VEHICLES COME THROUGH for curbside service at Rize U.P. on U.S. 2 in north Iron Mountain. (Betsy Bloom/Daily News photo)

IRON MOUNTAIN — The process has begun to allow a third marijuana dispensary in Iron Mountain, subject to a public hearing and final city council approval.

In a 5-2 vote Monday, the council introduced a change to its marijuana ordinance raising the cap on the number of dispensaries from two to three. The hearing will likely be held in January.

Over the past several months, the council has heard requests from licensed growing facilities in the city to add at least one more retail outlet, saying their product isn’t being offered by Rize U.P. or Lume, the two enterprises awarded retail licenses in 2019.

Public input has been sought, drawing a mixed response, City Manager Jordan Stanchina said.

The council’s vote came after a discussion with City Attorney Gerry Pirkola, who acknowledged “somebody is not going to be happy” no matter what course is pursued.

Voting no were council members David Farragh and Ken Clawson, with Clawson noting many constituents have spoken against expanded licensing.

Mayor Dale Alessandrini, who voted yes, said he hopes having one more license will put the issue to rest. “I’ll never approve two more,” he said.

Iron Mountain opted in for marijuana businesses after Michigan’s legalization initiative passed in 2018. The council decided to allow just two dispensary licenses and conducted a competitive application process.

One retail license went to Rize Cannabis, which promised a $5 million investment at 1580 N. Stephenson Ave., and the other went to Lume Cannabis, which renovated downtown buildings at 117 and 119 S. Stephenson Ave. at a reported cost exceeding $2 million.

The city initially limited its growing and processing licenses to two — those also going to Rize and Lume — but in November 2019 expanded it to five to satisfy applicants who’d finished out of the running.

The Source, which has a marijuana facility on North U.S. 2, is the next business on the waiting list for a dispensary license, followed by Superior Selections, which renovated a vacant warehouse on East Smith Street. UP Smoke Farms secured the fifth growing and processing license about a year ago but is not on the retail waiting list because it wasn’t part of the original application process.

In any event, unless Rize or Lume were to forfeit their retail permits, there’s no timeline under the city’s current marijuana ordinance for additional licenses to be granted.

Pirkola, meanwhile, cautioned that some parts of the city’s application scoring would be “potentially problematic if challenged,” based on litigation in other Michigan municipalities. By again delving into the ordinance, the city runs the risk of inviting lawsuits since retail licenses have “an enormous amount of value,” he said.

Council member Nathan Zemar, who introduced the motion to amend the marijuana ordinance, asked if there’s a risk of litigation regardless of what action the council takes now. “That’s a really tough call,” Pirkola said.

A proposal was heard Monday under which The Source would accept Iron Mountain’s third retail license and work cooperatively with Superior Selections and UP Smoke Farms. Don Lofholm of Norway, a co-owner of The Source, said the three businesses have invested $6 million collectively.

Having an Iron Mountain retail location for their locally grown marijuana would enable further “loyal to local” investments, he said.

Council member Kyle Blomquist, who voted in favor of introducing the ordinance change, said he’d actually prefer the city consider no cap on dispensaries. Currently, it has the “dubious responsibility” to perpetually “curate that list” of marijuana businesses, he said.

Council member Cathy Tomassoni, who has served since May 2021, initially abstained but then voted yes. The fifth yes vote came from council member Pam Maule, who had seconded Zemar’s motion to introduce raising the cap.

In addition to recreational marijuana sales, the cap also applies to medical marijuana provisioning.