Gov. Gretchen Whitmer signed an executive order Friday abolishing the board that approves or denies applications for licenses for medical marijuana businesses.

The action comes as the volunteer board has struggled to consider license applications in a timely manner, effectively stalling a fully viable medical marijuana market at a time when the much bigger recreational weed business is just around the corner.

A new entity within the state Department of Licensing and Regulatory Affairs — the Marijuana Regulatory Agency — will take over licensing, handling licenses for both the medical and the recreational markets. Under the executive order, the board will be abolished effective April 30.

While the state Legislature can veto the order, Whitmer reached out to the leadership in both the House and the Senate before issuing it.

Since beginning to consider applications for growers, processors, transporters, testing facilities and dispensaries in July, the board has approved 121 licenses. Of those, 105 — 31 growers, 11 processors, 54 dispensaries, four testing labs and five transporters — have paid their state regulatory assessments and actually been awarded licenses, and are operating.

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"This executive order will eliminate inefficiencies that have made it difficult to meet the needs of Michigan’s medical marijuana patients,” Whitmer said.

Shelly Edgerton, the former director of LARA, applauded Whitmer's action.

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"The volunteer board took on a monumental lift to get this program going, but in the short time frame the program has been running, we have not seen the expected volume of licensees entering the market,” she said. “With this executive order, the licensing process will be more efficient and allow more applicants into the space."

With the number of licensed growers fairly limited and the crop taking up to six months to be fully grown, licensed dispensaries have been worried about an impending shortage of medical marijuana for patients. As a result, the state has allowed unlicensed dispensaries to continue to operate with a deadline that has been repeatedly extended since mid-2018 and now stands at March 31 to get a license or shut down. There are about 60 unlicensed dispensaries operating in the state.

Denise Pollicella, a Brighton attorney who has several marijuana business clients, said she hopes the new system works better than the current licensing board.

"It’s a good move if it works," she said. "I hope we’re not replacing one inefficient bureaucratic process with another."

The licensing board was a body created in the laws passed by the Legislature in 2016 to regulate and tax the medical marijuana market. It was a five-member politically appointed board with recommendations for those serving coming from former Senate Majority Leader Arlan Meekhof, R-Grand Haven, former Speaker of the House Tom Leonard, R-Dewitt and Gov. Rick Snyder.

The board has been caught up in controversy since its appointment in May 2017. Former Speaker of the House Rick Johnson, R-Leroy, was a registered lobbyist when he was recommended for the board by Meekhof.

He also had been involved in negotiating the sale of his stake in the lobbying firm Dodak Johnson & Associates to a lobbyist for the medical marijuana industry, raising concerns about whether industry lobbyists would seek to curry favor with Johnson through the price paid for the stake in the firm. When news of that sale came to light, Johnson, instead, said he sold his interest in the firm to his partner Lou Dodak.

Johnson said Friday that he hadn’t heard about the executive order, but said of Whitmer’s action, “That’s her choice, not mine.”

Other members of the board include David LaMontaine, a Monroe resident, business agent and executive board member of the Police Officers Association of Michigan, who was nominated by Leonard; and Snyder’s appointees, Nichole Cover, a Mattawan pharmacist, health care supervisor for Walgreens and chairwoman of the Michigan Board of Pharmacy; Donald Bailey, a retired sergeant for the Michigan State Police from Traverse City, and Vivian Pickard of Bloomfield Hills, who is the president and CEO of the Pickard Group consulting firm and former president of the General Motors Foundation.

The board has come under fire for inconsistent decisions on medical marijuana licenses. Some applicants have been denied for minor brushes with the law that were decades old or even some where charges were dismissed.

Bailey was particularly hard on applicants, consistently trying to deny people seeking licenses who were registered caregivers and allowed to grow up to 72 plants for five medical marijuana cardholders. While caregivers are supposed to be able to recoup the costs of growing the plants, Bailey said he thought many of them were profiting beyond those expenses and shouldn’t be considered for a license. As a result, many caregivers, who have been the mainstay of the medical marijuana market since voters approved legalizing medical pot in 2008, have been denied licenses.

Bailey said Friday he thinks the decision to do away with the board was political payback for marijuana industry lobbyists, who supported Whitmer's campaign. He predicted that the floodgates will open up for license applications from people without the financial means or moral integrity necessary to run a marijuana business.

"Public safety just took a huge hit," he said. "Law enforcement is not prepared for what’s coming and now if it turns out that a bunch of people get licenses who shouldn’t, that’s going to make it even worse."

But Washtenaw County Sheriff Jerry Clayton said the new framework for marijuana enforcement will be more fair and consistent.

"The new system allows for more predictability, which will ultimately enhance public safety and keep our communities safe," he said.

While the medical marijuana laws called for the licensing board, the 2018 ballot proposal that legalizes marijuana for adult recreational use calls for the state Department of Licensing and Regulatory Affairs to handle licensing.

In her executive order, Whitmer said the state constitution gives her broad authority to “make changes in the organization of the executive branch of state government or in the assignment of functions among its units that are necessary for efficient administration.”

Combining the licensing authority under one body furthers those efficiencies, she said.

“To avoid licensing delays and to better coordinate varying sources of authority for the enforcement of state law, the administration of state laws relating to marijuana can more effectively and efficiently be administered by a dedicated state agency,” she said in her executive order.

That agency will be known as the Marijuana Regulatory Agency and a director to run the agency is expected to be appointed by the governor in the coming weeks.

The executive order can be considered by the Legislature and either approved or vetoed.

Whitmer, however, reached out to the Republican leadership in both the House and Senate before signing it. And Gideon D'Assandro, spokesman for Speaker of the House Lee Chatfield, R-Levering, said that while the GOP caucus will review the order, Chatfield appreciated the opportunity to weigh in on the issue.

The Legislature vetoed a Whitmer executive order last month that abolished several review panels created by the Legislature to oversee permitting in the Department of Environmental Quality. She came back with another order that still reorganized the DEQ into the Department of Environment, Great Lakes and Energy but kept two of the three review panels.

The new Marijuana Regulatory Agency will be required to have four public hearings a year to hear complaints about the department. The current licensing board holds its meetings in public when it considers license applications and has two more meetings scheduled before the executive order takes effect. It's not clear yet whether those meetings will be held or whether the new agency will hold similar public hearings on license applications.

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