Detroit — City officials on Wednesday announced the reopening of adult-use recreational marijuana business licenses after months of delay caused by lawsuits, which were dismissed by a judge this week.
Mayor Mike Duggan joined City Council President Pro Tem James Tate and Anthony Zander, director of the city’s Civil Rights, Inclusion and Opportunity Department, inside City Hall for the announcement that applications will reopen Thursday.
Judge Leslie Kim Smith of Wayne County Circuit Court dismissed lawsuits from Jars Holding against the city, stating the claim that the city’s ordinance, established in April, complies with state regulations. She also granted the city’s motion for summary disposition in the House of Dank case.
“Plaintiff’s first argue that the 2022 ordinance provides preferential treatment to equity applicants in violation of the MRTMA,” the judge found, referring to the Michigan Regulation Taxation of Marijuana Act. “In the court’s view, there is no preference for equity applicants because non-equity applicants may apply at the same time. Both groups are each limited to 50 awarded licenses. The city’s ordinance allows the issuance of equal number of licenses to ‘equity applicants from any disproportionately impacted community,’ not just Detroit residents, as well as 50 licenses to non-equity applicants.”
The company also argued the ordinance violated state law because it doesn’t allow already established medical marijuana businesses in the city from operating a recreational retail within its current medical facility. The judge ruled that a co-location is not prohibited by the city’s April ordinance.
“The court has determined none of these violations have occurred and denies the Plaintiff’s request for declaratory relief,” Smith said.
Applications initially opened Aug. 1; however, during the pending litigation Smith ordered a temporary restraining order preventing the city from accepting or reviewing applications.
Duggan on Wednesday said the city’s process has been halted for the last two years due to the operation of medical marijuana being “controlled by wealthy folks who don’t live in the city, and Detroiters have not benefited from it. Since the beginning, Councilman Tate has said we want recreational marijuana businesses in the city but not if that means Detroiters are going to be excluded.”
Registration will open at 8 a.m. Thursday online at homegrowndetroit.org through Oct. 1.
“Everyone is entitled to apply tomorrow but we are going to make sure there is equity,” Duggan said.
In the first phase, 60 licenses will be awarded, with 100 more in future rounds, officials said.
In the first phase, the city will award 40 retail dispensary licenses, 10 consumption lounge licenses and 10 microbusiness licenses (those with up to 150 plants); half of all licenses will be devoted to social equity applicants.
Social-equity applicants include those who live in a disproportionately impacted community, which the city of Detroit defines as “any community where marijuana-related convictions are greater than the state of Michigan median and where 20% or more of the population is living below the poverty line.”
A 2018 ballot proposal to legalize recreational marijuana in Michigan was supported by 68% of Detroit voters. However, the city has had a long route to establish a system to award limited licenses to owners hoping to break into the lucrative industry.
The city plans to award 100 retailer licenses in three phases as well as 30 microbusiness licenses and 30 consumption lounge licenses.
Tate, who led the initiative over the last few years, celebrated the news Wednesday.
“The city’s 2022 marijuana ordinance is unambiguous and provides a fair licensing scheme,” Tate said, quoting the judge’s ruling.
“I am excited that we are on the verge of having Detroiters and other equity applicants having a fair process that will allow them to participate in this multimillion-dollar industry,” he added. “It is complicated, it is challenging, but it is now possible and that’s the beauty of this fight.”
All Detroit medical marijuana business licenses expires on Sept. 30. There are no new medical marijuana provisioning center licenses, the city said. Click here to renew.
Kim James, director of Marijuana Ventures & Entrepreneurship, said the city office is in the process of selecting a third-party vendor to score the applicants and decide which licenses will be awarded. That third-party vendor will have to be approved by the City Council within the next month and once completed, licenses could be awarded around December.
James said the city has hosted a program to help social equity applicants and trained them in business planning and technical aspects to succeed in getting licenses. A citywide real estate program will be rolled out soon for verified applicants, she said.
On June 12, a ballot initiative petition was filed for placement on the Nov. 8 ballot, which, if passed, would repeal the current adult-use marijuana licensing ordinance; earlier this month, the Detroit Election Commission unanimously voted against the measure.
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“I stood here with Councilman Tate almost three years ago and he predicted that the fight to have inclusion and equity in the marijuana business was going to be a hard fight,” Duggan said. “We’re fighting on the ice and we’re starting to win and I think we are going to have what the people of this city expect.”
srahal@detroitnews.com
Twitter: @SarahRahal_
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