MI: Pot Business Proposal Hazy After Niles Puts Freeze On New Applications

Photo Credit: South Bend Tribune

A moratorium on new pot businesses may not necessarily mean one local company’s hope for a medical marijuana business is dead.

At least one partner in HDS Investments said he’s willing to keep working with the city, and one city official said the HDS plan might still have some life to it despite the new moratorium.

But the fate of the business’s plan is a little unclear.

The city council Monday night unanimously approved an approximately six-month moratorium on taking new medical marijuana business applications.

The move comes as city staff continue to field five to 20 phone calls every week from potential marijuana businesses, and as the state gears up to put recreational marijuana on the ballot in November.

City Administrator Ric Huff said he is concerned over where the state is headed in the next six months with recreational marijuana, and that it’s unclear how recreational pot, if approved, could affect the medical marijuana commercial system that is going into effect this year.

The state in 2016 adopted a commercial system for medical marijuana and let communities decide whether to opt into it by adopting their own ordinances. In Berrien County, Niles and a handful of other communities opted in.

The city’s moratorium is for 180 days, so it will expire not long after the Nov. 6 election, unless the council rescinds it before then.

Meanwhile, HDS Investments, a group of three area investors, last month proposed buying an empty, city-owned parcel at the corner of Lake and 13th streets for a medical marijuana growing operation.

HDS wants to obtain a Class C growing permit for 1,500 plants and is proposing to build a nearly $1 million facility in which the medical cannabis would be grown.

The city hasn’t decided whether to sell the company the lot.

Two partners of HDS — Mike Heskett and Jeff Durrell — made pleas to the council early in the meeting Monday night to consider selling the parcel to the group.

“It really upsets me to think I have to go someplace else,” Heskett, a Niles resident, said. “I need five of you to say yes.”

Heskett stressed the HDS medical marijuana plan was the only one the city has that calls for new construction, which would generate new property tax revenue for the city.

Council member John DiCostanzo later made a motion to sell the lot to HDS for a dollar, which is what the company had originally proposed to pay for it, but the motion failed to pass, 5 to 2.

After the meeting, Heskett said he didn’t think the city had shut the door entirely and that the company would continue to meet with officials to discuss sale of the lot.

He noted, though, that HDS would start looking elsewhere in Berrien County, in other communities allowing medical marijuana, such as Buchanan, Galien Township and Benton Harbor.

Durrell didn’t seem as optimistic. He said he was afraid the possibility of locating the business in Niles was dead.

“I’m very disappointed,” Durrell said.

Community Development Director Sanya Vitale wasn’t so sure the proposal from HDS would necessarily be shelved by the moratorium.

The group submitted a proposal to buy the property at Lake and 13th and a plan for the potential medical marijuana business, which the city could view as HDS having its foot in the door before the moratorium was adopted, Vitale said.

Another preliminary proposal from a company in Lansing to establish a medical marijuana business incubator in the old Simplicity building would be shelved, though, because that group had not yet made a formal application, Vitale said.

With the moratorium in place, city staff will tell potential medical marijuana businesses that inquire that the city isn’t currently taking applications and direct them to additional information on the city’s website.