Medical marijuana licenses approved by Warren City Council last summer were struck down by the Macomb County Circuit Court on Thursday.
A council-approved deal that granted 15 intervenors on Aug. 24 following a 2019 trial, which is currently before the Michigan State Court of Appeals, was dismissed by Judge Carl Marlinga.
After city council approved the deal in August, a motion was brought by Alan Greene and Christyn Scott of Dykema Gossett PLLC on behalf of Happy Trails Group, Inc. and Spruce Ventures, LLC asking that the Town of Warren and the 15 stakeholders are in contempt of court for violating Judge Marlinga’s order of April 14, 2020, which ruled that the 15 medical marijuana licenses that had been issued by the city in October 2019 were invalid.
Marlinga said it was inappropriate for the city to negotiate any kind of deal with stakeholders while the case was still before the appeals court.
“Licensing medical marijuana to the same 15 stakeholders through regulation violates the terms of my judgment,” said Marlinga. “The city and stakeholders have reached a settlement agreement that overturns an earlier ruling by this tribunal while the case is still pending before the Court of Appeal. The agreement is totally contrary to the decision of this tribunal. The city cannot take action that unilaterally overturns this tribunal’s order while it is on appeal.
In October 2019, the city’s Marijuana Review Committee selected 15 recipients to be granted medical marijuana licenses. Several companies that did not receive licenses immediately filed lawsuits in Macomb County Circuit Court, saying the committee’s scoring system for applicants was flawed and had repeatedly violated the Open. Meetings Act. Marlinga ruled that the committee had indeed violated the Open Meetings Act 13 times and agreed that the city’s scoring system was flawed and, in April 2020, ruled that all licenses issued by the committee were invalid.
All members of the Marijuana Review Committee were named in the lawsuit (Pinebrook Warren, LLC v City of Warren), including current City Councilor Ronald Papandrea, City Counsel Ethan Vinson and former Councilors Cecil St. Pierre and Steve Warner.
The 15 companies that issued the initial licenses have become stakeholders, saying they have already made substantial financial commitments to open marijuana sourcing businesses in Warren and their licenses should not be invalidated.
As part of Thursday’s ruling, Marlinga instituted a 42-day stay order that would allow all 15 responders, many of whom are already open, to continue operating while legal advisers on both sides of the lawsuit s ‘strive to move the case forward. Court of Appeal.
In his opening statement, Greene said the August deal was negotiated in secret and the real deal was not made public as part of the agenda and dossier for the meeting of the Warren’s tip of August 24. The e-packet contained a summary of the agreement, but not the agreement itself. Greene said he filed a Freedom of Information Act claim, received this information on September 14, and filed the motion asking that the town of Warren and the interveners be found in contempt of court the next day. .
“The settlement agreement is a private document that has not even gone to court,” Greene said. “He does an about-face and returns the permits to the interveners. There was a roadmap drawn up by this court and given to the city outlining the right way to handle the licensing process and they violated that judgment. They could have gone back and redo the process as it had been described and it would have been completed by now. “
Marlinga acknowledged providing a roadmap to the Town of Warren with best practices that should be used to completely redo the process of reviewing medical marijuana licenses, scoring applicants and awarding the 15 licenses. authorized by the Warren Prescribing Code. While the April 2020 decision was not in the form of an injunction, this week’s judgment came with Marlinga citing the shock and frustration that the Town of Warren did not comply with its original ruling.
“I’m putting this in the form of an injunction because I didn’t think such was necessary before, but now I’m doing it because of the actions I just witnessed,” Marlinga said.
Aaron Geyer of Aiello & Associates, LLC, which represents LE Battle Creek, Inc., said the uncertainty of the 15 medical marijuana licenses has put his customers in a difficult position after investing a lot of money in their business.
“My clients were licensed before the Open Meetings Act violation was determined,” Geyer said. “At that time, my clients had six months to open their establishment. They spent millions because they got a license.
Christopher Aiello of Aiello & Associates called Greene’s petition a “sour grape lawsuit” without “any facts to support the reasoning we have been discussing for the past two hours.”
Marlinga said that since the actions of the Warren City Council Marijuana Review Committee were overturned with its April 2020 decision, the August deal that was approved in substance grants licenses to 15 parties. without them submitting requests or being noted and reviewed by the city in any way.
“The losers (of the Pinebrook Warren, LLC v City of Warren lawsuit) got together behind closed doors and made a deal that said they won the lawsuit,” Marlinga said. “Then they tried to tell the court where they lost: there’s nothing you can do about it. They took advantage of a city council that was either misguided or didn’t know what it was doing.
The August settlement also paved the way for recreational / adult use licenses in the town of Warren and dictated that applications for 18 recreational licenses be taken over the next year. The status of recreational marijuana in the town of Warren is now in limbo due to the cancellation of the August deal.
Kristina Dedvukaj represented minority-owned cannabis company Viola Brands during the initial application process and hosted a networking event for those involved in the cannabis business on Thursday evening. She is concerned about the uncertainty surrounding recreational permits.
“Regardless of what happens in the appeal process, I hope there will be a competitive process in place for the licensing of recreational cannabis in Warren,” said Dedvukaj.
Despite a strong global presence in the cannabis industry, including a location in southwest Detroit, Viola did not receive a supply license to Warren. Viola chose not to join the ongoing litigation, but was set to apply for one of 18 recreational licenses under the now canceled deal.
Marlinga said the best possible thing for all parties involved would be for the case to go through the appeals process quickly.
“It would be better if the residents of the town of Warren had a final resolution on this,” said Marlinga. “I would like to end this today by not accepting the plaintiffs’ request, but I just cannot ignore the law and risk having all the prosecutions under the Open Meetings Act make no sense in the future. “