Detroit Cannabis Casino Set to Expand to More Michigan Locations

The Reef, one of Detroit’s first cannabis dispensaries, is marketing itself as the city’s first “cannabis casino.” It may well be the first such mashup anywhere in the country. The company says the promotion doesn’t count as gambling because players don’t have to pay to enter. However, the concept hasn’t been tested in court, and Michigan is in the midst of a crackdown on gray market gambling-adjacent products.

The dispensary on Eight Mile Road serves up craps, blackjack, roulette, and slots on top of THC and terpenes.

“As far as I know, nobody in the country has done it,” spokesman Tim Campbell told Detroit Metro Times.

Cannabis Casino Concept a Response to Recreational Sales Delay

According to Campbell, the promotion grew from a partnership between The Reef and Jason Kouza, who originated the idea.

Kouza is part of the group behind Dort Hwy Dispo, another dispensary in the Flint area. He developed the games now on offer at The Reef.

For The Reef, the decision to pivot came about as Detroit’s adult-use licenses were on hold.

Despite being quick to allow medical cannabis dispensaries following legalization in 2008, Detroit was near the last to allow recreational sales after voters had their say in 2018.

Unfortunately, a city ordinance intended to ensure Black Detroiters had entry into the newly legal industry had unintended consequences.

Instead of creating social equity in the cannabis industry, recreational expansion ended up on hold entirely thanks to years of lawsuits.

A modified ordinance was passed in 2022, and Detroit’s first recreational, adult-use dispensaries opened early this year.

Of that fiasco, Cambell told the Metro Times:

I’ve said this a lot of times, Detroit really built the bus for recreational use — and then it missed the bus. There’s so many other cities that opened up for years before.

The Reef followed, reopening its adult-use location, complete with “cannasino,” to customers earlier this month. To Campbell, that seemed as good a time as any.

Cannasino Concept Skirts Legalities, For now

Campbell has said that he doesn’t think the cannasino concept raises legal issues.

Legal definitions of gambling generally have three components:

  • Cash consideration (i.e., money at risk by the participant)
  • Something of value to be won as a prize
  • Luck as the determining factor in the outcome

Many products skirt gambling laws by removing one or more of those factors from the equation. For instance, skill machine manufacturers claim they’re not games of chance. Video games with gambling elements must ensure that their in-game rewards have no cash value.

Campbell says his dispensary’s games are legal because players don’t have to risk any money. Instead, The Reef’s customers can win cannabis products or store credit with tokens earned through the unique loyalty program, at least for now.

He explained:

We structured how many reward points you get at a ratio of how much you purchase. For instance, there’s days that you come in, and you spend $25, you get either a ball to go down the Plinko machine or a pull on the roulette wheel or a roll at the craps table. So you win prizes, and you can win pretty much no matter what.

As with most loyalty programs, the more you spend, the more you can benefit.

If you spend $50, you get two of these chances; for $75, you get three; and so on and so forth. Or you can let your points accrue… sit there and get hot on a game of blackjack, or get hot on a game of craps. You can sit there for a half hour to use your points all at one time.

Despite Campbell’s assertions, the state’s Cannabis Regulatory Agency has said the store is under investigation, though nothing has come of that yet. Meanwhile, the Michigan Gaming Control Board declined to comment when asked by Bonus whether it was investigating or had an opinion on the legality of the concept under Michigan gambling laws.

It’s “That Dope and Dopamine Effect.”

The cannasino gimmick is The Reef’s attempt to stand out in a crowded, competitive market.

Campbell told the Metro Times that just having the lowest prices is no longer enough:

We’ve got some real good pricing, but you know, a lot of people have good pricing. So you got to set yourself apart from and have the experience above and beyond just for coming in and purchasing a product. We want to make it a little bit more of a fun and enjoyable experience from top to bottom.

The Reef recently launched a riff on McDonald’s perennial “Monopoly” sweepstakes, too. Its promotion offers customers a chance at $100,000 and “free pot for life.” (It’s unclear, on the latter front, how the dispensary plans to get around the prohibition on directly offering cannabis or coupons for cannabis as a sweepstakes prize. Cannabis accessories are legal as prizes, but the drug itself is not.)

There’s also a Caribbean getaway for two and a ‘grow cannabis at home’ kit up for grabs.

The Reef also offers customers pull tab and scratch card promotions.

Campbell told the Metro Times:

There’s kind of something for everybody. It’s a little bit of that ‘dope and dopamine’ effect. They’re having fun. A lot of people have walked in and they’re pretty much flabbergasted, saying, ‘I’ve got to tell my friends about this.’

We’ve had really good feedback. We’ve created what we like to call our black hole. We acquire customers and then retain customers in our black hole.

Cannasinos Expanding to New Michigan Locations

With adult recreational use now legal in Detroit, The Reef plans to bring its cannabis casino concept to its Muskegon Heights location.

The company also has plans for more dispensaries in Detroit and Hamtramck, which will get the casino treatment, too.

Campbell said:

We had a couple other shops that were going to open that we just couldn’t open. It just didn’t make sense to open them until the recreational came online.

All of these adult-use cannabis dispensaries will get the ‘casino schtick.

Real gambling or not, Campbell has noticed a crossover between customers of these two formerly-illicit vices.

It’s definitely the same demographic. The same type of people seem to enjoy the same types of things, and until now, they haven’t been able to come together and enjoy them together.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and a lead writer at Bonus. Here she focuses on news relevant to online casinos, while specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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