The new marijuana consumption lounge could be the first of up to 28 in Ann Arbor

By Stone Andrews Last updated May 9, 2021

ANN ARBOR, MI – Ann Arbor planned the city’s first marijuana consumption lounge last week, and it could be the first of over two dozen in town.

“We’re going to allow 28,” said urban planner Alexis DiLeo, referring to an upper limit in the city’s regulations.

When the city council decided in October 2019 to give the green light to the city’s recreational marijuana industry, it limited the number of permits for micro-marijuana businesses, pharmacies and consumption centers to 28 each.

While the city has now got a grip on all the pharmacies it will see under the hood, the door is potentially open to 27 other entrepreneurs interested in creating spaces where customers can consume cannabis on-site.

But they’re not yet on, DiLeo told the planning commission this week when it approved a permit for Michigan’s first marijuana consumption lounge – in the house next to the Liberty Provisioning Center’s marijuana dispensary on Ashley Street in downtown.

“This is our first taker,” said DiLeo, noting that marijuana consumption lounges don’t seem to be as popular a business proposition as pharmacies.

Michigan’s first marijuana consumption lounge comes to Ann Arbor

It’s hard to find a model that is profitable, but the main reason no one opened a marijuana consumption lounge in the last year is entirely due to COVID-19, said Mark Passerini, co-founder of the marijuana pharmacy Om of Medicine Auf der Main road.

“COVID kind of put a kibosh on all social things,” he said.

He expects more marijuana consumption lounges in Ann Arbor once the pandemic is over, but Om has no plans to do so at the moment, he said.

“But I’m thrilled that it is happening,” he said of the first to come. “I’ve been waiting for this all my life and I feel like it’s something that is long overdue.”

Marijuana tourists visiting Ann Arbor are not legally allowed to smoke in their hotels, cars, or in public places such as parks. This gives them a legal place to light up, he said.

The approval conditions state that the lounge can only be used by customers of the adjacent pharmacy.

In addition to a city permit, the owner must obtain and maintain a state license for the lounge.

The company behind the business is Holistic Industries, which describes itself as the largest private cannabis operator in the country, with offices from California to Washington, DC. Its flagship retail and wholesale brand is Liberty Cannabis.

Rabbi James Kahn, the company’s public relations director, assured city planners that the company wanted to be a good neighbor.

“In America in 2021, owning a cannabis business is not a right but a privilege,” he said, noting that the company must periodically renew its license and respond to neighbors. “We all want to create facilities that we can live comfortably in that we take pride in showing and telling our children about, and that is vital to us.”

The lounge opening hours are expected to be from 12 p.m. to 8 p.m. every day. For customers who can present a receipt in the pharmacy next door on the same day, reservations within 45 minutes are free. Those who don’t have a receipt will be charged $ 10.

The maximum occupancy is 19 people, although the company initially only wants to allow up to two groups of four at the same time.

Councilor Lisa Disch, who serves on the planning committee, noted that the company has set out its plans for the lounge in detail, including odor control and property improvements of $ 655,000 and projections of gross annual revenue of $ 150,000 per year.

It was a big upfront investment for her that will take a while to pay for itself, she said.

The main goal of the company with the lounge is not to earn money, but to expand the offer for the customers of the adjoining pharmacy, said Kahn.

Despite some concerns that marijuana consumption lounges could cause people to drive up, the city decided to allow them the rules approved in 2019.

Passerini points out that downtown streets are already lined with alcohol-serving bars, and he hopes the city doesn’t overly restrict marijuana lounges.

“I had a conversation with the people at the Michigan Cannabis Industry Association the other day and we’re considering starting a whole new campaign to deregulate cannabis like alcohol,” he said. “The original legalization campaign was to regulate cannabis like alcohol, but now that we’ve regulated it, we’ve gone way too far. It starts to regulate like it was enriched uranium, as opposed to one of the least toxic substances known to man. “

A story of hash bash and marijuana activism in Ann Arbor

Passerini said he dreamed of having a consumption lounge in his building at some point, but that was the furthest away for him during the pandemic.

While some will come, they won’t be like Amsterdam-style cafes, he said.

“One of the biggest problems is that the way it is currently set up, you can’t serve food or drinks, and that wouldn’t be Amsterdam style,” he said. “Amsterdam had bakeries and of course coffee and, you know, a very different model from what we’re going to see.”

Given the restrictions on selling products in a consumption lounge, there have been questions about whether they are even financially viable and are expected not to spread throughout the community, said Councilman Erica Briggs, D-5th Ward, who was in the planning committee when the city worked out the regulations.

Briggs said there hasn’t been much discussion of her since then. The city is only trying to facilitate what state voters approved of legalizing marijuana for recreational use.

“We just have to monitor it while we go and see how it works,” she said of consumption lounges. “We just have to see how it integrates into the community.”

Brett Lenart, the city’s planning manager, said shortly before regulations were in order in 2019, he would be surprised if the city approached the limit of 28 consumer lounge permits, and he expected it to go along with the Pharmacies would be located.