Detroit Pot Proposals + New State Pot Regs, What’s the Deal?

Detroit voters have two decisions to make next week regarding sales of medical marijuana. One ballot proposal focuses on how sales will be handled. Another determines where sales can take place. The vote comes at the same time some pot dispensaries face uncertainty about remaining open.

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Detroit based medical marijuana shops that are not permitted under city ordinance are required to close their doors before December 15^th. State regulators say owners of shops operating without local approval will not be allowed to apply for a state license without first shutting down. The move is part of Michigan’s new regulatory strategy. New state regulations include five different kinds of licenses and provisions for the sale of edible products. Alex Leonowicz is an attorney with the Howard and Howard Law Firm specializing in the business of cannabis. He says the application process is somewhat complicated.

“It’s not a simple application, they’re way more in-depth. What does your grow facility look like? What’s your security plan? What are you doing with your chemicals, your pesticides? How are you ensuring that your employees aren’t taking your products outside? What are you doing with community involvement? The laundry list goes on and on”    – Alex Leonowicz; Howard and Howard PPLC

With nearly a quarter of a million card-holding medical marijuana patients, Michigan is in the top three states for medical marijuana permits. Chris Walsh is founding editor of Marijuana Business Daily. He says lack of regulations has hurt Michigan’s industry and its credibility, but he says a legal framework and enforcement will help sort things out.

“It’ll probably be messy for a little bit. I think the key on the business side is to remember that a regulated environment is good if done right. And some of these things might sound heavy-handed, maybe they are, but you’ve also gotta understand that there’s still a huge stigma around the industry and people are probably going to overreact with regulations at first”  -Chris Walsh; Founder of Marijuana Business Daily

Walsh has reviewed Michigan’s proposed regulations. He says most reflect what other states have found to be “best practices”.

While the Michigan Medical Marijuana Licensing Board has been working on regulations and enforcement, the group Citizens for Sensible Cannabis Reform wants some influence on how the industry is managed in Detroit. It collected enough signatures to put two proposals on the Detroit ballot

Proposal A defines how medical marijuana distributors will be required to handle sales. It allows for longer hours of operation from 9 am to 9 pm. Current city law does not allow dispensaries within 1000 feet of certain other businesses such as childcare centers, public housing, and liquor stores. Proposal A reduces the 1000 foot requirement to include only schools and libraries and adds a 500 foot limit between churches and other dispensaries.

Detroit City Councilmember, James Tate has worked on the regulation of dispensaries in Detroit.  He opposes Proposal A because it doesn’t require enough distance between dispensaries and daycare centers and liquor stores 

“For me it’s not about being anti-marijuana, it about how we want our communities to look, how we want them to feel as a resident. And I want us to eventually, potentially, opt-in to the states operation where we end up taxing these entities. But I still don’t want to end up in a situation where they are at every corner, four or five on a block, like they were before”  – James Tate; District One Councilmember

For all intents and purposes, Proposal A also puts the City in line with the new State regulations, something referred to as an “opt-in”.  And it defines how dispensaries can use signage, including prohibiting images of marijuana leaves and green crosses on signs.

Proposal B addresses where the businesses can be located. Current law limits dispensaries and grow operations to areas zoned for manufacturing and industrial use and in limited business corridors. City of Detroit Law Department Attorney, Kimberly James, says the proposal loosens zoning restrictions.

“Proposal B would allow all five of the uses, dispensaries, laboratories, transport businesses, cultivation, and processors in M1 through M5 and it would also allow dispensaries, cultivators, and processors in B1-B4 districts. So it expands the districts where these uses would be allowed”  -Kimberly James; City of Detroit Law Dept.

Another significant change in Proposal B limits public input. Detroit Corporation Counsel; Butch Hollowell says Proposal B eliminates a two-step public process that applicants are currently required to go through.  “Both of those hearings today, the public has a right to be there and to weigh in say ‘we really like this facility or we really don’t like this facility’, for whatever reason. It also expands the areas or the territory within the city that they can be”. Hollowell says the proposals take away much of the city’s regulatory power.

Organizers of the two proposals say they are forcing the city to take into account the needs of stakeholders, such as dispensary owners and growers. Citizens for Sensible Cannabis Reform Spokesperson, Jonathon Barlow, says the patients bear the brunt of regulations that are too strict. 

“The City never engaged the primary stakeholders in this industry. They claimed they did before the ordinance was written but that opportunity was never taken up by the City to really engage the true industry stakeholders. And so ultimately we believe that we are replacing a underground market that has existed for a very long time. We’re creating safe atmospheres.” -Jonathon Barlow; Citizens for Sensible Cannabis Reform

Marijuana Business Daily tracks the development of medical and recreational marijuana industries across the country. Editor Chris Walsh says new regulations at the state level combined with the proposals in Detroit, where nearly all of the dispensaries are currently located, could stymie the growth of the industry and inconvenience patients for a time. But he says taking thoughtful steps is important. 

“You do find in other states that getting the necessary approvals can can significantly delay the process of to get started in this industry. And in some cases it has derailed for a while the entire program. There should be an eye out on making sure this can be streamlined and that it’s not going to take an inordinate amount of time to get the license they need to operate”

Walsh says regardless of which requirements the state and the city of Detroit start out with the industry will ultimately look different. He says whether medical marijuana is approved through citizen referendum or by an act of the legislature, the trend among states is expansion of programs 

“Even states that have had very restricted programs where you only have five medical conditions allow three dispensaries in the entire state, in almost every case, lawmakers and regulators go back and they expand the number of dispensaries that are allowed and the number of grows. They expand the medical conditions list. To me that’s the best trend you can look at to show that if they are well regulated, the communities and the states actually embrace them”

All marijuana dispensaries in Michigan that are currently not licensed under municipal laws are required to close by December 15^th. State regulators plan to start issuing licenses after the first of the year. In the meantime, Detroit voters will decide on Tuesday whether the city rules for operation and location of dispensaries should be modified.

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