEAL TO THE HEARING OFFICER WAS ARBITRARY AND CAPRICIOUS BECAUSE IT WAS CONTRARY TO THE ORDINANCE. The City Clerk's decision to prohibit applicants from supplementing their applications in their written statement of appeal to a hearing officer is contrary to law and therefore constitutes an arbitrary or capricious decision. Lansing Ordinance No. 1217 provides no indication of the approp11ate standard of review for an appeal of an application denial to a hearing officer. The only subsection of the ordinance that discusses this particular stage of appeal is § 1300.1 S(C), which states: Appeal of denial of an application or revocation of a license: the City Clerk shall notify an applicant of the reason(s) for denial of an application for a license or license renewal or for revocation of a license or any adverse decision under this chapter and provide the applicant with the opportunity to be heard. Any applicant aggrieved by the denial or revocation of a license or adverse decision under this chapter may appeal to the City Clerk, who shall appoint a hearing officer to hear and evaluate the appeal and make a recommendation to the Clerk. Such appeal shall be taken by filing with the City Clerk, within 14 days after notice of the action complained of has been mailed to the applicant's last known address on the records of the City Clerk, a written statement setting forth fully the grounds for the appeal. The Clerk shall review the report and recommendation of the hearing officer and make a decision on the matter. The Clerk's decision may be further appealed to the commission if applied for in writing to the commission no later than 30 days from the Clerk's decision. The review on appeal of a denial or revocation or adverse action shall be by the commission pursuant to Section 1300.03. Any decision by the commission on an appeal shall be final for purposes of judicial review. The Clerk may engage professional experts to assist with the proceedings under this Section 1300.15. At no point is the applicable standard of review discussed in this particular subsection. Moreover, Lansing City Council did not prohibit denied applicants from supplementing their applications in their appeal to the hearing officer. In fact, Lansing City Council appears to have specifically contemplated 5 -46- applicants being permitted to submit additional materials at this stage of appeals based on the fact that City Council specifically prohibited submission of additional materials in appeals to the Medical Marihuana Commission. In§ 1300.03(e), City Council specifically established the scope and standard of review for appeals to the Commission as follows: TI1e Commission shall review and decide all appeals that are forwarded to it by the City Clerk under this chapter. The Commission's review of an appeal shall not be de novo. The Commission shall only overturn, or modify, a decision or finding of the Clerk if it finds such decision or finding to be arbitrary or capricious and not supported by material, substantial, and competent facts on the whole record considered by the Clerk in arriving at such decision or finding. Lansing Ordinance§ 1300.03(e) (emphasis added). The rules of statutory construction also apply to interpretation of municipal ordinances. See, e.g., Kalinojf v Columbus TJVp, 214 Mich App 7, 10 (1995). As§ 1300.lS(C) is silent on the scope and standard of review for a hearing officer reviewing a denied application, the ordinance is ambiguous, and Michigan jurisprudence dictates that rules of statutory constmction be employed. Id. The Michigan Supreme Court has long "recognize[d] the maxim expressio1111ni11s est exclusion altm'11s; that the express mention in a statute of one thing implies the exclusion of other similar things." Brad0 v Saranac Comm Schs Bd of Ed, 455 Mich 285, 298 (1997). Lansing City Council had the authority and indeed expressly contemplated the appropriate scope and standard of review in appeals of application denials, as evidenced by its decision to expressly set the scope and standard of review for appeals to the Commission in§ 1300.03(e). City Council's decision not to restrict the scope and standard of review for the first stage of appeals-the appeal to a hearing officer-must be construed as a purposeful omission . .Bradley, 455 Mich at 298. The City Clerk's decision to attempt to limit the scope of appeals to "materials provided during the application process" is therefore contrary to law, and an impermissible interpretation of§ 1300.15(C). See In re Complaint of Rovas Against SBC Michigan, 482 Mich 90, 99-109 (2008) (holding that it is the role of the judiciary to interpret statutes and that administrative agencies' interpretation of a statute is only entitled to "respectful consideration"). As a 6 -47- result, the City Clerk's decision to prohibit RJOPC from submitting additional materials to supplement their appeal constituted an arbitra1y and capricious decision. The City Clerk's prohibition regarding submission of additional application materials is made even more capricious by the fact that 230 days had elapsed from the time that RJOPC had submitted its application back on December 14, 2017 and the date that the City Clerk finally decided to deny its application on August 1, 2018. It should be no surprise to the Commission or the City Clerk that the facts and circumstances surrounding a business can-and in this particular instance did-change fairly dramatically in seven and a half months. Any concerns that the City Clerk may have had about follow through, sufficiency of capital, etc. concerning an application that was submitted seven and a half months ago would have been fully addressed if RJOPC could have simply been permitted to provide an update on the progress (significant capital investment) that had been invested into the development of RJOPC's intended operating location. Moreover, there were concerns raised by the Lansing City Clerk in its scoring of RJOPC's application for the very first time that RJOPC could have readily and easily addressed had it been permitted to simply supplement its application. For example, one of the concerns cited by the City Clerk regarding Tangible Capital Investment in the City of Lansing was RJOPC's members' involvement in other business ventures. Some of these ventures have since been dissolved in the 230 days that have passed for a myriad of reasons, some of which the City Clerk was already aware of, such as the fact that the City Clerk had denied RODA Investments LLC's application. Similarly, the City Clerk cited LPD Complaints that clearly have no affiliation with RJOPC as a basis for subtracting a point without providing RJOPC any opportunity to respond to these issues. In sum, Lansing City Council deliberately delineated the standard of review for appeals to the Commission to preclude additional materials. Its omission of a similar restriction at the hearing officer appeal stage was pmposeful and must be interpreted to permit applicants to supply additional information. This approach is consistent would be consistent with other administrative appeals. See, 7 -48- e.g. MCL 421.33 (permitting parties to submit additional materials in unemployment benefits cases at the first stage of appeaD . II. THE HEARING OFFICER'S ADOPTION OF THE ARBITRARY AND CAPRICIOUS STANDARD OF REVIEW IN EVALUATING RJOPC'S WRITTEN STATEMENT OF APPEAL WAS CONTRARY TO LAW AND MUST THEREFORE BE SET ASIDE. The Hearing Officer impermissibly conflated and adopted the Commission's standard of review in evaluating RJOPC's appeal. As previously noted, Lansing Ordinance No. 1217 does not specifically provide a standard or scope of review for the initial appeal to a hearing officer. Instead, Lansing City Council specifically narrowed the scope of appeal only for appeals to the Commission. Compare§ 1300.03(e) with§ 1300.15(c). Nonetheless, Hearing Officer Barnard in citing the applicable standard of review conflated these two distinct provisions and erroneously applied the Commission's standard of review. (Hearing Officer Decision at 2). The Hearing Officer's decision to apply an arbitrary and capricious standard of review violated Lansing Ordinance No. 1217, as Lansing City Council specifically reserved that standard for the Commission. As previously stated above, Lansing City Council had the authority and indeed expressly contemplated the appropriate scope and standard of review in appeals of application denials, as evidenced by its decision to expressly set the scope and standard of review for appeals to the Commission in§ 1300.03(e). City Council's decision not to restrict the scope and standard of review for the first stage of appeals-the appeal to a hearing officer-must be construed as a purposeful omission. Bradley, 455 Mich at 298. As a result, the Hearing Officer's decision to ignore that purposeful omission constituted an arbitrary and capricious decision. Moreover, the correct standard of review to be applied at the Hearing Officer stage is a de novo review by virtue of the fact that City Council specifically provided "The Commission's review of an appeal shall not be de novo." § 1300.03(e). The fact that City Council specifically indicated that the Commission's standard of review shall not be de novo and then indicating that the Commission's standard of review shall be an arbitrary or capricious 8 -49- standard necessarily implies that the first stage of appeal should be a de novo review. The Hearing Officer's interpretation to the contrary has the effect of impermissibly rendering a portion of Lansing Ordinance No. 1217 as rendering part of the ordinance "sutplusage or nugatory." It is a well- established principle of Michigan jurisprudence that in interpreting a statute or ordinance that a court "must give effect to evety word, phrase, and clause and to avoid an interpretation that would render any part of the statute surplusage or nugatory." People v Mille1; 498 Mich 13, 25 (2015). Hearing Officer Barnard's decision to apply the same standard of review at the hearing officer appeal as at the Commission's review impermissibly renders a significant portion of § 1300.03(e) to be mere surplusage. In relevant part, § 1300.03(e) states: 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. The second sentence clearly provides the standard and scope of review that the Commission is to employ-an arbitrary and capricious standard. This standard is far more restrictive than a de novo standard, which is a review without any deference. The first sentence indicating that the Commission's review shall not be de novo is rendered complete surplusage if there is not a prior appeal that is reviewed de novo, as the second sentence clearly and expressly provides for a standard that is not de novo. The only plausible and allowable intetpretation is that the Commission's review is not de novo because the appeal to the Hearing Officer is a de novo review. This interpretation is wholly consistent with having a two-tiered appeal system within the City of Lansing's administrative review of applications. As a result, Hearing Officer Barnard's decision to employ an arbitraty and capricious was not based on the Lansing Ordinance No. 1217 and therefore, RJOPC's denial must be reversed and remanded with instructions that the Hf'.aring Officer re\riew its application de novo. 9 -50- III. THE LANSING CITY CLERK'S PROCESS OF REVIEWING PROVISIONING CENTER APPLICATIONS HAS BEEN ARBITRARY, CAPRICIOUS, AND VIOLATIVE OF DUE PROCESS. Due process fails to exist when fundamental procedural fairness, transparency, and objectivity are considered afterthoughts. As the Supreme Court of the United States so eloquently stated, "The touchstone of due process is protection of the individual against arbitra1y action of government, whetl1er the fault lies in a denial of fundamental procedural fairness, or in the exercise of power without any reasonable justification in the se1vice of a legitimate governmental objective." Cnty of S acramcnto v Lewis, 523 US 833, 845-46 (1998) Qnternal quotation marks, alterations, and citations omitted). Simply put, due process rights under the United States and Michigan constitutions demand a level playing field. US Const, Am V, XIV; Const 1963, art 1, § 17. RJOPC's application was carefully constructed, based on months of work and input by professionals employed for their expertise in various fields, and represents an overall investment by RJOPC's members into the City of Lansing of nearly $500,000.00. RJOPC's members understood that there was no guarantee that this investment of time, energy, and resources would provide them with a license, but there was an understanding-and indeed a constitutional guarantee-that they would at least be treated fairly throughout the process. Unfortunately, the manner in which the application review process has played out has resulted in an inherently unfair, arbitrary, and unconstitutional process. RJOPC raises two principal arguments on appeal. First, the very nature of how the City Clerk has processed and reviewed applications runs afoul of basic procedural due process requirements and mandates that all timely filed medical marihuana provisioning center applications be re-processed. Second, RJOPC's application was scored improperly, inconsistently, and arbitrarily and must be rescored in accordance with the reasons and additional materials cited below. The cumulative effect of these errors requires the hearing officer to recommend: (1) that the Lansing City Clerk reverse the denial of RJOPC's medical marihuana provisioning center application; (2) that RJOPC's application 10 -51- be restored to pending status; (3) that RJOPC's supplemental application materials be properly considered as part of its application; and (4) that RJOPC's application be rescored in accordance with the arguments and materials provided in this appeal. Implicit in the concept of due process is procedural and substantive fairness . When it comes to a business applying for a license or a permit-particularly when there are a finite number of licenses or permits available, constitutional requirements of due process and equal protection mandate that each of the applicants be reviewed and judged objectively on the merits of the criteria to be considered. Because the Lansing City Clerk's review and processing of medical marihuana provisioning center applications has proceeded fo1ward in a manner that does not comport with a fair review of each application on their individual objective merits, the entire application process violates the due process and equal protection clauses of the United States and Michigan constitutions and also violates Lansing Ordinance No. 1217. The Lansing City Clerk's review and processing of medical marihuana provisioning center applications is a "process" marred by inconsistencies, impossible or indefinite standards that have been used to selectively and subjectively score applications, and a process that on its face is procedurally unfair. Clearly, Lansing City Council created an application process that dictated that medical marihuana provisioning center applications be graded on a curve-that point is beyond dispute by virtue of the fact that City Council limited the total number of initial licenses to 20 and established a point system to score applications without mandating a "passing" score--only that the 20 highest scoring applicants would be awarded licenses.1 One would naturally and fairly assume that to determine which applications are the 20 best that the grader would have to: (1) review all of the applications, (2) score all of the applications, and then (3) review the scores to find the top 20. 1 To be clear, RJOPC is not arguing that City Council lacked the authority to establish a point scoring system to evaluate applications. RJOPC's arguments are squarely and solely aimed at the deficiencies in how the City Clerk's office has evaluated the applications. 11 -52- However, the process that has been etnployed by the City Clerk has deviated substantially from this process. Instead, the City Clerk's office subjected all applications for a review for deficiencies to justify denial without scoring those individual applications. In the abstract, this approach would make sense, as applicants whose application is deficient in some major aspect or suffered from some other disqualifying defect would not be eligible to receive a license even if the applicant scored in the top 20. However, in each situation where a disqualifying situation arose for some reason other than scoring of the application and the applicant sought to appeal that decision, the City Clerk's office arbitrarily made the decision to individually score that applicant's application, assign a score of 50 points, and indicate that the applicant was also being denied based on points-in effect arbitrarily creating another obstacle for the applicant to overcome to discourage the applicant from proceeding forward. (Exhibit A -Denial Letters and Scoring from 2 Other Provisioning Center Applications2). This practice evinces that the City Clerk did not undergo a comprehensive review of all the applications prior to scoring- instead, it shows that the City Clerk has engaged and is presently engaged in a piecemeal scoring of the applications-in other words, the City Clerk has made it a practice to not treat all applications the same. Moreover, the application of RODA Investments LLC was also prepared by Grewal Law PLLC and had substantially the same format and structure as RJOPC's application. Nonetheless, RJOPC scored only 2 points out of 5 in the category of "Content and Sufficiency of Information; Professionalism of Submitted Documentation Including Clear Labeling of Required Items" while RODA Investments LLC scored a perfect 5 out of 5 in this category with a notation "Application submitted by Grewal law with introducto1y letter." Ex. A at 2. This discrepancy in the scoring is 2 Due to confidentiality concerns, the applicant's name, address, and identifying information of one of these applications has been redacted. The hearing officer and/ or the City Clerk has the ability of readily identifying and verifying this particular application, as the applicant was initially denied due to a purported defect in its facility sanitation plan and its appeal to a hearing officer was handled by Attorney John W. Fraser of Grewal Law PLLC. 12 -53- irreconcilable. How can two applications with the same structure and format, both professionally bound with a table of contents, and submitted by the same law firm have completely different scores? This is perhaps the clearest piece of evidence that the City Clerk's office is not evaluating and treating these applications the same. As a result, the City Clerk's process itself has been arbitrary and also constitutionally deficient. As a result of the arbitrary and capricious nature of the application scoring procedure, the denial of RJOPC's application must be set aside. CONCLUSION On the Lansing City Clerk's Medical Marijuana website, the following quote from Clerk Swope can be found: "My goal is for this process to be as fair and efficient as possible in the selection of provisioning centers that protects the public health, safety, and welfare of the residents of the City with the criteria set forth in the Ordinance."3 When citizens and businesses deal with their government, they can and should expect that they will be treated fairly-that everyone will play by the same rules and that the target will not move. Unfortunately, the City Clerk's processing of provisioning center applications has fallen short of this most basic and bedrock principle of our democracy. There is incongruency and inconsistency in the scoring of applications, a lack of transparency with regard to how points are awarded, and an inability for applicants to meaningfully respond or supplement the Clerk's office on changes that have occurred in the months that elapsed since the applications were initially filed. The members of RJOPC have invested approximately $500,000.00 into this business venture. While success in business is never guaranteed, entrepreneurs expect that they will at least be treated fairly. The ethos of our nation-the American Dream-is that every citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. This ethos is meaningless if it is not defended. To that end, RJOPC respectfully requests that the Commission give it a fair opportunity to earn a provisioning center license. 3 https: //lansingtni.gov /1637 /Medical-Marijuana. 13 -54- REQUEST FOR RELIEF WHEREFORE Applicant-Appellant RJOPC Investments LLC respectfully requests that the Commission: J\. set aside the City Clerk's denial of RJOPC's application for a provisioning center license; B. Remand RJOPC's application back to the City Clerk's office with instructions that RJOPC be permitted to supplement its application within 14 days of the date of the Commission's decision and for the Clerk's Office to re-score RJ OPC's application; and C. Award RJOPC any other relief that the Commission deems equitable and just. Dated: Respectfully Submitted, ~ 2.4108) _/ '--~ 14 -55- Grewal Law PLLC Attorneys for Applicant-Appellant 2290 Science Parkway Okemos, MI 48864 Ph.: (517) 393-3000 Fax: (517) 393-3003 E: jfraser@4grewal.com Grewal Law PLLC 2290 Science Parkway Okemos, i\IT 48864 (517) 393-3000 EXHIBIT A -56- City of Lansing Provisioning Center Ranking Total RODA Appllcant Name Poulblc INVESTMENT/TRU RODA INVESTMENT/mu RELEAF Points RE LEAF Applicant Address -4929 S. CEDAR 4929 S. cEOAR ST., SUITE 1 ST., SUITE 1 ----~c2[fng lfl~lgh~ Appllnnt provides marketing, advertising. promotion, and minor Marketing, Advertising and Promotion mlnlmluUon cicamples {e.11:;, will provide superb, ufe, wclceming. and 4 3 compassionate service, website aae vcrfflcd, won't sell products In shapes appealing to kids, labels sayfn& Intended for use by 18 and older, etc.). Lades an optimal amount of general markeUng, advertising, and promotion examples and details. Appllcant Indicates the 3,575 sq. ft. provisioning center building at <4929 S. T1n1lblc Capltal lnvestme.nt In the City of Cedar Is owned byVTGCCK who have kased to 4929 s. Cedar Lcuehofd who have subleased lo TRC (team members). Appllnnl members IPutrus l1nslns and Somo) also tied to 1,923 sq. ft. provisioning center "t 592_. S. PA Ave. (lnvntment In appllc1nls other provlslonln1 (RJOPC Investments, owned, and purchased for $20011:). Pulrus and Somo centers was not Included In score) 15 9 (RJOX Investments) also Intend to operating a processing racillty al 5920 s. PA Ave., and will seek to Integrate with a grow facility at 913 Beech St. (O:asi' Wellness Ctr.). Intend to Invest -$SOOK to ~model these properties. Lacks provisioning center ownership :and an optlm:al amount of tangible c;;ipltalinvestment. Job Creation Applicant indlutes 30 to 60 full-time positions wiU be created In l.anslna at 5 2 the propoled operations. Passing reference Is made to local hiring and employee training. Licks sufficient detail and fa Us short of an optimal number of }obs. Appllcant Indicates tkey will fund Its startup com largely through personal Flnanclnl Structure and Flnandni: savings of its fOtJnders. Provide CPA attested statement that RJOPC has 1cceu to $125,7K in llquld capital from c..sh on hand and bank accounts. 3 1 Applicant also states If there Is any concern about fundln1 avaUabHity they wtll produce, upon request, promissory notes or other legal documenu needed to evidence Immediate aval11bUity of funds to RJOPC. Given there arc four desaibed ventures, there Is definite concern about proven financial resources beln& spread too thin. Plans lo lnlee,rate Fadlltywilh Other Appllcant Indicates they wlU seek lo inteerate the provlslonlnr center with Establishmcmts 2 l a grow facility at 913 Beeth St. but do not provide any dctads regardlna the sq. ft, or number of plants that will be arown there. Charitable Plans and Strata9IH Appllcant lndlc;;ites they will work with local charltlcs llke New World Flood to :assist In dolne eood works In the Lanslna community. ~cks sufficient ~ 1 details,• dollar commitment amount, and proof of any actual payment or cicecutcd agreement. Number of Jobs at the Provlslonln1 Ccnler Calecory lhresholds: 1 = < 6 Jobs, Insufficient det1lls; 2 = < 6 Jobs, sufficient dctalls; 3 = 6 Applicanl indiutes 1010 20 full·time positions will be created in L.anstnc at Jobs, sufficient details; 4 = > 6 Jobs 5 4 1hc provhlonlng center. Passing reference Is made to local hiring and Insufficient detalls; 5 = > 6 Jabs, employee tnlnlne. Falls short of an optlm1l level of details. sufficient/good details. Amount and Type of Compensation (PC) Appllcant Indicates aU PC ~ployees will cam at least $15 per hour but 2 1 provides Insufficient additional dctalli. -57- City of Lansing Provisioning Center Ranking Percent of Employees Earning At Least $15/Hour) {PC) Projected Annu;il Budcet and Rewcnue (PC) SuH/clent Financl;al Resources Buslneu EMperhmce Content and Sufficiency of lnlorm:ition; Proresslonallsm of submlued documentation Including dear labelin11 of required items Buffering between residential zoned areas and cst.abHshment Increased traffic on side streets will be scored lower Enlrance and c11il on main slrects, adcqUile parking 1101 on residcntl<11I streets, Quality of Securit\I Pl;in Plan to meet with neighborhood organizations, lmrirovcments made or proposed lo building Pl.an to mi11lmlze/ellmlna1e traffic Pl.an to mlnimlz"/ellmlnate noise Plan lo mlnlmlze/ellminatc odor LPO Complalnts Demo or Regulatory Compliance Ullgallon History Tot;i.I 5 10 3 2 3 100 50 ApplieiJnl indicates all provisioning center employees will earn at least SJ.S/hour. Applicant provides detailed projected annual budget and revenue data (e.g., $1.0 million In ew:pens.M oand $1.38 m~Jion in grou rcvcnuu during year 1}. However, there Is a disconnect regarding monthly rent payments as the financ.lal tables Indicate So and the lease agreement Indicates $1,942.20 during months 7 through 36. Appllcant does not provide rotnplcte litia.atlon complJ.ance verlOatlon forms for all key team members (I.e., Putrus missing). Provide CPA attested 510Jtement that RODA Investments has access 10 $125.7K In llquld capltal from cash on hand and bank accounts. Appllant also stales If there Is any concern about funding avallabillty theywlll produce, upon request, promluorv notes or other leg;i;I documents needed to evidence Immediate. availability of funds to RJOPC. Given there are four described venture,, there ls deflnlte concern about proven finandilll resources being spread too thin. Applicant lndlcilltes they llillve decades of appllcable business experience (e.g .. marketing, retail, business management and ownership, clc.). However, they do not rerlect any medical marihuanill Industry experience. Lacks the optimal amount of applicable business experlen~. Appllcatlon submitted by Grewal law with lntroducto~ letter In small strip mall with no rcsldenllal No side streets dose to Jolly & Ccd;ir Intersection; poor security pliln No plan Tic.kcted by Buildin& Silfcty notr<11fflc no noise pl<11n no odor plan TRADE SEX. FOR MM, 4 B&E alanns-1 anauk-3 fighl caUl-6 o\horcaUs-1 thra:il-1 medlcal-1 hud-1 chadc sacurity-2 5U5pldou1 parson -1 thr111t- Cad1rJoly plua, 21 majortaxluue no litlgatlon history -58 - City of Lansing Provisioning Center Scoring Applicant Name Applicant Address Marketing, Advcrtfslnc and Promotion Tanalble Capital Investment In the CJty of Lan sins (Investment In applicants ottter provlslon!nc centers was not Included in score) Job Creation Financial Structure and Finan cine Plans to Integrate Faclllty with Other Esubllshments Charlrible Plans and Strategies Number of Jabs at the Provi51onlne Canter (ateeoryThresholds: 1 = < 6 ]obs, lnsuffident dculls; 2: < 6 Jobs, 5uffldent detalls: 3 =&Jobs, sufficient detafls; 4: > 6 Jobs Insufficient detalls; S = > 6 Jobs, sufflclent/1ood det1Us. Amount and Type of Compensation {PC) Appllcant provides 11 brief general discussion rc/atlne to mark!!tlni:. advertfsinc. promotion, and minor mlnlmlntlon, lndudlnc a few examples (e.g., no cartoon flgur~. ate restrfcted website). lacks suffidcnt details and uamples. Applicant provides a gcnerk 01.1erview lndlcatlngtheywlll rent& a (1,250 sq. ft.) and pursue operating, grower, and processing racilitlcs in the future, and acquire products from local c:ultfviiltors .. nd production facilities. Lacks details about lnlee:rated orcanlzatlons, an Indication of capital dollar amounts to be invested, property tax revenue generation, etc. Applicant only Indicates they wHI hire loc:il citizens and veterans and have 8 to 10 full· time employees at the providonlne center In the first year. Lacks sufficient details and falls short of an optimal number of )obi. Applicant provfdes proof of $102,000 In the bank (bank statement) and fndlc.illes startup costs will lucely be covered through inltlal capital Investment Lacks sufficient dctalfs and support documents (e.c., caplt:al requirements). Appllcant does not provide ;;my details tei:ardlne its plans to Integrate the provisioning center with other establlshments. about Its chOOtab1e ?fans and stratecles, lndltatins It will pay up to around $16K aMvally to cover employee volunteer work (assuming 10 employees each working 104 hours/year). lacks sufticient specific eKamples, falls short or optimal dollar commitment potential, and lacks Applleant Indicates there will b~ 8 to 10 full·tlmc empfoyces at thl! provl"onlnt cenlerwlthln the first ye&Jr. Falls 1hort of an op!lmal level of detail~. App/leant Indicates they will offer competitive and sustainable wa~es ($15.50/hour minimum) but does not p<o\lide :1n optimal amount of support dctarls. -59- City of Lansing Provisioning Center Scoring Applicant Name Applicant Address Percent of Emptovees Earning Al Least $15/Hour) (PC] ProJected Annual Budget and Revenue (PCI Sufficient Finandal Rcsource:i Business Experience Content and Sufficiency of Information; Profcssiom11ism of submitted documentation lndudlng cloar labclina of required Items Bufferlnc between resldcntlal toned arcu and csbb/ishmcnt Increased traffic on side strcl!ts will be scored lower Entrance omd c11:1t on main streets, adequate pMklni not on residcntl;il strcetl, Q.ua\lty of Security Pian Pfan to meet with ner~hborhood organlzaUons, Improvements made or proposed to bulldins Plan to mlnlmlze/ellmlnate traffic Pliln to mfnlmlze/ellmlnatc noise Pliln to minimlze/ellmlnate odor LPO Complalnts Demo of Aeculatory Compliance Llllgatlon History Total Score . . ·, so Appllumt Indicates that illl of their employees wlh urn at least $15.50 per hour. Applicant provides detallcd projected annual budect and revenue data (e.£., $1.Dl mdlion in expenses <1nd $1.38 mllllon In revenues durln11yc:u1) that arc undemandable . Applicant does not provide litlgatlon compliance verification forms for all key teaam members (i.e., onl.). Applicant provides proo 2,000 In the bank (bnnk statement) and indicates sunup costs will larsely be covered through Initial capUal Investment. lacks sufficient detaUs and support documents (e.e., capital requirements). Appl/cant Indicates they have about 13 years of appllcable businen management experience but no rnedkal marihuana fridustry cxperl~ce. Lacks the optimal amount of applicable buslncn ekperience. Minimum submitted. Not organized Sec pf;an weak plan meet with Eutslde Nclghbrhood, Pl 29 no tmprovemcnU planned traffic plan lnduded no noise plan Use of airtight container, not any detail beycndthillt 1 B&E illarm • 1 Check Sec.· 1 Uiruu • 1 olhtr,-1 cells no bx issues, iUcgal temp signs Clear hlnorv -60- I O'\ t-' I US POSTAGE & FEES PAID PRIORITY MAIL FLAT-RATE ENVELOPE ComPlsPrice 06250009993647 7933081 FROM48933 p 111~1~11~~1 stal'tl;IS encitcla 10/1912018 PRIORITY MAIL 2-DAYTM Chris Swope Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing Ml 48933 RJOPC Investments LLC 0004 jco68] SHIP TO: 31000 Northwestern Hwy Farmington Hills Ml 48334-2557 USPS TRACKING# 1111111 111 11111 9405 5116 9900 0398 0287 26 stamJ)s endicia Shipping Label Receipt Delivery Confirmation™ Service Number: 9405 5116 9900 0398 0287 26 Priority Mail 2-DAY with USPS TRACKING#* Electronic Service Fee: $0.000 Total Postage and Fees: $6.35 Weight: 1 lbs. Print Date: ~0/19/2018 Mailing Date: 10/1912018 From: Chris Swope To: Lansing City Clerk's Office 124 W Michigan Ave Floor 9 Lansing MI 48933 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills Ml 48334-2557 USPS Postmark Here "Regular Priority Mail 2-DAY Service postage rates apply. There is no fee for Delivery Confinnatlon™ service on Priority Mail services with use of this efeclroric shipping label. Postmark reqlired if fee refund requested. Delivery infonnation 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. October 19, 2018 RJOPC Investments LLC 31000 Northwestern Hwy Farmington Hills, Ml 48334 Dear Provisioning Center Applicant: Chris Swope Lansing City Clerk Your appeal before the City of Lansing Medical Marihuana Commission will be held during the regularly scheduled meeting of the Commission on Friday, November 16, 2018, at 2:00 PM in the Conference Room in the City Clerk Election Unit located at 2500 S Washington Avenue in Lansing. The entrance, with ample free parking, is at the back of the building . Per Lansing City Ordinance 1300.3(e), the Commission's review of the appeal shall not be de novo. The Medical Marihuana Commission Appeal will become a matter of public record. 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. The presentation timeline used by the Commission during the meeting for your appeal presentation is enclosed. No additional materials may be submitted for review. Chapter 1300 provides that should the applicant not receive a license, one-half the application fee shall be returned. This refund will be processed after all appeals are exhausted. If you have begun business operations pursuant to State Emergency Rule 19 and Executive Order 2017-02, you must cease operations. Sincerely, Chris Swope, Master Municipal Clerk Lansing City Clerk Lansing City Clerk's Office Ninth Floor, City Hall, 124 W Mir ... =--n Ave, Lansing, Ml 48933-1695 517-483-4131 -62-·377-0068 FAX www.lansingmi.gov/clerk city.clerk@lansingmi.gov