Detroit issues first licenses for recreational pharmacies

Detroit officials on Thursday granted nearly three dozen adult-use cannabis retail store licenses, more than four years after Michigan voters approved a measure to legalize recreational marijuana in the state.

The licenses were issued after US District Court Judge Bernard Friedman Wednesday morning denied a motion to postpone the issuance of licenses to cannabis retailers. The judge’s decision was made in a lawsuit challenging Detroit’s licensing regulations, which include provisions to encourage ownership of the regulated marijuana industry by local residents and those harmed by decades of marijuana prohibition.

“Since the day voters approved the sale of adult-use marijuana, our goal has been to ensure we have a city ordinance and process that provides fair and equitable access to those licenses, and the courts have affirmed, that we did just that,” Detroit Mayor Mike Duggan said in a statement Thursday.

Recreational pot was legalized in Michigan in 2018

Licensed sales of recreational marijuana began in some Michigan cities in December 2019, following the approval of a 2018 statewide ballot legalizing adult-use cannabis. An ordinance regulating the sale of adult-use cannabis was passed in Detroit last year, but legal challenges led a federal judge to rule that the measure was “probably unconstitutional.”

An amended ordinance was then presented by the city council in February. Another lawsuit was filed, with plaintiffs arguing that the city’s cannabis ordinance unfairly favored longtime residents. Plaintiffs in the case had asked Friedman to stay the licensing process while the case was decided, but the judge denied that request Wednesday.

“I am grateful for the wisdom of Judge Friedman, who today ruled against the injunction that would have once again prevented Detroit from moving forward with our current adult marijuana regulation,” Council President Pro-Tem James Tate said of the judge’s decision.

“We’re making sure we’re doing the right thing,” Tate, who led the drafting of the regulation, said at a news 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 or not always the way you want it, but eventually it will happen.”

The city on Thursday issued a total of 33 adult-use cannabis retail licenses. Twenty of the licenses were granted to so-called social equity applicants, including individuals living in communities disproportionately impacted by the marijuana prohibition policy and individuals with certified Detroit Legacy status currently in Detroit or another disproportionately affected community live. The remaining 13 cannabis retailer licenses issued Thursday were issued to non-equity firms.

A total of 90 applications were received by the city for the 60 adult-use cannabis retailer licenses that were available in the first round of dispensary licenses, but city officials said only 33 of the applicants met the requirements for the coveted permits. The city also received several licenses for cannabis micro-businesses and consumption lounges, but regulators have yet to issue these types of licenses. Detroit regulators began issuing licenses to cannabis growers and processors in April.

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

According to Anthony Zander, director of the Detroit Department of Civil Rights, Inclusion and Opportunity, city leaders plan to hold at least two more rounds of licensing retail cannabis dispensaries, with the next round opening as early as next month with City Council approval. The city will award up to 30 additional retail licenses, 20 micro-business licenses, and 20 consumption lounge licenses in the next round.

Although the federal judge decided against stopping the issuance of the first adult pharmacy licenses, Tate said the city should be prepared for further legal action.

“There’s no way the so-called fight is over,” he said. “We have already been told that we will be sued again. We know that’s the nature of this game.”

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