Michigan Report: Detroit Needs More Land To Launch Cannabis Industry & Catch Up With Rest Of State

Detroit’s new recreational cannabis law, welcomed by many, has triggered a land grab and is pushing up prices for property zoned specifically for cannabis shops.

Recreational cannabis sales were finally approved, after months of delays, in an 8-1 vote in early April by Detroit's City Council. While the ordinance is equity-driven and meant to provide opportunities for Black and Brown Detroiters to become owners of cannabis businesses, the dearth of affordable land for weed dispensaries remains a hurdle for residents to get started.

James Tate, City Council president pro-tempore and sponsor of the legislation told Axios that he wants to reduce zoning restrictions to help solve the problem. Future zoning changes also could allow recreational cannabis shops to open downtown.

"We certainly are not being progressive with the ordinance, the zoning that we have right now," Tate said. "I recognize there’s a major challenge for space."

Cannabis businesses are prohibited from opening within 1,000 feet of churches, schools and other drug-free places. Tate is looking to lower that zoning barrier to 750 feet.

Catch Up And Cash In

Detroit is obviously eager to catch up and cash in on Michigan’s lucrative cannabis industry. While Detroit was forced to cool its heals as the rest of the state pushed forward, available land got snatched up, noted Axios, by multistate operators with deep pockets. 

It’s difficult to find property zoned for cannabis use that 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, which leaves out smaller entrepreneurs without as much capital. This scenario surely cannot be good for the social equity applicants Detroit is looking to help.

Fortunately, Detroit officials have plans to even the playing field as city officials, led by Tate, pursue relaxed zoning restrictions, especially on some 18 properties owned by the city. 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 is pitching in by raising money for grants and other assistance. The fund recently received support from 4Front Ventures FFNT FFNTF and NFL stars Calvin Johnson Jr. and Rob Sims.

Detroiters are hoping for more to come.