Michigan’s marijuana industry jolted by Ohio legalization, local vote defeats

• Voters in Ohio approved legal marijuana on Tuesday, likely impacting pot retailers in southern Michigan
• But voters in four metro Detroit communities rejected attempts to bring pot shops to those communities
• Sales statewide continue to rise, increasing 28 percent in September compared to a year earlier

Voters in metro Detroit and Ohio sent strong messages Tuesday that could have long-term impacts on Michigan’s $3 billion marijuana industry. 

As marijuana users pour into recreational marijuana shops in 160 Michigan communities, voters in four municipalities — Birmingham, Rochester, Grosse Pointe Park and Keego Harbor — rejected proposals to allow pot shops in their towns.

At the same time, across the state’s southern border, Ohio voters embraced legal recreational marijuana in a move that industry leaders fear could dim sales at southern Michigan pot shops — and the value of the many marijuana billboards that line U.S. 23 and Interstate75.

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“I think Ohio is a much bigger deal,” said Al Williams, owner of Da¢ut marijuana stores in Detroit and Flint.

Stores in Lenawee and Monroe counties — especially those just off I-75 in Monroe Township about 15 miles north of the border — could be hurt, Williams said. “It’s going to have a huge impact on Monroe.”

There are 13 marijuana retailers in Monroe Township, which was awarded $570,000 in state marijuana tax revenue last year because of those stores. That’s in a township with a $4.1 million annual budget.

Township officials said they planned to use the money to fix roads, improve the fire station and expand a playground.

The township will have time to adjust to the potential lost revenue. It could be months or years before Ohio sets up a licensing system and green lights pot shops across the border. 

Michigan’s marijuana industry has grown quickly since the first pot shops opened in 2019 and sales continue to grow, up 28 percent for recreational marijuana in September, compared to a year earlier.

There now are 574 marijuana retailers or microbusinesses in Michigan across 160 cities, townships and villages in 64 of the state’s 83 counties. There are 40 in Washtenaw County and 30 each in Kent and Kalamazoo counties. There are 22 in Oakland County and 20 in Wayne County.

Each community that has opted-in gets nearly $52,000 per store in annual payments. But the vast majority of the more than 1,500 municipalities in Michigan have opted not to allow the stores.

But voters in Birmingham, Rochester, Grosse Pointe Park and Keego Harbor all rejected proposals to allow them on Tuesday, with leaders in some of these towns raising concerns about who was behind them.

“It’s easily accessible, it’s not far; you can have it delivered to your door,” said Michele Hodges, mayor of Grosse Pointe Park. She said she was glad voters rejected the ballot measures and the stores they could bring. “In our community we feel we can do better,” she said.

The future of marijuana revenues are also unclear. Prices have fallen precipitously as demand — and stores — have increased and the industry has grown and growers and dispensaries have seen profits squeezed.

The arrival of recreational marijuana in Ohio could further harm the industry, Williams said. And that would hurt state marijuana revenues, which will top $59 million this year.

Advocates for the Ohio ballot proposal made note of this, even mocking the recent U-M football sign-stealing scandal to push for legalization, arguing that Michigan is also stealing tax revenue that should pay to fund Ohio’s schools and repair its roads.

With the market getting saturated — and knowing that Ohio voters were considering legalizations — Williams said he was aware that industry insiders were behind efforts to add more communities.

“I’ve seen this before,” Williams said. “These are owners in the industry that get politically active to extend the industry. Especially as Ohio is coming on now.”

Prior to Tuesday, little was known about the group that got the measures on the four municipal ballots, officials said. But they successfully used existing ballot procedures to get them before voters.

“We do not know (who was behind it),” said Hodges of Grosse Pointe Park.

The “Open Stores” group that was behind the efforts has a website that provides information on how much communities can get if they allow marijuana retailers. But the site has no contact information nor any details about who is behind it. Its address is a UPS store in Troy.

Hodges said campaign material implied the city had put the measures before voters but it had not. “Residents were unclear if the city was behind this,” she said. “The city had no involvement whatsoever with it.”

Keego Harbor officials initially blocked the measures from the ballot but Michigan Court of Appeals ordered them to put it back on.