Tough rules make for Detroit pot shop growing pains

Detroit — It’s been a year since Detroit put laws in place to regulate medical marijuana shops and as of today, only two have been approved to operate.

The strict set of zoning and licensing requirements adopted in 2015 by the City Council went into effect last March. That’s when all shops — existing and new — seeking to operate lawfully were required to apply online, submit plans, meet rules and obtain licensing, or face closure.

The city has received more than 260 applications for Medical Marijuana Caregiver Centers since that time. But new figures released by the city this week reveal only two prospective centers cleared the required hurdles.

Green Cross on West Eight Mile opened in mid-February as Detroit’s first licensed center. Its operators were the first to apply under the new law and completed the “vigorous” process Feb. 3, said manager Simon Berro.

“We went to the city. We listened to what they said. We followed their rules,” said Berro of the center, operated by the Detroit Caregivers Center Association. “We took all precautions, and it was a vigorous process, but nonetheless, it worked out at the end.”

The Green Genie on McNichols on the city’s west side also has its license. The building and its signage indicate the facility is open, but no staff was there Thursday afternoon.

Meanwhile, 136 shops have been closed down, padlocked and sealed with bright orange stickers by the city’s Building Safety Engineering & Environmental Department. And 115 others remain in various stages of the application process, according to the building department, which has enforcement authority under the code.

“There’s a lot of growing pains that exist,” said Jamaine Dickens, a spokesman for Top Dollar Holdings, which operates a caregiver center, 420 Dank on Gratiot. “It’s been a learning experience for all involved from the city and most certainly from the industry.”

The center, Dickens said, had been in operation prior to the ordinances and has done everything “by the letter of the law.” Top Dollar Holdings is one of only a few operators so far granted a variance by the city’s zoning board after it was deemed too close to a church and liquor store. Its center is now working to obtain its business license, Dickens said.

The rules, aimed at bringing order to what had been an unregulated practice, have cleared the way for Detroit to shut down so-called pot shops failing to seek compliance under the ordinance or dispensing medical marijuana in zones prohibited under federal, state and city statutes.

The federal Drug Free School Zone Act prevents marijuana from being delivered, sold or manufactured within 1,000 feet of a school. State law also factors libraries into the rule. The city’s zoning regulations cover educational institutions and goes beyond that, prohibiting shops from operating near child care centers, arcades and outdoor recreation facilities.

There were 283 dispensaries throughout the city when Detroit began accepting applications under the new laws on March 1, 2016.

Detroit Corporation Counsel Melvin Butch Hollowell said each was sent a letter, warning they were “operating at their own risk” until fully licensed. The shops were also provided a 30-day window to submit applications before enforcement officially began.

Hollowell and the zoning code note shops in operation prior to the laws without licenses are able to continue serving patients so long as they have put in “good faith” applications. The operators who haven’t top a priority list for closure, Hollowell said.

Some medical marijuana advocates contend the city’s zoning laws are unfairly restrictive and applications are being processed too slowly, and they fear patients will suffer.

Robin Schneider, executive director of the National Patient Rights Association, said she’s disappointed with the lack of progress a year in.

“(Detroit) has the most exclusionary zoning practices of anything I’ve ever seen in the state,” said Schneider, who is concerned some applicants have been improperly turned down because they are located near long-closed former schools or child care buildings. “I think the fact that patients still do not have access to licensed facilities is a disservice to patients.”

The zoning legislation will permit about 50 shops overall. Still, Hollowell doesn’t think it will lead to hardships.

“There will be an appropriate number of locations that will be made available for people to sell the medicine,” he said. “We just want to make sure that as they are opened, they are opening in an orderly fashion and meeting needs of patients required for treatment.”

Hollowell added the small number of shops to complete the approvals so far shows “diligence” in the stringent requests for zoning, site and security planning, tax and health code clearances and licensing.

“It’s a new field,” he said. “It’s being processed well.”

Under the code, centers must operate in heavily commercial or industrial areas and are barred from locating in neighborhoods.

That’s welcomed by by Cortez York, who lives off Eight Mile on the city’s east side where centers along the main roadway have been plentiful. The 24-year-old said the marijuana centers “bring a lot of activity.”

Some of it has subsided since the city’s new laws have gone into place, he said.

“Some of them are taking the signs away. I see less cars pulling up all day and pulling out,” he added. “The neighborhood looks more peaceful.”

Hollowell said a mix of about 150 newer and older shops operating in Detroit are still facing closure because they haven’t made bids to legally operate. The city’s Law Department on Thursday said it estimates another 70-80 shops with applications pending are also operating.

About 80 others have been shuttered by neighborhood police officer and building inspector enforcement teams, and 55 closed after Detroit’s legal department filed nuisance abatement lawsuits in Wayne County Circuit Court.

Under city ordinance, centers must submit specific documentation and undergo a site plan review, public hearing over land use and secure a certificate of occupancy, business licensing and inspections, among other things. The requirements also cover site and security plans, insurance, lighting and parking specifications. Licenses must be renewed annually.

Centers can appeal to the city’s Board of Zoning Appeals for variances if they are turned down for being too close to schools, churches, liquor stores or other controlled uses. Challenges beyond that can be argued in circuit court.

Nathan Oakes, managing partner of Greener Crossing, a caregiver center on the city’s east side, said he supports the strict laws, saying they help rid the city of facilities that aren’t running honest business.

Oakes, a U.S. Marine Corps. veteran, said he got into the business to ensure safe access for veterans. He opened the center in October 2015 on a heavily industrial section of Hoover, off Eight Mile.

Oakes’ center is among those the city has allowed to continue serving patients while completing the application process. He’s endured the various steps and is obtaining his certificate of occupancy and inspections. He hopes to get his business license by spring.

“I find (the city) to be strict. I think that’s a good thing,” he said. “There’s a lot of fly-by-night organizations trying to just grab money in this business. Then, there’s the legitimate operations serving the patients. I think the ordinance helps distinguish between those two.”

But Andre Godwin, who represents the Sons of Hemp, a group of herbalists, caregivers and dispensary owners, said the laws have left many in limbo and are “making it bad for everyone.”

Godwin, who formerly filed a legal challenge to the new law, said the city is being “too intrusive” and the group is considering a petition drive to get a measure before voters in hopes of repealing it.