Recap: ICLE Community Zoom on Marijuana Topics

By Rebekah Page-Gourley posted 14 days ago

  

We recently started holding informal Zoom sessions to give ICLE Community members a chance to ask questions of each other or discuss current practice issues. We’ve covered the Clean Slate legislation, landlord-tenant issues, and, most recently, marijuana topics with John Fraser of Grewal Law (and Council Chair of the SBM Cannabis Law Section), Michelle Donovan from Clark Hill, and Ben Sobczak and Jerome Crawford from Pleasantrees. Here’s a taste of what we discussed during our most recent Community Zoom: 

  • Adult-use licensing. We talked about the sale and transfer of adult-use licenses and related issues to consider. Adult-use licenses can be transferred, but there are a number of difficulties in doing so. For example, the agency has to approve all new members before the sale can occur. An important issue to consider is whether the prequalification background check is complete or not before attempting to sell or transfer; if not, there could be delays. 
  • Social equity issues. Because of the history of marijuana criminalization and the disproportionate enforcement of laws barring its use and sale against Black people, there are a number of social equity issues intertwined with recreational use legalization. Jerome Crawford talked about what can be done to balance the scales, including things like reduced licensing costs, legislative advocacy for clemency for those still behind bars, and legacy programs in municipal ordinances that ensure longtime community members get a chance to participate and profit. 
  • Federal litigation. The group discussed a suit challenging the City of Detroit’s ordinance regarding marijuana business applications. The Detroit ordinance has a social equity component that includes preferential review periods for legacy applications and limitations on licenses for applicants who don’t have at least 50 percent ownership by Detroit residents. The complaint alleges violations of the MRTMA, the federal constitution, and the Michigan constitution. The plaintiffs’ federal constitutional argument is under the dormant commerce clause, arguing that Congress has the exclusive authority to regulate interstate commerce. The counterargument is that marijuana is not legal everywhere, and, as such, there can be no interstate commerce. (However, John Fraser did point out the U.S. Supreme Court’s opinion in Gonzales v Raich, which rejected the argument that “purely local activities” like noncommercial cultivation and possession of cannabis for medical use were beyond the reach of the commerce clause because those activities involved “cultivating, for home consumption, a fungible commodity for which there is an established, albeit illegal, interstate market.”) U.S. District Judge Bernard Friedman issued a temporary restraining order in the Detroit case, blocking the city from processing adult-use business applications. The case is especially interesting because if any part of the Detroit ordinance is struck down, the entire ordinance is invalidated. The next hearing is set for the end of May. 
  • State litigation. The group also briefly discussed a current case in the Michigan Court of Appeals brought by businesses that filed their applications for adult-use licenses in Detroit and Traverse City before those municipalities had enacted their ordinances. (Under the MRTMA, a municipality must opt out of licensing adult-use businesses, or else it is in.) The businesses argue that under the statute, the operative date is the day on which the application is filed, not anytime during the pendency of the application review. While the issue in the case is fairly narrow, it does represent a potential opportunity for the court to interpret the MRTMA. Check out oral arguments in the case here
  • Tips for municipalities. Many municipalities are involved in litigation right now because they are required to have a competitive process if there are more applications than spots allowed. Each municipality has their own system for evaluating and approving applications—sometimes involving points systems—and they are all being tested. Michelle Donovan encouraged attorneys to manage their clients’ expectations, because while the ordinances get tested, litigation is inevitable. The group noted that it would be best for all parties if municipalities were comfortable with these businesses. Ben Sobczak pointed out that the process should be focused on selecting the applicant most suited to operate in compliance with the MRTMA. John Fraser suggested that a practical approach would be for municipalities to eliminate the caps on such businesses and let folks try to get up and running; the free market would dictate which businesses succeed. Michelle also noted that municipalities can charge up to $5,000 for an application, so it can be a lucrative prospect to let them try. 
  • Potential impact of the People v Thue decision. In Thue, the Michigan Court of Appeals held that revocation of probation based on medical marijuana use is a violation of the medical marijuana act. The MMMA section 4 provides immunity for patients complying with the act from penalty in any manner. John Fraser pointed out that all of the same statutory language informing the analysis in Thue is present in the MRTMA. So, it will be interesting to see what happens if a similar case comes up involving adult-use. 

Keep an eye out in the Community for announcements about future Zooms, and feel free to send me ideas for topics at rebekahp@icle.org.

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