GRAND RAPIDS — Cannabis operators want Grand Rapids officials to provide more education and clarity around the city’s Cannabis Social Equity Policy, as well as make policy changes so more operators can comply with their social equity promises.
The Grand Rapids City Commission narrowly approved a resolution 4-3 on Aug. 9, 2022 to amend its cannabis social equity program and hold off on enforcement until Jan. 1, 2023. City staff presented an administrative policy to City Manager Mark Washington, which he approved on Nov. 3, 2022, and went into effect with the new year.
The current policy allows operators to transfer social equity points for some categories where a business is exceeding its commitment to an area where it is falling short. Businesses can also pay into a nonprofit to make up for some point categories as well. The policy also prioritizes local residency in ownership, employment commitments such as workforce diversity, new business development such as mentoring and incubator programs to help cannabis entrepreneurs, and supplier diversity.
The social equity policy is applicable to all cannabis business operations that made initial social equity commitments to get a leg up in the city’s licensing lottery system. However, many operators say they have no feasible way to abide by the policy given the current state of the cannabis market.
“Some of the areas that we’re not compliant with are not for a lack of trying, it’s just literally impossible,” said Lisa Dawdy, who handles licensing at JARS Cannabis. “There was really no feedback from the industry on how this would affect us.”
Operators from 11 cannabis companies signed a letter to city officials asking for adjustments to the city’s cannabis policy, and called on city leaders “to make the requirements feasible for the cannabis industry license holders. We are asking the city of Grand Rapids to work with licensees to incorporate another set of revised administrative policies.”
Representatives across the cannabis industry invited top city officials to a hybrid in-person and virtual meeting at noon on Feb. 17 to talk over the requests for policy changes.
At the invitation of the cannabis companies, members of the media, including this MiBiz reporter, also joined the call, unbeknownst to City Manager Mark Washington. Once media presence on the call became apparent, Washington told participants that the meeting should be rescheduled or held as a public meeting. A representative from JARS Cannabis, which helped organize the discussion, then asked members of the press to exit the Zoom meeting, which then continued on, according to other meeting attendees.
In a post-meeting conversation, Dawdy told MiBiz that city officials seemed open to reviewing requested policy changes, but some of it would require approval from the city commission.
“The city is willing to better understand and work with us on how to better implement the policies,” Dawdy said after the meeting.
During the meeting, city officials agreed to work on improving communication with cannabis operators and having more frequent meetings, said Grand Rapids Deputy City Manager Kate Berens. The city has not committed to making policy modifications at this time, she added.
“As we continue the conversation, there may be changes we concur to if they are needed to ensure we are maximizing the clarity of the policy and the ability to get compliance with the city’s overall equity goals,” Berens said.
According to Dawdy, operators are struggling with the supplier diversity and diversity, equity and inclusion in hiring requirements included in the city’s policy. As an employer, JARS Cannabis is unable to ask employees any questions about their racial background, which creates difficulty in gathering all of the information to meet the city’s requirements, she said. Dawdy added that meeting participants also discussed hiring metrics, which the city attorney is currently working to address.
JARS Cannabis is tied to equity promises made by Greenskies Healing Tree LLC, the former license holder of its business. Greenskies was a local operator that earned points in the city’s equity program, points that did not transfer to JARS Cannabis, which is not locally owned, Dawdy said.
Amendments to the cannabis policy that went into effect this year include the ability for operators to pay into the Community Reinvestment Fund, a nonprofit the city founded in February 2022. Operators can pay into the fund to make up for areas where they are not meeting some of their social equity commitments.
Having to pay additional fees on top of the already high operating expenses that cannabis operators face could break smaller operators, Dawdy said.
“We really need change. The policies are in a lot of ways untenable. We believe in social equity and want to do the work, but some of these things we can’t do, there isn’t a way to do it,” said Annamarie Buller, director of community engagement at JARS Cannabis, speaking before the meeting with the city. “The city needs to understand where we’re coming from.”
More than half of the concerns outlined in the operators’ letter to the city were addressed at the Friday meeting in what Buller called a “big victory.”
“There were some really good clarifying answers to some of these questions we were asking,” Buller said. “This is why we need to have these sort of opportunities, and we are requesting more educational moments from the city.”
For the better part of 2022, The city has worked to amend its Cannabis Social Equity Policy, which has long been a subject of debate among commissioners and led to delayed enforcement several times since most cannabis operators are not complying with the policy.
The city created a Marijuana Industry Voluntary Development Agreement (MIVEDA) in 2019, which eight out of the 11 cannabis dispensaries were not fulfilling as of August 2022. The operators made MIVEDA promises voluntarily and in exchange for a better chance of getting zoning and licensing approved by the city.
The city also has a Cannabis Industry Social Equity Voluntary Agreement (CISEVA) program, which is similar to MIVEDA but applies to recreational operators.