Detroit cannabis land grab drives up prices

Detroit voted to permit recreational cannabis sales on April 5, leading to an immediate land grab battle in the city for building zoned for cannabis dispensaries.

The city passed the new law in hopes of helping locals break into the legal cannabis industry. However the rise in property prices due to the demand is still keeping many out.

City Council President Pro Tem James Tate said that he wants to reduce zoning restrictions to help solve the problem. There has also been talks of future zoning changes that would allow dispensaries to open in downtown Detroit.

"We certainly are not being progressive with the ordinance, the zoning that we have right now," Tate says. "I recognize there’s a major challenge for space."

Currently, cannabis businesses can’t open within 1,000 feet of churches, schools and other drug-free places. Tate is looking to lower that zoning barrier to 750 feet.

Douglas Mains, a cannabis-focused attorney at Honigman LLP said that it has been difficult to find property that’s zoned for cannabis use and isn’t "incredibly expensive" because the owners know that they are sitting on a potential goldmine.

For those with the capital to invest, the increased price won’t prevent them from getting their piece of property. But for smaller entrepreneurs that have a limited budget, the options are basically non-existent.

The city currently own 18 properties itself that are eligible for cannabis retail. Officials like Tate are working on a program to award the properties to Detroit locals. With the additional aid of a Homegrown Detroit fund raising money for grants and other assistance, plus Tate’s efforts to update zoning restrictions, there is still some opportunity for smaller entrepreneurs and especially locals to get their foot in the door of legal cannabis in Michigan.

Michigan legalized cannabis in 2019, however due to slow and poor planning plus lawsuits, the city never got around to passing their own rules and regulations.