Conservative restrictions break from Planning Commission recommendations
GRAND RAPIDS — A proposed ordinance would limit businesses operating in the medical marijuana industry to approximately 40 sites across the city.
Backers of the ordinance say the plan would allow the city to dip its toe in the water with the burgeoning medical marijuana industry, ahead of a statewide vote on a ballot proposal that would legalize it for recreational use later this year.
The Grand Rapids City Commission and city staffers put forward the ordinance, which will get a public hearing on July 10.
However, opponents argue the ordinance as proposed is too conservative and essentially will prevent marijuana businesses — industrial, commercial or otherwise — from being able to flourish in the city. At best, the ordinance will allow just a few pockets of the city to benefit from the new industry, they said.
“As it stands, I think it’s really an effort to use zoning as a tool to eliminate the possibility of medical marijuana-related businesses in our community, given the limited scope of locations that are available for one of the five tiers of business,” said First Ward City Commissioner Jon O’Connor, who represents much of the city’s west side.
The City Commission’s proposed ordinance differs from a set of recommendations the Planning Commission issued in late May that would have opened up more land to businesses seeking to operate in the industry, which O’Connor largely backed.
The Planning Commission looked into the issue at the behest of city commissioners earlier this year. However, at a meeting in early June, the City Commission decided to largely disregard the recommendations and move forward with a public hearing based on the more conservative regulatory framework put forward by city staff.
The Planning Commission’s recommendations would have allowed for nearly 100 more “provisioning centers” — or retail stores selling medical cannabis — and nearly 400 locations for industrial uses, such as growing and transporting.
Suzanne Schulz, the city’s managing director of design and development, said the city has many reasons for wanting to limit the number of sites where medical marijuana businesses could operate. Few other West Michigan communities, if any, are likely to opt into the state’s new framework for regulating medical marijuana, meaning that Grand Rapids could possibly get the majority of the business associated with the industry, Schulz said.
As such, Schulz and others want to avoid a situation in which marijuana-related businesses concentrate in any given area, such as what happened with Lansing’s so-called “Green Mile” before the city clamped down on the sector.
Schulz also remains concerned that more liberal zoning could open Grand Rapids to speculative outside investors, potentially to the detriment of neighborhoods.
“Everyone is going to be looking to come in as fast as possible to try to get their toehold in there,” Schulz said. “I think the speculation that’s going to occur, the speculative development that will happen … personally I think it’s a huge risk to our community and to our business districts to just let the free market figure it out.”
Additionally, the city estimates about 40 pharmacies currently operate within the municipal boundaries, Schulz said, adding that she doesn’t see a need for comparatively more medical marijuana provisioning centers.
O’Connor called that assertion “disingenuous,” noting that several areas of the city still lack a traditional pharmacy, including the central business district.
LIMITED REAL ESTATE
Under the proposed ordinance put forward by city staff and the City Commission, medical marijuana- related businesses would be relegated to just a handful of pockets in the city, largely in or around industrial areas.
That’s problematic for O’Connor, who believes the city’s traditional business districts should be opened up to provisioning centers, albeit with buffers in place to prevent any over-concentration.
“They are almost exclusively within our industrial- zoned areas,” O’Connor said of the areas where the proposed ordinance would allow marijuana businesses. “For all intents and purposes, that means that provisioning centers cannot operate within the context of a traditional business district, which also means they’re absent from our transit corridors — and that people who are trying to obtain their medicine have less access to be able to get there.”
The ordinance favored by the City Commission would permit provisioning centers in about five parts of the city, such as around Ann Street and Turner Avenue, a couple of pockets south and west of downtown, on the city’s northeast side around Oak Industrial Drive, and near the intersection of 28th Street and Breton Road.
The sites in the southwest corner of downtown appear to be in relatively close proximity to The Rapid’s Central Station.
MORE DISCUSSIONS AHEAD
It remains unclear what kind of economic spinoff the medical marijuana industry could have in Grand Rapids.
Many commercial real estate brokers around West Michigan are taking a wait-and-see approach to how medical marijuana — and the potential for legalized adult recreational use — could affect the market.
Bill Bussey, a retail real estate director at X Ventures, a Grand Rapids-based commercial brokerage, said he’s seen a sea change in the overall acceptance of medical marijuana within his industry.
“If you’re looking at a dispensary, the biggest change is that in the past, a landlord would be approached by a head shop and unless you really needed a tenant and were desperate, you wouldn’t lease to them because it would be a negative to your other tenants,” Bussey said. “Today, circumstances have changed with the dispensaries, and you can’t tell the difference between the current genre of dispensaries and a med center.”
Nonetheless, the perceived lack of available real estate under the proposed Grand Rapids ordinance poses concerns for O’Connor.
“I just don’t think (the proposed ordinance is) really opening the door,” O’Connor said. “Essentially, what we’re going to do is drive those real estate prices in those select locations through the roof given the extremely tight land-use controls around them.”
Early adopters of medical and recreational marijuana — including Denver, Seattle and Portland, Ore. — have experienced considerable economic benefit, according to reports.
An April study by the Federal Reserve Bank of Kansas City found that Colorado — the first state to legalize the adult recreational use of cannabis — experienced employment growth of about 5.4 percent, although marijuana only accounted for 0.7 percent of the state’s workforce. Pot accounts for 2 percent of the state’s tax revenue, according to the Fed report.
While 29 states and the District of Columbia have legalized medical marijuana, just nine states plus the District of Columbia have allowed for recreational use. However, support for liberalizing pot laws has gained steam nationwide in recent years.
Early polling shows a Michigan ballot initiative to legalize the adult recreational use of marijuana is likely to pass this fall.
Schulz said the legalization of recreational marijuana would provide a better opportunity than the current situation to have a discussion of the potential for economic development for the industry within the city.
“This is a first step and it does a provide a basis to work from,” Schulz said. “The recreational … language, if passed — we’ll have to go back and make additional adjustments to the ordinance. If we’re going to talk about encouraging small business owners … then (if the initiative passes) that’s the opportunity to go back and have a little broader discussion about what that means for neighborhood business districts. If we’re only looking at it from a medical (perspective), how many sites do you really need?”