Detroit seeks to extend opt-out period for recreational marijuana sales

Christine Ferretti
The Detroit News

Detroit — The city might push its temporary ban on recreational marijuana sales to the spring as officials craft legislation to govern how shops will operate and give Detroiters a better chance to participate.

City Councilman James Tate, who is leading the effort, introduced on Tuesday an ordinance proposal to extend the city's opt-out period, noting the potential billion-dollar industry should have a "pathway for Detroiters to be gainfully employed."

"We will not be rushed," Tate said during Tuesday's formal session. "We make no apologies for it."

City Councilman James Tate

Tate first introduced an ordinance in the fall to temporarily prohibit adult-use marijuana establishments in the city until Jan. 31. The proposal before the council now is seeking to bump that deadline to March 31. A public hearing will be held Jan. 28. 

Michigan voters approved a ballot proposal to legalize the adult-use of recreational marijuana in November 2018. Since then, more than 1,400 municipalities have instituted bans to prevent marijuana businesses from opening in their communities. 

The Marijuana Regulatory Agency issued the first recreational license in November. Recreational marijuana sales began Dec. 1 at four licensed retailers, nearly a year after its use became legal. To buy, consumers must be at least 21 years old with a valid driver's license or state ID. 

There are currently 64 licenses in the state, 36 of which are retailers, according to David Harns, a spokesman for the state's Department of Licensing and Regulatory Affairs. 

As of Jan. 12, retail sales for recreational marijuana had surpassed $10 million in Michigan. 

Tate said his office has convened workgroups to identify the challenges faced by African Americans and other minorities who are seeking to get into business and identify avenues to help, including a reduction in application fees. 

A fund to aid with start-up and technical assistance is also being contemplated. It's unclear where the dollars would come from or how such a fund would be managed. 

Individuals who own and operate medical marijuana dispensaries in Detroit that have come online in recent years "overwhelmingly are not residents of the city of Detroit," Tate said.

"While that may not be a problem for the free market, it's definitely a challenge for Detroiters to enter into an industry that has, at this point, no ceiling to the economic benefit for those that participate," he said. "For us to sign off on an ordinance without taking the necessary time to address this issue would be foolish, despite what type of pressure is being applied to opt-in."

But the city is facing criticism from industry advocates and others who view the move as an objection to the will of the voters.

"It's unfortunate that it is taking Detroit this long to figure this out," said Matthew Abel, senior partner Cannabis Counsel, PLC, which advises entrepreneurs on licensing and compliance. "It's been a year now, and we still haven't had a single public hearing. This is the first we've heard of anything publicly where citizens will have the right to comment."

Letting the moratorium expire, Abel added, would allow businesses to flourish here.

"Otherwise, it seems that they are just over-regulating," said Abel, who as chairs the State Bar of Michigan's marijuana law section. "That's the danger that they are over-regulating this and they are missing the economic opportunity that this brings for taxes, for jobs and for building rehabilitation."

Tate noted the city is well aware that voters in 2018 supported recreational marijuana along with the rest of the state. 

"That was the majority vote; we're honoring that," he said. "But what we have to do is ... look at it from all the positives and all potential negatives that go with it."

Detroit attorney Maurice Morton specializes in the cannabis industry and is among those to consult with Tate's office and the state on social equity goals. Morton, a former Wayne County prosecutor, is advocating for participation for individuals previously incarcerated for marijuana-related offenses.

For Detroit, he said, that means ensuring residents previously convicted of a marijuana offense have a chance to participate.

The state already has some social equity allowances. But Detroit's law, he said, could take those even further,

"They could do a set aside (in licenses) for social equity candidates," he said. "Some cities nationally have done that. We haven't seen it yet in Michigan. I anticipate that's what we'll see in Detroit."