Bad Axe City Attorney crafting guidelines for granting marijuana licenses

Police Chief David Rothe, who previously provided updates to the city council, said that such rubrics are being used in other Michigan municipalities and have been held up in court.

The village of Pinckney, which Rothe thinks can serve as an example Bad Axe can follow, was sued by a rejected applicant for saying its scoring system is discriminatory, with U.S. District Court ruling in favor of the village.

“This system is tested in the court system and it passed, so why not use it?” Rothe said. “Why take a chance on something that could fail?”

He explained their process for approving licenses is broken into two parts. Part A of this process is for applying for a special-use permit via building and zoning, which would ensure everything in the proposed building is in compliance.

Part B of the process is a checklist of required materials for approving a license. Applicants are required to provide an area location map showing its distance from schools and churches, ownership documents or lease agreements, a business plan, ownership structure and expected job creation, among other requirements.

The scoring rubric has an 83-point system with a one-point tiebreaker. Some bonus points are awarded for items that show a commitment to the community. Whichever applicant ends up with the most points will be awarded an operating license.

“This isn’t a fly-by-night type of thing where if I was just a citizen, I can just come and say, ‘Hey, I want to open a marijuana facility,'” Rothe said. “I don’t think I have the legal capacity to get through that all by myself. That’s why corporations have legal teams and they run that.”

Pinckney charges a total of $5,000 to applicants, $1,700 for Part A and $3,300 for Part B. If the applicant is rejected, the $3,300 would be refunded to them, but if anything is missing from the Part B forms, no refunds will be given.

According to the Michigan Department of Licensing and Regulatory Affairs, cities and villages with under 5,000 residents can have anywhere between one and six marijuana facilities. Since Bad Axe has around 3,000 residents, Rothe suggests that two would be the most they have, but that is up to the city council to decide.

Rothe had previously stated the city received inquiries about turning three vacant buildings into marijuana facilities — the former Pepper’s Restaurant on North Van Dyke Road, a former laundromat at the corner of Huron Avenue and Buffalo Street and the former Thumb Industries building on Sand Beach Road.

The Michigan Regulation and Taxation of Marijuana Act states that of the taxes collected through marijuana sales, 15% goes to the municipalities where marijuana stores are located, 15% goes to the respective county where stores are located, 35% goes to the Michigan Transportation Fund, and 35% goes toward funding the state’s schools.

In 2020, each municipality with an adult-use marijuana facility got about $28,000 per facility. That number doubled in 2021, with each such municipality getting $56,000 per adult-use facility.

Rothe estimated if Bad Axe allowed two such facilities to operate in town, it would rake in at least $113,000 from the state as a result of sales tax. With that money going towards the police department’s operating budget, the city could reduce its contributions and the resulting savings would go toward the city general fund.

The measures Ferris will write up are expected to be presented at a future city council meeting for approval.

Councilman Richard Peterson, the lone dissenting vote on this motion, felt the council should know how much they will pay Ferris for writing up these marijuana plans.

Rothe said whatever legal fees they have to pay Ferris will be recouped through the fee gained from the application process. Since the amount of money from two applications would be $10,000, he cannot imagine it costing more than that.