Measures that could grow Detroit’s medical marijuana industry go to voters

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By John Schroyer

Two local ballot measures to grow Detroit’s once-sizable medical marijuana industry have overcome significant legal hurdles and will now go before voters in November.

The proposed changes, if approved by voters, would likely result in a broadening of the MJ-related business opportunities in Michigan’s biggest city.

The measures – one to formally opt the city into a state MMJ regulatory system and one to amend the city’s cannabis business zoning laws – have withstood a legal challenge from the Detroit Elections Commission and also received a green light from the county’s election commission.

Both decisions came in the past week and mean the ballot questions will go before voters on Nov. 7, said Jenn Zielinski, a spokeswoman for Citizens for Sensible Cannabis Reform, the organization behind the measures.

Even if the measures pass, however, it doesn’t mean the city’s previously operating 200-plus medical cannabis retailers will be able to transition to the newly regulated market.

‘More opportunity’

“The zoning is less restrictive, so there’s going to be more opportunity, but there isn’t any particular number I could give any clarity on,” Zielinski said when pressed for specifications on how much the ordinances would open up Detroit’s MJ business opportunities.

“There are hundreds of people looking to Detroit to set up an operation within (the regulated MMJ industry), but I don’t have a clear indicator on how many are actually going to be taking up residency there.”

So far, according to Detroit’s city government:

  • Just eight dispensaries have been formally licensed under a new and restrictive zoning ordinance that went into effect last year.
  • Another 69 are operating while awaiting formal business permit approval.
  • A dozen more are attempting to get permits but aren’t serving MMJ patients.
  • An additional 175 have been closed by city officials.

The ballot measures represent the latest moves in a lengthy back-and-forth battle between the MMJ industry in Detroit and local officials who have been trying to rein in marijuana businesses for years.

In March 2016, new zoning regulations went into effect that were intended to force most of Detroit’s medical marijuana caregiver centers (the longer, but official, name for Michigan dispensaries) out of business.

Since then, Detroit’s MMJ industry has been in a state of upheaval and flux, with dozens of gray-market dispensaries closing or leaving for other cities, such as Lansing.

The dispensaries’ biggest problem with the city’s 2016 zoning rules was that the ordinances required they all be at least 1,000 feet from schools, churches, child care centers, libraries, public housing projects, parks and other dispensaries.

The upcoming zoning measure would:

  • Eliminate the zoning requirement that all MMJ retailers be at least 1,000 feet from liquor stores, day care centers and parks.
  • Change a zoning setback requiring MMJ retailers be at least 500 feet from churches instead of 1,000 feet.
  • Streamline the city licensing process by removing jurisdiction of the Detroit Board of Zoning Appeals, meaning MMJ licensing would be up to the Buildings, Safety Engineering and Environmental Department.

What’s unclear is how much of a foothold those changes would give existing MMJ operators in Detroit, or how much difficulty they would present for new market entrants over the next year as the state enacts a cannabis regulatory system.

The two ballot measures would bring some stability and expansion to the Detroit market but wouldn’t give it nearly as much breadth as it had just a few years ago, indicated local activist Rick Thompson, a board member of the Michigan chapter of NORML and author of the Compassion Chronicles blog.

Numbers game

“This is not a game-changer for anyone other than a few businesspeople who had real estate options in questionable locations, and who may find it easier to get involved in the application process,” Thompson said. “What these two ordinances don’t do is change the outlook or city vision of Detroit’s council or planning and zoning commission, who had in their mind a fixed number of (dispensaries).”

City officials have indicated they want only roughly 50 operational dispensaries, Thompson noted, down from the over 200 that were operating without licenses in 2015.

Zielinski said she could see the city becoming home to 100 or more cannabis businesses, but she emphasized that number includes all five license types enumerated under state law – dispensaries, cultivators, processors, testing labs and transporters. And that estimate is by no means definitive, she noted.

Thompson added that while the ordinances certainly are a “positive move,” he doesn’t see them helping the city’s MJ industry flourish.

“I don’t expect that these two ordinances will create a lot of new businesses,” Thompson said, “but they’ll create opportunities in neighborhoods that would have been denied opportunities for economic benefit in the past.”

Local vs. state

Detroit’s MMJ industry rules must also be reconciled with impending state regulations, he noted.

“There’s been some discussion about some zoning restrictions being put into new statewide regulations, and if the city of Detroit’s zoning restrictions conflict with the state’s, that could create problems for locally licensed but not state-approved (businesses),” Thompson said.

The Department of Licensing and Regulatory Affairs is scheduled to adopt regulations in November, and the agency’s Medical Marihuana Licensing Board is to begin accepting state license applications Dec. 15.

It’s unclear if locally licensed MJ businesses – such as Detroit’s eight dispensaries – will be required to shut down at that point until they receive state licenses.

But Thompson said that the owner of one of those eight has so far refused to sell medical cannabis because he doesn’t want to jeopardize his chances of obtaining a state MMJ license – illustrating the degree of uncertainty Michigan MMJ businesses are operating under.

“You’d think that one of those eight would just be rubbing his hands with glee, looking at all the big piles of cash he’s about to make, and he says, ‘Nope, we’re not even going to open until we get (a license) from the state,’” Thompson said.

John Schroyer can be reached at