Michigan towns poised to become medical marijuana hubs

Sharon Stalsberg is looking forward to the day, hopefully in the next several months, when Pinconning Township will no longer be known as the home of the Pinconning Paralyzer.

The legendary — and supposedly very potent — strain of marijuana plant, developed in the 1980s by a Pinconning resident who was looking for relief from symptoms of multiple sclerosis, has defined the township for decades, the township supervisor said.

The move from the illegal marijuana business to the new regulated and taxed medical marijuana industry is set to go live in the next month or two and Stalsberg said the township in Bay County is all in for the legal business and ready to erase the memory, if not the few remaining seeds and cloned plants, of the Paralyzer.

Along with Pinconning, dozens of other communities are pinning their hopes of economic growth and revitalization on the new industry. According to an unofficial report put together by the Michigan Department of Licensing and Regulatory Affairs, 64 communities have approved ordinances to allow medical marijuana businesses in their towns and half of those have placed no limits on the number of licenses they’ll approve.

“The way we looked at it, it's a right the state has given people,” said Marcus Braman, supervisor of Windsor Township in Eaton County near Lansing, which has approved an ordinance allowing for 100 Class C grow licenses — those that allow for 1,500 marijuana plants, as opposed to the Class A and B licenses, which allow for 500 and 1,000 plants respectively.

He said the township is looking forward to the development of a large, 130-acre industrial marijuana park this year.

"As soon as you have development and jobs, that spurs economic growth,” he said.

Harvest Park Development along the Grand River in the township is set to become one of the largest marijuana business parks in the state. Ranging from 2½ to 25 acres, half the 20 lots at Harvest Park Development are already sold, even though potential cannabis entrepreneurs are buying the land with the knowledge that the purchase is a big gamble because they may not get a license from the township or the state to grow, process or test marijuana at the park.

“Most of the buyers that I’ve dealt with have seemed to have successes in other businesses. A lot of them will build out a shell and will try to avoid the tenant improvement costs, like HVAC and lighting systems so they’re not exposed to those costs until they get a license,” said Jeff Donahue, managing partner of Harvest Park. “If they have a nice warehouse shell, they could resell it without a whole lot of exposure if they don’t get a license. But I haven’t talked with one buyer who doesn’t think they’re going to get a license.”

In Pinconning, Stalsberg is looking forward to moving from the Paralyzer to PinCanna, a Farmington-based medical marijuana business that has applied for 15 Class C grow licenses that will allow it to grow up to 22,500 marijuana plants in greenhouses on 108 acres in the township.

“When these businesses go up, they’re going to be state-of-the-art. I don’t think you’ll see any opposition anymore,” she said, noting the PinCanna plan is a multimillion project.

Pinconning was the first township in the state to pass an ordinance to allow medical marijuana businesses into the community and is poised for an explosion of legal cannabis businesses anchored by 59 licenses that have already been approved for Class C growers.

And that’s just the start. The township has decided not to limit the big growers who might find Pinconning’s welcoming demeanor and location, with easy access to I-75, a boon for business.

The medical marijuana business is expected to generate more than $700 million in sales once it’s fully phased in. And if a ballot proposal to legalize marijuana for adult recreational use gets on the Nov. 6 ballot and is passed by voters, that amount is expected to easily exceed $1 billion.

More: Are mega medical marijuana growers good for Michigan? State, towns disagree

More: Detroit issues moratorium on new medical marijuana licenses

Spreading the wealth

Another industry benefiting from the marijuana onslaught is the commercial real estate business. The lots at Harvest Park are going for $149,000 per acre, which is more than twice the price that normally is charged for light industrial space in an area without many other businesses nearby, such as the open acreage in Windsor Township, said Steve Morris, a partner in Axis Advisors, a commercial real estate consulting firm in Farmington Hills.

“It’s been a pretty successful endeavor for us,” said Donahue, whose company bought the land and is selling the lots to marijuana businesses. “A number of the partners have owned commercial real estate in the area, so we weren’t uncomfortable with the investment. We tried to find a really solid location with access to freeways and we found a township open and willing and it just started as that, as a conversation."

Indeed, Braman said, the township was impressed enough with the caliber of the people applying for permits that it decided to boost the number of Class C licenses from 10 to 100.

“If there’s going to be a good development setup, we’d like to meet market demand. What we didn’t want to do is to have a top-notch operator disappear because there aren’t enough licenses,” he said. “We’re not looking to hand them out willy-nilly. If we only have 15 licenses given out in the next few years, that’s fine. But this is an industry we believe is another big opportunity.”

The Lansing Board of Water and Light is also on board and is planning to install new lines to provide the necessary water and electricity that the large grow operations will need.

Hidden behind walls

In Michigan, people hoping to get a glance at marijuana blooming across the state will be disappointed.

The greenhouses that will be put up for growing the product will be hard-sided with walls that won’t be see-through. The roof might be made of some sort of transparent material to let in the sunlight, but the facilities will also have extensive artificial lighting systems to aid the growing process, said Hilary Dulany, one of the partners in Aardvark Extracts, a 13,000-square-foot grow facility in Oregon, who hopes to get licenses for a 50,000-square-foot growing, processing and dispensary facility in Michigan.

Electrical and water demands at grow facilities are going to be huge, she said, to power the lights, watering systems and heating and air conditioning units.

“A 50,000-square-foot facility is going to cost in the six figures per month just for electricity,” she said, noting that her Michigan business is named Aardvark Cannabis Company and that eventually, renewable energy sources such as solar and wind power will pop up at hers and many other grow facilities.

Security will also be tight around the cannabis businesses with gates, surveillance and facial-recognition equipment, and remote-control access to all the systems on-site, which will set off alarms when levels of certain compounds such as CO2 get too high. They will also be able to turn on emergency generators during power outages.

Each community will develop its own rules on when the lighting systems can operate to avoid light pollution coming from the transparent roofs and what kind of signage will be allowed on the greenhouses.

“It’s going to be a city by city determination until the state decides to make it a blanketed rule,” Dulany said. “In the township we’re working with, it’s going to be a 7 p.m. to 7 a.m. lights-out situation, but they’re still fleshing that out.”

At Green Man Cannabis in Aurora, Colo., neighbors would never know that the former plumbing and pipe manufacturing facility is actually an 118,000-square-foot building full of marijuana plants. There is no distinguishing signage, primarily because there are no sales allowed from the building, and the only hint of what's going on inside is a heavy security presence at the site, said Corey Buffkin, master grower and one of the owners of the business.

"It’s a huge building. It looks like a WalMart," Buffkin said, noting he is able to monitor all the systems at the facility, which includes 3,000 lights, on his Apple Watch. "Right now, it costs about $80,000 a month in electricity to run the place ... and on any given day, there are 60 to 65 people working there."

Revenue for local communities

In Bay County’s Bangor Township, the board upped the number of class C licenses from 30 to 80 to accommodate all the interest from marijuana entrepreneurs.

“This particular industry found us. Widget factories weren’t knocking on our door, so this is the opportunity for us,” said township Supervisor Glenn Rowley. “We’re a handsome host. We’re surrounded by river, rail and road.

“The vote for the ordinance was unanimous. It was, quite honestly, lead, follow or get out of the way.”

One company, which Rowley wouldn’t name, has applied for and received township approval for 29 Class C growing licenses with a plan to transform a vacant manufacturing plant that Dow Chemical once owned into a massive grow facility.

“This will be the poster child for medical marijuana facilities. As the building sits right now, there’s enough power to run five Meijer supermarkets,” Rowley said. “But that only handles about one third of their needs. The biggest challenge is to generate enough power to run these shops.”

The businesses will bring in not only revenue for the township from licensing application fees — up to $5,000 for each application — but property tax revenue and a portion of the 3% excise tax that will be charged on medical marijuana sales.

That has already brought in enough money for Pinconning for the township to fund two additional Bay County Sheriff deputies to patrol the town, add a canine unit and two law enforcement vehicles.

“We’ve made out pretty good on our permits,” Stalsberg said. “So we’re making sure that everyone is secure and safe.”

In Bangor, the extra cash from fees “definitely doesn’t hurt one bit," Rowley said. "Not that I’m ready to go public with how much we’ve received, but it’s more than I had last year.”

And the township will start giving out a bulk rate discount. Any business that applies for more than 10 licenses, the fee will go down from $5,000 to $2,500.

Bay County Executive Jim Barcia has no problem with his county becoming a mecca for mega growers. Three additional towns — Kawkawlin and Gibson townships and Bay City — have also approved ordinances with generous numbers of licenses available.

“We’re getting a pretty substantial amount of contact from individuals who are interested in investing in Michigan for grow operations,” he said, adding that if full legalization is approved in November, those early communities approving ordinances will have a head start on a billion-dollar market. “We’re getting regular contact with people who are interested in investing in a new industry that’s spreading throughout the state. We’ll see what happens with the ballot proposal.”

Contact Kathleen Gray: 313-223-4430, kgray99@freepress.com or on Twitter @michpoligal.