Detroit overwhelmed by applicants for recreational marijuana shop licenses

Sarah Rahal
The Detroit News

Detroit — "Legacy Detroiters" have until Friday to submit applications for certification to operate a medical marijuana shop but the office reviewing the applications is already overwhelmed, officials said.

Nearly 600 residents have submitted their applications, "far more than what was expected," Erica Hill, deputy director of the city's Civil Rights, Inclusion & Opportunity department, told The Detroit News Wednesday.

The city is giving preference to certain longtime Detroit residents. Applicants can qualify if they've lived in Detroit for 15 of the last 30 years; 13 of the last 30 years and are low-income; or 10 of the last 30 years and have a past marijuana-related criminal conviction or have parents who have a prior controlled substance record and still live in the city.

Matthew Carter of Madison Heights gets a nose full of Sour Diesel marijuana as the smells come from tiny molecules called terpenes during a 420 block party at Utopia Gardens in Detroit on April 20, 2019.

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The office set up a call center this month to answer questions from applicants by bringing back three furloughed city employees to serve as attendants and a supervisor.

"Definitely, we did not expect the volume of inquiries and activity. It's not so many outsiders. The bulk are Detroiters asking the status of their applications," Hill said. "So that's when we decided to utilize the furloughed employees and bring them back to assist with those calls."

So far, 217 applications have been approved and 14 that did not have the proper paperwork have been rejected, Hill said. 

The city expects to certify hundreds of legacy Detroiters so they can seek state and city licenses, but will only allow 75 recreational marijuana shop licenses in the city. 

Mayor Mike Duggan said at least 50% of the licenses will be granted to legacy Detroiters.

"We are in an exclusive window period here and the way this is going to work is every time a Detroiter is approved, somebody in the outside gets approved. But we are never at any point going to be below 50% of Detroiters having these licenses," Duggan said during his eighth State of the City address Tuesday.

Hill said the office is on track to accept applications beginning April 1. Detroit legacy applications will be reviewed beginning May. 1. General applicants with existing marijuana licenses will be reviewed starting June 16 and applicants without an existing medical marijuana license will be reviewed beginning Aug. 1.

The mayor, in his budget proposal to city council Friday, allocated an additional $1 million for CRIO as the department will need help to review applications over the next year, he said.

► More: Lawsuit challenges Detroit recreational marijuana shop licensing rules

"Councilman (James) Tate and Council have made a commitment, which we're now going to fight in court but I feel good about our chances that say if there are going to be recreational marijuana businesses in the city, 50% of those will be owned by Detroiters," Duggan said to the Detroit City Council Friday. "We are setting up a process where legacy Detroiters get properly evaluated, get first shot. It's going to take a major lift from the CRIO department."

During his Tuesday address, Duggan said, "There is no greater example of inequity, as far as I'm concerned than what's happening with the marijuana businesses."

Crystal Lowe, who has lived in Detroit for 11 of the past 30 years, sued the city earlier this month, arguing the legacy preferences are unfair. She plans to apply for an adult-use retail establishment license, however, the city “has almost certainly denied" her chances to obtain a license because the city's "licensing scheme favors certain Detroit residents over other Michiganders based on the duration of their residency” there, the filing said.

He touted Tate for leading the effort to prioritize longtime residents after a flaw was found in the state's recreational marijuana law.

Duggan said the law to legalize recreational marijuana passed by Michigan voters in 2018 gave exclusive rights to those who already had medical marijuana licenses.

"They wrote a preference in for themselves," Duggan said. "And in Detroit, 46 medical dispensaries were operating when this passed, only four were owned by Detroiters. They had written a law that if we had expanded into the recreational marijuana industry it would have locked African American and Latino business folks from Detroit out of this business forever."

To address the demand for equity, qualifying residents get a 99% discount on licensing fees this year and a 75% discount in 2022. They also receive a 75% discount on city-owned land.

"Beyond this process, the social equity portion of it kicks in and so there are a lot of additional components that will help some of these individuals maybe partner, identify different avenues to take," Hill said. "So, there's another component to it that will assist those applicants that have gotten a certification but may not be in the current position to get the licensure or be awarded."

New director named

Charity Dean, former CRIO director overseeing the program, left the position Wednesday for a job outside of the city, the mayor's office announced. CRIO officials would not answer questions about her new job. Dean declined to share details, saying her new role is "not public yet." She had been with the city for four years.

"Charity has done a phenomenal job helping lift up Detroiters as a public servant and advocate, I have no doubt she will continue to be a champion for the residents and business owners of this City," Duggan said in a press release Wednesday.

The mayor appointed Kimberly Rustem, who led the development of the marijuana program, as Dean's replacement.

Rustem has led policy initiatives for the mayor's office including the mental health co-response pilot in partnership with the Detroit Wayne Integrated Health Network. She advises the Detroit Police Department and provides input on technical assistance programs specifically targeted to assist microbusinesses led by women and people of color.

"Kim has done an excellent job in navigating and addressing several of the policy issues that have historically created inequities in the day-to-day lives of Detroiters," Duggan added. "I’m very excited to have her in this new role where she can continue and expand her role in making sure all Detroiters have equitable access to opportunity."

Twitter: @SarahRahal_