Kalkaska: Marijuana Mecca

Unlike most other small northern Michigan towns, Kalkaska has gone all in on pot.

By Patrick Sullivan | Dec. 7, 2019

For weeks, in a shopping plaza near the southern limits of the village of Kalkaska, workers have been busy transforming a former Forest Area Federal Credit Union branch into a marijuana store.

The Village of Kalkaska wants to be a mecca for marijuana, and as recreational marijuana goes on sale legally for the first time in Michigan this month, the flurry of activity from one end of the village to the other proves just how determined the town is to accomplish that goal.

What’s happening at the Forest Area shows how fast things are changing.
“The person who owns [the building] now just walked into the credit union and said, ‘I would like to buy it, and I will pay you this much money for it,’ and it was sold that week,” said Harley Wales, Kalkaska’s village president. “That’s the kind of money that we’re dealing with.”

By the end of the year, Wales expects Kalkaska will be home to 14 licensed marijuana growers and one large marijuana transportation company. By early next year, at least three and as many as five marijuana stores will be in business, licensed to sell medical and recreational weed. There will also be three licenses available for people to open micro-boutiques, sort of like microbreweries for pot, where people can smoke house-grown marijuana on site. And Kalkaska is home to Michigan’s first recipient of a recreational marijuana event license. Wales envisions Kalkaska playing host to outdoor music festivals that feature pot tents instead of beer tents.
 
ONE-STOP SHOPPING
At that shopping plaza on the edge of town, currently home to a Family Fare, a Family Dollar, and a Family Farm & Home, the credit union branch won’t be the only marijuana business.

A high-end retail pot business is getting ready to open there, too. And in the strip mall next to Family Dollar, plans are moving ahead for someone to open up a business under a “consumption” license, which means it would be a venue where people could go to smoke pot.

While giving Northern Express a tour of Kalkaska’s burgeoning pot empire, Wales noted how the consumption spot will be a great location for such a place, given that two provisioning centers are opening up in the same plaza — and because there is a hotel next-door.

“Potentially then, this could be someone coming to the hotel, getting on their app, buying weed and having it delivered there, being able to consume it, and then go play in the pool,” Wales said.

Wales said the village government has gone out of its way to accommodate the new businesses. They help the newcomers find suitable locations, navigate the bureaucracy, and get licensed. In two instances, the village sold real estate it owned to accommodate marijuana businesses — a storage building near downtown and a vacant lot on the outskirts.

They’ve even established a marijuana ombudsman position.

“I don’t think anybody else has done that,” Wales said. “We’re here to make sure that everything is done correctly and that it’s done to the higher bar that we’ve set, and it has been very productive.”
 
GUN-TOTING, OPEN-MINDED PEOPLE
Why has Kalkaska embraced marijuana while so many other northern Michigan towns have rejected it or, at the very least, struggled with how to put limits on it?

Wales said he believes it is for the same reason someone like him could get elected village president of Kalkaska. Wales is an openly gay man who won election last year following a predecessor whose right-wing ideology stirred controversy and made national news.

“I think that the history of the town, the open-mindedness that the village has shown to other subjects, like me getting elected … it kind of gave them the laser focus on where they did and didn’t want to go,” he said. “I’m not saying it’s not a conservative area. It’s a very gun-toting, conservative area. However, they are also open-minded people.”

Wales also said that it has helped that the village has been extremely transparent in its pro-marijuana policy and that people with concerns can quickly get their questions answered.

Wales said he administers the village’s website, the town’s Facebook page, and the Downtown Development Authority’s Facebook page, and he said he answers questions from residents almost immediately.

Moreover, everyone understood that Kalkaska needed an economic stimulus. Marijuana turned out to be one that looked promising and that most of the population could get behind. Village politics had been pro-marijuana even before Wales took over, after all.

“Our last industry was the oil industry, and before that, it was the lumbering industry back at the turn of the century, and so these people are starved for what’s next. And this was an opportunity for the village, kind of early on, prior to me, making that stance that this was going to be a direction that they would like to go with,” Wales said. “Since, in the last few years, and with recreational taking over, we really made it perfectly clear, we are open to the industry, and we’re feeling the benefits of that.”
 
OUT OF SIGHT, OUT OF MIND
So far, while the marijuana industry has taken over Kalkaska, it’s done so quietly, almost behind the scenes, taking over vacant buildings once home to oil businesses in the two industrial parks or refitting shuttered businesses behind darkened windows, getting ready to open retail locations once the state issues the licenses they need.

“I still get asked every day, ‘When are those marijuana people coming to town?’ And then I have to share with them that we have 15 or 20 businesses already, and you just don’t see them,” Wales said. “That’s how we planned it. All the large operations and growers are back in the industrial park, out of people’s vision, in the area where you would expect to see a pole barn with no lights on.”

Gradually, residents will start to notice bigger changes as those public-facing businesses open, like the stores, the consumption venue, and the micro-lounges.

But Wales’ biggest vision could also have the biggest public impact.

On Dec. 17, Wales and some other village officials will travel to Lansing to make a pitch to win a $3.1 million state grant to remake Railroad Square, the mostly vacant land that sits across Cedar Street from the row of historic buildings that make up Kalkaska’s now-struggling downtown.

The would-be remade square would offer a focal point for the village and serve as a center for gatherings of all different sorts, and Wales hopes that it is a catalyst for reinvestment in downtown businesses. But he also sees it as an ideal venue for outdoor festivals, the kind that would pair well with the marijuana event licenses.

That means concerts with pot tents.

The event license will require that a pot tent be limited to people over age 21 and that the facilities are separate, closed-off, and basically out of sight.

Wales said he understands that some of the village’s more conservative, more traditional residents might be concerned about a concert taking place downtown that features a tent where people can smoke marijuana, but he doesn’t expect that to generate significant opposition to Kalkaska’s pro-pot policies. The rules will be the same as they are for beer tents: consume responsibly and get a designated driver.

“I think it’s really going to be dependent on the way that it’s pulled off, just like everything to this point has been. And the fact that people are tolerating it now, it’s because it’s not in their face, so, it’s still not going to be in their face,” Wales said. “Nobody’s going to see anyone walking around with a joint or bubbling a bong downtown. It’s confined to a space. … It will be in a corner somewhere where the venue is set up away from people’s vision.”
 
A GOOD PROBLEM TO HAVE
Kalkaska’s marijuana boom isn’t without its problems, however; it’s prompting some serious growing pains.

Properties in the industrial parks that could have been bought for a couple hundred-thousand dollars only a few years ago are now listed for millions of dollars — and even those are disappearing fast.

Likewise, Kalkaska is on the cusp of facing one of those problems that’s a mixed blessing for a booming community: a housing shortage.

Wales said he bought his house a decade ago, during the economic crash, for $20,000. Houses like his are going for four times that these days. But Kalkaska’s housing shortage is becoming more acute in more expensive ranges, too. There’s a shortage of homes available for the better-paid managers and owners of the new businesses who want to live in Kalkaska.

That shortage has been further aggravated by a new medical pavilion Munson Medical Center opened in Kalkaska this fall; it brought even more higher-wage jobs to the village. Rather than a low-income housing problem, Kalkaska now has a middle-income housing shortage.

That’s the kind of problem Wales and anyone in his spot wants to have, though. He sees a transformed downtown in the future, and envisions Kalkaska becoming a destination, not only for snowmobiling, fishing, and access to outstanding mountain bike trails but also for the marijuana.

Those micro-licenses, for instance, could represent opportunities for talented marijuana growers to be able to offer particular strains that are only available at their location. Just as people today travel to Michigan on the hunt for a unique beer from a small, out-of-the-way brewpub, Wales said he sees people in the future visiting Kalkaska in search of the interesting pot strains only available at those micro-grows.
 
The most tangible, immediate affect from all of this for Kalkaska, however, is what it means for village coffers. Each business must pay thousands an annual license fee to the village; many pay twice, because there is a separate fee for businesses that grow or sell medical and recreational marijuana. It adds up to close to $400,000 annually for the village.

Wales said the first thing the village will do with the money will be to hire another police officer for the small village police force. Beyond that, the village will look at what new needs arise from the new reality.

Boosted property values, an increase in visitors, and a better local economy will pay additional dividends, Wales said. There have also been some other unexpected benefits.

One of the new marijuana businesses made a $13,000 donation to the village so that the police department could acquire and train a drug-sniffing dog.

That gift was unexpected, Wales said. He and other village officials didn’t know what to make of it at first, and consulted the village attorney.

“It was a big huge surprise, and we we’re really taken aback because we’ve never had anybody throw money at us before,” Wales said. “[The attorney] said actually, in larger municipalities, it’s fairly common for a business to come to town, and as a good-will gesture for the town, to make some type of donation.”
The village council accepted the donation with the caveat that it would not be considered a “quid-pro-quo” transaction and that the donor should not expect favorable treatment.

Since the donation was accepted and the dog joined the force this fall, its already been responsible for two drug busts.

It’s also perhaps the first drug-sniffing dog in northern Michigan that’s been trained since marijuana has been legalized. Therefore, it was not trained to sniff for pot.
 
“PROGRESSIVE AND SUPPORTIVE”
Optimism aside, Wales said all the pieces are not yet in place. The village has yet to lure someone there to open a marijuana testing facility. Under the recreational marijuana law, the drug must be rigorously tested for potency and to make sure it doesn’t contain toxins.

Meanwhile, Wales is also investigating the possibility of Kalkaska becoming home to a marijuana credit union. That’s because, while marijuana remains illegal under federal law, traditional banks are unavailable to marijuana businesses.

Despite all that, Tom Beller thinks Kalkaska’s marijuana policies are great.
Beller owns Real Leaf Solutions, and he was among the first businesses in the state to receive a recreational marijuana license. The other businesses were in Ann Arbor.

Beller is primarily in the business of growing and processing marijuana, but his recreation event license will allow him to stage concerts and special events to introduce new marijuana strains. (Beller’s business does not sell retail marijuana.)

Beller is from Metro Detroit, but he moved to Kalkaska three years ago to get into the marijuana business, and he’s overseeing a large growing operation.

“I can only speak to my experience here, but from what I’ve read and heard from associates in other communities, some communities are very open, but Kalkaska has been great,” Beller said. “They’ve been very progressive and supportive of us and what we’re doing here.”