Grand Rapids Cannabis Operators Chafe Under City’s Social Equity Rules

by Scott McClallen

 

When Grand Rapids enacted a social equity program for recreational cannabis, the goal was to create “equitable policies and opportunities that address the historical systemic and institutional injustices often connected to cannabis.”

But some cannabis operators say the rules are nearly impossible to follow as business grows.

The Grand Rapids City Commission amended its cannabis social equity program by a 4-3 vote on Aug. 9, 2022, and delayed enforcement until Jan. 1, 2023.

The Marijuana Industry Voluntary Equitable Development Agreement and Cannabis Industry Social Equity Voluntary Agreement set goals that applicants pledged to meet in return for priority in the license application process.

The social equity system gives points for local ownership, workforce diversity, supplier diversity, employing people with marijuana convictions, and more.

“This Policy is intended to be a step toward helping to support equitable economic initiatives, including job creation, removing barriers to local ownership, and contracting opportunities for traditionally disadvantaged groups within the community,” the city commission policy says.

Yes, Every Kid

The policy allows operators to transfer points across categories in which businesses are struggling.

Applicants can also earn points by investing in The Grand Rapids Community Cannabis Reinvestment Fund, a city-created nonprofit.

The rules burden the marijuana industry with the weight of government’s actions, says Shoran Williams, the general counsel and chief regulatory officer of Fluresh, a cannabis company in Grand Rapids.

Williams said the equity goals were hard to reach because many companies can’t deposit dispensary money since marijuana is still federally illegal. For example, Williams said supplier diversity can be hard to fulfill.

“The pool of vendor suppliers was already small,” Williams said in a phone interview with The Center Square. “You add on top of that the pool of suppliers who want to do business with cannabis companies, and then you reduce that number even more by those who are owned by minorities who can service a company that needs to get 10,000 hair nets every quarter.”

Regarding the city-created cannabis nonprofit, Williams wants to directly donate to charity instead of giving to a third party.

“My problem: I don’t want to dilute our community engagement via someone else’s vehicle,” Williams said. “I want to be able to look out of my office window and see the impact that our efforts and dollars have made in 49507,” she said, referring to her business’ ZIP code.

Landon Bartley worked as a staffer for Grand Rapids when it crafted equity rules for the medical marijuana program. He’s now the president of the West Michigan Cannabis Guild.

“There are very few stores in the city right now that opened without this type of social equity commitment,” Bartley said in a phone interview.

Now, some dispensaries can’t meet these goals, Bartley added.

“This isn’t a question of choice,” Bartley said dispensaries told him. “We’re trying, but we can’t do it. This is a good faith effort and we can’t meet the requirements.”

Williams said that cannabis social equity programs nationwide are expecting one industry to “undo years of government and private policy sanctioned by government that have decimated these communities.”

“There is no cannabis company that has overpoliced Black and Brown communities,” Williams said. “No cannabis company has imprisoned people for the same things cannabis companies are making money doing now. Those were government actions. We can be a good community neighbor without governmental interference. This is not true of every company but is for Fluresh.”

Williams questioned why the cannabis, liquor, and cigarette industry aren’t being treated the same regarding social equity. Williams said the city is in a quandary and is trying to help.

“But as a business, it very much feels as though even though the voters of the state of Michigan overwhelmingly approved legalization, and provided for communities to opt-in, the city of Grand Rapids does not feel very welcoming for the cannabis industry,” Williams said.

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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org.
Photo “Medical Marijuana Dispensary” by O’Dea. CC BY-SA 4.0.

 

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