On June 17, Federal Judge Bernard Friedman put the kibosh on the City of Detroit’s plan to give recreational marijuana licensing preferences to longtime Detroiters, and hence attain “social equity” for disadvantaged Detroit residents.
Ruling in the matter of Crystal Lowe v City of Detroit, the Judge declared the Detroit licensing ordinance “gives an unfair, irrational and likely unconstitutional advantage to long-term Detroiters over all other applicants.” He further stated the ordinances ``favoritism...embodies precisely the sort of economic protectionism that the Supreme Court has long prohibited.”
If mediation fails, the matter will go to trial in Federal court one year from now, in September 2022. Unless Detroit goes back to the drawing board and drastically re-writes its ill fated ordinance it will be a very long time, if ever, before the City of Detroit will see any recreational dispensaries within its boundaries.
The Detroit ordinance contained a “poison pill” clause which specified if any part of the ordinance is found unconstitutional then the entire law is null and void.
It took almost two years for the City Council to create and vote on the doomed ordinance.
Calls made by MM Report to the Mayor’s office, Councilman James Tate (the primary architect of the ordinance ) and Detroit State Senators Sylvia Santana and Adam Hollier for comment were not returned. Perhaps there are good reasons for their silence.
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| Councilman James Tate |
In a comment to the Detroit News on April 26, Deputy Mayor Conrad Mallet Jr. said prior to Judge Friedman’s ruling; “the City did not ask the judge for a delay, but we are not concerned about litigation slowing down the implementation of our program either. We want to get this right, and we are in no hurry.”
In the endgame, maybe it is best Detroit leaders make good on their threats and permanently opt out of allowing marijuana dispensaries in the city. That is, if they really want to help the poor and disadvantaged.
MM Report made an honest effort to get a handle on the cost differential between a grey market dealer selling weed with no license in Detroit, as opposed to businesses that follow the letter of the law.
We contacted experts like Steve Linder, executive director of the Michigan Cannabis Manufacturers Association (MCMA) and the Michigan Regulatory Agency (MRA) to find some solid numbers. They had no answer to the question. The same was true for a prominent cannabis CPA and a well known canna business entrepreneur.
Common sense however, tells one the margin must be huge. In addition to the punishing Federal 280E tax, there are insurance costs, fees for “secure delivery,” upfront and ongoing licensing fees payable to both the State of Michigan and local municipalities, building maintenance, security devices and more. There is also the equivalent of an FBI background check needed to pass muster and get a license.
It seems to me if Detroit drops out, that will really help disadvantaged persons who are selling and consuming cannabis in the grey market in the city. The vast majority of small-time dealers in Detroit are not making big money, but it puts groceries on the table and covers the utility bills. Their customers are folks who simply cannot afford to pay dispensary level prices for their medical or recreational marijuana needs.
I asked veteran Detroit journalist Larry Gabriel, who among other things covered the marijuana beat for the Metro Times for many years, whether or not it is better for Detroit to just drop out.
Mr. Gabriel said it is common knowledge that weed has always been “easy to get in Detroit, long before it ever became legal.” In that respect, there are persons benefiting from the status quo right now, just like in the old days before legalization ever happened.
He went on to say “in the short term” the current situation helps some people meet their needs and there is nothing wrong with that. However he was concerned about the future. “Cannabis is a burgeoning industry. It is getting more and more acceptable, like alcohol has gotten to be” over many years. He went on to suggest “there will be costs for Detroit in the long run” in terms of lost revenue and other legacy opportunities should Detroit opt out.
There is a sense as he put it, “the political will is not there in Detroit to make this work. Thereis a strong strain within the Detroit political class that marijuna is bad. Morally they do not like or trust it...they had an opportunity to do something when all the medical marijuana dispensaries started up in the city some years ago.”... The way Detroit handled it “caused lots of bad blood with the business community. It was a big mistake and they are (still) hiding their head in the sand.”
Detroit's Larry Gabriel
Craig Canterberry a keen intellectual advocate for social and economic justice and an expert on the most arcane details of marijuana law and history in Michigan, suggested another way to help disadvantaged people.
Canterberry suggested Detroit leaders should start “demanding that medicare, medicaid and Blue Cross pay for medical marijuana.... That way the disadvantaged can afford to pay dispensary prices.”
And so the world turns...
