Detroit has received 90 applications for 60 available adult-use cannabis licenses as the city navigates a three-phase licensing process.

Detroit officials plan to issue 40 retail, 10 microbusiness and 10 consumption lounge licenses in the first phase, according to a Detroit Free Press report.

The application period opened Sept 1 and closed Oct. 1.

The city will issue a total of 160 licenses over the three phases, with half the licenses awarded to social equity applicants. To qualify as a social equity applicant, the business must be at least 51% owned by Detroit residents or individuals who live in other communities disproportionately impacted by the war on drugs.

Forty of the 90 applications received during the first phase qualify as social equity, the Detroit Free Press reported.

Detroit’s social equity provisions have been challenged in multiple lawsuits; Detroit City Council approved a revised adult-use cannabis ordinance in April 2022, nearly 10 months after a U.S. district judge blocked the city’s previous attempt to license adult-use cannabis businesses. The original ordinance would have allowed entrepreneurs to obtain “Detroit Legacy” status when applying for the licenses, providing licensing preference to applicants who have lived in the city for a certain number of years, as well as those with low incomes and past cannabis-related convictions.

Detroit’s revised ordinance, which outlines plans to issue half of the available adult-use business licenses to social equity applicants, provides separate processes for residents and non-residents to receive licenses to ensure that the two types of applicants do not compete against each other in the licensing process.

A group of medical cannabis dispensaries filed a lawsuit in May to challenge a provision in the ordinance that they claimed barred medical cannabis operators from receiving adult-use licenses until 2027.

Another medical cannabis company, JARS Cannabis, filed a second lawsuit in June alleging that Detroit’s ordinance violates Michigan law by giving preferential treatment to certain applicants.

Both lawsuits were dismissed in August, but a third complaint was filed last month to challenge the ordinance on the grounds that it gives unfair preference to longtime Detroit residents.

Twenty-eight of the 40 applicants who qualify for social equity status during this licensing round also qualify for “Detroit Legacy” status, the Detroit Free Press reported.

Detroit officials selected Rob Huth of Clinton Township-based law firm Kirk, Huth, Lange and Badalamenti, to score the applications, according to the news outlet. Detroit City Council approved Huth for the job Oct. 18, and councilmembers were given seven days to reconsider the vote before the decision goes to Mayor Mike Duggan’s office for final approval, the Detroit Free Press reported.

Kim James, director of the Detroit Office of Marijuana Ventures and Entrepreneurship, told the news outlet that once a vendor was approved to score the applications, applicants will find out if they have been selected for a license in four to six weeks.

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