Royal Oak introduces amendments to marijuana licensing ordinance

By: Sarah Wojcik | Royal Oak Review | Published October 7, 2020

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ROYAL OAK — On Sept. 28, the Royal Oak City Commission voted 5-1 to approve the first reading of two amendments to its recreational marijuana licensing ordinance, which it initially adopted July 27, in an effort to provide a more open playing field.

The purpose of the changes is to, firstly, allow operators who do not currently hold a medical marijuana license to apply for a retail recreational marijuana license in Royal Oak and, secondly, remove language encouraging applicants to perform neighborhood outreach prior to being awarded a municipal license slot.

In order to adopt the amendments, the commission must approve a second reading at its next meeting on Oct. 12.

The proposed amendments came up as city staff was finalizing the application for a recreational marijuana establishment license and formatting the application for the city’s website.

Staff — with the assistance of outside counsel at Dickinson Wright — identified the two changes that would benefit the city, according to City Attorney David Gillam.

The way the ordinance is currently written, the application documents that interested parties must submit to the Clerk’s Office to be eligible for further review include “(pre-qualification) for a Marijuana Establishment license by the State of Michigan” in order for the state to “do the heavy lifting in the initial screening of potential licenses,” according to Gillam.

However, with the exception of microbusinesses, the state’s Marijuana Regulatory Agency is currently prioritizing the processing of applications for recreational marijuana facility licenses for those who already hold a medical marijuana facility license.

Consequently, Gillam said it appears, at least for the initial round of licensing, that the only recreational marijuana establishment license applicants the city would see when the window opens would be entities that currently hold a medical marijuana facility license.

“In our mind, this would seem to reduce or shrink the pool of applicants,” he said. “I think that’s totally contrary to what the consensus of the commission was. I believe it is the commission’s consensus to attract as broad of a pool of applicants for a recreational marijuana facility license as possible.”

Currently, prequalification for a “marihuana facility license,” or a medical marijuana license, does not satisfy the city’s requirements for a recreational license.

Gilliam recommended that the commission adopt an amendment to include not only entities that have obtained prequalification for a recreational license, but also potential applicants who have been prequalified for a medical marijuana facility license but do not actually hold one.

“We’re still relying on the state process to do the initial vetting of applicants, but we would also allow entities that have obtained prequalification for a medical marijuana facility license but don’t actually hold the license yet to apply for a recreational license here in Royal Oak,” Gillam said.

Commissioner Kyle DuBuc said the changes in eligibility expand the pool so the city is not only looking at operators that are already established in the industry.

“That’s what we’re trying to avoid, but it will still allow us control and make sure we have quality operators,” DuBuc said. “We’ve made it clear from the onset of this process that we don’t want to be a part of allowing a small group of those already at the table to dominate this industry across the state.”

Gillam called the second amendment to the ordinance more of a “housekeeping” issue. He said staff questioned whether applicants should be encouraged to perform community outreach prior to being granted a license.

The recommendation was to delete a reference to “performed” outreach.

“We’re still demanding to have a plan in place for community outreach (for operators to) develop and execute if awarded a license,” DuBuc said. “If we have 100 applicants and everyone has to go banging on doors in our neighborhoods and our business corridor ... we’re eliminating a potentially serious nuisance to our residents by making the change.”

Commissioner Randy LeVasseur cast the “no” vote.

“Outreach comes in many forms, not necessarily banging on doors. I think there is potential value in applicants in the process seeking out some feedback from the area just to know what concerns people have, and they can possibly address those on the front end,” LeVasseur said.

Commissioner Sharlan Douglas said the commission is not precluding applicants from talking with residents and neighboring business owners.

“Probably the smart ones will do that as a matter of course, but we don’t want to dictate that they do that at the risk of … 100 applicants knocking on doors in 100 neighborhoods,” Douglas said. “The kind of engagement becomes less effective if we have all of these entities doing it at the same time.”