May 2, 2022 - Politics

Detroit tries to temper a cannabis land grab

Illustration of a tug of war over a map overlaid with a marijuana leaf.

Illustration: Lindsey Bailey/Axios

Detroit’s new recreational cannabis law triggered a land grab, driving up prices for property zoned for weed shops.

Why it matters: The city crafted the law so longtime Detroiters could break into the cannabis industry, but the scarcity of affordable land for recreational dispensaries remains a hurdle for residents to get started.

Driving the news: City Council President Pro Tem James Tate tells Axios he wants to reduce zoning restrictions to help solve the problem. Future zoning changes also could allow recreational marijuana shops to open downtown.

  • "We certainly are not being progressive with the ordinance, the zoning that we have right now," Tate says. "I recognize there’s a major challenge for space."
  • Cannabis businesses can’t open within 1,000 feet of churches, schools and other drug-free places. Tate is looking to lower that zoning barrier to 750 feet.

Context: Detroit is late to the lucrative recreational cannabis industry that started in 2019, largely because the city took a long time putting together rules trying to ensure racial and economic diversity. Plus, they got sued.

  • The period of uncertainty left a lot of time for those on the sidelines to snatch up land.

What they’re saying: It’s difficult to find property that’s zoned for cannabis use and isn’t "incredibly expensive" because the owners know that they are sitting on a potential goldmine, said Douglas Mains, a cannabis-focused attorney at Honigman LLP.

  • Clients with deep pockets will suck it up and pay the higher prices, Mains added. That leaves out entrepreneurs without as much capital, often the social equity applicants that Detroit is looking to help.

Yes, but: Detroit officials have plans to even the playing field while Tate pursues relaxed zoning restrictions.

  • The city owns about 18 properties eligible for cannabis businesses. Officials are developing a program to sell them to longtime Detroit residents at a yet-to-be-determined discount.
  • The city’s Homegrown Detroit fund also is raising money for grants and other assistance.

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