Business
Weighing the Options
[dropcap class=”kp-dropcap”]M[/dropcap]ichigan has 1,773 cities, townships and villages, according to the latest available numbers. Each municipality has the right to opt in or out of the Michigan Medical Marihuana Facilities Act and license any number (including zero) of cultivators, processors, provisioning centers, testing labs and secure transporters.
To date, only a few more than 100 municipalities have “opted-in” by adopting ordinances allowing any types of facilities. Many more have “opted-out,” some taking the position that they will reconsider the issue once Michigan begins to license adult-use (recreational) facilities. That is likely to begin either in the fourth quarter of 2019, or at the beginning of 2020.
The purpose of this piece is to offer suggestions for municipalities that are in the process of making determinations about how to draft and implement ordinances allowing cannabis businesses.
First, we need to educate people about the effects of having licensed facilities nearby. The major objections voiced by opponents and concerned citizens are:
- What about the children?
- Perceived detrimental effect on local property values.
- Concern about the so-called “gateway effect.”
Through research efforts, three main facts are evident about the state of cannabis and minors. First, access and consumption of cannabis by minors have been reduced in states where cannabis is legal (likely due to reduced illegal market share and increased regulatory market share of entities, which will not sell to minors). Second, property values have increased in neighborhoods with licensed cannabis businesses, both from rehabilitation of blighted properties and the desire of employees to live close to where they work. Finally, the “gateway effect” theory has been debunked by revered entities such as the National Institute of Science.
Cannabis has a positive effect on localities, both as an instrument of harm reduction (where cannabis substitutes for inarguably harmful substances) and as an engine driving economic growth.
“Above all, what is needed is for consumers to speak up and demand the types of facilities they want in their communities.”
In moving forward, many players in the industry advocate for very restrictive numbers of licenses, presumably to lessen their competition. However, that may not be the wisest course. Many times, those who advocate for low numbers, expecting that they will be among those favored, end up sorely disappointed when they realize that others are treated more favorably, regardless of who was the primary instigator in getting the ordinance passed in the first place.
Municipalities often restrict available locations by imposing distance barriers between facilities. This can have the unintended effect of spreading facilities almost everywhere allowed throughout the municipality. Lessons learned from the retail industry should be absorbed in the cannabis space. Co-location of retail businesses has a net positive effect on all participants. For the consumer, it provides a central location where consumers can browse among the businesses without traveling to another location. For the businesses, it provides a larger customer base, where customers can select products based on merit, rather than being restricted to the few products available at any one retailer.
As we move forward into adult-use licensing, we may begin to see municipalities design cannabis business parks, including 150 plant micro-businesses, which are set up for cannabis tourism, much like wine-tasting tours, and including consumption lounges, where consumers can spend several hours to sample and learn about cannabis products, and purchase both cannabis and ancillary products, which will add to the bottom line of the business entities and the municipality itself.
Above all, what is needed is for consumers to speak up and demand the types of facilities they want in their communities.
