Real Estate Developer Suing Pontiac, Michigan Over Failure to Enact Cannabis Rules

The city of Pontiac, Michigan and its clerk are being sued by a real estate developer due to the delays made by officials in enacting cannabis rules, the Oakland Press reports. Rubicon Real Estate Holdings and Joseph Brown, of Brown Design Consultants, are seeking $60 million claiming the city’s delays are responsible for Rubicon’s lender withholding $45 million in loans needed to rehabilitate seven parcels in Pontiac. 

Pontiac voters in 2018 voted to allow cannabis businesses to operate – by a single vote – the Morning Sun reports, but city officials have subsequently dragged out the permitting process.   

As part of the property purchase agreement, Rubicon agreed to submit plans and applications for a cannabis license. To finance the renovations, Rubicon negotiated leases for the new space with several companies, including two cannabis businesses, Family Rootz and Pharmaco. According to the lawsuit outlined by the Press, Pharmaco’s 15-year lease is worth between an estimated $37.5 million in rent while Family Rootz’s lease is worth between $9 million and $12 million over three years for two properties.   

In 2021, Sixth Circuit Judge Yasmine Poles ordered the city to approve all the pending permits related to the redevelopment and allow Rubicon and its tenants to move forward, the report says. Her ruling notes that the case was not considered closed and the recent lawsuit is based on Poles’ opinion. 

The lawsuit also claims that the city acted punitively toward Brown, who had been involved in a separate lawsuit in 2021 that ended in a judgment against the city.  

The attorney for Rubicon and Brown, Cindy Victor, is asking for a jury trial.