Four Cannabis Companies Sue Detroit Over License Revocations, Zoning Dispute

The companies assert that a school was not included on maps during the initial permitting process.

After Detroit city officials changed course on a proposed multimillion-dollar marijuana cultivation and processing facility, the four companies with stakes in the operation filed a lawsuit, hoping to regain business permits revoked due to the facility’s proximity to a high school.

The suit – filed by Cannabis Professional Design LLC, MB City Transportation LLC, HZ Detroit Holdings 1 LLC, and HZ Detroit Holdings 2 LLC – asserts that Detroit Community High School “was the reason” that the business licenses were yanked by officials, even though the businesses went through two different hearings before the permits were granted, Law360 reported.

The proximity of the high school to the proposed cannabis business creates a “drug-free zone,” which the city contends nullifies that parcel of land for a possible marijuana facility. Although the school has been operational since 2009, it reportedly was not listed on city maps that cannabis officials initially consulted during the permitting process.

City officials reportedly substituted in a new zoning map after already granting the permits, an apparent error in the process, leading to the lawsuit. The four companies are requesting that a court reinstate their licenses.

“Unilateral revocation of all permits, despite the entity’s reliance upon those permits, does not seem to be the city’s usual policy, considering past zoning violations for already-established marijuana businesses have not resulted in the revocation of the property owners’ [special land use permits] or building permits,” the suit contends, adding that the city acted “arbitrarily and capriciously” to deny the four companies’ property rights.

The companies contend they’ve already invested $15 million into purchasing the parcel of land in question and have lined up $20 million in cannabis supply chain deals with vendors, Law360 reported. The companies also asserted they have hired at least 12 employees who are expecting to start work in the near future.

The lawsuit has also been moved from its original filing in state court to federal U.S. District Court in the Eastern District of Michigan.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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