Detroit’s marijuana licensing program that gives preferential treatment to longtime residents suffered a potentially lethal legal blow Thursday when a federal judge wrote that it is “likely unconstitutional” and issued a preliminary injunction halting the program indefinitely.
U.S. District Judge Bernard A. Friedman issued the written order that will block Detroit from issuing recreational marijuana business licenses at least until a pending lawsuit that spurred the injunction is resolved.
And based on Friedman’s order, it seems unlikely Detroit will prevail.
Detroit’s City Council took great time and care to draft an ordinance that ensures the city’s marijuana market isn’t overrun by wealthy outsiders and gives preferential treatment to longtime residents designated “legacy” applicants.
In doing so, a lawsuit filed by prospective marijuana shop owner Crystal Lowe claims Detroit is violating both the state and U.S. Constitution.
‘The city ordinance governing the process for obtaining a recreational marijuana retail license gives an unfair, irrational, and likely unconstitutional advantage to long-term Detroit residents over all other applicants,” Friedman wrote.
The judge previously issued a temporary restraining order in April until he had time to receive briefs and hear arguments on the matter.
The Detroit marijuana licensing program defines legacy applicants as those who have lived in the city for 15 of the last 30 years; have lived in the city for 13 of the last 30 years and are low income; or have lived in the city for 10 of the last 30 years and have a marijuana conviction or a parent with a marijuana conviction.
It gave various perks to legacy applicants, including a head start on application processing. .
Legacy applicants were also to receive a 99% discount on licensing fees in 2021, a 75% discount on licensing fees in 2022, and the opportunity to purchase city-owned land for 25% of the market value.
The intent of the ordinance aligns with the state marijuana law that voters passed in 2018. The law includes support for the concept of social equity, with the intention of supporting or at least to avoid the penalization of anyone who’s been negatively impacted by prior marijuana prohibition.
The Detroit licensing plan calls for no less than 50% of up to 75 new retail businesses to be owned by legacy residents and the 50% legacy minimum applies to most other license types.
Lowe, a 33-year-old who planned to enter the Detroit market, claimed the residency requirement put her at an unconstitutional disadvantage. Despite her having lived in Detroit for 11 of the last 30 years, Lowe does not qualify as a legacy resident.
“The Michigan Court of Appeals has repeatedly indicated that ‘durational residency laws which require residency for a period of time before applying for or obtaining a benefit’ generally trigger strict scrutiny under the Michigan Constitution, as they violate the fundamental right to inter- and intrastate travel, and are generally disfavored,” Friedman wrote.
Lowe’s attorney, Kevin Blair, in a brief called the designation “pure economic favoritism.”
MLive sought and is awaiting comment from Detroit Councilman Todd Tate Jr., who spearheaded crafting of the Detroit ordinance.
At a March 29 Detroit City Council meeting, the Civil Rights, Inclusion and Opportunity Department, which was receiving marijuana business license applications, reported that 400-plus legacy applicants “had already been certified,” according to Lowe’s lawsuit.
As if prepared for the possibility of a legal challenge, Detroit’s licensing ordinance states no license will be issued or renewed if any portion of the law is struck down or deemed unconstitutional.
Care to learn more about Michigan’s marijuana industry from some of its key players? MLive is hosting an online Cannabis Insights information and networking event June 17 from 4:30 p.m. to 6 p.m. featuring industry experts who will discuss various topics from the perspectives of businesses and consumers. Event and ticketing info is available here.
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