A federal judge on Wednesday issued a temporary restraining order halting Detroit, Michigan’s adult-use cannabis licensing process over its legacy licensing plan that gives Motor City residents preferential status and fee discounts, MLive reports. The lawsuit by Crystal Lowe, who hopes to open a retail cannabis shop in the city, claims the rules run afoul of both the state and U.S. Constitution.
Kevin M. Blair, of Honigman law firm who is representing Lowe, claims in the motion the city’s rules amount to “pure economic protectionism.”
“Time and again, Michigan courts have struck down municipal licensing schemes for private businesses that discriminate based on residency.” – Blair, in the lawsuit, via MLive
Detroit’s retail cannabis licensing plan calls for 50% of up to 75 new retail businesses be owned by legacy residents and the 50% legacy minimum applies to most other industry license types. Legacy applicants also receive a 99% discount on fees this year, a 75% discount next year, and the opportunity to purchase city-owned land at a 25% discount.
Legacy applicants are defined by the city as individuals that have lived in Detroit for 15 of the last 30 years; 13 of the last 30 years and are low income; or for 10 of the last 30 years and have a cannabis conviction or a parent with a cannabis conviction.
U.S. District Judge Bernard Friedman issued the temporary restraining which prohibits city officials from receiving any more industry applications until at least April 21 or April 22, when a hearing will be held to determine if a preliminary injunction will be issued. A preliminary injunction could mean no industry licenses are issued until the lawsuit is settled.
The city’s ordinance includes language that says no licenses will be issued or renewed if any part of the local law is deemed unconstitutional or otherwise struck down. The city had planned to begin issuing licenses on May 1.
Detroit Corporation Counsel Lawrence Garcia indicated that Detroit’s Civil Rights, Inclusion and Opportunity Office would “reach out to certified Legacy Detroiters to offer general advice and support while the litigation is pending.”
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