MUSKEGON, MI -- Muskegon is preparing to lift a moratorium on medical marijuana businesses with the development of an ordinance that would require licensing of caregivers and dispensaries.

The Muskegon City Commission is expected to take a first vote on the amended "marihuana" ordinance when it meets for its work session at 5:30 p.m. Monday, Aug. 11. A second and final vote is expected to be taken at the regular meeting at 5:30 p.m. Tuesday, Aug. 12.

The ordinance requires that grow operations and dispensaries obtain a license that carries a $1,500 application fee and a $1,100 renewal fee. Patients who grow medical marijuana in their residence would be subject to a $100 application fee and annual renewal fee, under the proposed ordinance.

The city had enacted an ordinance in 2011, but in March declared a moratorium on new medical marijuana establishments while staff worked to update the ordinance.

The proposed ordinance broadens the areas where medical marijuana facilities can be located. Previously restricted to I-2 heavy industrial areas, the amended ordinance expands allowable medical marijuana operations to areas zoned B-2, -3 and -4 business districts; B-5 governmental services; I-2 light industrial; and medical care. It prohibits medical marijuana primary caregivers from operating in residences.

Many aspects of the ordinance follow requirements of state law. The licensing fees will help cover costs of required inspections of city building and fire inspectors, said Muskegon City Manager Frank Peterson.

"They do require quite a bit of oversight because of the potential for illegal sales, safety concerns, having them robbed and so forth," Peterson said.

Having the businesses licensed through the city will allow for a registry of legitimate grow operations that police can use when responding to complaints of drug sales, Peterson said.

The proposed city ordinance also requires grow operations to be done indoors -- within an "enclosed, locked facility."

It allows up to 12 marijuana plants per licensed patient in patients' principal residences. Caregiver facilities cannot have more than 72 plants at one time per caregiver -- 12 plants for each of the allowed five patients and 12 for the caregiver if that person is also a patient.

The ordinance enables the city to revoke or not renew a license for several reasons, including excess public safety calls, nonpayment of taxes and fines and "maintenance of a nuisance on the premises."

The ordinance bans medical marijuana facilities within 1,000 feet of a school as well as signs advertising the facility.

Once the city commission takes two affirmative votes on it, the city zoning ordinance would have to be amended. One the ordinance takes effect, existing medical marijuana facilities would have to cease operations and apply for a license within 15 days.

Lynn Moore covers the city of Muskegon for MLive Muskegon Chronicle. Email her at lmoore8@mlive.com and follow her on Twitter and Facebook.