Council Votes 4-1 to Halve Distance Between Dispensaries in Most Areas

Above: the property at 1950 Merritt Road, one of two potential medical marijuana provisioning center locations on Merritt Road 

East Lansing City Council voted 4-1 Tuesday night to reduce the required separation between medical marijuana provisioning centers (dispensaries) from 1000 to 500 feet—but not everywhere in the City.

The ordinance also abolishes any required separation between provisioning centers and liquor stores.

Council previously established four medical marijuana overlay districts in the City, and established a required 1000 feet of separation between medical marijuana provisioning centers, and between provisioning centers and liquor stores. The overlay districts are:

• Properties bounded by the existing B2 (“Retail Sales Business”) district within the City limits that are south of Michigan Avenue and west of Brody Road.
• Properties north of Abbey Road “as extended to U.S. 127,” west of Coolidge Road, east of U.S. 127, and south of the northern boundary line of the existing OIP (Office Industrial Park) District extended to 127.
• Properties bounded by Park Lake Road, Haslett Road, and Merritt Road, near the new Costco.
• Properties south of Grand River Avenue between Cedar Street and Hagadorn Road – the area known as the East Village and containing The Hub project, now under construction.

Above: location of the old DPW site which will be the second medical marijuana provisioning center on Merritt Road

Ordinance 1448 would have modified the distance in only one of the four medical marijuana overlay districts drawn by the City: the one on Merritt Road. One provisioning center has already been approved for 1950 Merritt Road, and the city-owned property recently sold on eBay is located approximately 700 feet away. The intended use of the land by the buyer is a provisioning center.

Under the 1000-foot separation rule, the City’s Merritt Road property could not become a provisioning center. Reducing the required distance to 500 feet would allow both properties to become medical marijuana retail operations.

The Planning Commission unanimously recommended approval of Ordinance 1448 if the required distance between provisioning centers was reduced to 500 feet in all four overlay districts. The Planning Commission also suggested that Council remove the required separation between provisioning centers and liquor stores. According to City Planning liaison David Haywood, Planning had basically asked “why should there be a separation distance that only applies to situations that benefit the City?” in reference to the Merritt Road property.

The Downtown Development Authority (DDA) voted 5-1 to approve Ordinance 1448 as written. They also voted 6-0 not to recommend the Planning Commission’s version.

Early in the discussion, Mayor Mark Meadows moved for adoption of Planning Commission version of the ordinance except that the 1000-foot separation would remain in place for the overlay district on Grand River Avenue. That is the only one of the four districts that is also part of the DDA’s district.

Meadows said that a 1000-foot separation “still makes sense there,” and referred to congestion and traffic as well as earlier comments by Acting MSU President Satish Upda who had urged Council not to allow provisioning centers near campus.

Councilmember Aaron Stephens indicated that he wasn’t in favor of the original ordinance 1448, but also wasn’t in favor of amendment because “if there’s going to be a separation distance it should be fair. If it changes for one it should change across the board.”

His concerns were echoed by Councilmember Shanna Draheim, who said she liked the consistency of making it the same throughout the overlay districts, and didn’t see the congestion and density as an issue because the area is already a busy retail hub.

Councilmember Erik Altmann supported Meadows’ view that the Grand River overlay district is substantively different from the other three because economic development is a goal in the other three districts, all three are far away from neighborhoods, and Grand River is denser and more heavily trafficked. He stated that he saw neither a fairness issue nor a need for consistency because of those differences.

Altmann added that selling marijuana remains a federally illegal business, is largely cash-only, competing with a black market, and therefore merits a “go-slow” approach, particularly on Grand River. “The way the recreational marijuana law is worded,” he said, we should expect that medical marijuana provisioning centers are likely to become recreational provisioning provisioning centers in the future, and would be selling recreational intoxicants parallel to alcohol. “I don’t think we’d consider locating three or four liquor stores along Grand River,” he said.

The amendment to Ordinance 1448 passed 3-2 with Meadows, Altmann and Councilmember Ruth Beier in support and Draheim and Stephens against.

Acknowledging that “this is an unusual way to have a public hearing,” Meadows invited anyone who wants to address the ordinance as amended to address Council.

Mike Corcoran, an attorney representing ABCD LLC which now owns Oadie’s at 1108 Grand River Ave., asked Council not to pass the ordinance as it relates to removing the separation between provisioning centers and liquor stores. He noted that his clients purchased the property in cash before the ordinance was passed, and said they have “skin in the game” unlike other applicants, and have spent “real money, time and energy on this.”

Corcoran went on to explain that ABCD had purchased the former party store with the idea that they’d open a liquor store, and that if medical marijuana provisioning centers were allowed there by the City, they would convert it to a dispensary. The size of the Grand River overlay is such that a 1000-foot separation from liquor stores would mean that no other marijuana business could locate in that district, and that ABCD could effectively have cornered the market, preventing existing applicants from locating provisioning centers there and later converted their liquor store into a provisioning center.

His clients, he said, have already been approved for a license to sell liquor and are in the process of opening as a liquor store, and removing the distance requirements for liquor stores would “changes the rules in mid-stroke.”

Lisa Knowles, a dentist with an office in a professional complex across Merritt Road from the overlay district asked Council for clarification. “There could be two dispensaries on Merritt if this passes?” she asked. “Please keep it at 1000 feet.”

Meadows then closed the public hearing and called for a vote on Ordinance 1448 as amended. Draheim said that she would be voting “no” because she supports a 500-foot distance, but feels very strongly about fairness.

The Ordinance passed in a 4-1 vote with Meadows, Altmann, Beier and Stephens in the majority.