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. Half 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 (HomegrownDetroit.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.
Michigan marijuana retail giant Lume Cannabis Co. abruptly closed four dispensaries on Monday.
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 “non-equity” applicants aren’t competing with each other.
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