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Traverse City's cannabis companies say "let us sell"

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Max Johnston
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Interlochen Public Radio

Recreational marijuana was legalized in Michigan in 2018. But you still can’t buy any in Traverse City even though 12 dispensaries are open, and ready to sell it.

So they are are suing the city, hoping they'll be able to cash-in on what could be a big tourism season this summer.

Paula Hagen manages one of those dispensaries: Green Pharm, a medical marijuana shop just within Traverse City limits. Hagen says she’s turning a lot of customers away lately.

"Constantly, probably 50 to 100 people a day," she says in Green Pharm's empty lobby.

 

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Credit Max Johnston / Interlochen Public Radio
Green Pharms, a medical marijuana dispensary in Traverse City, proudly has a 'Don't Tread on Me' flag out front.

Hagen is turning away people who want recreational marijuana. Green Pharm, along with every other dispensary in Traverse City, can only sell medical marijuana. So Hagen sends these customers to their store in nearby Kalkaska, where recreational sales are allowed.

But she does one other thing first. She has them sign a petition to change the rules in Traverse City.

"There’s hundreds and hundreds of signatures on that," she says.

 

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Credit Max Johnston / Interlochen Public Radio
Many of the city's dispensaries also have a petition urging city officials to allow for recreational use.

Traverse City’s 12 dispensaries are beautiful buildings. Most have big, bright signs and sleek storefronts.

It briefly looked like Traverse City would allow recreational marijuana sales in the summer of 2020. The city released a scoring rubric for dispensaries to open.

But they capped the number of recreational shops in town at four. Traverse City Commissioner Brian McGillivary said they could take it slow.

"You know we can always expand it," he said in a meeting last year. "Let’s start small and work our way up.”

Traverse City’s existing dispensaries hated the city's plan and several cannabis companies quickly sued. A judge has since banned sales until those are settled.

"We've been here a year."

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Credit Max Johnston / Interlochen Public Radio
House of Dank in Traverse City has plenty of products, but few customers.

Michael DiLaura runs House of Dank, another dispensary eager to sell recreational marijuana. He worked with Traverse City officials on the city's medical marijuana rules, which he says went well, but slowly.

"Traverse City from the start has been taking this very seriously, and they've done a really good job with the existing stores to ensure compliance," he said.

DiLaura assumed the city would use the same process for recreational marijuana, although city officials said that was never their plan.

"It seems like people are under the impression that medical-use facilities were just gonna be able to transfer over to recreational," said Traverse City Mayor Jim Carruthers in City Commission meeting last year. "I don't remember having that conversation." 

DiLaura says he was stunned by the city's proposal to limit the number of dispensaries to four. He thinks the marketplace should determine that.

"Most municipalities don’t decide that, based on their population, they only need three coffee spots," he says.

What is merit?

Only a select few dispensaries would be allowed to sell recreational marijuana, and the city was going to ask them for more. Dispensaries would be scored on various criteria by Traverse City officials.

A higher score would increase the chances of becoming one of the four dispensaries able to sell recreational marijuana. For instance, extra points would be awarded to dispensaries that build housing.

"We hired an architect to take a look at some residential housing, it looked like Frankenstein above my store. It just doesn’t make any sense to stuff apartments on top of this," DiLaura said.

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A section of the city's proposed scoring rubric.

Michigan’s recreational marijuana law does allow cities to set these criteria in what's called a merit-based system. A couple cities in Michigan have been sued for doing so, including Traverse City.

So now the courts must decide what’s a fair definition of merit. Matt Abel, the executive director of the Michigan chapter of the National Organization for the Reform of Marijuana Laws, says it's a hard question to answer.

"What you might perceive as something that’s beneficial, someone else might perceive differently," he said.

Abel also helped write the law that legalized recreational marijuana in Michigan. He says it was deliberately written to empower cities to embrace recreational marijuana sales.

The law has accomplished that in some parts of the state, in others it spawned litigation.

"[Recreational sales have] gone slower than many of us would have preferred, but it is moving." he said.

Traverse City’s rules are still in flux based on that lawsuit from cannabis companies. The Traverse City Clerk said city officials couldn’t comment on the dispute because of that pending case.

Summer time

Dispensary owners say the clock is ticking for the city's existing medical marijuana shops. Mike DiLaura at House of Dank says if they can’t sell recreational marijuana, most of the dispensaries will close within a year

He hopes something will change before Memorial Day.

"I am convinced that this is likely to be the most lucrative travel season in Michigan’s history," he said, citing rising Covid vaccinations across the state.

He says if city officials are looking for how to sell marijuana safely in town, DiLaura's answer is: let us do it.

"We’ve been here a year, there's been no trouble, nothing has changed," he said. "Traverse City is still this world-class town that people want to visit and live in. Cannabis hasn't altered that."

The state already gave out nearly $10 million dollars to some communities that allow recreational sales.

Nearby Benzie and Kalkaska counties each got over $80,000 for their shops.

Traverse City got nothing.