Southgate City Council learns the basics about city marijuana businesses

 

By SUE SUCHYTA

Sunday Times Newspapers

SOUTHGATE – The City Council learned about ways to allocate recreational marijuana businesses at the city level during its Aug. 3 study session, with attorney Allision Arnold providing a primer for pot. 

Arnold, a partner with Pollicella, PLLC, spoke on behalf of the Cannabis Attorneys of Michigan at the invitation of Councilmember Phillip Rauch. 

Medical marijuana was approved by Michigan voters in 2008, with additional legislation passed in 2016 for different types of facilities and licensing. 

In December 2018, recreational marijuana became legal for adults over 21 in Michigan, and allows for possession, cultivation and consumption. A majority of Southgate residents voted in favor of Proposition 1, which legalized recreational marijuana in Michigan. 

The provisions of Proposition 1 apply throughout Michigan whether or not a city opts in or out to allow commercial marijuana businesses. 

However, the sale of marijuana is subject to licensure by the state, with 13 different types of licenses, for medical and adult recreational use, ranging from growers to processors to retailers, with provisions for consumption establishments and even temporary events. 

In her presentation, Arnold explained some of the benefits of opting in for recreational marijuana sales, which she said includes excise tax revenue sharing, economic development, job creation and the availability of cleaner and safer cannabis. 

“There are, as you know, some significant financial benefits to opting in,” she said. “There can be more than $56,000 of revenue for every microbusiness or retailer, in addition to a $5,000 yearly application fee, a yearly excise tax, for 20-21, and it has grown every year, and that amount goes to both the municipalities and the counties.”

Arnold said cannabis businesses can spur economic development in certain areas, especially blighted areas which need redevelopment. 

“Jobs are another ancillary benefit,” she said. “And when you bring in licensed cannabis, your citizens have clean, safe, tested cannabis, which hurts the black market, which we don’t want to stay in business.”

Arnold said cities must decide how to control the number of businesses in a community. Numerical caps are one way, but they have triggered litigation because they must be predicated by merit-based competition. 

She said numerical caps can leave a community vulnerable to lawsuits by businesses that are not granted local access. 

Arnold said she recommends controlling the number of facilities in a community through zoning regulation controls, which avoids placing an artificial numeric cap on the number of licenses. Some cities limit marijuana businesses to commercial or industrial zones, and create distances which they must be from schools, churches and community recreation areas, and can help provide odor control.

“If you decide to opt in, I would advise you strongly not to do numerical caps, but there is a great way if you do decide to opt in to limit businesses, and that is through zoning controls,” she said. “Through zoning controls, you can set areas where marijuana businesses go, and then you can do bumpers between things that are sensitive uses, like schools, daycares, libraries and residential areas, and you can also put bumpers between businesses.” 

Arnold said targeted zoning controls can map out how many marijuana retailers a community will have. 

“You can do that very successfully,” she said. “Communities that do that are not subject to litigation.” 

Arnold said it is also important to accept applications electronically, which are then automatically date stamped, as opposed to applicants lining up in person, which can cause buffering issues, as well as difficulties for the city clerk’s office. 

She said that residents in some cities have used ballot initiatives to overturn elected officials’ opt out decisions, and said voters often opt to allow recreational marijuana businesses in their communities, which takes it out of the control of the city council.  

Arnold said that while older people prefer alcohol, younger people prefer marijuana. 

“A wide majority of your voters voted for Proposition 1, and I think a wide majority of your citizens would like to have legal, safe cannabis and the economic benefits that it would bring to Southgate,” she said. 

Mayor Joseph Kuspa said the city has been working diligently to redevelop the community, and to have businesses successfully occupied, and he takes offense when she refers to “blighted areas.”

“There is very little blight in Southgate, and very little areas where this would be applicable to your blight designation,” he said. 

Arnold apologized, and said that, in a broader sense, it applies to areas that need to be developed. 

“The growers and processors, you don’t even know where they are,” she said. “They are manufacturing facilities.”

Arnold said the retail locations tend to look nice, like an Apple store. 

“As much as certain demographics might not like those stores, there are huge demographics that do like those stores, and will patronize a coffee shop or a restaurant or other stores in that area,” she said.

Rauch said that he is an advocate for marijuana businesses. 

He said it is the first time that he is aware of that the state has come to communities and offered them a way to make money. 

“More people voted ‘yes’ for it (Proposition 1) than voted to put us in office,” Rauch said.

He said that there are still empty storefronts in the city. 

“Let’s talk about this – the good, the bad – and if it means we have to do zoning to make this work, then it’s our job. That is why we ran – to make the city better, to make the city move forward.”

Rauch reiterated that more people now use marijuana than alcohol, and that usage will increase, so the city council should do its due diligence and look into this.