IRON MOUNTAIN — Provisional licenses will be issued to two downstate businesses for medical marijuana facilities after three local applicants failed Monday to convince Iron Mountain City Council their projects are more worthy.

Barring successful lawsuits, licenses will go to Macomb-based RIZE, promising a $5 million investment and 60 to 90 jobs, and Attitude Wellness of Evart, whose commitment is $2.18 million and 20 jobs.

Unsuccessful local applicants included Tree of Life Center, owned by Dave Fraser of Breitung Township and Ryan Mulder of Channing, 13 jobs and an $867,000 investment; The Source of Iron Mountain, owned by Jo Poulin of Iron Mountain, Brad Butler and Robert White of Niagara, Wis., nine jobs and a $1.2 million investment; and Green Spectrum Labs, primarily owned by Dan Kreider of Breitung Township, 10 jobs and a $411,000 investment.

After announcing the results of its 52-point rubric earlier this month, the council met Monday to hear appeals.

During a contentious portion of the three-hour session, Mayor Dale Alessandrini mused that no licenses should be granted.

Attorney Vincent Petrucelli of Iron River, representing The Source of IM, said a court challenge may be filed.

“We tried to do this as fair as possible,” Alessandrini said. He later conceded, “We probably still didn’t get it right.”

Petrucelli, who succeeded in raising his client’s score — but not by enough — advised, “We’ll let other people decide this if they (The Source) decide to take that route.”

The downstate businesses fell short of maximum scores only because they have no local owners. RIZE, owned by Nick Issak of Macomb and Julie Wentworth of Bay Harbor, scored 49, as did Attitude Wellness, owned by Robert Barnes of Evart.

RIZE plans a facility at a now-vacant building at 1580 N. Stephenson Ave., about a quarter-mile south of Industrial Drive and North Lake Antoine Road.

Attitude Wellness intends to build a growing and processing facility on the west side of Hydraulic Falls Road between Stephenson Avenue and Breitung Cutoff Road. Its provisioning center would be at 117 and 119 S. Stephenson Ave., just south of East Fleshiem Street, where structures would be rehabilitated.

The other initial scores were 45 for Tree of Life, whose proposed facility is on the 1800 block of North Stephenson Avenue in buildings now occupied by Iron Mountain Power Sports; 44 for The Source of IM, who would build near the 1500 block of North Stephenson at the site of the former Mountain Motors; and 42 for Green Spectrum Labs, who would refurbish a building on the 100 block of East Smith Street.

After hearing appeals, the council raised the scores of both Tree of Life and The Source of IM to 47, while Green Spectrum remained at 42.

In grading the applications, the city had sought to emphasize economic and neighborhood impacts as well as the ability to operate. Under an ordinance adopted in June, licenses were limited to two apiece for growing, processing and provisioning.

Although the two successful applicants showed a big advantage in job creation, all five proposals scored a maximum six points in that category by committing to at least nine full-time jobs. Up to four points were available if the proposed capital investment exceeded $900,000, with three of the applicants getting the maximum.

Scoring arguments Monday concerned the interpretation of capital investment as well as questions on wages, building uses and blight remediation.

In most of the disputed appeals, council members Pam Maule and Nathan Zemar favored additional points, while Alessandrini joined Bill Revord and Butch Schinderle in supporting the city’s scoring. Juan Saldana was absent and Kyle Blomquist abstained due to a conflict with his architectural business.

In the end, The Source fell short because it got too few points in the areas of blight elimination and building design. Tree of Life lacked points in capital investment, while Green Spectrum scored too low in investment, blight elimination and new construction.

“We should not be penalized for the absence of blight on our site,” Kreider said.

City Attorney Gerald Pirkola said the city was under no obligation to develop a scoring system but wanted a means to compare competing proposals. Possible legal action is no surprise, he added.

City Manager Jordan Stanchina offered explanations for the city’s scoring, noting some proposals seemed at least partly designed to jump through the hoops of the rubric.

Revord said the city limited the number of licenses so it could “walk before we run” on legalized marijuana.

The council will have a public hearing Monday on a proposed recreational marijuana ordinance. Final approval would put the rules into effect 30 days later, several days after Michigan’s Marijuana Regulatory Agency starts accepting applications Nov. 1 for business licenses.

Iron Mountain would then have a 45-day window for applications for recreational licenses, which would also be limited to two each for growing, processing and provisioning.

Under the state’s current rules, only medical marijuana license holders can receive a recreational license. If the council adopts an ordinance for recreational marijuana, a scoring rubric for those applications would follow, likely including incentives to discourage providers from abandoning medical marijuana.

By state rule, medical and recreational businesses can occupy the same facility, but products must be kept separate and are subject to testing and labeling.