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Up in Smoke Court ruling puts pot purveyors out of business

Patrick Sullivan - August 29th, 2011
Up in Smoke: Court ruling puts pot purveyors out of business
By Patrick Sullivan
Owners of medical marijuana collectives decided not to wait for the police to knock on their doors following last week’s court decision that, for now, puts an end to legal patient-to-patient sales of pot.
“We’re just telling (our customers) that due to the recent government ruling, we’ve been advised by our attorney not to be transferring medicine period,” said Steve Ezell, an employee at the Collective, a marijuana shop on State Street in TC.
Pot shops across the state are in jeopardy after the Michigan Court of Appeals ruled Aug. 24 in favor of prosecutors in an Isabella County case and said the Michigan Medical Marijuana Act does not legalize the sale of marijuana for profit.
TC Police said they would look into the business practices at marijuana shops, but before they could, shops across town apparently closed.
That put around a dozen employees at the Collective out of work and left around 1,500 members who have a doctor’s prescription to use marijuana without a source for the drug.
The court ruling determined that the businesses are public nuisances and violate the state public health code, which is meant to protect citizens from hazards.
Ezell said he didn’t think the business he worked at ever posed a threat to the public. It opened last November.
“You’ll have to check with the Traverse City police, but I’m confident that there’s been zero incidents involving the Collective,” Ezell said.

NON-PROFITS NEXT?
Jesse Williams, a TC attorney who represents collectives, said he’s advising his clients it’s too risky to stay in business.
“The Court of Appeals made it clear that patient-to-patient transfer for compensation is not what was intended” in the Medical Marijuana Act, Williams said.
Williams believes a footnote in the decision leaves open the possibility that non-profits could open in the place of the businesses that just closed, but he believes eventually prosecutors and the courts might seek to close those also.
“It’s going to create a whole whirlwind of non-profits popping up now,” Williams said.
He said he thought the medical marijuana act was intended to make it possible for patients to get access to marijuana, and that’s what the collectives did. Now, some patients who don’t grow it themselves will be forced to go without marijuana or deal on the black market.
“It’s back to a free-for-all and to me that doesn’t make sense,” Williams said. “I don’t know why we are spending so much time and energy fighting something when the same amount of consumption is going to happen regardless.”

SCHUETTE PRAISES DECISION
The decision, which took immediate effect, was praised by state Attorney General Bill Schuette.
“This ruling is a huge victory for public safety and Michigan communities struggling with an invasion of pot shops near their schools, homes and churches,” Schuette said in a press release. “Today the Court echoed the concerns of law enforcement, clarifying that this law is narrowly focused to help the seriously ill, not the creation of a marijuana free-for-all.”
Schuette said he would send a letter to each county prosecutor to explain how the decision empowers them to close medical marijuana shops.
The decision was signed by judges Joel P. Hoekstra, Christopher M. Murray, and Cynthia Diane Stephens.
“It’s a helpful opinion in that it gives people some guidance. Not everyone’s going to agree with it,” said Joseph Hubbell, prosecutor for Leelanau County, which until this week had one dispensary, the M-22 Collective in Elmwood Township.
M-22 had a sign posted Thursday saying they were closed.
Hubbell said he hasn’t decided whether to take action based on the ruling. He said he will have to see how the businesses respond to the new reality.
While there was only one marijuana business operating in Leelanau County, numerous townships were grappling with how to regulate proposed marijuana shops.

HOW THE BUSINESS WORKED
The business in Mt. Pleasant called Compassionate Apothecary (CA), whose case led to the decision, went to great lengths to avoid actually being in the business of buying and selling marijuana, according to the court decision.
Despite the measures, Isabella County prosecutors sought to prove CA operated outside of the bounds of the Medical Marijuana Act, and the court of appeals agreed.
CA’s goal was to provide an uninterrupted supply of marijuana to their patients by facilitating “patient-to-patient transfers,” according to the decision.
It made money by bringing together patients and caregivers who could then sell marijuana to each other.
They had around 345 members who paid $5 per month. The business also controlled 27 lockers it rented for $50 per month.
A patient could store 2.5 ounces of marijuana in their locker and if they had excess marijuana they could sell it to other patients. Caregivers could store up to 2.5 ounces for each of their patients.
A patient would show their Michigan Department of Community Healt-issued medical marijuana card and they would be taken to a display room where they could look at, touch and smell different strains of marijuana.
A patient could purchase up to two and a half ounces every two weeks. Owners set the price and CA collected 20 percent.
The business opened in May of 2010 and in the first two and a half months it sold 19 pounds of marijuana. Marijuana owners made around $79,000 and CA made around $21,000 in that time, according to the decision. CA also had outlets in Traverse City and Lansing.
 
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