Judge Denies Plaintiff’s Request to Halt Detroit’s Adult-Use Cannabis Licensing Process

Detroit, Mich., has cleared another legal hurdle in its efforts to stand up an adult-use cannabis market after a judge denied plaintiffs’ request to halt the city’s licensing process.

A prospective cannabis business owner and a medical cannabis company in Detroit filed litigation in September that claimed the city’s adult-use cannabis ordinance gives unfair preference to longtime Detroit residents.

U.S. District Judge Bernard Friedman denied the plaintiffs’ motion for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Michigan, according the Detroit Free Press.

Michigan launched adult-use cannabis sales in December 2019, and Friedman issued a 19-page injunction last year to block the Detroit City Council’s original adult-use ordinance.

Detroit’s initial plan allowed business entrepreneurs to obtain “Detroit Legacy” status when applying for an adult-use cannabis license. The legacy provision would have also given preference to applicants with low incomes or past cannabis-related convictions.

Friedman wrote that the original ordinance was “likely unconstitutional” in his ruling.

Detroit officials went back to the drawing board and adopted a new ordinance earlier this year.

Under the new ordinance, 160 adult-use cannabis dispensary licenses will be available, half of which will be reserved for social equity applicants. The revised ordinance also opens up licensing for cannabis consumption lounges and microbusinesses.

The new plan provides separate licensing processes for Detroit residents and non-residents, so that the two types of potential licensees do not compete against each other.

Two separate lawsuits were initially filed following Detroit’s adoption of the new ordinance; a group of medical cannabis dispensaries sued in May to challenge a provision that bars medical cannabis operators from receiving adult-use licenses for the first several years of the program, while JARS Cannabis filed a separate lawsuit in June that alleged that the ordinance violates Michigan law by giving preferential treatment to certain applicants.

Wayne County Leslie Kim Smith dismissed both lawsuits in August, just before the new litigation was filed in September.

“When I looked at the first ordinance, the Lowe case, it didn’t take much to look at it and it just screamed ‘constitutional violation,’” Friedman said at a Dec. 21 motion hearing regarding the latest lawsuit, according to the Detroit Free Press. “There’s no question about it. When I looked at this [ordinance], it didn’t.”

Christine Constantino, the attorney representing the plaintiffs, told the news outlet that Detroit “artfully disguised its preference” for longtime residents “now in equity.”

Nonetheless, Friedman’s ruling allows Detroit officials to start awarding its adult-use cannabis licenses. The city plans to issue 160 licenses in three phases, and as of October, the city had received 90 applications for its first phase of licensing.

John Roach, a spokesperson for the city, told the Detroit Free Press that Detroit’s Office of Marijuana Ventures and Entrepreneurship plans to provide additional information on the licensing process Dec. 22.