Licensing and permit requirements may shift for Ann Arbor marijuana stores

Tuesday, October 8, 2019 - 7:42pm

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Design by Sherry Chen

Touted as the cannabis capital of the Midwest, Ann Arbor is no stranger to recreational marijuana use. However, the city’s marijuana market may be undergoing a dynamic shift. This past week, Deputy City Attorney Kevin McDonald presented a first draft proposal for a points-based scoring process for businesses seeking to obtain a permit to sell cannabis products.  

At a City Council meeting Monday, several councilmembers, including Jane Lumm, I-Ward 2, said they believe the topic requires further discussion.

“It’s a topic of considerable interest to residents and deserves more public discussion and input,” Lumm said. “I just think it’s critical to get it right,”

Points would be assigned to businesses based on four criteria: past performance, state compliance, location and community interest. Each category would be worth a maximum of 25 points.

Past performance points would showcase the business’s influence and historical relationship with the city. State compliance points would measure how well the business has followed the city’s regulatory laws surrounding marijuana. Location points would portray how strategic a company’s geographic positioning in Ann Arbor is, considering the demographics of neighboring residents as well as competitive stores. Community interest points would measure the potential demand for the business in the market.  

The city is planning to limit the number of permits available for marijuana micro-businesses to 28. Marijuana micro-businesses cultivate up to 150 plants and process, package and sell cannabis products to adults over 21, retail dispensaries and consumption centers.

Councilmember Jeff Hayner, D-Ward 1, said he voted for legalization in 2018 because he was a proponent of decriminalization, not because he wanted more facilities opening up in Ann Arbor. 

“I didn’t vote for Prop 1 to have 600 distribution and consumption facilities open in my community,” Hayner said. “And I have had people come up to me and say they have legitimate concerns about the placement of these, and legitimate concerns about large money flowing to the cities that do allow this use and it driving out other businesses that serve a broader portion of the community.”

Current businesses in Ann Arbor that sell cannabis products have city permits they must renew on an annual basis. The new points-based application system will affect how these already-established marijuana facilities comply with the city’s licensing rules as well as their annual renewals.

According to the Marijuana Regulatory Agency, failure to comply with the department’s laws may result in nonrenewal of the business’s license. 

“A state operating license shall not be renewed unless the department has determined that the individual qualifications of each person required by the act and these rules is eligible, qualified, and suitable as part of the license renewal in accordance with the relevant licensing standards set forth in the act and these rules,” the Michigan Marijuana Regulatory Agency wrote in the policy statement. 

This shifting legal aspect of regulations will also impact businesses looking to enter into the Ann Arbor marijuana market. 

Once the policy is set, if the state starts to receive more license applications than the limit of 28, it will mean an increase in competition between the new cannabis businesses looking to set up shop in Ann Arbor. The decision of selecting applicants is at the discretion of the city, rather than the state, and according to McDonald, whether applicants are “best suited” to operate in the city will depend on the compliances of the Michigan Regulation and Taxation of Marihuana Act. 

Recreational marijuana businesses need a city permit in addition to state licensing to operate, with the annual city fee being $5,000. Michigan will start accepting license applications starting Nov. 1 of this year. 

The final vote to officialize the initial proposal will be next month. The city council will vote whether to impose further regulations on recreational marijuana businesses. Then, a separate resolution will be established for requiring the scoring systems on applications. 

Michigan voters legalized marijuana use in November 2018. Though many cities in the state have banned local cannabis businesses, Ann Arbor appears to have welcomed the increase in cannabis businesses.

According to Kinesiology senior Laurence Horowitz, president of Green Wolverine, a student-led club focused on advancing the knowledge surrounding the cannabis industry, it is unlikely the culture around smoking weed will change in Ann Arbor.

“Regardless of whether marijuana is legal, illegal, regulated, people are going to smoke it,” Horowitz said. “It’s a deeply rooted tradition and people aren’t going to stop just because these stores aren’t allowed to open.”

Horowitz said Ann Arbor’s move toward stricter policies shows city council is working to maintain a safe environment for the college town.

“At the end of the day, it comes down to making sure the residents of Ann Arbor have the safest regulations that there are out there,” Horowitz said. “They want to make sure these laws are written the right way and not rushed to any conclusion regarding hundreds of stores opening up in AA. They want it to remain a residential area.” 

The following marijuana businesses did not respond in time for publication: Om of Medicine, Green Planet, Bloom City Club and Greenstone Provisions.