Lansing considers using revoked pot shop licenses for social equity

Proposed changes to marijuana licensing laws in Lansing could help pave the way for more women and people of color to get involved in the local cannabis industry.

City Clerk Chris Swope sent letters last month to 81 city license holders — five retailers and 76 growers — that have yet to open. The letter demands they acquire state licenses or forfeit their licenses and make room for someone else. About half have until the end of September to comply, and the rest have till the end of the year.

Those license holders that wish to retain their city licenses must respond to Swope explaining their plans and the reasons for the delay in their state licensing. In addition, 11 processors haven’t received their state licenses but haven’t been warned.

And when those openings emerge, the City Council wants to keep focused on social equity — reserving as many of those newly opened license spots as possible for local women, people of color and those who have been disproportionately and unfairly impacted by the war on drugs.

The concept would involve an amendment to city ordinances that piggybacks on the state’s Social Equity Program designation for Lansing, which took effect last June and gives selected minority entrepreneurs access to licensing specialists and state fee reductions of up to 70%.

Because Lansing had already hit its cap of 28 retail operations before that designation was announced, city officials have been unable to incorporate social equity components into its licensing criteria.

The availability of new licenses in the Capital City offers another chance, officials explained.

“It can’t just be a reduction in licensing fees,” said Councilwoman Patricia Spitzley. “We need to make sure that we are providing the support necessary for folks to be successful, developing a business plan, a utility plan and other things that make new small businesses likely to succeed.”

COVID-19 restrictions have played a role in delaying those businesses in getting into full compliance, industry officials said. The provisional licenses under scrutiny were all approved at least a year before the pandemic crippled the economy and brought the city to a standstill. 

Council President Peter Spadafore said he’s “very interested” in transforming any license that becomes available into a social equity license. Spitzley also noted that the Council requested funding to hire a staff member into the city’s financial empowerment program. She thinks that person could be tasked with assisting with business plans and mentoring young businesses.

“We need to make sure we’re setting them up for success,” she added.

Robin Schneider, executive director of the Michigan Cannabis Industry Association, said many provisional license holders (like in other industries) have been hampered by COVID-19. Part of the issue has been rising costs for building materials, she said.

“That has really been a huge part of the setback,” Schneider added.

Swope also acknowledged that increased construction costs and additional virus-related restrictions could have played a role in the delay. Those who can provide evidence of temporary and unforeseen obstacles will receive leniency.

Schneider said she has not yet discussed Lansing’s plans — which are in a nascent form — with city officials, but she is “looking forward to seeing their plan and talking with them.”

The association is working with the city of Detroit to implement its social equity program. There, the city’s civil rights and inclusion office steers assistance to those entrepreneurs who need it. Schneider labeled the partnership “incredible.”

The idea of expanding access to licensing has also been met with enthusiasm by state officials.

“We support local governments and their efforts to create a more diverse, equitable, and inclusive marijuana industry here in Michigan,” said Andrew Brisbo, director of the state Marijuana Regulatory Agency.

Spadafore said discussions over changes to the city’s marijuana licensing ordinance began Friday. It could be weeks before draft amendments make their way to the full City Council.

“We’re making sure that anything we are proposing is not only helpful, but legal,” he added.