NILES – The City of Niles may soon offer a new type of marijuana license to current and future businesses.
Niles City Council plans to provide Class A cannabis microbusiness licenses — in addition to the standard microbusiness license already available — to entrepreneurs looking to profit from marijuana in the city.
A microenterprise can be vertically integrated but is limited to 150 factories and must produce all crops or products in-house. A Class A micro-enterprise license would double the number of plants to 300 and allow micro-enterprises to purchase mature plants, edibles and other products from licensed operators. Unlike standard microenterprise licenses, Class A microenterprises are not permitted to process their plants into oils, extracts, or infused cannabis products.
After listening to the discussions and debates regarding the two microenterprise licenses, the Niles Planning Commission recently passed a motion recommending that the city council consider adding Class A microenterprise licenses to the current ordinance. No more than four micro-enterprises – regardless of class – will be allowed in the city. Currently, two licenses have been authorized, one is open and the fourth is under construction. The Board will make a decision on this at a future Board meeting.
Aim for class A
Southland Farms, 215 A. 11th St., Niles, is a microbusiness that hopes to apply for a Class A license if the city allows it. The license would allow the company to sell more product during a period 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 fell by 48% in the medical market – from $213.89 to $110.72 – and by 44% in the adult market – from $217.94 to $121.58.
“What I’m asking you here today is very simple, let us choose between a micro business and a micro business A so that we can allow customers in Niles and throughout the region to have a choice when they walk into the store. They deserve to know they’re getting clean, organic produce. … We’ve done our best to meet every commitment the State of Michigan and the City of Niles have asked us to make to get this It doesn’t seem like everyone in this room lives up to that, but we did it because we asked ourselves to make that commitment and we lived up to everyone.
“There was never a contractual agreement between the city and any of the operating licensees,” City Attorney Robert Landgraf said in response to Noonan. “The city has decided to allow the marijuana business in Niles. You came the way you can come in with different opportunities and different availabilities and you kind of fight amongst yourselves over what you want. The city has no obligation to help you because the business climate has deteriorated.
Ron Coleman has lived and worked in Niles all his life. Although not a cannabis expert, Coleman, the owner of the 215 S. 11th St. building that now houses Southland Farms, believes the city should allow the Class A license to be obtained.
“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 they have it now, they should be able to apply for it. My understanding is that (Southland Farms) has lights set up on tables inside the building and a large plant under one light, all they want is two plants under the light.
Regional Roots, LLC received approval for a microenterprise license in December 2020. Although the business has yet to open, co-owner Michael Felder hopes the city will allow Class A microenterprise licenses so that Regional Roots can grow.
“With the 300 factories, we see this as an opportunity,” he said. “We have encountered many obstacles over the past two years, whether it is material costs, labor costs, etc. I hope you consider it; as a small business, it would be huge to have only 300 factories to support our small business and the additional costs we incurred along the way.
While microbusinesses hope the city rules in their favor, others in the cannabis industry believe the city shouldn’t allow the Class A microbusiness license.
According to City Administrator Ric Huff, a maximum of four supply center licenses are available in the city. Currently, three supply 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 another center has a provisional license, which means it is not open yet but should be operational soon.
Michael Gelatka, CEO of ReLeaf Center, 1840 Terminal Rd., is against the Class A license and believes the city should support the original four dispensaries that have invested time and money in the community.
“We continue to employ 70 people from this community,” he said. “Wives, husbands, people whose children go to school here. We don’t need more competition. We need the city’s support, if there is any, because Dowagiac is legalizing it today. New Buffalo, New Buffalo Township, all of our surrounding suburbs are increasing licensing. I think Niles should take a different direction and support the four dispensaries. … This is what we have invested in; we have invested in one of these four clinics.
George Lynch, owner of Green Stem Provisioning, 1140 S. 11th St. Ste. A, believes the city should wait to make a decision until each supply center is open.
“I think all we need to do is step back for a year,” he said. “Let’s visit this on September 15 next year after all the computers are open and after granting the four micro enterprises, let’s see what it looks like. Then we come back and say, you know what, we can do a few more outlets, or at that point you’re going to see people shutting down because that’s what’s happening in the business.
Mayor Nick Shelton responded by saying that even if the license is not approved by council, the likelihood of more competition appearing in nearby communities is high.
“I think something that council needs to consider is that if this council says no, (if the township of Niles approves of marijuana) it can open up, literally across the city limit at less than a mile from you and do the same,” Shelton said.
“We’re losing business in Edwardsburg, we’re losing business in Buchanan and we’re definitely going to lose business in Dowagiac, when the casino opens we’re going to lose all of our business in New Buffalo,” Lynch replied. “We already know that there are constraints there. We just don’t want to clutter up, and that’s how we feel.
William Haas of Native Michigan Remedies, 2112 Industrial Dr., doesn’t think the council should wait. His problem lies with the local cultivation establishments. According to the CRA, between July 2021 and July 2022, the number of active producer licenses increased by 65%. In properties in the industrial zone, an unlimited number of plots can be used for cultivation and processing in Niles.
“Mr. Lynch keeps coming 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 (producer establishments); they are saturated,” he said. “More and more of them are coming into this Simplicity building all the time, but (Lynch) doesn’t want to know the details. It’s so un-American it’s unreal.
Haas said he favors the city offering a Class A license to those who seek it.
“I’m all for it, let them do their thing,” he said. “But I would really like to see the four micro business licenses become available because when we started this we didn’t have any. If I want to change things, it will cost me a lot of money, but I should have an opportunity.
Moving forward together
Although no decision has been made, members of the cannabis industry in Niles have suggested joining forces to create a group to improve unity and communication.
“It seems to me that we have an industry in Niles that is not only growing but thriving,” said Katie Lindgren, public relations manager for Green Stem Provisioning. “In order to be able to communicate as a group and as an industry, if we were to come together and form a Niles cannabis business guild or association so that when things like this happen, we as an industry internal to Niles, can communicate with the city council or with the administrator so that we can share our thoughts or our feelings… It becomes a copasetic relationship, rather than coming to these and not knowing what we think or not knowing our positions. Then we can work together before doing major work to encourage the growth of industry in this community. »