Only four weeks after going into effect, Detroit’s new recreational cannabis ordinance is in danger of being struck down once more after medical dispensary owners file suit against the city, claiming that they are giving preferential treatment to newer applicants.
Four companies who operate medical dispensaries in and surrounding Detroit – House of Dank, Herbal Wellness, TJM Enterprises Services, and Detroit Natural Selections Enterprises (who operates Green Genie) – filed a lawsuit against Detroit in Wayne County Circuit Court on Wednesday, claiming the ordinance would force existing medical marijuana retailers to close by requiring them to wait until 2027 before applying for recreational licenses. The suit was filed by Kevin M. Blair, who last year led the legal team that successfully sued the city to repeal its ordinance.
The new ordinance does not explicitly prohibit businesses from applying for recreational licenses in Detroit outright, the suit claims that it would make it very difficult to survive without a recreational license to compete adequately within the five-year period.
“While places already faced stiff competition from license retailers and other jurisdictions who can deliver marijuana to individuals in the city the consequences on its business have only being able to sell medical marijuana to register patients while it’s nearby competitors can sell marijuana to anyone over the age of 21 years old will be catastrophic and likely results in the closure of its businesses,” the suit alleges.
Many in the state’s cannabis law space saw the lawsuit as inevitable. Eric Foster, a Detroit-based attorney and cannabis lobbyist, says that the ordinance’s language was unchanged from when it was struck down in 2020 by a federal judge for unfairly preferring Detroiters.
“The filing of the lawsuit is no surprise,” says Matt Abel, attorney for the cannabis law firm Cannabis Counsel. “The city could’ve avoided it by not being so stingy and issuing licenses to all the existing medical licenses.”
Although adult use cannabis has been legal in Michigan since 2019, Detroit has lagged behind because of the 2020 lawsuit that struck down the original ordinance for favoring city residents rather than a broader class of social equity applicants. The ordinance was drafted in an attempt to give Black Detroiters an opportunity to establish themselves in the industry.
As a result, no recreational licenses were awarded within city limits for two years.
The revised ordinance increases the number of adult use retail licenses from the earlier law’s 76, to 100, and creates a lottery system to award licenses to applicants who have not found a location to operate, giving Detroiters a chance to cash in on the $1.1 billion industry in the state.