This story was republished with permission from Crain’s Detroit Business.
In one of the last metro Detroit communities to open its doors to retail marijuana businesses, the process of applying for a license is a war of attrition.
Dozens of eager applicants have been lined up day and night for three weeks outside of the Redford Township hall on Beech Daly Road.
The cannabis company operators are vying to secure a license to open a dispensary in Redford, which approved an ordinance to allow for marijuana sales over the summer and decided on a first-come-first-serve process for applications, which effectively incentivized operators get in line last month – and stay there – in hopes of securing one of the valuable licenses.
“It’s inhumane,” Nick Hannawa, chief legal counsel for Troy-based Puff Cannabis Co., told Crain’s.
Representatives from Redford Township did not respond to inquiries on the process. The township was to begin accepting applications at 9 a.m. Thursday.
The township’s rules allowed for applicants to use foldable camping chairs, but barred cots, tents or sleeping on the ground. Temperatures were 48 degrees last night in Redford.
Applicants told Crain’s early Thursday morning they would walk to the nearby Exxon or Shell gas stations to use the bathroom while waiting in line.
Most of the people in line were hired line sitters, holding spots for their employer or whatever marijuana operators paid them to be there. The sitters worked in shifts over the course of the last three weeks.
Aric Klar, CEO of Birmingham-based Quality Roots, who took over his company’s spot in line Thursday morning, said he’s spent $22,000 on wages for employees to work in shifts in the line since Sept. 11.
Puff Cannabis alternated employees in the line since Sept. 12, securing somewhere between the eighth and 10th spot in line, said Hannawa, who arrived at city hall on Thursday morning to submit the company’s planning and licensing documents.
Steve Kiousis, managing partner at Troy-based Kiousis Law PC and representing Zaza Cannabis Co., was also onsite to turn in documents. Zaza employees secured the 17th spot line after arriving on Sept. 23.
In an interview with WXYZ, Redford Township Clerk Gary Christie said he did not expect the lineup to occur.
“I was surprised to see it,” Christie told WXYZ on Sept. 19. “I was anticipating seeing them out here in mid-October.”
Lucrative opportunity in one of the last communities
But the eagerness of the operators is to be expected, as Redford Township is one of the few remaining communities in Southeast Michigan to allow for marijuana sales. A license to operate in its borders is potentially lucrative. The suburb borders Southfield, Detroit, Dearborn Heights and Livonia.
While talking to Crain’s, Klar, CEO of Quality Roots, which operates eight dispensaries across the state and was fifth in line, received a phone call where another operator offered $200,000 for Quality Roots’ spot in line. He declined.
Municipalities are required under state law to make the selections based on a competitive process that typically takes the form of a scoring system — often revolving around an applicant’s ability to invest in curb appeal or sustainable operations. But some communities have done first-come, first-served methods of accepting applications, including Garden City, Westland and Harper Woods. One could, theoretically, argue lining up for weeks is, in fact, competitive.
But in Harper Woods the process devolved into a show of athletic prowess, much like how issues are settled on the playground: with a footrace, as applicants were barred from arriving until the day applications would be received but required to wait in the parking lot until a set time to line up for the three available licenses. The applicants then sprinted to secure their spot in line, which resulted in at least one applicant being knocked down.
Redford Township, however, did not place a numerical limit on its licenses — but is doing so through zoning.
Zoning restricts licenses to approximately 12
The township has relegated the available locations or dispensaries into a handful of overlay districts on 7 Mile, Inkster, Plymouth and Telegraph roads. Applicants must have leased or bought property in one of those districts at the time of submitting an application on Thursday.
However, the applicants can be eliminated from contention if another applicant’s license, who was ahead of them in line, is awarded a license due to proximity. The township’s ordinance requires dispensaries to be at least 2,500 feet apart.
That realistically translates to only 12 conceivable licenses within the roughly 30,000 linear feet of available dispensary space in the overlay zones, according to Crain’s calculations.
Hannawa said area building owners were asking $25,000 per month to hold properties for cannabis operators going through the application process.
Puff Cannabis has a property under contract on Telegraph Road, he said.
Applicants in line Thursday were wondering out loud how long before the process in Redford Township resulted in lawsuits against the municipality, as many in the region has battled lawsuits over the license selection process.
Dozens of lawsuits existed last year against municipalities, including Royal Oak, Warren, Pontiac and others. The plaintiffs argue the city’s competitive process to award licenses was unfair.
However, any potential lawsuits against Redford Township are unlikely to occur until licenses are awarded; and it’s unclear when that will occur.
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