NILES — For the past few years, Maggie Patterson has wondered why Niles Charter Township isn’t interested in gaining any of the new jobs and tax dollars that have come to Michigan communities that allow cannabis businesses inside their borders.
After getting nowhere with township government, she’s now taking matters into her own hands and spearheading an effort to get an initiative before voters on the Nov. 8 general election ballot. But first, she needs to secure the names of 250 registered township voters by Aug. 2.
And she doesn’t want to take any chances after expending her time, as well as her money, on the effort, even hiring an attorney to provide advice and draft language for a proposed ordinance to put in front of voters.
“To be safe, I’d like to get 400 signatures, and I want to get them well before the deadline,” said Patterson, the owner of a small business called Doggie Drive-Thru at South Third Street and East Bertrand Road, in Niles Township, about a mile from the Indiana state line.
Patterson, 65, is a believer in the benefits of cannabis for those who are suffering from chronic illnesses, pain and anxiety. But she also sees the economic benefits that have come to the city of Niles, Buchanan and many other places in the region that have allowed cannabis stores, grow and processing facilities and a host of other related businesses.
Economic benefits of weed
Even a year ago, officials in Niles and Buchanan were claiming the creation of about 150 jobs in each community, in addition to the increased property valuations that have followed the millions of dollars in investments needed to build or refurbish stores, as well as grow and production facilities.
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In addition, local cities, villages and counties in southwestern Michigan have benefitted from the 10% adult-use marijuana excise tax that is collected each year by the state. Earlier this year, it sent $42.2 million back to cities, villages, townships and counties based on the number of licensed stores and microbusinesses they have.
Locally, Berrien County was the big winner, gaining $508,080 for its general fund while Benton Harbor received $56,453, Buchanan got $282,277 and Niles gained $169,360.
Cass County received $225,813, while Edwardsburg and Cassopolis each received $112,906. St. Joseph County got $169,360, while Constantine received $112,906 and Sturgis got $56,453.
And that tax spigot won’t be shutting down anytime soon.
“It’s not like we couldn’t use the tax revenues, the jobs and the investment,” said Patterson, referring especially to the estimated three-mile stretch on South 11th Street between Indiana and the cannabis stores at the southern end of Niles.
“This is the heart and soul of the corridor and it’s a dead zone,” she said. “All of those customers from Indiana and other states are driving right through here to get to those stores.”
The township was among the many places in Michigan that initially opted out of allowing cannabis, but many of those communities with initial misgivings have been coming around.
That’s not the case in Niles Charter Township. It hasn’t changed its stance on opting out, but it won’t actively oppose the ballot issue, said Terry Eull, township clerk.
“We’ve chosen to let this play out,” he said of the petition. “If they get it on the ballot, then it’s up to the people.”
In Edwardsburg, village officials reversed course in 2019 and decided to allow adult-use stores because of softening attitudes toward cannabis as well as the potential for a ballot issue similar to the one Patterson is behind.
Today, there are two dispensaries operating in Edwardsburg in space that had previously been vacant.
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“A lot of places opted out initially, but many of them are changing their minds,” said Allison Arnold, a partner and director of legislative affairs for Cannabis Attorneys of Michigan. “Eventually, I think it’s going to be just about everywhere.”
Cannabis ballot initiative
After getting nowhere on her own, Patterson hired Arnold to see whether she could persuade township officials to allow cannabis businesses in the community. That effort failed, so the two decided to go with the ballot initiative.
And if they can get the needed signatures, Patterson is hopeful voters will approve the measure, especially since township residents voted in favor of a statewide issue to legalize recreational marijuana in 2018.
“We voted 57-43 in favor of recreational back them, so the township is in favor of it,” Patterson said. “And in the meantime, we’ve lost businesses that survived because of Sunday alcohol sales to Indiana residents.”
That changed in 2018 when Indiana began allowing Sunday alcohol sales and residents no longer had to cross into adjoining states like Michigan to make purchases.
Arnold said the ballot issue will be in the form of a proposed ordinance that residents can vote to accept or reject. It stipulates a wide array of marijuana business — retailers as well as growers and processors — that would be permitted in the township.
But some wonder whether it might be too late for the township to cash in on the marijuana boom as competitive pressures already are forcing retailers and even growers to consider consolidation.
According to the Michigan Cannabis Regulatory Agency, the price for an ounce of marijuana has dropped about 47% from $252 per ounce in January 2021 to $133 an ounce in April this year.
And barring any unforeseen problems, there’s little chance that prices will reverse course anytime soon as additional grow facilities, processors and dispensaries are opening each month across the state.
But will they come?
Competition already is leading to consolidation and that won’t be changing anytime soon, said George Lynch, CEO of Green Stem Provisioning at 1140 S. 11th St., a family-run store about three miles from the state line.
“I think prices will continue to decline, especially when the outdoor crop comes in later this year,” said Lynch. And because of the competitive climate, he’s not sure that businesses will rush to open facilities in the township, even if the ballot issue is approved.
“If they had opted in at the beginning, it definitely would have been an ideal location,” he said, adding that more than 50% of the business at Green Stem comes from Indiana residents.
But with Green Stem and Primitiv now open at 1286 S. 11th St., will a business gamble hundreds of thousands of dollars or more that it might be able to pull traffic away from the established retailers?
Lynch hopes the relationships that Green Stem has been able to form over the past few years will see it through, but at the same time he admits he’d have to keep a close eye on possible competition that might spring up.
“It’s a tough putt no matter where you are,” Lynch said. “The big guys are moving in, especially on the retail side.”
More on cannabis prices: Marijuana prices likely to keep falling in Niles, Buchanan and other Michigan towns
But while giving a nod to the competitive pressures currently facing the industry, Patterson and her attorney still believe there is room for growth, especially in locations as ideally located as the township.
Individuals in Michigan are permitted to grow 12 plants a year, but no one knows exactly how many are being grown and how much of it is being sold illegally, said Arnold, a former prosecuting attorney.
And there’s also illegal marijuana still coming into Michigan from other places like Canada, said Arnold, adding that a 2020 study estimated that two-thirds of the marijuana market in Michigan was illicit.
“Prices have dropped considerably since the state approved recreational, and we think a predominant reason for that is black market activity,” she said. “We’re lobbying to increase enforcement.”
And if those efforts succeed, there would be plenty of demand to support product that is legally grown, processed, tested and sold across the state, Arnold added.
“It’s not at all too late for the township,” she said.
Patterson agreed and asked township residents to get involved in the effort. Petitions are available at her business as well as Lush Lighting, Bertrand Auto Parts, Flow-N-Grow and Birds Eye View, she said.
“I’d like to see the jobs, taxes and business investment coming to our community,” she said. “The township is missing the boat.”
This article originally appeared on South Bend Tribune: Business owner still hopes to bring weed, dispensary to Niles Township
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