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Detroit Awards First Recreational Dispensary Licenses

On Thursday, Detroit officials issued almost three dozen retail licenses to adult-use marijuana shops. This comes more than four years since Michigan voters passed a law legalizing recreational cannabis.

On Wednesday, U.S. district court Judge Bernard Friedman rejected a request to delay the issuing of marijuana retailer licenses. The judge’s decision was made in a lawsuit challenging Detroit’s licensing regulations, which include provisions to encourage ownership in the regulated marijuana industry by local residents and those harmed by decades of marijuana prohibition.

“Our goal from the day voters approved the sale of adult-use marijuana was to make sure we had a city ordinance and a process in place that provides fair and equitable access to these licenses and the courts have affirmed that we’ve done just that,” Detroit Mayor Mike Duggan said in a statement on Thursday.

Michigan Legalizes Recreational Pot in 2018.

In December 2019, licensed recreational cannabis sales began in several Michigan cities after the passage of an 2018 state-level ballot measure legalizing adult-use cannabis. An ordinance to regulate adult-use cannabis sales was passed in Detroit last year, but legal challenges led a federal judge to rule that the measure was “likely unconstitutional.” 

In February, the city council unveiled an amended ordinance. A lawsuit was filed again, with plaintiffs arguing that the city’s cannabis ordinance unfairly favored longtime residents. Friedman was asked by the plaintiffs to suspend the licensing process until the case is resolved. However, the judge refused this request Wednesday.

“I am thankful for Judge Friedman’s wisdom in ruling today against the Temporary Restraining Order that would have again prevented Detroit from moving forward with our current Adult-Use Marijuana Ordinance,” Council President Pro-Tem James Tate said about the judge’s decision.

“We make sure we do the right thing,” Tate, who led the drafting of the ordinance, said at a press conference Thursday morning. “I’ve always said — and I’ve been told — if you do the right thing, everything will work out. It may not happen exactly when you want it to or not always how you want it to, but eventually, it’ll work out.”

On Thursday, the city issued 33 adult-use marijuana retailers licenses. 20 of these licenses were granted to social equity applicants. These include people living in areas that have been adversely affected by the prohibition on marijuana and residents with Detroit Legacy status, who are currently in Detroit. Non-equity companies were granted the remaining 13 cannabis retailer licenses.

For the 60 adult-use cannabis retailer permits available in the second round of dispensary licensing there were 90 applicants. But, officials from the city said only 33 had met the required requirements to obtain the highly sought after permits. The city was also granted several licences for consumption lounges and microbusinesses in cannabis. However, regulators have yet to issue these types of licenses. Detroit regulators issued licenses to cannabis growers, processors and traders in April. 

“The recreational marijuana industry has tremendous potential to generate wealth in income for our city, as well as personal and generational wealth for those who participate,” said Detroit Deputy Mayor Todd Bettison.

City leaders plan to hold at least two more rounds of retail cannabis dispensary licensing, with the next round opening as soon as next month with city council approval, according to Anthony Zander, director of Detroit’s Department of Civil Rights, Inclusion and Opportunity. Up to 30 additional retail licenses are expected, along with 20 microbusiness licenses. The next round will also include 20 consumption lounge licenses.

Tate stated that the city must be ready for further legal action, even though the Federal Judge did not stop the issuing of the first adult-use dispensary licences.

“By no means is the so-called battle over,” he said. “We’ve already been told that we’re going to get sued again. We know that’s the nature of this game.”