Michigan marijuana social equity program favors college towns


A foreign observer to the greater Lansing metro area sees a stark disparity to its two central cities, split by U.S. 127.

East Lansing is a prosperous college town with a booming center of high-rises. The median house costs more than $200,000, a steep price tag in the Midwest. Political fights in the East Lansing Ccouncil race are about how to prepare for new luxury developments, not whether they will happen.

Lansing is a struggling Rust Belt city, still reliant on the shrinking auto industry now paralyzed by the month-long UAW strike at General Motors. The median housing price is just $89,000 and abandoned houses can be found in almost every neighborhood. The city boosts development with brownfield tax abatements for almost every private investment.

But to the Michigan Marijuana Regulatory Agency, which wrote the rules determining who might be eligible for social equity discounts, it’s East Lansing that’s impoverished while Lansing is doing OK.

East Lansing residents qualify for deep discounts on licensing fees if they apply to enter the marijuana industry as a result. Lansing residents do not.

The reason? East Lansing has a high number of college students who skew the federal poverty rate. East Lansing’s poverty rate is 44 percent. A full 79 percent of college-age residents have little or no income, even as no other age group has a poverty rate higher than 20 percent, according to figures published at city-data.com.

The discounts are meant to alleviate the harm the state disproportionately caused certain residents and communities, such as poor people and African-American residents. The program was not allowed to be race-specific so instead regulators tried to relieve communities where poverty is rampant and arrest rates were high.

Lansing Councilman Peter Spadafore sarcastically decried the results. “East Lansing fails to address its poverty problem,” he said, while noting more earnestly, “Our state officials need to take a look at the algorithm. These are not just numbers on a spreadsheet. These are people’s lives.”

Andrew Brisbo, the executive director of the state’s Marijuana Regulatory Agency, decided on two metrics to determine which communities would qualify. All of Ingham County qualified under the first, and more important stipulation — an historic marijuana arrest rate higher than the state average. But East Lansing was the only municipality in the metro region that qualified under the second metric — the poverty rate.

A public stakeholder work group had chosen the two driving factors. Brisbo said it wanted to help communities where the poverty rate was “more than a quarter.” Brisbo then decided to round up and set the threshold for communities at 30 percent of residents living in poverty.

Lansing, where the poverty rate is 27 percent and the childhood poverty rate is 41 percent, was left out.

The state regulator said he wanted to “let the data drive the decision-making” and let the chips fall where they may. It would be subjective, he said, to quibble with results that mark East Lansing as high-poverty but not Lansing, even if many observers perceive the opposite.

“I think that is entirely based on your preconceived notions of East Lansing as an affluent community,” Brisbo said.

It’s a pattern in communities that qualify for the discounts across the state, although none so starkly as East Lansing. College towns with high numbers of impoverished 18-to-24-year-olds such as Mt. Pleasant, Albion and Kalamazoo qualify ahead of Lansing. These communities all have evidence of significant childhood poverty that East Lansing does not.

Ann Arbor did not quite qualify even as Washtenaw County and Ypsilanti did. Michigan State University is larger than the University of Michigan, and Ann Arbor has nearly 2.5 times as many people as East Lansing, reducing the influence of the college students on overall income levels. Its poverty rate is still a surprising 23 percent.

Councilwoman Kathie Dunbar also said the state’s algorithm was flawed and called it “total BS” that East Lansing somehow qualifies due to high poverty ahead of Lansing. She had stated publicly — and incorrectly — that Lansing did not qualify because of its low marijuana arrest rate.

Dunbar tried and failed to pass a social equity program for Lansing. Council opponents Jody Washington and Patricia Spitzley used Lansing’s omission from the state social equity program as a reason not to pass an ordinance locally. “I’m still not convinced we can’t do our own program,” Dunbar said.

In Brisbo’s defense, he needed to build a legal grounding for the metrics rooted in the public input that would be simple to understand and easy to defend. Sussing out a more nuanced formula that did not allow temporarily poor but relatively privileged MSU students to skew the program would’ve been complex and harder to legally defend. The federal poverty rate is a blunt metric but one anyone can easily find out.

Michigan Cannabis Industry Association Executive Director Robin Schneider said Brisbo’s handling of the public process had been fair and inclusive, even if the results were unexpected.

“We assumed Lansing would qualify before East Lansing would qualify,” Schneider said.

She said the social equity discounts were only one component of operating a dispensary. Other factors, such as securing enough capital to open a business were more difficult. Most local municipalities also will not allow the opening of dispensaries, including many of the communities where residents qualify for discounts.

“I do feel the state does all that it can to assist with the applicant. They even bring in the fire inspectors at workshops to help them with code,” Schneider added.

Unsurprisingly, some of the communities that had a disproportionate arrest rate during marijuana prohibition are the same communities enacting local ban on the sale of cannabis even after voters legalized the plant. The more things change, the more things stay the same.


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