Two additional retail permits proposed
ADRIAN — Recreational marijuana sales in Adrian took a small step forward Monday night as the city commission had its first discussion on a competitive process that would determine how permits will be awarded for retailers.
The city’s marijuana ordinance allows for up to 10 retail permits, which includes both medicinal and recreational marijuana. Due to the limit, the Michigan Regulation and Taxation of Marihuana Act requires the city to develop a competitive process to determine how permits are awarded.
The competitive process was discussed during Monday’s premeeting. The process would score applicants in four areas: business plan, social equity, land use and applicant stakeholder history, with 100 points possible.
Land use has the most possible points and carries the most weight. This category will consider how a company will or has made use of their property with points available to those who revitalize a blighted structure. For retailers already in business on the medicinal side points can be scored for limiting traffic and noise in a community as well as distance away from other retailers.
Business plan will look at factors such as capital investments and job creation.
Stakeholder history will examine a company’s compliance to state and local laws.
Social equity carries the least amount of weight but is included as the state also requires marijuana companies to have a social equity plan. This category will consider things such as how a company markets itself, promotes community education, limits exposure to minors and charity efforts.
City attorney Tamaris Henaga recommended a five-person body consisting of herself, a member of the planning commission, a city commissioner, city clerk Robin Connor and community development director Greg Elliott to score the applicants.
Henagan said another option would be to have the commission appoint five people to score applicants.
There are a few items to iron out before the commission puts the competitive process language to a vote, such as how to break a tie.
But the biggest issue that will need to be flushed out is the proposal by Elliott and Henagan to expand the number of permits available to 12.
Elliott explained to the commission that an additional two permits may be needed to make the process actually competitive.
Currently, 10 permits, all for medicinal marijuana retail, have been awarded. Three dispensaries are already in business in North Coast Provisions, Gage and Amazing Budz.
Elliott said those 10 permits have been awarded in a non-competitive way.
“It doesn’t look like competition to us, in that case,” he said.
Technically, there would be no permits to award. However, Henagan put forth the idea of a dual-permit where a facility could sell medicinal and recreational marijuana under one permit.
The city attorney said all 10 permit holders will probably apply to sell recreational marijuana.
“They would have to become dual-use purpose and then at that point, like Greg said, those are essentially guaranteed only to those who already have a permit here so there’s been no competition,” she said.
Expanding to 12 would allow for some competition, Henagan argued, and give the city footing in possible legal challenges.
“If we stay at 10, there will be no competition and we open ourselves up to legal challenges for those who want to come in to apply … and have no way to do it,” she said.
The idea of possibly two more dispensaries did not sit well with the commission.
Commissioner Gordon Gauss said it would be much easier if the cap was set at five permits with a need to go to seven or eight.
“It looks like we have too many provisioning centers out there now,” he said. “If we had to do it all over again we would have set a lower cap.”
Commissioner Lad Strayer agreed that 12 would solve the problem.
“From the very beginning, we assumed if we did everything right with medical that we would be in a great spot if adult-use (recreational) was passed,” he said. “We thought we were doing everything right and the state is the one who kind of threw us a curve on this.”
Henagan said she hears from those in the industry that they don’t want more competition. Representatives from Amazing Budz who were in attendance nodded in agreement.
Still, 12 might be the best bet for the city to offer competition and abide by state regulations.
“We’re giving a chance for someone to show up, and if they can survive here given that there’s already companies here up and running, great,” Henagan said. “We all know it’s going to become survival of the fittest with this industry.”
The city has a temporary moratorium in place for the issuance of permits, licenses and zoning approvals for recreational marijuana while the process is sorted out. Commission members were in agreement Monday night for more small group discussions on the matter.
The moratorium expires on Feb. 28, 2020 but can be lifted sooner if the competitive process if finalized before then.