On only its second day of operation, the new state Marijuana Regulatory Agency began flexing its muscles Thursday, saying it will either approve or deny the license applications of most unlicensed medical marijuana dispensaries by June 1 and will immediately change rules on where licensed dispensaries can buy their products.

The agency was responding to a court ruling issued Tuesday by Court of Claims Judge Stephen Borrello, which stated that the agency couldn’t shut down about 50 unlicensed medical marijuana dispensaries until their applications for a license had been reviewed and approved or denied.

Andrew Brisbo, the director of the agency, told a Senate committee Thursday during his confirmation hearing, that “if an applicant failed to provide the documentation necessary to make a decision, we can deny them on that basis and those will all be done before June 1.”

He said about 77 applicants have paid the state’s $6,000 application fee, and provided some, but not all, of the documentation necessary to make a decision. Some of those applicants are unlicensed dispensaries that have been allowed to continue to operate while they wait for their license application to be considered by the state.Those dispensaries will be forced to shut down if the state denies them a license.

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Roughly 80 more marijuana businesses, including growers, transporters, processors and dispensaries, have been denied pre-qualification status or a license and are appealing the decision. The state won’t be able to act on those businesses until after their appeal is heard and their application is reconsidered by the agency.

Borrello also ruled against medical marijuana caregivers, who are registered to grow up to 72 cannabis plants for five patients. They wanted to continue to be able to sell their overages directly to licensed and unlicensed dispensaries, which could sell the pot to patients as long as they acknowledged that they knew the product hadn’t been tested.

Now under rules that the state tried to enforce earlier this year, the caregivers will immediately only be able to sell their overages to licensed growers and processors, who must test the product before it can be sold to licensed dispensaries.

Continuing to allow at least some caregiver product into the market will help deal with potential shortages as more growers are licensed and their cannabis begins to reach maturity.

“The regulated supply is making progress toward meeting demand,” Brisbo said. “We aren’t there today, but we’re giving continued allowance … for caregivers to sell product into the regulated market to provide supplemental inventory.”

The new agency, which was established by an executive order issued by Gov. Gretchen Whitmer, takes over for the five-member, politically appointed Medical Marijuana License Board. The volunteer board, which met only once a month and had been criticized for its slow pace and inconsistent decisions, was abolished last month after issuing 179 licenses, including for 89 dispensaries.

The new agency will be handling applications as they come into the office and is expected to be able to make licensing decisions more consistently and frequently.

“We all want to get to the same end point and that’s a fully regulated market,” Brisbo said, adding that he expects the agency to have draft rules ready by June for the impending recreational marijuana market that was approved by voters in November.

“And we will begin accepting applications three months later,” he said. “We want to get (the recreational market) up and running and quickly as possible.”

The court ruling and the new agency's determination that most of the unlicensed dispensaries' licenses will be approved or denied by June 1 has put a bill awaiting a vote in the state Senate on hold. The bill would require that unlicensed dispensaries shut down by June 1 or risk not being able to get a license for at least one year.

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Kathleen Gray covers the marijuana industry for the Detroit Free Press. Contact her: 313-223-4430, kgray99@freepress.com or on Twitter @michpoligal.