Detroit's council approves rules for the operation of adult-use marijuana shops
Detroit — The City Council on Tuesday approved a long-awaited law for the operation of recreational marijuana shops, with controversial provisions to give residents priority.
Detroit Councilman James Tate led the effort that guarantees no less than half of all licenses awarded in Detroit will go to legacy residents.
The plan, unveiled in late October, seeks to ensure residents will have an equitable opportunity to participate in an industry that's estimated to yield $3 billion in annual sales, Tate has said. Council members approved the measure 9-0.
Tate said the regulations are the product of two years of work "to identify ways to make sure there's success" for Detroiters.
"We've seen around the country where individuals who live in the municipality where the industry is located are frozen out and not having an opportunity to participate," he said Tuesday.
Medical marijuana operators and Detroiters hoping to break into the recreational industry made up the majority of callers during a virtual Tuesday public hearing, supporting the ordinance.
Former Detroit Lion Rob Sims, who co-founded the Michigan-based cannabis company Primitive, said he backs the law and believes Detroit is trying to "do the right thing."
"We are looking forward to partnerships with social equity candidates," he said. "I'm looking forward to touching more people in the city of Detroit with our medicine."
Mitzi Ruddock, a Detroit single mother with a past marijuana conviction, told council that the "cannabis has saved my life" in terms of her mental health and economically.
“I and many other Detroiters have sacrificed so much to see the day that brings generational wealth to our children through legal cannabis businesses," said Ruddock, who runs Black Cannabis Access, which she said helps urban communities "break the cycle of wealth and economic disparities."
"This isn't a game nor has it ever been a side hustle for us," said Ruddock, 40. "Detroiter-owned companies will hire Detroit employees, which will support Detroit families and rebuild Detroit communities and contribute to Detroit income tax base."
A few others, however, came out against the recreational marijuana law that they claim is flawed.
Marvin Winans, founder and pastor of Detroit's Perfecting Church, said he was "ashamed" of Tate, who oversaw crafting of the rules.
"I'll be here when the smoke settles and the dust clears," Winans said. "I'll just pray that we have a better idea to bring the city back than weed."
Michael DiLaura of House of Dank, which has six retail locations in Detroit, argued the industry as a whole was "not consulted enough" and "the proposal doesn't go far enough."
The ordinance will give special preference to residents under a certification that the city is calling "Detroit Legacy."
Applicants can qualify for the "legacy" certification if they've lived in Detroit for 15 of the last 30 years; lived in Detroit for 13 of the last 30 years and are low-income; or lived in Detroit for 10 of the last 30 years and have a past marijuana-related conviction.
The adult-use law is expected to go into effect in January.
Under the ordinance, legacy Detroiters be able to purchase city-owned land at 25% of the fair market value and that all application fees be slashed to 1% of the total cost. They also will be offered an exclusive, six-week early licensing period.
Afterward, individuals who already operate medical marijuana facilities will get their own reserved 6-week application process before other applications will be reviewed.
The city will license up to 75 adult-use retailers, the same number it allows for medical marijuana provisioning centers.
Council members also voted Tuesday on numerous amendments to the ordinance including the addition of provisions that would require that jobs provided pay at least $15-an-hour and that temporary marijuana events be subject to community outreach. Those event requests must be submitted at least 90 days in advance and take place at privately owned locations.
Detroit officials have said only four of the city's 46 medical marijuana dispensaries — permitted under a law approved by Detroit's council in 2018 — are owned by residents.
Tate last fall said an earlier draft of the law didn't go far enough to ensure opportunities for residents. His office convened workgroup sessions with industry professionals and grassroots advocates to develop the social equity component in the proposed ordinance and identify challenges faced by Black entrepreneurs.
Licensing covers 10 state-approved categories, including medical marijuana provisioning centers, adult-use retailer establishments, growers, processors, safety compliance facilities, temporary events, microbusinesses, designated consumption lounges and secure transporters.
Designated consumption lounges and microbusinesses will be limited to no more than 35 citywide, the ordinance notes.
The city plans to work with philanthropic groups and private lenders to develop sources of funding and expertise to back Detroit-owned marijuana business startups.
Voters in Detroit and across the state approved a ballot proposal in November 2018 to legalize adult-use of recreational marijuana. There are more than 1,400 municipalities with bans to block recreational marijuana businesses from opening in their communities, according to state figures.
Adult-use retail sales have totaled about $376 million, according to the state's Department of Licensing and Regulatory Affairs.
Staff Writer Sarah Rahal contributed