Lume Loses Michigan Village Fight

Law360 reported that Michigan-based Lume Cannabis also known as Attitude Wellness LLC has lost its battle against the tiny town of Pinckney, Michigan. Lume was pretty annoyed that it didn’t win the sole cannabis license for this little town and sued the town to find out why. Lume already owns 26 stores in the state so the fight for this little town’s license was described by some in the state as a bullying move. Pinckney had originally opted out of the program and then changed its mind.

The Means Project Wins

In Michigan, if a town chooses to limit its licenses it has to create a standard for scoring and ranking the applicants. Pinckney received three applications for its single cannabis retailer license.  The Means Project received a perfect score under the Matrix, whereas QPS Michigan Holdings LLC obtained 66 points, and Lume scored last with 65 points.  Lume lost points for not presenting the Village with a clean energy plan and choosing not to operate its retail business in a vacant and distressed building.  Neither Lume nor QPS Michigan Holdings received any residency points.

Lume argued that the residency requirement was discriminatory, but it lost that argument. Lume argued that favoring local merchants was an illegitimate public purpose, but the court decided the village would probably win this argument as well. Lume also complained that the town’s desire to move into a vacant building had nothing to do with the state’s cannabis law. However, the court said that local municipalities can make decisions like this if they want to.

Up In Smoke

The judge decided that Lume faced no harm in not receiving the license, however, the town did since the licensing process has been delayed due to the lawsuit. Plus, the winner The Mean Project has spent $2.2 million on its plan to open its dispensary and the delay has caused it to fall behind other markets. The judge wrote, “Without a viable MRTMA claim, Lume’s case goes up in smoke.”

What was odd about the whole complaint is that Lume is already fairly large and the license is in a tiny town of just 2500 people. Lume began business in the fourth quarter of 2019 with 75 employees and by the fourth quarter of 2021, had reached 1,000 employees. The company has said that revenue grew 2.6x from 2020 (the first full year of business) to 2021, and is on pace to at least double again next year.

Lume was started by and is still owned by, Michigan natives. One of Lume’s minority owners has since moved out of state, however, and is now a citizen of another state. The CEO/founder Dave Morrow was also the founder of Warrior sports – lacrosse and hockey gear.

 

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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