Niles to consider offering new type of marijuana license

Published 9:55 am Thursday, September 15, 2022

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NILES — The City of Niles could soon be offering a new type of marijuana license to current and future businesses.

The Niles City Council is considering providing Class A cannabis microbusiness licenses – in addition to the already available standard microbusiness license – to entrepreneurs looking to cash in on marijuana in the city. 

A microbusiness can be vertically integrated but is limited to 150 plants and must produce all crops or products in-house. A Class A micro business license would double the plant count to 300 and allow microbusinesses to purchase mature plants, edibles and other products from licensed operators. Unlike standard microbusiness licenses, Class A microbusinesses are not allowed to process their plants into oils, extracts or infused cannabis products.

After listening to discussions and debates regarding the two microbusiness licenses, the Niles Planning Commission recently passed a motion recommending the City Council to consider adding Class A microbusiness licenses to the current ordinance. No more than four microbusinesses – regardless of class – will be allowed in the city. Currently, two licenses have been permitted, one is open and the fourth is under construction. The council will make a decision on the matter during a future council meeting.

Aiming for Class A

Southland Farms, 215 A. 11th St., Niles, is a microbusiness hoping to apply for a Class A license if the city allows it. The license would allow the business to sell more product during a time when the price of the plant has fallen. According to the Cannabis Regulatory Agency, between July 2021 and July 2022, the average retail price for an ounce of flower has declined 48 percent in the medical market – from $213.89 to $110.72 – and 44 percent in the adult-use market – from $217.94 to $121.58.

“What I’m asking you here today is really simple, allow us to choose between a microbusiness and a microbusiness A so that we can allow the customers of Niles and the entire region to have a choice when they come into the store. They deserve to know that they’re getting clean, organic products. … We have done our very, very best to live up to every single commitment that the state of Michigan and the City of Niles asked us to make to get this license. It doesn’t sound like everybody in this room is living up to that, but we did that because we asked us to make that commitment and we have lived up to every single one.”

“There was never a contractual agreement between the city and any of the licensees in operation,” said City Attorney Robert Landgraf in response to Noonan. “The city made a decision that they wanted to allow the marijuana business in Niles. You guys came in the way that you can come in with the different opportunities and different availability and you’re kind of fighting among yourselves as to what you want. The city does not have any obligation to assist you because the business climate has gone bad.”

Ron Coleman has lived and worked in Niles his whole life. While not a cannabis expert, Coleman, the owner of the 215 S. 11th St. building now home to Southland Farms, believes the city should allow the Class A license to be obtainable.

“No matter what business you have, you’ll always have competition,” Coleman said. “Sometimes you like it, sometimes you don’t. If there’s a new license available that Michigan didn’t have before, and now they have it, they should be able to apply for it. My understanding is that (Southland Farms) has lights set up on tables inside the building and big plant under a light. All they want is two plants under the light.”

Regional Roots, LLC received approval for a microbusiness license in December 2020. While the business has not opened yet, co-owner Michael Felder hopes the city will allow Class A microbusiness licenses so that Regional Roots can expand.

“With the 300 plants, we’re looking at it as an opportunity,” he said. “We’ve had a lot of hurdles over the last couple of years, whether that’s material costs, labor costs, different things like that going up. I hope you consider it; as a small business, it would be huge to have a mere 300 plants to sustain our small business and the additional costs we’ve incurred along the way.”

While the microbusinesses hope the city rules in their favor, others in the cannabis industry believe the city should not allow the Class A microbusiness license.

Dispensaries divided

According to City Administrator Ric Huff, a maximum of four provisioning center licenses are available in the city. Currently, three provisioning centers — Native Michigan Remedies, 2112 Industrial Dr., Primitiv Group Niles, 1286 S. 11th St. and Green Stem Provisioning, 1140 S. 11th St. Ste. A — are operational, and one more center has a provisional license, meaning it is not open yet but is expected to be operational soon.

Michael Gelatka, CEO of the ReLeaf Center, 1840 Terminal Rd., is against the Class A license and believes the city should support the four original dispensaries that invested time and money into the community.

“We continue to employ 70 people from this community,” he said. “Wives, husbands, people whose children go to school here. We do not need more competition. We need support from the city, if anything, because Dowagiac is legalizing it today. New Buffalo, New Buffalo Township, all of our surrounding suburbs are increasing licenses. I think Niles should take a different direction and support the four dispensaries. … That’s what we invested in; we invested in one of those four dispensaries.”

George Lynch, owner of Green Stem Provisioning, 1140 S. 11th St. Ste. A, believes that the city should hold off on making a decision until every provisioning center is open.

“I think that all we need to do is take one step back for one year,” he said. “Let’s visit this on September 15th next year after all the PCs are open and after you granted the four micro businesses, let’s see how it looks. Then we come back and say, you know what, we can do a couple more, more retail outlets, or by that time, you’re going to see people go out of business because that’s what’s going on in the business.”

Mayor Nick Shelton responded by saying even if the license isn’t approved by the council, the likelihood of more competition appearing in neighboring communities is high.

“I think something that the council must consider is that, should this council say no, (if Niles Township approves marijuana) they can open up, literally on the other side of the city limits line less than a mile from you and do the same,” Shelton said.

“We lose business to Edwardsburg, we lose business to Buchanan and we’re definitely going to lose business to Dowagiac, when the casino opens up we’re going to lose all of our New Buffalo business,” Lynch replied. “We already know that there’s constraints out there. We just don’t want to pile on, and that’s what this feels like.”

William Haas of Native Michigan Remedies, 2112 Industrial Dr., does not believe the council should wait. His issue lies with the local growing establishments. Per the CRA, between July 2021 and July 2022, the number of active grower licenses has increased 65 percent. In industrial-zoned properties, an unlimited number of parcels can be used for growing and processing in Niles. 

“Mr. Lynch keeps coming up here asking for one more year, one more year,” Haas said. “It’s not our fault he invested so much. It’s not my fault.

“The real problem here is the (grower establishments); they’re saturated,” he said. “More and more of them are going into that Simplicity building all the time, but (Lynch) doesn’t want to know the details. That’s so un-American it’s unreal.”

Haas said he is in favor of the city offering a Class A license for those who seek it.

“I’m all for it, let them have their business,” he said. “But I would really like to see all four microbusiness licenses become available because when we started this, we didn’t have those. If I want to switch things around it’s going to cost me a bunch of money but I should have an opportunity.”

Moving forward together

While no decisions were made, members of the Niles cannabis industry suggested joining forces to create a group in order to improve unity and communication.

“It sounds to me like we have an industry in Niles that is not only growing but thriving,” said Green Stem Provisioning PR Manager Katie Lindgren. “In order to be able to communicate as a group and as an industry, if we were to get together and create a guild or an association of Niles cannabis businesses so that when things like this happen, we as an industry internally in Niles can communicate with the city council or with the administrator in order to be able to share our thoughts or feelings… It becomes a copasetic relationship, rather than coming to these and not knowing what we;re thinking or not knowing our positions. Then we can work together prior to get major work done to encourage the growth of the industry in this community.”