Detroit Crackdown Shows Importance of Knowing Local Cannabis Laws

While a steady stream of entrepreneurs and investors are moving into the cannabis industry, the business requires a strong commitment to keeping abreast of the often tangled web of local and state laws governing marijuana-related operations.

Nowhere did this become more apparent than recently in Detroit, where authorities have closed 80 dozen dispensaries operating outside new local laws governing marijuana dispensaries.

The plan is to close all but 50 by the end of the year. About 170 are still in operation.

The city is “making meaningful progress” toward reaching that goal, Melvin “Butch” Hollowell, the city’s corporate counsel, told Crain’s Detroit Business.

Changing Local Cannabis Laws in Detroit

As with every place across the country that has legalized medicinal or recreational marijuana, the laws can change depending on the state, county or city in which you operate.

The hodgepodge of laws have happened because, at the federal level, marijuana remains an illegal drug to possess, much less sell. That’s left regulation to the states where voters have approved making marijuana legal.

The result: a patchwork quilt of marijuana laws across the country.

Michigan voters approved the sale and possession of medical marijuana in 2008. In late 2015, the Detroit City Council passed an ordinance governing zoning for marijuana dispensaries. That means that every dispensary in the city had to go through an application process or become illegal.

Detroit City Councilman James Tate, who created the ordinance, said he did so because of the number of dispensaries in the city.

The new ordinance has several different regulations, which include:

  • A mandate that all dispensaries had to submit bids or applications to remain in operation by March of 2016
  • A rule that dispensaries must operate at least 1,000 feet from drug-free zones such as arcades, schools, child care centers, libraries and outdoor recreational facilities
  • They must also remain 1,000 feet away from a city park or religious institution

Michigan Laws Changing, Too

While Detroit continues to close shops – another 14 have already received notice to stop operations – the state of Michigan also recently passed new laws governing marijuana businesses.

Earlier this fall, the state legislature passed news laws levying a 3 percent tax on marijuana sales and also established a state licensing commission governing growing, selling, transporting and testing marijuana.

The story out of Michigan provides yet another example for those in the marijuana industry: know local regulations by heart and keep track of all planned and acted upon changes. Expect them to continue in the years to come.

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