Iron Mountain initially had four grow sites, but two have ceased operations in the past year, said City Manager Jordan Stanchina. He proposed Monday the council consider grandfathering the existing grow operations while issuing no new licenses.

The main problem the city has encountered since adopting marijuana licenses six years ago has stemmed from odor complaints from growing operations, Stanchina said. “That’s why I recommend discontinuing this license type,” he told the council.

The proposed licensing change, along with several others, comes as state lawmakers consider whether to limit new marijuana business licenses statewide.

Under a proposal from state Sen. Sam Singh, D-East Lansing, the number of retail marijuana stores in a given municipality would be capped at no more than one for every 10,000 residents. Existing shops could continue to operate, but there would be no new licenses in any municipality over that ratio.

Rize operates a marijuana retail outlet at 1580 N. Stephenson Ave. in Iron Mountain, shown here, along with a growing facility nearby. (Terri Castelaz/Daily News)

Iron Mountain, with a population of slightly more than 7,500, has two retail businesses — Lume and Rize.

Rize and Smoke U.P. Farms LLC have marijuana growing operations on North Stephenson Avenue. Lume, meanwhile, pays for a growing license but doesn’t have such a facility.

According to Bridge Michigan, Singh’s proposal would indefinitely prohibit the state from issuing new licenses for testing labs, transportation companies and any growing operation cultivating more than 150 plants, beginning in 2026.

The proposed state restrictions have been spurred, in part, by oversupply and stiff competition in the marijuana market. In addition, a new 24% wholesale excise tax on recreational marijuana transfers between producers and retailers takes effect next year.

Stanchina said sections of Iron Mountain’s marijuana ordinance should be amended to reflect the current market and practices the city is already allowing.

“The industry has changed considerably since we adopted this ordinance,” he said.

He proposes the city remove licensing requirements for medical marijuana operations, except for dispensaries. None of the current licensees are cultivating medical marijuana, as the market has largely diminished.

The section of the ordinance requiring license applicants to adhere to their initial proposal is also under review by City Attorney Gerry Pirkola. He pointed out that Iron Mountain has been fortunate to avoid the lawsuits that many other municipalities have experienced over licensing issues.

Rize and Lume were awarded retail licenses in 2019 through a competitive process, as the city capped the number of dispensaries at two. Rize pledged a $5 million investment, while Lume committed to a $2 million project. Up to five growing and processing operations were allowed under the city’s licensing process.

Legal disputes are ongoing in a number of other cities, including Menominee. That city of 8,300 in the U.P. has eight dispensaries and at least two more seeking to open despite contentious efforts to enact a cap.

In another ordinance matter, Stanchina suggested the city lift a prohibition on curbside or drive-thru marijuana sales. The restriction hasn’t been enforced since the COVID-19 pandemic and there haven’t been any issues associated with ongoing sales at Rize and Lume, he said.

Pirkola may have drafts of ordinance amendments ready for review at the council’s Nov. 3 meeting.

——

Jim Anderson can be reached at 906-774-2772, ext. 85226, or janderson@ironmountaindailynews.com.