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Detroit may soon have recreational marijuana dispensaries and related cannabis businesses.
Seven months after a federal judge blocked the city's approval of applications for cannabis businesses, stating that its ordinance was "likely constitutional", city council members came up with a new plan.
In an effort to ensure that long-time Detroiters played a major role in legalizing marijuana, the ordinance gave licensing preference to those who had lived in the city for a long time. The policy led to a lawsuit claiming that the residency requirements were discriminatory and unconstitutional.
U.S. District Judge Bernard A. Friedman agreed with the assertion that the ordinance gives long-term Detroit residents an unfair, irrational and likely unconstitutional advantage over all other applicants.
The case will be tried in September.
James Tate, City Council Pro Tem, said that the new ordinance is a compromise between equity for Detroiters, and opportunities for other long-term residents to obtain a license to operate dispensaries, grow operations, testing labs, and other cannabis-related business.
Two avenues are available to obtain a license under the new ordinance. The other is for residents who have been in the area for many years and won't be competing with non-residents to obtain a license. They will be eligible to receive city assistance for business plans, networking, and reduced licensing fees.
Non-residents have another option. The new ordinance allows residents to form business partnerships with non-residents. Mayor Mike Duggan stated that he supports the new ordinance.
The new ordinance will allow the city to issue licenses for up to 76 recreational dispensaries as well as 30 licenses for designated consumption lounges or micro-businesses. There are no restrictions on how many licenses can be issued to growers, processors or secured transporters. Safety compliance facilities, temporary marijuana events, and organizers of marijuana events, as well as marijuana event organizers, will all be granted.
The council's Public Health and Safety Standing Committee will discuss the proposal. If everything goes according to plan, the city could begin issuing licenses in the first quarter this year.
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On Thursday, a federal judge in Detroit blocked the city from processing applications for recreational marijuana businesses. He ruled that a new ordinance giving long-time Detroiters preference in licensing is "likely unconstitutional".
U.S. District Judge Bernard A. Friedman granted an interim injunction in a case in which the plaintiffs argued that the residency requirements were discriminatory and unconstitutional.
Friedman stated in a 19-page decision that the ordinance "gives an unfair and irrational advantage to long term Detroit residents over all others applicants."
Crystal Lowe, who lives in Detroit for 11 years, filed the suit in March. She argued that the ordinance "almost certainly denied" her the opportunity to get a license. This is because the "licensing system favors certain Detroit residents over others based on their duration of residency."
The Detroit City Council approved the "legacy ordinance" in November. This gives priority to applicants who have lived in Detroit for at least 15 years or more, are less-educated, or have had a marijuana-related conviction in the past. Legacy residents must receive at least 50% of the licenses.
Council members stated that the ordinance was designed to address the war against drugs' disproportionate impact on Black Detroiters. The judge pointed out, however, that the ordinance does not necessarily favor applicants who have been impacted by the war against drugs.
He said that the ordinance "prefers wealthy applicants who have not had any interaction with the War on Drugs over low-income applicants who were ravaged by it, as long as the wealthy applicants have been in Detroit for the correct amount of time."
Friedman agreed to Lowe's lawyer Kevin Blair, who claimed that the ordinance was "pure economic protectionionism".
Friedman stated that the Ordinance was far more protective than it is equitable.
Friedman's decision is a significant blow to Detroit's long-awaited legalization of recreational marijuana, at least for the near term. Detroit has no plans to change its ordinance to allow recreational marijuana businesses in the city.
Kim Rustem (director of the city’s department of civil right, inclusion, and opportunity) stated in a statement to Metro Times that one thing is certain, The city won't issue any recreational licenses until there is legal assurance Detroiters will get a fair share.
Since December 2019, recreational marijuana businesses in Michigan have been legal. Detroit, along with more than three quarters of Michigan's municipalities, passed an ordinance that would prohibit dispensaries and growers from operating.
It was the plan to create an ordinance that would protect Detroiters from losing out on this lucrative industry.
In January, the city started accepting licenses for recreational marijuana businesses. The city intends to issue licenses to up to 75 recreational marijuana sellers and 35 cannabis consumption lounges.
James Tate, a Detroit Councilman, helped to draft the ordinance. He said that he will continue pushing for a way to allow Detroiters to enter the cannabis industry. Tate stated that the adult-use licenses would not be granted without a plan.
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The City Council of Michigan’s biggest city unanimously approved an adult-use marijuana ordinance on Tuesday. The ordinance will allow Detroit to compete with other municipalities, many of which opted in for allowing recreational facilities months ago. Although the city has a late start, it does have one advantage over other municipalities: Detroit is one of the first cities in Michigan to allow designated consumption lounges.
In total, Detroit will allow 75 adult-use retailers, 35 consumption lounges, and 35 microbusinesses. Unlimited amounts of safety compliance facilities, transporters, processors, growers, and marijuana events will be licensed once approved.
Detroit has allowed medical marijuana facilities for years, but decided to wait before allowing recreational establishments. The city first developed a social equity program intending to benefit Detroiters who were disproportionately affected by the War on Drugs. The social equity legislation was introduced by Detroit City Councilman James Tate.
"I am thankful for the assistance of my colleagues, the social equity workgroup, my staff as well as Mayor Duggan and his team for help in crafting such a comprehensive ordinance. We have taken lessons learned from other cities around the state and country that opened up the adult-use market and applied elements that we believe will help provide opportunity for those seeking to enter and succeed in the cannabis industry. We have taken major steps to address the inequities found in the city's current medical marijuana industry and included provisions that provide genuine opportunity for Detroiters to create generational wealth."
James Tate, Detroit City Councilman
The new ordinance contains many provisions aiming to assist Detroit residents. First of all, at least half of all licenses must be given to “Detroit Legacy” residents. “Detroit Legacy” refers to current Detroit residents who have lived in the city for at least a year before applying for their license, and have also lived in Detroit for either 15 of the last 30 years, or 13 of the last 30 years and have low income. It also applies to citizens who have lived in Detroit for 10 out of the last 30 years and have had a marijuana conviction.
“Detroit Legacy” applicants will pay less in licensing fees than non-Detroiters, as well as have priority in the application process, and have the benefit of applying before any other applicants. They will also have the opportunity to purchase certain city-owned properties at a quarter of the price of fair market value.
In addition to “Detroit Legacy” benefits,  a minimum of $1 million from marijuana sales tax revenue will be dedicated to youth drug abuse programs, as well as social equity initiatives. Detroit expects to generate at least $7 million in yearly tax revenue on recreational marijuana sales alone.
Detroit has taken its time drafting and passing its recreational marijuana ordinance, making sure to take care of Detroiters above all else. The city will begin accepting applications from “Detroit Legacy” applicants on January 1st, 2021. Six weeks later, applicants who already run medical marijuana facilities in Detroit can begin to apply. Other hopeful applicants can begin submitting applications another six weeks later.
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The City Council of Michigan’s biggest city unanimously approved an adult-use marijuana ordinance on Tuesday. The ordinance will allow Detroit to compete with other municipalities, many of which opted in for allowing recreational facilities months ago. Although the city has a late start, it does have one advantage over other municipalities: Detroit is one of the first cities in Michigan to allow designated consumption lounges.
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Detroit has taken its time drafting and passing its recreational marijuana ordinance, making sure to take care of Detroiters above all else. The city will begin accepting applications from “Detroit Legacy” applicants on January first, 2021.
Detroit could delay recreational marijuana sales through 2021, but lawmakers and citizens are hoping an ambitious ballot initiative will accelerate the process.
Detroit is lagging behind the region when it comes to the recreational marijuana industry. Officials have temporarily banned the businesses from opening in Detroit, and may even extend the ban into next year. The ban has already been extended once, as the original end date was supposed to be March 31st, 2020.
With nearly 30 percent of it’s land areas being vacant, the recreational cannabis industry could improve Detroit’s local economy immensely. The dense population, affordable real estate and convenient location has drawn lots of attention to the area. Bricks + Mortar Group has sold several facilities in Detroit, and continues to receive inquiries about purchasing property within the city on a daily basis.   Â
"The ban was Detroit’s plan to ensure a social equity program is put into place before recreational dispensaries are allowed."
-James Tate, Detroit Councilmember
The social equity program will allow Black Detroiters who have been harmed by the War on Drugs to participate in the new economy. The ban was extended earlier this year, and may be extended again.. for another six months. This means Detroit may not see recreational cannabis stores until 2022 or later.
That puts Detroit far behind many other municipalities in the state. Recreational cannabis businesses, where any adult over the age of 21 can buy cannabis legally, have opened in the past year in Ferndale, Ann Arbor, Inkster, River Rouge, and Hazel Park. There are currently 37 marijuana dispensaries in Detroit, all of which are at a disadvantage due to the ban. They are limited to selling only medical marijuana products, which is hurting both the businesses and the city itself.
The attorney who represents several medical marijuana businesses, including The Reef and Utopia Gardens, says the ban extension is harming her clients. The businesses have filed a lawsuit against the city of Detroit. They were pre-approved to sell recreational marijuana, and believe they should be allowed to sell adult-use products.
Former Michigan State Senator Virgil Smith is gathering signatures to put the issue on the November ballot. He would need to collect 9,000 signatures by the end of the month, but in a city of over 670,000 people, it may be easier than it sounds.
Michigan residents voted to allow recreational marijuana sales in 2018. As of January, 2020, there were 27 adult-use dispensaries throughout the state. By 2021, Michigan is projected to make over one billion dollars in recreational marijuana sales alone. It’s no wonder Detroit business owners feel as though they are being left behind.
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Detroit has finally fully opted into the MMFLA by finalizing an ordinance that will allow an unlimited number of processing, cultivation, safety compliance and secure transport facilities (as zoning allows). Â The unanimously approved ordinance sets the cap for provisioning and caregiver facilities at 75, with 60 provisioning facilities and caregiver centers already legally operating in the city.
The newly drafted ordinance also changes many of the procedures for future operation of caregiving facilities. Â These changes are as follows:
The ordinance identifies the buffer zones in which all medical marijuana facilities must be in compliance with to operate in Detroit. Â They are as follows:
Detroit City Councilman James Tate explained that they are preparing for November’s recreational vote, “In plain speak, the reason why we’re doing this now is to ensure we’re in compliance with the ballot initiative.”  This may be the reasoning behind the stricter zoning requirements in the updated ordinance.
Overall, the newly adopted ordinance makes some significant changes to the medical marijuana facilities regulation throughout the city, as well as to the application process. Â Language existing in the ordinance also encourages marijuana businesses in the city to provide community benefits, very similar to the way Grand Rapids is accepting licensing applications.
Curious about how the Detroit application process works? Check out our Detroit medical marijuana facilities application roadmap, which also goes into detail about the functionality of Detroit’s newly formed Medical Marijuana Facilities Review Committee.
