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Michigan social equity regulations help cannabis applicants

get started but lack continued support
Published July 17, 2020 | By Bart Schaneman
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Daily examining social equity regulations and business opportunities in key (Expo Dates – Oct 20-22)
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Michigan’s marijuana social equity provisions lower the barrier to entry for
Pre-Show Forums, Oct 19
recreational cannabis business applicants, but some industry insiders say
Networking events
the state needs to do more to help keep such companies running.
Online content also available for 2021

Regulators also appear to be relying on municipalities to develop their own

rules for social equity in the absence of detailed guidance at the state level. GET SHOW DETAILS

Discounts for licensing based on social equity criteria can total 75% off of application and license fees, with criteria
including: Company News

Residency in a disproportionately impacted community for at least five cumulative years within the past 10 years: BlueOx Credit unveils
CenturionPro adds
Union variable
partners
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25% fee reduction. and rail Financial
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July
June 16,1, 2021
Conviction of a marijuana-related offense. Misdemeanor convictions: 25% fee reduction. Felony convictions: 40%
April 13, 2021
fee reduction.
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Eligible social equity participants who plan to operate a marijuana business within a disproportionately impacted
April
March 27,24,2021
Ex-advertising2021 agency executives launch a
community will receive a fee reduction on all adult-use licensing fees.
minority owned cannabis & spirits platform
June 14, 2021
M.J. Hall & Company introduces the first
Also, eligible social equity participants who plan to operate a cannabis company outside a disproportionately impacted admitted cannabis product in Arizona

community will receive an extended fee reduction for only two years after receiving an adult-use license.

‘Unfulfilled promise’

Despite the assistance those discounts could provide, one commonly cited major hurdle for social equity applicants is
access to capital to help such businesses succeed. News Briefs

“Someone can get a break on the fees, but that’s not really the most expensive part of the whole endeavor,” said Matt Husband
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July 14, 2021
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“Even if someone qualifies for a reduction, that doesn’t help them with real estate, an architect, legal fees, accounting fees
or any of the material and equipment that are required.” Missouri
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Rick Thompson, owner of the Flint-based Michigan Cannabis Business Development Group, said the lack of social equity July 12,
16, 2021
14,
support is his “single greatest disappointment with the Michigan cannabis industry.”
NY lawyers
Court
California
approves
governor
may Canadian
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with off
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“Social equity is the great unfulfilled promise of America’s cannabis revolution,” he added. CannTrust’s
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Kayla Siam, an attorney in Chicago-based Seyfarth Shaw’s cannabis law group, has been studying social equity across July 9,14,
16, 2021
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She said one of the main sticking points in the development of Michigan’s social equity program has been the slow CEO onmarijuana
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progress of awarding adult-use licenses. That’s partly the result of the coronavirus pandemic , which is also the case in July 9,13,
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But the Illinois program is “much more robust,” said Barton Morris, a Royal Oak-based attorney with the Cannabis Legal licenses forbegin
counts
minorities incultivators
cannabis
July 29
Group. July 9,13,
15, 2021
2021

So far, Barton is “underwhelmed” with the social equity program in Michigan. Prominent
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That’s largely because of the foot-dragging at the municipal level to not only license adult-use cannabis businesses but to July 9,13,
15, 2021
2021
also expand local social equity programs.
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The city has yet to award adult-use licenses, and medical marijuana businesses aren’t eligible for social equity help.

City leaders are still discussing ways to ensure the city, which is 85% Black, is appropriately represented demographically
by its cannabis business ownership.
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Barton said the city has said publicly it will have a social equity component, but the industry is still waiting and it seems the
city leaders are having some difficulty finding out how it will work.
26.6k
followers
Detroit is home to 75 medical marijuana dispensaries, and the state law states that an adult-use business owner must
have an MMJ license before opening a recreational cannabis store. 72.6K
followers

Abel pointed out that DeAndree Watson, a top aide for Detroit City Councilman James Tate and a point person on this
project, was murdered in June , which has been a major setback. 41.9k
followers

Siam added that she’d like to see more cohesion among Michigan’s regulations at the state level instead of relying on the
cities to take up the slack. 45.9k
followers

What can be improved

170
followers
The potential for improvements to the state’s rules is vast, according to industry analysts.

Thompson would like to see social equity applicants receive assistance in several ways, including: July Issue

A break on real estate via a land bank.

Payroll or accounting services provided to the applicants.

Human resources and employment services.

Free executive leadership training through a partnership with an established business to guide these new owners.

“What we’re talking about with social equity is leveling the playing field,” Thompson added.

He’d also like to see a state-based program that offers loans for these applicants to provide access to capital.

Barton agrees on the training point. He’d like the applicants to be offered help on operational planning, odor mitigation
and management planning, to name a few.

A lot of the caregiver applicants, for example, have not had to submit a plan on how they manage pesticide remediation,
Barton said. Get Our Daily Email

Siam emphasized that the training be provided for upper-level positions – management or testing lab technicians, for
instance – and not just for lower-rung employees. Get Our Newsletter »

The better state-level programs in the cannabis industry are those that allocate a certain amount of revenue to create a
fund to provide loans to social equity licensees, Siam said.

It’s about more than just getting a license, she said “it costs money to operate a business.”

“The social equity applicants are going to be the ones who need the most help,” Siam added, “who need the most
resources.”

Bart Schaneman can be reached at barts@mjbizdaily.com

For a sampling of organizations and efforts that support, foster and enhance social equity in the cannabis industry as well
as opportunities for minorities, overall diversity and racial justice, click here .

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