Weed

Detroit begins accepting applications for recreational marijuana businesses, despite lawsuits

A medical marijuana dispensary in Detroit. Two lawsuits allege the city’s cannabis ordinance violates state law because it prevents medical facilities from getting a recreational license until 2027. LEE DEVITO

By Steve N eavling

The city of Detroit announced Friday that it will soon begin accepting online applications for recreational marijuana businesses, the first major step in entering the legal market.

The city is moving forward despite two lawsuits that allege Detroit’s recreational marijuana ordinance violates state law. Both lawsuits are attempting to stop the city from issuing recreational cannabis licenses.

The city will accept online applications from Aug. 1-31 for up to 40 dispensaries, 10 micro-businesses, and 10 consumption lounges.

This is the first of multiple phases.

In all, the city will award licenses to up to 100 dispensaries, 30 micro businesses, and 30 consumption lounges. H alf of the licenses will go to social equity applicants, who must live in a city that was disproportionately impacted by the War on Drugs.

The city launched a recreational marijuana site (H omegrownDetroit. org) for license applications, resources, updates, and tips on getting licenses.

“I want to thank my colleagues for allowing this next critical step in the licensing process despite the frivolous lawsuits and ongoing attempts to get Detroit’s ordinance tossed,” President Pro Tem James Tate, who sponsored the recreational marijuana ordinance, said in a statement. “For years Detroiters have been fighting for an opportunity to compete in the state’s ever-growing market and the time has finally come to reap the benefits of their hard work.”

The Detroit City Council approved the latest ordinance on April 5.

“City Council Pro Tem James Tate deserves a great deal of credit for his leadership on this issue. Assuring that City of Detroit residents have full and unfettered access to retail marijuana licenses is in everyone’s best interest,” Mayor Mike Duggan said. “Despite all the hurdles President Pro Tem Tate and members of the administration had to clear, we finally have in place a fair and equitable process that creates real opportunity for Detroiters.”

But a lot is unknown about the future of recreational marijuana in Detroit. Two lawsuits allege the city’s ordinance violates state law because it prevents medical facilities in the city from getting a recreational license until 2027. According to the lawsuits, the ordinance also violates state law by using an unfair scoring system for choosing which companies receive a license, rather than providing a competitive application process. The scoring system, for example, gives preference to companies that hire Detroiters and donate to Detroit nonprofits.

The city is late to entering the legal recreational marijuana market, and that could be a major problem for prospective businesses. The market is flooded with marijuana products, growers and dispensaries, causing prices to hit all-time lows and forcing some businesses to sell cannabis at a loss.

This is the city’s second attempt at entering the market. In June 2021, a federal judge deemed the city’s original recreational marijuana ordinance “likely unconstitutional” because it gave preferences to longtime Detroiters.

The city scrapped the ordinance and drafted a new one that offers two tracks for licenses so that “equity” and “nonequity” applicants aren’t competing with each other.

Marijuana giant closes 4 dispensaries in Michigan, but plans to open 3 more at different locations

MICHIGAN MARIJUANA RETAIL behemoth Lume Cannabis Co. abruptly closed four dispensaries last week, saying the closures are part of a “realignment for growth.”

Lume, which has more than 1,000 employees and operates 29 dispensaries statewide, closed stores in Bay City, Christmas, Cheboygan, and Southfield.

The laid off employees will be given severance pay and an opportunity to apply for positions at other Lume stores, the company said in a statement to Metro Times.

Later this month, the company is opening new dispensaries in Ann Arbor, G rand R apids, and Portage.

“This realignment is a key part of our strategy to maintain and strengthen our position as Michigan’s leading cannabis retailer,” said Doug H ellyar, president and COO of Lume. “We remain absolutely committed to growing and deepening our retail footprint in communities across Michigan and continuing our efforts to offer high-quality cannabis products for patients and adult-use customers.”

The family that owns Belle Tire has a significant stake in

COURTESY PHOTO

Lume.

The realignment comes at a tough time for cannabis businesses. With the market flooded with marijuana, prices have hit all-time lows, forcing some businesses to sell cannabis at a loss.

In January 2021, the average cost for an ounce of marijuana was $512, compared to $131 in May, a 74.4% decline, according to the Michigan Cannabis R egulatory Agency.

There are more than 1,000 dispensaries in Michigan, with new ones opening weekly.

The city of Detroit plans to begin approving up to 100 new recreational dispensaries later this year or early next year. But that plan hangs in the balance following two lawsuits that claim the city’s new recreational marijuana ordinance violates state law.

– By Steve N eavling