Last November, the City of Detroit announced its rules for allowing licensed adult-use recreational marijuana sales, which included controversial provisions meant to give “social equity applicants” a competitive opportunity. Applicants are entitled to preferential treatment if they have lived in Detroit for:
- 15 of the last 30 years
- 13 of the last 30 years and are low-income
- 10 of the last 30 years and have a past marijuana-related criminal conviction, or
- Have parents who have a prior controlled substance record and still live in the city
These rules gave rise to a lawsuit filed on March 2, 2021, in Wayne County Circuit Court, by a plaintiff who has been a Detroit resident for 11 of the past 30 years who intends to apply for an adult-use retail establishment license.
The lawsuit alleges that the “licensing scheme favors certain Detroit residents over other Michiganders based on the duration of their residency.” The plaintiff argues that the ordinance violates the U.S. Constitution’s commerce clause because it “discriminates against out-of-state residents and punishes people for moving between states.”
In April, U.S. District Judge Bernard Friedman issued a temporary restraining barring Detroit officials from receiving any more marijuana business applications.
On June 17, Judge Friedman again ruled in favor of the plaintiff by issuing a preliminary injunction halting Detroit’s recreational marijuana licensing program indefinitely.
The issuance of a preliminary injunction in the case is significant because the U.S. Supreme Court has set a high burden of proof for a plaintiff seeking an injunction. The Court identified a four-part balancing test in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008), which requires plaintiff to demonstrate:
- Likelihood of success on the merits
- Likelihood of irreparable harm
- The balance of both equities and hardships is in their favor; and
- That a preliminary injunction would be in the public interest
In his order, Judge Friedman stated that Detroit’s licensing program is “likely unconstitutional.”
To learn more about the Detroit lawsuit, as well as other challenges to municipal licensing schemes related to recreational marijuana in Michigan, click here.
At Fraser Trebilcock we have a strong litigation department that has handled multiple lawsuits in the cannabis field and are able to assist you if you believe you are entitled to relief. If you have any questions or require assistance, please contact Paul Mallon or your Fraser Trebilcock attorney.
Fraser Trebilcock attorney and former Michigan State Legislator Klint Kesto has nearly two decades of experience working in both the public and private sectors, including serving as Co-Chair of the CARES Task Force. You can reach him at firstname.lastname@example.org or 517.377.0868.