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MUSKEGON, MI – A proposal to significantly expand marijuana retail locations in Muskegon has been rejected by planning commissioners who left open the possibility of future expansion.

City staff proposed five new “overlay districts” to be included in the city’s ordinance allowing for various marijuana-related businesses. The districts specified 16 properties for various uses, mostly retail.

But following a public hearing on Thursday, Aug. 20, commissioners voted 6-2 to reject the plan.

Some planning commissioners and members of the public said the method of choosing properties was problematic, with one likening getting onto the list to winning the lottery. Property values in the city’s existing marijuana district have skyrocketed and the same likely would happen for the 16 properties, some said.

Tracy Powers, a resident of the Lakeside neighborhood, said the proposal would lead to “land speculation” and described it as “naïve at best and disingenuous at the worst.”

Among the properties were three in the heart of downtown, including a vacant lot at First Street and West Western Avenue and a shell of a former bank building at First and Clay Avenue. The latter, at 880 First St., is owned by Michigan State University trustees Joel Ferguson and Brianna Scott, who is a Muskegon attorney.

In addition, staff proposed retail pot sales be allowed on three neighboring properties on Lakeshore Drive near the corner of McCracken Street in the Lakeside business district. All three currently have businesses in them.

Other locations were on Terrace Street in downtown; Clay Avenue near downtown; at the Watermark Center, a sprawling partially developed factory; the Getty Street/Apple Avenue intersection; and on East Laketon Avenue.

All were proposed for recreational retail and medical marijuana provisioning outlets and the Terrace Street location was also proposed for a basement growing operation.

“I think we’re picking winners and losers,” said Planning Commissioner Joe Doyle.

Mike Franzak, the city’s director of planning, said the idea was to encourage development of blighted and vacant properties and to serve as a catalyst for development around them.

Planning Commission Chair Bryon Mazade said it essentially rewarded owners of blighted property, and said he didn’t think the plan would help drive down the cost of property in the existing marijuana district.

Besides, Mazade said he didn’t think the citizens of Muskegon were ready for such a “proliferation” of marijuana businesses.

Mayor Steve Gawron agreed, saying he preferred to be “a bit more guarded” in allowing marijuana businesses in the city and predicted resident and business owner “pushback” to the proposal.

“I think the bottom line is that though it is legal … (marijuana) is not yet accepted as mainstream,” Gawron said.

Franzak said the proposal also was a response to people, including minorities, who have said they wanted a chance to get involved in the industry but had been priced out of property at the city’s existing marijuana district.

Citizen John Lanore said he would have liked his properties on Laketon Avenue to have been included in the proposal.

“A lot of us are incapable of affording the property” in the existing marijuana district, Lanore said. “I’d like to see it spread across Muskegon like we’ve seen in other cities.”

Vice Mayor Eric Hood applauded the effort to include more people in the cannabis industry, and voted against a motion to reject the proposal. City Manager Frank Peterson, who also is a member of the planning commission, cast the only other vote against the rejection motion.

“(The proposal) shows that Frank has been listening to the community,” Hood said. “Certain parts of the community, especially the minority community, was wondering how … they could get involved in the business.

“I don’t want everywhere you go you see a marijuana factory or district, but I do agree with what’s trying to be done here also.”

Some planners and public commenters said the city should first fill up the existing marijuana district before allowing businesses elsewhere. Peterson said the idea should not be to fill every lot in that district with cannabis businesses.

“We designed this so Muskegon as a whole can be a winner,” Peterson said of the rejected proposal.

Planning Commissioners Jill Montgomery-Keast and Lawrence Spataro said they were opposed to the proposal because of the way certain properties were selected, but that they would support another way to expand the cannabis business in the city.

The existing marijuana district consists of a square bordered by Seaway Drive, Young Avenue, Park Street and West Hackley Avenue. The second, oddly shaped portion of the district is roughly bordered by Laketon Avenue, Park Street, Keating Avenue, Holbrook Avenue and a line just east of Peck Street.

That district allows for businesses operating under any medical or recreational marijuana license allowed by the state, including for growing, processing, transporting, selling, and prescribing marijuana.

Franzak estimates that he has approved 25 to 30 requests for new businesses there. Three retail operations have opened in the last year, and a fourth, along with two grow operations, are currently under construction.

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