DETROIT — When Michigan legalized recreational marijuana, Detroit’s leaders set out to ensure that the city’s residents could share in the profits.
They passed one of the nation’s most ambitious “social equity”These laws are intended to help Black and Hispanic communities, who have paid the most from the war against drugs, participate in the lucrative industry.
But more than two years after legalization in Michigan, even as marijuana entrepreneurs are thriving in Detroit’s suburbs, the city itself has become a cannabis dead zone. Its first recreational cannabis law was BlockadeA federal judge struck down a provision last year that prohibited long-term Detroiters from receiving licenses. A second law was enacted this week. AnotherIts future is in doubt due to a lawsuit
The resulting delay has meant that Detroit’s would-be cannabis entrepreneurs — the very people the city set out to help — are left watching and waiting as their suburban competitors get an edge.
Black owners of licensed medical dispensaries, who have waited years to expand into recreational cannabis, are among those who are most affected. Kimberly Scott is a Detroit-born leader of the Black Cannabis Licensed Business Owners Association of Detroit. She said that many aren’t able to weather the legal chaos.
“The majority of current owners are struggling to stay afloat,”Scott said.
Last year, she opened Chronic City, a medical dispensary on Detroit’s east side, which is licensed to sell cannabis to people with documented medical conditions. She struggled to compete against recreational dispensaries in the city, which can sell to anyone over 21. After six months, the shop was closed and is now empty. It will remain dark until recreational sales in Detroit are legal.
“It impacts everyone,”Scott said. “And for those of us that are social equity and that have been in Detroit our whole lives and have been impacted by the war on drugs, it definitely impacts us.”
The problems in Detroit reflect the difficulty that lawmakers around the country have encountered as they’ve tried to level the playing field in an industry long controlled by white men.
15 of the 36 legal marijuana states have social equity programs. Many cities, including Los Angeles, Oakland, California, have attempted to implement them. SupportMany of these efforts are made possible by local entrepreneurs fall shortExperts and advocates agree that more support is needed. Black and Hispanic business owners may need additional support in making contacts and securing funding to compete in an industry that’s illegal under federal law and ineligible for traditional loans.
Some efforts, like Detroit’s, that aim to help a particular group of entrepreneurs have been hit with lawsuits and challenges.
John Hudak is a Brookings Institution senior Fellow who studies state and federal marijuana policies. He said that these other factors are simply not sufficient to counter generations of inequality and segregation.
“Handing out a social equity license doesn’t make all the racism go away,” Hudak said. “It just gives someone a license and sets them afloat in American commerce, which is rife with racism and discrimination and bias.”
‘Uneven playing field’
James Tate, Detroit City Council President Pro Tem, stated that he knew Detroit would require a strong marijuana social equity law in 2014 when he headed a city effort regulate the burgeoning number of medical dispensaries.
At the time, he said, he was focused on changing the fact that the medical dispensaries existed in a legal gray area — people could be licensed as “caregivers’’ to provide marijuana to a limited number of patients with medical conditions, but businesses weren’t formally permitted by the city or state. Tate noticed that of the roughly 240 semi-legal dispensaries the city counted then, only a handful were owned by Detroiters.
“It was a concern,”He said. “Many of the establishments were making pretty good money,” but the proceeds weren’t staying in the community.
Scott stated that the ambiguous status for medical dispensaries scared many Detroit entrepreneurs. Most of the city’s residents are Black, and given a long history of over-policing in Black neighborhoods, some feared the consequences of opening less-than-legal businesses.
Scott, a 41-year-old former history teacher and nurse, was considering opening a medical dispensary, but she was concerned about the legal risk. She also worried about her safety selling marijuana alone, so she decided to use her rented space on the city’s west side to grow cannabis rather than sell it directly to consumers. She used roughly $20,000 of her savings to buy seeds, lights and other equipment — a venture that failed when the building’s faulty heating and cooling system and its rusty water destroyed the crop.
Scott tried to open a new business for the second time in 2017. In 2017, dispensaries were more legal, but she was faced with new rules from the state and the city.
At the city level, strict new zoning laws that barred dispensaries within 1,000 feet of schools, churches and liquor stores made it difficult for her to find a building since investors with deeper pockets had quickly bought up the best properties in Detroit’s “green zone.”
State-level applicants are eligible to apply for a “provisioning center”License needed to submit extensive site plans and financial projections. They needed clean criminal records and to show they had enough money to succeed — hurdles that left many on the sidelines.
“Society created an uneven playing field even before any sort of legalization occurred,” said Andrew Brisbo, the executive director of the state’s Cannabis Regulatory Agency, who helped streamline the application process to make it less onerous. “And then, with legalization and commercialization, it tilted it even a little more out of the favor of disadvantaged communities.”
All of those factors, Scott said, help explain why of the 75 licensed medical dispensaries in Detroit today, only about 10 have Black owners — in a city where 4 out of 5 residents are Black.
A recent state survey revealed that only 14% of Michigan’s Black residents are living in Michigan. 3 percentBlack owners make up a majority of cannabis businesses.
After Michigan legalized recreational marijuana in 2018, Tate was determined address the underrepresentation of Blacks in the industry. But the state’s initial statute gave an advantage to existing medical dispensaries, requiring businesses to have a medical license for two years before they could get a recreational license.
“It wasn’t fair,”Tate stated.
He urged the city not to issue recreational licenses to the public until 2020, when the state was considering dropping that requirement. He then set out to ensure that residents had access to the industry. He proposed the following: “Legacy Detroiter” law, which set aside 50 percent of retail licenses for people who’d lived in the city for at least 15 of the previous 30 years. Detroit residents with low incomes and marijuana convictions could be eligible for fewer years of residency.
The new law — enacted unanimously by the City Council — was “powerful,”Maurice Morton, Black owner of Motor City Kush medical dispensary, said: