Detroit tries to temper a cannabis land grab


Detroit’s new recreational cannabis law has sparked a land grab, driving up prices for properties zoned for weed shops.

Why is it important: The city crafted the law for longtime Detroit residents to enter the cannabis industry, but the scarcity of affordable land for recreational dispensaries remains a barrier for residents.

Driving the news: City Council Speaker Pro Tem James Tate told Axios he wanted to reduce zoning restrictions to help solve the problem. Future zoning changes may also allow recreational marijuana stores to open downtown.

  • “We’re definitely not progressive with the ordinance, the zoning that we have right now,” Tate said. “I recognize that there is a major challenge for space.”
  • Cannabis businesses cannot open within 1,000 feet of churches, schools, and other drug-free places. Tate is looking to lower that zoning barrier to 750 feet.

The context: Detroit is late for the lucrative recreational cannabis industry which began in 2019, largely because the city It took a long time put in place rules to ensure racial and economic diversity. Moreover, they was prosecuted.

  • The period of uncertainty left plenty of time for those on the sidelines to grab the land.

What they say : It’s hard to find a property that’s zoned for cannabis use and isn’t “incredibly expensive” because landlords know they’re sitting on a potential gold mine, said Douglas Mains, an attorney who specializes in cannabis at Honigman LLP.

  • Customers with deep pockets will suck it up and pay the highest prices, Mains added. This leaves out entrepreneurs without as much capital, often the social equity candidates that Detroit is looking to help.

Yes, but: Detroit officials intend to level the playing field as the Tate pursues loosened zoning restrictions.

  • The city has about 18 eligible properties for cannabis businesses. Officials are developing a program to sell them to longtime Detroit residents at a price yet to be determined.
  • The city’s Homegrown Detroit Fund also raises funds for grants and other aid.

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