Applicants in 19 'impacted' Michigan communities to get leg up in pot licensing

Beth LeBlanc
The Detroit News

Residents from 19 Michigan communities will be allowed to participate in a state marijuana licensing program that would give a leg up to people disproportionately impacted by past marijuana enforcement efforts.

Members of the Marijuana Regulatory Agency social equity team will meet with those communities several times prior to the opening of the recreational marijuana license application process Nov. 1.

They will offer assistance with licensing questions and applications, provide educational resources on the marijuana industry and connect them to other state agencies involved in the industry as well as attorneys or accountants in the private sector.

The program also allows applicants to receive up to 60% off the application fee, the initial licensing fee and renewals to a license if they live and locate their business in the 19 communities.

A 25% discount will be given to those who have been a resident of one of the 19 communities for the past five years, another 25% discount will be given if they also have a prior marijuana-related conviction, and an additional 10% will be given if the person was a registered caregiver for at least a two-year span between 2008 and 2017.

The state's application fee is $6,000, while the licensing fee ranges from $1,000 to $40,000. Renewal fees differ by license type and tier. 

"I believe that our social equity program will lead the nation in accomplishing the social equity objectives that Michigan voters assigned us last fall when they passed the adult-use marijuana proposal," said MRA executive director Andrew Brisbo. 

The 19 communities to benefit from the program were chosen based on the number of marijuana-related convictions and poverty rate. They are Albion, Benton Harbor, Detroit, East Lansing, Ecorse, Flint, Highland Park, Hamtramck, Inkster, Kalamazoo, Mt. Morris, Mt. Pleasant, Muskegon, Muskegon Heights, Niles, Pontiac, River Rouge, Saginaw and Ypsilanti.

The plan from the state is "forward thinking" and "critical" to the future of the industry as it attempts to include those impacted by the past prohibition on marijuana, said Josh Hovey, a spokesman for the Michigan Cannabis Industry Association.

"We have the benefit of looking at some of the best practices that are out there and how they have worked in other states," Hovey said. "Hopefully, what’s listed in Michigan’s program will achieve the equity and inclusion goals that were set forth in Proposal 1 last year.”

The social equity piece of the Marijuana Regulatory Agency’s rollout of the adult use program was a requirement of the voter-approved ballot initiative that legalized recreational marijuana use and sales last November.

The ballot initiative legalized the use of recreational marijuana starting Dec. 6 but allowed the state a year from legalization to implement the commercial end of the ballot initiative.

The agency issued emergency rules that will govern the recreational marijuana industry earlier this month and plans to begin accepting applications Nov. 1.

The social equity team will begin meeting with the 19 communities in August. The agency has goals of issuing 50% of the licenses in the identified communities to social equity participants, ensuring that at least 10% of those who participated in outreach sessions find other marijuana employment and engaging 10% of licensed social equity participant in future outreach sessions.

The agency also wants to ensure that a minimum of 60% of the social equity participants who obtain licensure maintain those for the next five years, Brisbo said.

"The key component to our program comparatively to other states is our focus on the continued success of the business operators," he told reporters. "That the most important criteria we're evaluating is not just the issuance of licenses but the success of those who are engaged in the industry.”

The program will operate within the context of the recreational marijuana law, which allows communities to limit the number and location of marijuana businesses or opt out of the industry altogether, Brisbo said. 

In communities that have opted out of allowing recreational marijuana businesses — such as Albion and Mt. Pleasant — individuals would be able to obtain the same assistance from the state but would be ineligible for the license fee reduction.

"We're going to attempt to provide resources to individuals from qualifying communities that can be beneficial to them in a number of ways," Brisbo said.

The pot industry remains hopeful that some of those communities that opted out will rethink that decision, especially given their designation as a disproportionately impacted community, said Hovey. 

"I think a lot of communities will be taking a second look at the industry and their comfort with it now that the emergency rules for adult use have been released," he said. 

Mt. Pleasant seems to be one of those communities.

The home of Central Michigan University, which likely made the list because of its high student population, allows medical marijuana facilities but had opted out of the adult use side, said City Manager Nancy Ridley. But the new emergency rules from the state have prompted the city to take a second look at the policy. 

"Our city commission just started last week talking about if we opted back in what would that look like," Ridley said. "They are certainly working toward that."

To receive the fee reductions and other assistance from the state, the primary applicant with majority ownership must meet the social equity program requirements as to residency, business location and marijuana-related history. 

"The majority of our applicants are business entities," Brisbo said. "Provided that the majority of the business is owned by individuals who qualify for the criteria of the social equity program, then that entity’s application would be eligible for the fee reductions.”

By law, for at least the first year of licensing, the Marijuana Regulatory Agency must first consider those already licensed in the medical marijuana industry for adult use licenses for retail, processing, or Class B and C growers.

Brisbo believes some already in the medical pot industry may qualify for the new social equity program for recreational use. And Brisbo noted that the agency could begin accepting applications from unlicensed individuals as soon as Nov. 1 for licenses in other fields such as safety testing, Class A growers, and microbusinesses.

The program didn't do enough for Mitzi Ruddock, a black marijuana business owner in southeast Michigan who participated in some of the state's stakeholder meetings earlier this year on the recreational market. She said the program amounted to "fluff" that did the "bare minimum" to help impacted communities. 

The black community, which studies have shown has been arrested for pot possession at higher rates than whites, needs more than education opportunities and fee reductions to overcome the mistrust and financial obstacles left after decades of marijuana arrests and penalties, said Ruddock, owner of the social use club Buds, Forks and Corks. 

"They’ve been locked up for it," she said. "And now I’m supposed to trust the same system that did that to help me get in the business?"

Ruddock lamented the lack of grants and low-interest loans in the program and questioned rules that required what is sometimes a transient population to have lived for the past five years in the same city.

"We’re talking about a peer-to-peer transaction that’s been taking place for decades, and now you have all these regulations, all this red tape," Ruddock said. "On so many levels, it just doesn’t address the majority of African Americans who want to be on the legal side."  

The Marijuana Regulatory Agency said the residency requirement was meant to ensure that those benefiting from the program were "truly residents" and not people merely seeking to qualify by listing a local address.

The fee reduction was a financial aspect under the agency's purview, whereas incentives such as grants or loans would require "a funding mechanism and spending authority through the Legislature," the agency said.

(517) 371-3661