Downtown Dispensary Closure Raises Questions About Local Cannabis Market

Dunegrass closed its downtown dispensary on Front Street on November 20, 2025, while maintaining an open retail location in Grawn. The downtown property has been listed for sale, and city officials say the closure triggers a lapse in the dispensary s Traverse City license under the city s marijuana ordinance. City Clerk staff indicated that the licensing framework requires multiple steps of review and oversight, and that the clerk s office will notify the city commission that the number of active licenses in the city has decreased by one.

Under Traverse City s rules a dispensary license lapses when a business closes. That provision means the city commission would need to take up the question anew if an operator or a new applicant seeks to reopen a downtown cannabis retail location and have a license issued in the city again. City Clerk staff described the multi step licensing and oversight process that governs how applications are evaluated and how ongoing compliance is monitored.

Local operators and market participants have said the regional cannabis market is growing more saturated and competitive. That sentiment adds context to the downtown closure, as operators balance rent and operating costs against shifting customer patterns and a greater number of retail choices across the region. For downtown businesses and residents the loss of a storefront matters both in terms of immediate storefront vacancy and in the broader competition for limited customer dollars.

The downtown site s listing for sale raises questions about the future character of that stretch of Front Street. A vacant retail space can affect foot traffic downtown, which in turn influences neighboring businesses that rely on pedestrian customers. For employees of the downtown dispensary the closure may have resulted in job changes, though the company s Grawn location remains open for customers who travel to the area.

Beyond local property and traffic concerns, the episode highlights the role municipal ordinance language plays in shaping who can operate in the city and how quickly a retail landscape can change. As Traverse City navigates the shrinkage in active licenses the city commission will face a decision point should an operator request reinstatement or should a new applicant seek to fill the downtown void. For residents this is a reminder that municipal rules and market forces together determine how quickly vacant commercial spaces are repurposed and how the downtown economy evolves.