After the Detroit City Council’s vote on April 20 to enact a revised adult use cannabis ordinance, aspiring operators have begun to work through the city’s application process. But applicants say it’s been a bumpy process, and other hopefuls are hanging back, with the expectation that the city’s new rules will also get struck down in court.
Although adult use cannabis has been legal since 2019 in Michigan, Detroit is coming late to the game because it was sued following its first legalization attempt, which prioritized city residents, rather than a broader class of social equity applicants, in an attempt to give Black Detroiters a leg up to establish cannabis businesses. That ordinance was struck down by a federal judge, who said it “gives an unfair, irrational and likely unconstitutional advantage to long-term Detroit residents over all other applicants.”
The revised ordinance increases the number of adult use retail licenses from the earlier law’s 76, to 100, and creates a lottery system to award licenses to applicants who have not found a location to operate.
Jessica Jackson, a lifelong Detroit resident and legacy applicant, said that the two year wait was difficult but worth it, since she and other Black Detroit residents now have a chance to break into the industry. She is hoping to establish LegacyCo, a microbusiness in Detroit that will be marketed to Black women in the city.
“As a qualified, legacy Detroiter who wants a cooperative model where workers own the business, my goal is to make sure that the money is retained in the community,” Jackson said. “Revenue generated should go to the communities that were harmed strongest by the prohibition. I feel frustrated that it took so long to put in place a policy that benefits the community.”
Jackson has been building her legal cannabis bonafides in multiple parts of Michigan. She established a “bud and breakfast” short term rental space called Copper House in Detroit with her wife, Jacqara, and is cannabis company Common Citizen’s director of external affairs and social equity in Flint. She lobbied the Detroit City Council for the original 2019 ordinance that was later struck down by a federal judge.
Eric Foster, a Detroit-based attorney and lobbyist for the industry, thinks Detroit applicants won’t get far before another lawsuit lands in court. He reports that none of the clients he represents are going to bother applying for licenses because they fear the licensing process will be struck down again before it even starts.
“The ordinance is still going to fail because it’s still based on the original language and the way new provisions were added,” Foster said. “There’s a way to create opportunities and incentives and help benefit local ownership, but you have to write it in a way that doesn’t prohibit competition or create dispariting lanes.”
Foster believes that for the ordinance to work, the City Council needs to remove barriers that make it harder for some residents to apply. This includes convincing residents to pool their resources together to open up businesses in the city and making it easier for people to apply for all forms of businesses, whether they are for dispensaries or cultivation, to make it less burdensome.
To get a license in Detroit, Jackson said she needed to qualify as a social applicant in the city, submit a state background check to scan for both criminal activity and potential financial conflicts of interest, identify secured property for her business, then obtain state and city approval of her business plan.
Although she says she has the financial resources to establish her business, Jackson said her biggest hurdle has been finding land properly zoned for cannabis sales. Land in Detroit for a adult use cannabis business is either too expensive or would be in areas unable to serve clientele looking for cannabis products, Jackson claims.
Jackson expects it will take roughly two years to fully establish her business. She hopes that more businesses are spread out throughout the city.
“There are around seven medical dispensaries along the 8 Mile area,” Jackson said. “If we spread out in the city where businesses can give back to the community, then everyone would benefit from the industry.”