Michigan’s new pot industry has some green with envy — though there are still kinks to work out

A budtender helps a customer at Detroit’s BotaniQ.
A budtender helps a customer at Detroit’s BotaniQ. Lee DeVito

Higher Ground readers know that Detroit City Council opted out of adult-use marijuana until at least Jan. 31. Councilman James Tate told Metro Times that it was because Council was working to put together a good social equity program. Social equity is called for in the law that legalized marijuana in order to promote participation in the business from communities disproportionately impacted by marijuana prohibition. Tate didn't talk about any proposed details of that program.

"I believe the city's dilemma is more available space — the restrictions on what can be and where it can be," says Joe White, director of Detroit NORML. "They need to expand the available space."

When Council adopted zoning ordinances for where there could be a provisioning center, the result was almost nowhere. Now much of the available space has been taken by medical marijuana provisioning centers. There are no social-equity provisions in the medical marijuana law, and any marijuana arrests from the past disqualified one from getting a provisioning center license. On top of that, the state is only taking adult-use marijuana applications from already established medical marijuana provisioning centers.

That leaves the social equity Detroiters out in the cold as far as retail storefronts. Licenses for micro-businesses will be available, but where will they go? According to city zoning as it stands, nowhere within 1,000 feet of a school, church, daycare center or park. That's in addition to some other rules about industrial and main street areas.

"If there are only 100 chickens available and 75 are sold, what the hell are we going to do?" says White. "If they're going to do the right thing, they're going to have to open up more available space."

That's got to be complicated. It took a long, long time to come up with the medical marijuana zoning rules we have now. It involved protests, petitions, an election, and lawsuits as provisioning centers fought it out with city officials. I remember sitting at a City Planning Commission meeting one time and asking the city employee who had just done an informational presentation if we were going to have to go through this again when we get recreational marijuana. He said yes.

If he was right, then buckle up for another roller-coaster ride of a process. Hopefully, this time around Council has a better handle on how to get this done. According to Tate, Council has already got past issues with the conservative church crowd. However, it looks like they'll have to undo a bit of what they did before in order to open this up for more Detroiters.

Pending legislation to expunge the records of some folks with marijuana convictions opens up opportunities that weren't available when this legalization thing started. Generally, these are the folks with experience in the marijuana business, and the social-equity provisions give them some advantages for legal re-entry into the business. And this isn't just about Detroit; there are 41 Michigan social-equity communities listed on the MRA website.

Ann Arbor envy

There were plenty of people around the state who had Ann Arbor envy in their hearts, with news reports of hundreds of people lined up to buy adult-use marijuana when sales began last week. That envy was high among provisioning center owners who have been struggling to get by financially. Those retail outlets collected a reported $221,000 in marijuana sales on Dec. 1. There literally were not enough hours in the day to sell marijuana to all the people who wanted to buy some on the historic first day of sales.

Watching coverage of Ann Arbor's festive opening day, River Rouge-based Herbology Cannabis Co. owner Tarek Jawad felt hopeful. "I can't wait to be a part of it," he said.

There were plenty of people around the state who had Ann Arbor envy, with news reports of hundreds of people lined up to buy adult-use marijuana.

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Jawad says that he's been pre-approved for an adult-use license at one of his locations and expects to have one any day now. He admits that, financially, things have been "tight for the most part" for the past couple of years, so the bump of adult-use sales will make a difference.

Anqunette Sarfoh, co-owner of BotaniQ provisioning center in Detroit, had an emotional response. "I was so jealous," she says. "It would have been cool to be a part of history, but if it's going to be anywhere, it should be in Ann Arbor. And how poetic to have John Sinclair buying joints 50 years after he was busted for [having] them. You can't make that stuff up."

The way that Opening Day was decided and announced probably caught some provisioning centers off guard. The prevailing wisdom was that the first day of sales would be in 2020, but the Marijuana Regulatory Agency surprised most of us with the Dec. 1 decision just a few weeks before it happened. Even if state regulators had been able to get licenses out, the retailers didn't have much time to prepare.

"We weren't really focused on the recreational, so it didn't concern us," says Amy Jackson, a receptionist at The Reef in Detroit. "It's kind of disappointing, but we couldn't be ready by December 1."

Another irony

Just to be clear: Because he doesn't have a state license to do so, John Sinclair could still be busted for selling joints today. This license thing is kind of weird because that's kind of how prohibition started, with the Marihuana Tax Act of 1937. It didn't make marijuana illegal, but it imposed serious taxes ($1 per ounce in 1937) and required anyone selling marijuana to acquire a federal tax stamp. It also required anyone paying the tax to "register his name or style and his place or places of business with the collector of the district in which such place or places of business are located." One had to tell the government what you had, how much you had, and where you got it.

The Marihuana Tax Act was later replaced in 1971 by the Controlled Substances Act. However, it's kind of funny that taxation was used to make marijuana illegal. Now taxation is a big part of the drive to legalize marijuana. Stuff just keeps coming back around dressed up all different.

By the way, that $1 per ounce tax in 1937 is equal to about $18 in today's money. For comparison, a top-shelf medical flower such as GMO costs $380 per ounce at The Reef in Detroit. The 6 percent state sales tax on that brings the total price to $402.80. That's a total of $22.80 in taxes, more than the rate that was set by the Marihuana Tax Act. Every provisioning center or retail store will charge the state sales tax.

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About The Author

Larry Gabriel

Larry Gabriel covers cannabis for Metro Times. He also writes the Detroit Watch in the monthly Michigan Cannabis Industries Report. Larry's chapter "Rebirth of Tribe" in the book Heaven Was Detroit, from jazz to hip-hop and beyond chronicles the involvement of Marcus Belgrave, Wendell Harrison, Harold McKinney,...
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