A judge dismissed a pair of lawsuits in August that challenged Detroit’s adult-use cannabis ordinance, but last week, a prospective cannabis business owner and a medical cannabis company in the city filed new litigation claiming that the ordinance gives unfair preference to longtime Detroit residents.
Arden Kassab and PharmaCo filed the lawsuit Sept. 28 in U.S. District Court for the Eastern District of Michigan, asking the court to invalidate the ordinance and block the city from accepting applications for dispensary, microbusiness and consumption lounge licenses, according to the Detroit Free Press.
Michigan launched adult-use cannabis sales in December 2019, and Detroit City Council approved a revised adult-use ordinance in April 2022, nearly 10 months after a U.S. district judge blocked the city’s previous attempt to license adult-use cannabis businesses.
The original ordinance would have allowed entrepreneurs to obtain “Detroit Legacy” status when applying for adult-use licenses, providing licensing preference to applicants who have lived in the city for a certain number of years. The legacy provision would have also given an advantage to those with low incomes, as well as those with past cannabis-related convictions.
Detroit’s revised ordinance outlines plans to issue half of the available licenses to social equity applicants, which are defined as longtime Detroit residents and individuals who live in communities where cannabis-related convictions are greater than the state average. However, it provides separate processes for residents and non-residents to receive licenses to ensure that the two types of applicants do not compete against each other in the licensing process.
“While Detroit alleges that its new cannabis ordinance cures the constitutional deficiencies found by Judge Friedman, the … [ordinance] remains ‘far more protectionist than it is equitable,’” the lawsuit claims, quoting U.S. District Judge Bernard Friedman’s June 2021 opinion on Detroit’s original adult-use ordinance, according to the Detroit Free Press.
The lawsuit also alleges that “Detroit has essentially rebranded the ‘legacy’ program as a ‘social equity’ program,” the news outlet reported.