Detroit to issue recreational marijuana licenses in summer 2021

Sarah Rahal
The Detroit News
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Detroit — Starting January, longtime city residents will be the first to apply for certification and secure recreational marijuana licenses by the summer, city officials announced Wednesday.

Mayor Mike Duggan and councilman James Tate unveiled a timeline urging residents eager to jumpstart their marijuana business to begin by applying for Detroit Legacy certification opening online Jan. 19. The first licenses could be issued to qualified residents as soon as June.

Tender Jacob Samways, left, lets Gregg Etzel, 67, of Dundee smell some marijuana flowers during the first day of sales of recreational marijuana at Exclusive Provisioning Center in Ann Arbor, Mich. on Dec. 1, 2019.

The city's long-awaited ordinance for recreational marijuana, which was unveiled in October, guarantees no less than half of all licenses awarded will go to legacy residents.

"It's by far the most controversial provision," Duggan said. "The city will not issue a license to any business unless 50% of the licenses in that category are Detroiters. Which means if you're from outside the city, you can't get a license unless a Detroiter already has one. We'll never go below 50%."

The plan, city leaders say, was crafted to ensure residents disproportionately affected by the nation’s failed “War on Drugs” will have an equitable opportunity to participate in an industry that's estimated to yield $3 billion in annual sales. In late November, the city council unanimously approved the ordinance.

"It was imperative for us to ensure we right that wrong," Tate said. "We have individuals who are making a very good living on marijuana today, the same plant that created this situation of mass incarceration around our country in the city of Detroit, so this is an opportunity for us."

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.

Legacy Detroiters will receive benefits including reduced fees, technical assistance and a six-week period when only legacy Detroiter applications will be reviewed before the rest of the public by the city's Civil Rights, Inclusion and Opportunity Department.

Legacy Detroiters will be able to purchase city-owned land at 25% of the fair market value and all application fees be slashed to 1% of the total cost.

Detroit officials have announced plans to give certain residents a head start and other assistance in applying for marijuana licenses.

"These are for real Detroiters, those who have roots in the community," Duggan said. "Or you can qualify as a business legacy, owned and controlled 51% by individuals with the legacy certification."

Despite the scrutiny they face, "Detroit is ready for this huge lift," Tate said.

He added it was rare to witness overwhelming excitement about an ordinance but said it's because "now (residents) have that sense of opportunity and hope."

How to apply

The adult-use law is expected to go into effect in January and Detroiters can start by reviewing the process at detroitmeansbusiness.org.

Starting Jan. 19, the website will open for applications for legacy certification. Applicants will also need state certification through the Michigan Marijuana Regulatory Agency

The state requirements include a $6,000 fee with reductions for those involved in social equity programs. Applicants must provide the state information on the company and have a personal background check.

The state process could take two to three months and Duggan said Detroit applicants can begin the city process in January before state prequalifications are complete.

Starting April 1, Detroiters and general applicants will able to apply for licenses through the Buildings, Safety Engineering and Environmental Department.

Legacy Detroiters will be the first applicants reviewed for licenses starting May 1. General applications will be reviewed starting Aug. 1.

City licensing fees will cost $1,000, but only $10 for legacy Detroiters.

"We are going to change the inequity on Detroit versus non-Detroit businesses," Duggan said. "We’re doing everything we can to create every opportunity for Detroiters to start these businesses."

The city will license up to 75 adult-use retailers, the same number it allows for medical marijuana provisioning centers. Officials said it amounted to one dispensary every two square miles in the city.

Applicants will need:

  • Detailed business plans
  • Three years of income tax returns
  • Authorizations for background checks
  • Property tax clearances and clearances of any blight
  • An address for the business

Those without an address can obtain a provisional license valid for one year and for information on properties. Applicants can email bryantji@detroitmi.gov.

Detroit Councilman James Tate answers questions about the proposed ordinance for adult-use marijuana establishments.

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. 

Mitzi Ruddock, a 40-year-old Detroit single mother with a past marijuana conviction, told The News that having a seat at the table made a difference.

“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 is the best we could do. It was a process and probably the most aggressive in the country. 51% is huge" she said.

Ruddock said there are still barriers to overcome by instituting further education and outreach on cannabis.

"There are a lot of gaps in the system. That's how my organization was founded because people aren't aware of the resources," she said. "I often do PowerPoint education for community leaders because miseducation on cannabis is huge."

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 from more than 400 locations, according to the state's Department of Licensing and Regulatory Affairs.

The U.S. House voted Friday for the first time to legalize marijuana at the federal level, but the bill has little chance of being considered in the Republican-controlled Senate.

The Marijuana Opportunity Reinvestment and Expungement Act would remove marijuana from federal drug schedules under the Controlled Substances Act and expunge convictions for marijuana offenses. The bill would also put a 5% excise tax on cannabis,with proceeds to be used to help individuals who have been punished for drug offenses. The bill passed the House 228-164.

srahal@detroitnews.com

Twitter: @SarahRahal_

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