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SALINE, MI – A development deal that could have brought a marijuana dispensary to a city lot off East Michigan Avenue in Saline is dead.

Developers with Michigan marijuana giant Lume Cannabis Co. terminated a $1-million agreement to buy the 6.5-acre property in a city business park next to Zippy Auto Wash, officials announced during a City Council meeting on Monday, Jan. 23.

“They did not feel the lot was economically feasible for them any longer,” Saline City Manager Colleen O’Toole said.

Developers initially imagined the project would include a new building for the Lume dispensary, as well as additional mixed-use development toward the rear of the property. But due diligence assessments showed challenges for that part of the lot, O’Toole said.

“It’s not impossible, but certainly adds to the financial equation,” she said.

City leaders inked the purchase and development agreement with an affiliate of Lume in April 2022, just a month after passing rules opening the city up to recreational marijuana shops and other developments.

The $1-million sale price for Lot 20A of the Sauk Trail Business Park surpassed the $817,500 asking price, according to a real estate listing at the time.

Read more: A million-dollar deal: Saline OKs sale of city lot to marijuana retailer

The deal gave the cannabis company time to evaluate the property and the option to back out of the purchase, a standard part of many similar real estate arrangements.

Lume opened a new location in Ann Arbor last summer, adding to its more than 30 establishments across the state. Around the same time the major Michigan marijuana retailer abruptly closed four locations, calling the move a business “realignment.”

Lume’s chief marketing officer didn’t immediately respond to a call and email seeking comment on its plans in Saline on Tuesday, Jan. 24, and an email to a general inbox for the company was also not answered.

The Lume development in Saline was just the beginning of a parade of dispensary proposals in the city, some of which have already received City Council approval and are moving ahead.

Because of required buffers between retailers, the Lot 20A property now won’t be used for marijuana purposes, O’Toole said.

Read more: Aiming to avoid a dispensary ‘on every one of our corners’, Saline changes marijuana rules

Saline Mayor Brian Marl said Monday he hopes city staff will work to aggressively market the property, letting other developers know the city would be eager to work with someone proposing a “dynamic mixed-use project” at the site.

City leaders hoped a year ago the parcel would be developed as a new health care facility, publicly criticizing a major Michigan physician’s group and urgent care operator after talks over the property broke down.

Future marketing of the lot could involve a city request for proposals, where officials outline exactly what they know about the parcel and what their vision is, to better align with a potential developer’s plans, O’Toole said.

More from The Ann Arbor News:

Development on farmland near Saline would have feel of Ann Arbor’s Old West Side, planner says

Future of vacant Ann Arbor-area movie theater again up for debate

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