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Published in Economic Development
Recreational cannabis poised for major growth in Grand Rapids COURTESY PHOTO

Recreational cannabis poised for major growth in Grand Rapids

BY ANDY BALASKOVITZ and KATE CARLSON Sunday, November 08, 2020 07:10pm

GRAND RAPIDS — The retail market for recreational cannabis is primed for significant growth in the city of Grand Rapids as local officials prepare to consider more than a dozen business applications in the coming months. 

While one recreational dispensary has been operating since Oct. 23, three others have special land use approval to move forward. Two more, which are already operating as medical cannabis provisioning centers, are seeking approval this week from the Grand Rapids Planning Commission.

All told, Grand Rapids could approve up to 28 retail recreational cannabis sites by March, city officials tell MiBiz. While industry experts say it’s unlikely that many businesses would be operational because of market saturation and the high upfront costs of opening stores, cannabis activists nonetheless hail it as a significant advancement after criticizing the city for moving too slowly to allow retail stores. 

Many industry insiders believe the market activity could propel Grand Rapids as a cannabis leader in the state.

“Adult-use sales in Grand Rapids as a whole has been a long time coming,” said John McLeod, president of Oak Flint LLC, which seeks to open a growing, processing and retail facility in Grand Rapids. “I’m very excited for Grand Rapids to experience an actual regulated adult-use market.”

Joshua Smith, supervisor of Michigan Supply and Provisions at 2741 28th St. SW, shared a similar sentiment. Michigan Supply and Provisions, which sells medical marijuana, is going before the Planning Commission for a special land use permit on Nov. 12. 

Smith said the Grand Rapids market has attracted the attention of executives at parent company Ascend Wellness Holdings LLC, which operates dispensaries across the country.

Corporate officials are “excited about what’s happening in Grand Rapids,” Smith said. “They think Grand Rapids is going to be one of the biggest markets in Michigan, and they think Michigan itself will be a big market for cannabis sales.”

Green Skies - Healing Tree LLC, which does business as 3Fifteen and operates medical marijuana dispensaries on Plainfield Avenue and Division Avenue, wants to open as many as seven recreational stores in Grand Rapids. The properties are in various stages of redevelopment and some are being prioritized to open before others, said Green Skies spokesperson Andrea Hendricks. The company plans to open its next store at 330 Ann St. NW.

Although Green Skies hopes to open several retail stores in Grand Rapids, “once all of those retailers are up and operating, we’re going to see saturation,” Hendricks said. “I do anticipate a lot of these will take a while to open.”

Regulatory process

For cannabis companies, local land use approval effectively serves as a green light for stores to open, signaling crucial local approval for a state-issued license to operate.

Instead of setting a limit on the number of recreational cannabis dispensaries that can operate in the city, Grand Rapids has taken a land use-based approach, said Grand Rapids Planning Director Kristin Turkelson. 

Only certain land uses are permitted to have cannabis facilities, and the number of dispensaries is further limited by separation distances required between facilities and sensitive uses, such as schools and places of worship. 

Retail applicants have two paths for approval in Grand Rapids. A retailer co-located with growing or processing can ask for an administrative review, which doesn’t require approval from the Planning Commission. Standalone retailers require Planning Commission approval before applying for a state license. 

The Nov. 12 Planning Commission meeting is the first to consider granting special land use approval to standalone dispensaries to start selling recreational marijuana. 

The city is accepting adult-use applications in different rounds, and is first considering applications from medical cannabis provisioning centers that did not require a waiver from the city to open. Ten facilities fall into this category, and will be considered through mid-February 2021, Turkelson said. The Planning Commission then will start considering the next round of applications for facilities that required waivers to open. 

Currently, 21 standalone provisioning centers have received land use approval for medical marijuana sales. Another seven are on sites with multiple cannabis uses and can go through the administrative review process. 

If every existing medical provisioning center applies to sell adult-use cannabis and receives approval from the Planning Commission or planning staff, then at least 28 dispensaries could open for adult-use sales in Grand Rapids. 

“Based on what we know currently, there is very little land left for a cannabis facility to be proposed in the city,” Turkelson said. 

This could change, however, if a daycare, religious institution or other sensitive use closes, potentially freeing up more space for cannabis business.

While it’s unclear how many recreational dispensaries may be operating by next year, the city is poised for a major shift.

“As this new industry grows in our community, we are working hard to ensure that it has a positive impact in our City,” Mayor Rosalynn Bliss told MiBiz via email. “With only one recreational cannabis facility currently open, it is too early to assess the long-term impact at this time.”

Social equity

Amid this growth, some cannabis advocates are also watching the city’s social equity initiative to ensure diversity in development. So far, Five Lakes Farm LLC, which does business as Pharmhouse Wellness, is the only applicant to have its application prioritized under the equity initiative, which includes qualifiers such as diversity and equity in hiring, local ownership and whether applicants have been affected by prior cannabis convictions. 

“I am a local, I have lived in the city for a long time and have a history of being affected by the war on drugs and have family members with a similar experience,” said Pharmhouse owner Casey Kornoelje. “It truly is ironic. Every day I wake up and basically pinch myself because I can’t believe that what I’m doing now for a living previously put me in handcuffs.”

The city also scores applications based on a Marihuana Industry Voluntary Equitable Development Agreement (MIVEDA), which prioritizes facilities on a rating system.

Bliss said the process has created a “positive impact” for applications employing city residents.

“The equity policy for recreational facilities is still in process, so we don’t have a report — yet our intent is that it will be aligned with our diversity and inclusion goals,” Bliss said.

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