The city of Pontiac began accepting recreational marijuana business applications last week, but the timing couldn’t be more challenging for prospective operators.
The Pontiac City Clerk’s office opened its 21-day application window on Dec. 2 for up to 17 retail licenses just as the latest Michigan cannabis flower prices hit new bottoms.
The application period, which runs through Dec. 23, follows voters’ approval in February of Ordinance 2424, which laid out new licensing guidelines after years of regulatory delays and legal challenges.
The former automotive manufacturing hub, which emerged from state-appointed emergency management in 2013 after clearing $87 million in debt, has long seen cannabis as a potential new revenue stream. Pontiac sits at the heart of wealthy Oakland County but has struggled to attract new business investment since the Lions left and General Motors closed its last assembly plant in 2009.
“I want to make sure this is a fair process to all applicants who apply,” City Clerk Garland Doyle said in a statement announcing the window. “This is why we are providing greater detail in our application materials.”
The ordinance established a 185-point scoring system that gives up to 30 bonus points to applicants previously approved for medical marijuana permits. Applicants must submit a $5,000 non-refundable fee.
Folks like Pleasantrees, which operates five dispensaries in Michigan and previously secured medical marijuana approval in Pontiac, have been working on their applications over the past year.
The path to recreational sales has been anything but smooth. Despite voters first approving medical marijuana in 2018, years of squabbling between city council members and the city’s former mayor, who opposed cannabis businesses, prevented any licenses from being issued.
New Michigan entrants generally face an uphill climb in the maturing cannabis market, where oversupply has created an unsustainable price war. Despite logging $268.6 million in sales last month, the state’s 3.56 million active plants — up 73% year-over-year — have driven flower prices down another 6% in October to $74 per ounce, according to Crain’s Detroit.
The city plans to distribute 17 retail licenses across four districts: three in Woodward Gateway, six in Downtown, seven in Cesar Chavez, and seven along Walton Boulevard.
The ordinance also allows for five Class A microbusinesses and six designated consumption establishments while including social equity provisions and removing previous caps on contributions to a city-administered social equity fund. The clerk’s office began accepting applications for other license types, including growers and processors, in August.
While Pontiac moves forward with cannabis retail, the industry faces pushback elsewhere in Southeast Michigan. Recent votes in Howell, Lathrup Village and other communities have rejected marijuana businesses, while a Michigan appeals court ruling has halted ballot initiatives across multiple municipalities. The regional resistance could benefit Pontiac operators, but they’ll still have to deal with rock-bottom prices and nagging oversupply.
Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News.
Story was published in You Smoke Mids