Next month marks four years since voters opened the door in Pontiac to medical marijuana. But not one business has opened since then. That could change soon.
Voters approved allowing up to 20 marijuana dispensaries and an unlimited number of processors, growers, safety compliance facilities and secured transporters.
The decision created a series of tasks for the city council to update zoning rules, create districts, and determine which businesses would get permits. Then-council president Kermit Williams told The Oakland Press, “The city is proceeding as if the 60-day clock to start issuing applications has begun. We’re going through the process now in order to determine what they’ll look like.”
City officials ultimately received 116 applications for permits.
But progress repeatedly stalled because of infighting among members of the city council and with former mayor Dierdre Waterman, and foot-dragging by those players and others to implement the will of the people. The city council and mayor racked up thousands in legal fees fighting over separation of powers, and the council’s ability to draft proposed ordinances and adopt resolutions.
For example, a delay in issuing permits led to a lawsuit which was settled by Oakland County Circuit Court Judge Yasmine Poles, who ruled in 2021 that Rubicon Capital could move ahead with construction plans for a 28-acre site that included a medical marijuana facility, grocery store and retail outlet.
The ruling reversed interim Clerk Garland Doyle’s decision to withhold conditional approval so the business could get building permits, even after the city council voted 6-1 in January 2020 to rezone the property to accommodate the project. Council had not amended the city’s zoning ordinance to reflect the January decision.
In another example, Waterman, who had already lost her bid for a third term in office, continued opposing marijuana business endeavors and violated the city’s charter by appointing herself last year to the newly created marijuana commission which resulted in the city attorney ending the board’s November meeting just minutes after it started.
Councilwoman Kathalee James told The Oakland Press this month she does not want marijuana trade in Pontiac, but she is not actively opposing it because the people have spoken.
“I have a lot of respect for the vote,” she said. ““It can work to our benefit, but it’s up to us to shape that, and decide what that looks like.”
James is just one of an all-new council, elected last November, along with a new mayor, Tim Greimel.
No permits were approved last year or in the first few months of 2022.
Even as Pontiac’s efforts to create a marijuana marketplace lurched forward, there were additional speed bumps. Some appointees to a city marijuana commission quit to run for the city’s new charter commission, leaving the group without a quorum. Some appointees in a second group left within a week of being sworn in citing health or time challenges and in some cases, the complexities involved in approving the permits.
Medical marijuana in Pontiac
By April a third iteration of the commission, composed of chairman Robert Ford, Jr.; vice-chair Paul S. Wilson; secretary David Porath; and member Myron Maley had been sworn in. Doyle walked them through the main process of their mission: Reviewing the 103 applications for the city’s 20 provisioning center permits and the 13 applications for permits to grow, process, inspect and transport the products.
Doyle had ranked each applicant on a 130-point scale. Categories included proof of a state license, liability insurance, renovation plans; security and an incident-reporting process; and the number of parking spaces.
The committee made its selections and on June 28, the city council agreed with the choices, granting conditional approval to five growers, two processors, and 20 provisioning centers. Two types of permits not yet awarded include secure transportation, which had one applicant who withdrew from consideration, and none for safety inspections.
The five highest ranking dispensaries in each of the city’s four districts now have conditional permits to move ahead to meet the requirements of building permits, hiring the number of projected employees, paying the wages required, pay area agencies and make charitable donations.
Each business has a year to meet all the agreed-upon requirements.
Regardless of the reasons, Pontiac’s stumbles have put it well behind in the race to cash in on marijuana. Pontiac voters approved medical marijuana licenses, but those businesses will be competing against recreational marijuana distribution and sales in nearby communities that moved faster.
Unlike traditional businesses that pay taxes, some marijuana operations can be lucrative for communities. State law allows municipalities to charge up to $5,000 for application, administrative and enforcement costs. State law created the marijuana regulatory fund, which holds fees and fines related to retail stores and microbusinesses in each community.
Under the state’s medical marijuana rules: 25% of the state’s revenues was to be paid to municipalities, based on the number of such businesses they have. But the law included a clause saying this would no longer apply once recreational marijuana was approved.
Recreational marijuana taxes and fees to the state are also divided: 15% to counties; 35% to schools for K-12 education and 35% to the state’s transportation fund, dedicated to repairing and maintaining roads and bridges. Cities, townships and villages get 15%.
In March, the state’s treasury officials reported that more than $1.1 billion was collected from recreational sales in 2021. Of that, state officials disbursed nearly $45 million to the 62 cities, 15 villages, 33 townships and 53 counties with active recreational use marijuana businesses.
Hazel Park, Ferndale, Walled Lake and Madison Heights moved quickly to approve recreational outlets. Billboards promoting the various outlets are pervasive along Metro Detroit roads.
Hazel Park, which has six active businesses, received $338,720.64 from the state. Ferndale and Walled Lake, each with three businesses, received $169,360.32. Madison Heights, with two businesses, received $112,906.88.
All 14 businesses contributed $790,348.16 to Oakland County. Washtenaw County, with the highest number of businesses in the state with 32, received $1,806,510.08.
Mayor Greimel, in office just over seven months, said some businesses with conditional medical permits in Pontiac may delay opening until they know if the city will allow recreational sales.
Royal Oak-based attorney Michael D. Stein, who specializes in helping marijuana businesses get approvals to open and operate, told WDIV-TV last year that Pontiac may be the worst at implementing the process of the communities he’s worked with, because of the last administration’s chaotic approach.
He told The Oakland Press this month that initial frustrations and hurdles in Pontiac seemed to have cleared up. But significant obstacles remain for the city to grab its share of the windfall, including competition with recreational dispensaries and the slowing demand for cannabis products.
“In Michigan, frankly, to spend all the money to do solely medical is a death sentence. You can’t, based on the new climate,” Stein said, characterizing the current marketplace by noting that the state’s income from marijuana sales is nearly 90% from recreational sales, versus 10% for medical.
While medical marijuana products undergo extra testing, he said, in most cases cannabis products for medical and recreational use are essentially the same.
Stein said communities need to adapt to a marketplace that is rapidly adapting to recreational marijuana.
Though Pontiac’s marijuana marketplace has been delayed, there may be opportunity to catch up, Stein said.
“A lot of things have happened in other cities, but a good location is a good location,” Stein said. “In this industry, the cream rises to the top, if you have a good operation, good deals, good products and good customer service.”
Pontiac isn’t the only municipality with challenges. On July 11, Waterford Township officials heard from four of the five recreational businesses it approved. Each asked for one-year extensions of their provisional permits, citing supply chain issues in most cases, with one company’s progress delayed by a business acquisition deal.
Greimel said he expects to introduce an ordinance to council next month, which would reverse the last administration’s decision to opt out of allowing recreational marijuana.
A big question remains. Will the recreational ordinance require companies with medical marijuana permits to submit new, competitive applications for a limited number of recreational permits, or will those businesses be allowed to expand into recreational sales?
Because the city council has yet to see a recreational ordinance and hear related public comment on the idea, Stein said it’s impossible to predict how Pontiac will benefit.
He’s confident swift approval of an recreational ordinance will increase its chances, but if the process drags out, companies currently eager to start operations in Pontiac could begin looking elsewhere.
PERMITS
Here’s a list of the businesses that have received conditional permits:
Growers
Botanical Greens Inc.
Family Rootz
Lucid Detroit
Pharrnaco Inc.
PGSH Holdings Inc.
Processors
Family Rootz
Pharmaco Inc.
DISTRICT PROVISIONING CENTERS
Cesar Chavez
The Cured Leaf TC Inc,
Greenhouse Farms Pontiac LLC
Rize Cannabis
West Fort Holdings LLC
Yellow Tail Ventures
Downtown
3 Green LLC
Common Citizen
RTMC Enterprises Inc. (two permits).
Zenith Ventures LLC
Walton Blvd
444 Commercial Consulting LLC
3967 Euclid LLC
Leaf Co Ventures Inc.
Oak Flint LLC
Shine Cannabis
OTHERS
Called “non-overlay” these are permits anywhere in the city approved by the planning commission and city council.
Attitude Wellness LLC
Greenhouse Fanns Pontiac LLC
HKM Group LLC
Nature’s Remedy of Pontiac LLC
Pleasantrees
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