Starting Thursday, individuals who want to operate adult-use cannabis retail dispensaries, consumption lounges and microbusiness facilities in Detroit can finally apply for a limited number of licenses.
Detroit Mayor Mike Duggan and Detroit City Council President Pro Tem James Tate announced Wednesday that the city is set to move forward with its controversial adult-use cannabis licensing process after the Tuesday dismissal of two lawsuits filed over the city’s recreational marijuana law.
One suit argued that medical marijuana dispensaries already operating in the city should automatically be granted recreational marijuana licenses. The other asked the court to halt Detroit from moving forward with its ordinance on claims it would cause financial harm to businesses that aren’t run by Detroit residents.
Wayne County Circuit Court Judge Leslie Smith dismissed both cases, noting that the city’s law did not prevent businesses with medical marijuana establishments from obtaining a co-location license for adult use establishments. The judge also rejected claims that the ordinance gave preference to certain applicants over others.
Duggan on Wednesday touted the legal victory and the opening of the application process alongside City Council President Pro Tem James Tate, who spearheaded the city’s marijuana legislation.
Duggan said he’s eager to have longtime residents and social equity applicants apply for their licenses.
“We are going to have what the people of this city expect; access to recreational marijuana in a way that Detroiters benefit fairly,” Duggan said during an afternoon press conference at City Hall.
Duggan said 60 licenses will be available in this first phase, half of which will go to social equity candidates – people who have lived in the city for at least 10 years or those who live in neighborhoods that have been disproportionately affected by the criminalization of marijuana.
Overall, Detroit intends to give out 160 licenses over three phases. In the second and third phases, the city will issue 30 licenses each round for adult-use retail establishments as well as 10 licenses apiece for microbusinesses and consumption lounges, the city noted in a news release.
“So poor communities’ applicants will get half the licenses,” the mayor said. “Obviously, we are quite hopeful the lion’s share of those go to residents of the City of Detroit.”
There are 40 retail licenses, 10 microbusiness licenses and 10 consumption lounge licenses. Half of each category will be for social equity applicants. The application period closes at 8 a.m. Oct. 1.
Tate said the court rulings show the city’s willingness to fight and that “we’re on the right side of things,” he added.
Mike Dilaura, general counsel at House of Dank, a chain of five medical marijuana facilities in and around Detroit behind one of the suits, said Wednesday that he and his team will continue to “evaluate the judge’s opinion and will ultimately decide whether an appeal is prudent.”
“But for now,” Dilaura told BridgeDetroit, “we’re going to evaluate our options and continue to see what makes the most sense.”
Dilaura said despite the legal disagreements, House of Dank will be applying for the non-social equity license.
“House of Dank is in it for the long haul,” he said. “We always have been born and bred in Detroit, both the individuals and the business. We’re not going anywhere.”
Detroit’s first adult-use ordinance was struck down by a federal judge in 2021 after it was considered “likely unconstitutional” for giving too much priority to longtime Detroiters. The city spent the next 10 months revising the law to ensure the legislation was equitable for Detroiters without unfairly preventing other businesses from being part of the city’s emerging recreational marijuana industry.
Tate said the process of getting Detroiters into this business has been complicated and challenging. Tate has estimated that the recreational marijuana industry could generate $8 million in revenue within four years.
“I am excited about the fact that we are on the verge of having Detroiters and other equity applicants in the City of Detroit having a fair process that will allow them to participate in this multimillion dollar industry,” he said.