Lawsuits Clog the Pipes in Michigan Cannabis Program

Small communities are hit with lawsuits over licensing.

This story was republished with permission from Crain’s Detroit and written by Dustin Walsh

For many marijuana operations seeking to open locations in communities across Southeast Michigan, plans are dying on the vine.

Dozens of companies remain at loggerheads with city councils over the licensing selection process, and the disputes have been playing out in Michigan’s court system for years.

The cities of Royal Oak, Warren, Pontiac, and others remain tangled in lawsuits, keeping marijuana operations sidelined while the judges cultivate a ruling.

Under the Michigan Regulation and Taxation of Marihuana Act of 2018, passed overwhelmingly by Michigan voters, the state offers unlimited licensure to marijuana operations; it’s up to local municipalities to create a competitive formula to decide who is allowed to sell or grow marijuana in their community.

“The driver of all of this is from probably the worst decision that the drafters of the adult use statute made — requiring that competitive selection process,” said Lance Boldrey, partner and cannabis attorney at Detroit-based law firm Dykema Gossett PLLC. “It all sounds well and good from a policy standpoint, trying to eliminate picking favorites, but it is the longest process and most expensive process for applicants to follow, and you end up with these lawsuits that can tie applicants up in court for three or four years.”

But a December ruling by a Court of Appeals panel in a lawsuit against the city of Berkley may have cleared the way for the suits to be dropped, as local municipalities tighten their grip on defining the competitive licensing process.

A Broken Process?

In Pontiac, the city continues to languish over its medical marijuana ordinances that were approved by voters nearly five years ago. Not a single dispensary has opened in Pontiac, and a proposed adult-use recreational ordinance that was introduced last year is further complicating matters.

Earlier this month, the Pontiac City Council continued to make changes to its medical marijuana scoring system. The city planned to give medical marijuana licenses to five companies, but a Dec. 9 ruling by an Oakland County Circuit judge found the city’s scoring system was unfair to Marshall-based vertically-integrated marijuana company Common Citizen.

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