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I believe in Ann Arbor MI, you only get fined if caught smoking pot. They have an event called Hash Bash at the University of Michigan. They also have an annual Naked Mile Run and is known for its liberal vibe. Culture of Ann Arbor, Michigan - Wikipedia, the free encyclopedia
How about Madison, Wisconsin? It's very progressive and has more than just the university there on account of being the capital. It's affordable and the unemployment is generally low. It has large lakes in the center of the city, is near good state parks, not too far from Lake Michigan, and accessible to a major city.
Austin seems to be the city you're describing, it literally has all of the qualities you just described. However, the population is growing rapidly.
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Austin isn't a small city anymore like it was in the 60's, 70's, 80's, 90's, & early 2000's...its becoming a major city just shy of a million people.
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