What’s the State of Marijuana Retail In East Lansing?

UPDATED: Monday, January 10, 2022, at 5:15 p.m. This article was updated to provide further information about a book scholarship program after an ELi reader brought it to our attention.

It’s been more than a year since marijuana became legal for recreational use in Michigan, and three dispensaries in East Lansing are now up and running to cater to the cannabis desires of those age 21 or older. Two more are expected to come online in the next two years, putting at least one pot shop in every one of the areas allocated for marijuana retail sales by East Lansing’s City Council in 2018.

As the open (and taxed) sale of marijuana becomes a normal facet of life in Michigan, we take a look at the state of the marijuana retail in East Lansing.

Which dispensaries are open right now?

Currently, there are three dispensaries open in East Lansing and selling cannabis products both for medical and recreational use. 

There’s a Skymint store on Coolidge Road on the City’s northwest side, Pincanna on E. Grand River Avenue near campus, and Pleasantrees on Merritt Road near Costco (right off of Haslett Road, next to Red Cedar Spirits). 

All three are selling both medical marijuana and adult-use recreational products, because all three have been awarded Special Use Permits (SUPs) by City Council to sell both.

The law in East Lansing currently requires businesses to get separate SUPs for the sale of medical and recreational marijuana if they want to sell both. This reflects State marijuana law, which deals with the two types of sales separately.

In East Lansing, an applicant is required to pay a $5,000 fee with each SUP application for marijuana sales. So, every dispensary that aims to sell both medical and adult-use marijuana in East Lansing will need to fork over $10,000 in total to the City for the two applications.

Are there more dispensaries coming to East Lansing?

Yes. Two new dispensaries are slated to be constructed in East Lansing: one at 1415 E. Michigan Ave. — at the site of the former Sawyer’s Pontiac dealership, next to a big new student housing project — and another at 2040 Merritt Rd., just up the way from Pleasantrees. Council approved special use permits (SUPs) for medical marijuana sales at both those locations in August 2020. 

East Lansing Planning and Zoning Administrator Peter Menser told ELi that these two locations have yet to submit SUP applications for the sale of marijuana for recreational use. He did say that he expects to receive the applications sometime soon, likely in the first quarter of this year.

The SUP for medical marijuana sales had been approved for the E. Michigan Ave. location in March 2019, and had subsequently been extended to expire in March 2021. SUPs usually last a year, Menser explained, and the pandemic caused a delay in construction. According to Menser, the City’s ordinance requires that construction begin before the approval’s expiration, and that happened.

“The [E. Michigan Ave.] applicant started the project with the demolition of the principal building on the site,” Menser told ELi in November 2021. He said he expects those developers to apply for recreational sales soon.

Beyond SUPs, what other parameters and requirements are there around the sale of marijuana in East Lansing?

The current limiter on new commercial marijuana retail operations in East Lansing is a zoning ordinance passed by City Council in 2018.

Ordinance 1416a — a piece of legislation that was a great source of controversy and the subject of several ELi reports — ultimately specified four areas where medical marijuana could be sold. The City has since used the same areas to allow recreational-use sales. 

The areas are:

• Properties on the City’s west side near what is now the University Edge (Red Cedar) development, specifically an area identified as the existing B2 (“Retail Sales Business”) district within the City limits that are south of Michigan Avenue and west of Brody Road.
• Properties on the City’s northwest side, specifically north of Abbey Road “as extended to U.S. 127,” west of Coolidge Road, east of U.S. 127, and south of the northern boundary line of the existing OIP (Office Industrial Park) District extended to 127.
• Properties bounded by Park Lake Road, Haslett Road, and Merritt Road, near the new Costco.
• Properties south of Grand River Avenue between Cedar Street and Hagadorn Road – the area known as the East Village and containing The Hub project.

Part of the plan with these locations was to keep dispensaries from cropping up near single-family home neighborhoods or in the core downtown. A majority of the Downtown Development Authority had objected to the idea of marijuana sales in the central downtown.

City Council also outlined certain “setbacks” — basically limits on how close two marijuana retail shops could be — so there could not be “too many” dispensaries or the formation of some kind of cannabis district. The setbacks were pegged at 1,000-feet for marijuana dispensaries in East Lansing until one special exception was created.

That exception involved the land known locally for its sale by the City via eBay.

The land at 2040 Merritt Rd. had been owned by the City and used by the Department of Public Works. In an effort not to devalue the land the City owned, in the midst of the marijuana real estate gold rush, East Lansing’s City Council approved a zoning change (Ordinance 1448) which lowered the setback distance to 500 feet for the zoned area that included property that the City owned, and kept setbacks at 1,000 feet for the other three zoned areas. 

That meant that the establishment of the Pleasantrees shop, located in a rehabbed dentist’s office, did not eliminate the possibility of another marijuana shop on the City’s property on Merritt Road.

The City’s Merritt Rd. property was then infamously sold to a marijuana industry figure via an eBay auction — possibly for less than the value the City could’ve gotten for it if they had openly advertised the auction of the land to all.

The would-be developer of that land came back to Council recently to ask for a new clarifying agreement about their SUP approval and to ask for a lot split. City Council voted to allow the developers to split the lot into three parcels and agreed to an extension of the plan that called for the developers to construct three buildings  — a dispensary, a hotel, and a small retail strip mall — starting with the dispensary. 

Randall Buchman, the CEO and Founder of Pleasantrees wrote to Council about this matter. He expressed his displeasure with Council having “moved the goal post” by allowing shorter setbacks where his business was also located. He cautioned that the developers of the 2040 Merritt Road site could just build the dispensary, bug out, and not build the other two planned buildings, something Buchman claimed to have witnessed elsewhere.

“Obviously, I am not thrilled about another marijuana retail location on an abutting property to my own,” Buchman wrote in December 2021. “However, I am even more disappointed witnessing the developments that unfolded up until now. As a business operator and supporter of seeing the City thrive economically, I wanted to be sure to raise my voice this time. It is critical that the current Council composition has full context and is advised of the potential pitfalls and unforeseen circumstances.”

Despite several City Council members’ desires to see the local marijuana industry benefit people of color impacted by the War on Drugs, that hasn’t really happened.

There are a number of ways this could happen, including via the Social Equity Program from the State of Michigan designed “to promote and encourage participation in the marijuana industry by people from communities that have been disproportionately impacted by marijuana prohibition and enforcement and to positively impact those communities.”

City Council member Dana Watson, then on the Planning Commission, asked in June 2020 if the City was making efforts to include in legal marijuana the people who had been punished excessively when it was illegal.

“Are we doing anything to ensure that those disproportionately affected [by the way marijuana was historically handled by the criminal justice system] are able to come into this business?” Watson asked. “I’m concerned, because this is my community.”

But East Lansing hasn’t “done anything” about this issue other than talk about it. The various dispensaries in East Lansing are owned by companies located outside of East Lansing and not by people impacted by the War on Drugs as far as is evident. 

Council did discuss the matter further in 2020, but didn’t really come to any conclusive actions.

After this story was published, an ELi reader wrote in to highlight a program from Pleasantrees to provide book scholarships to Michigan State University students who are “member[s] of an ethnic minority group that is historically underrepresented in higher education.” The program provided for up to ten $500 book scholarships to be awarded for the application period ending on April 31, 2021.

Isn’t some of the money dispensaries make supposed to work its way back to the communities in which they’re located?

Yes. The law passed by the State of Michigan allowing for the medical and recreational sale and use of marijuana also laid out an in-depth tax scheme designed to take some of the marijuana profits and funnel them to public goods. 

A state excise tax is added to all the sales and then revenue-shared with municipalities where dispensaries are located. According to East Lansing’s Fiscal Year 2022 budget, this tax will net about $56,000 in revenue for the City this fiscal year.

The City also has its own  “percent for art” requirement which requires that the equivalent of one-percent of certain development projects’ budgets be devoted to public art — or donated to a fund for it. You might have noticed the eye-catching artwork outside of Pincanna — that’s because of this law.

Skymint donated their “art tax”  into the City’s Public Art Fund, which is an alternative option for development projects to satisfy the law.

There’s also an East Lansing law — Ordinance 1469 — that requires marijuana sales operations to donate one percent of net profits or $5,000 (whichever is greater) each year to a 501(c)3 nonprofit “largely benefitting the residents of East Lansing and organized and operated exclusively for purposes of improving the lives of people with low to moderate income, conserving or improving natural resources, or preventing cruelty to children or animals.”