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Judge halts marijuana licensing process in Menominee

EagleHerald Staff Writer

MENOMINEE—41st Circuit Court Judge Mary Barglind has barred the City of Menominee from issuing licenses and building permits for any marijuana establishments for the time being.

Barglind signed a Stipulated Stay of Preliminary Injunction Proceedings on Dec. 21 and notified representatives of marijuana companies the city was “enjoined,” or prevented, from issuing approvals of marijuana licenses and permits by court order.

The judge also ordered four suing companies—NU Group, Attitude Wellness/Lume, Highwire Farms, and O.I. Holdings/Higher Love—to withdraw their motions for a preliminary injunction without prejudice. Without prejudice means the order does not affect the companies’ claims and they can be heard at a later date. The suing companies retain the right to ask the court to modify the order.

Barglind decided Nov. 23 the four lawsuits seeking an injunction should be consolidated as one case for efficiency and expediency because they involve similar issues. The lawsuits say the city violated the Open Meetings Act, the Michigan Regulation and Taxation of Marijuana Act and Equal Protection laws in the way it reviewed and scored applications and awarded licenses. It’s unclear whether the judge’s order voids the licenses the Menominee City Council approved Sept. 20.

Any time limitations the City of Menominee set previously were removed by the order and the clock will start over as of Dec. 21, according to Barglind’s stipulated stay document, which the EagleHerald received Wednesday.

Steven Eckley, business management for HigherLove, said the companies that received retail licenses might have spurred the judge to act before the scheduled Jan. 25 hearing. The city gave them six months to open their stores or risk losing their licenses, so they were under pressure to proceed with their plans, despite the lawsuits requesting the court void their licenses. “There were a couple of parties working very hard to get their construction started; they might have been pushing on the judge,” Eckley said Wednesday.

Menominee City Council Member Bill Plemel, chair of the Judicial & Legislative/Personnel & Labor Committee, said he hadn’t been notified of the order as of Wednesday but said it probably won’t put an end to the litigation. “It’s temporary. They’re coming after us tooth and nail after the first of the year.”

Matthew Cross, the attorney from Plunkett Cooney hired to represent the city in the litigation, said by email Thursday, “The order was intended to maintain the status quo while we work through the merits of the claims raised against the city. It was not an admission of any violation of law. The City now has to essentially ‘hit the pause button’ on issuing provisional or final licenses, any building permit or certificate of occupancy, or signing any MRA Attestation C-2 form until further notice.”

Interim City Manager Brett Botbyl said the order will affect the companies the Menominee City Council awarded licenses to in September. “With respect to the applicants that were awarded licenses, the city will now pause on issuing any type of building permit or provisional license until further notice,” he said in an emailed response to the EagleHerald’s questions.

In September, the Menominee City Council approved licenses for The Fire Station Cannabis Co. and Rize to open adult-use recreational marijuana permits. Attitude Wellness/Lume received a medical-use license but is pursuing litigation with hopes of receiving an adult-use recreational marijuana license. The EagleHerald requested comments from the companies approved for licenses but didn’t receive responses from most by press time Thursday.

AgriMed, which received a license for a medical marijuana store and hasn’t filed a lawsuit, said Wednesday it hasn’t yet closed on the property it intends to purchase but still wants to open a store. It filed applications for 3109 and 3113 10th St. Owner Greg Maki said he has been following the EagleHerald’s coverage and had hoped the Menominee City Council would hold a meeting.

“The city was going to have a meeting and that got canceled because they want to be careful about the Open Meetings Act. It doesn’t look pretty either way. It looks like it could be real long drawn out mess, which isn’t uncommon,” Maki said Wednesday.

Maki wasn’t aware of the judge’s order to enjoin the city from issuing licenses and permits, but said he thinks the city will probably have to pay some of the marijuana companies. “How much people spent? Probably a million bucks. We’re in pretty heavy up there,” he said. AgriMed is still proceeding with its plans, he said.

Eckley also hadn’t seen the judge’s order yet but referenced the amount of money at stake as one reason the judge would have acted swiftly. “It would stop the process and allow some transparency, but coming into effect, it also protects other folks that may start making an investment that isn’t wise,” he said.

It was unclear at presstime how the order might affect a fifth marijuana company, Rocky North/GreenPharm, which filed a lawsuit against the City of Menominee Dec. 17 about the licensing process and was not included in the consolidated case with the other four companies.

A Jan. 25 hearing date originally set aside to hear the consolidated case remains on the court calendar, and Deputy County Clerk Dawn Brazeau said it might be used to hear the new case. “She is still holding the date open because we do have another case that got filed,” Brazeau said.

In its complaint, GreenPharm has asked the court to award its adult-use recreational marijuana retail license application additional points or revoke the retail licenses previously awarded and reissue licenses based on recalculated scores. It also wants to be reimbursed for its costs.

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GreenPharm sues Menominee over retail licensing process

EagleHerald Staff Writer

MENOMINEE—A fifth marijuana company has filed a lawsuit accusing the City of Menominee of conducting an unfair licensing process for marijuana stores.

Attorneys for Rocky North, which does business as GreenPharm, said in the complaint the city’s marijuana selection committee didn’t evaluate its retail application fairly because it didn’t award points where they were due.

GreenPharm wants the court to award its application additional points or revoke the retail licenses previously awarded and reissue licenses based on recalculated scores, according to the Dec. 17 filing by attorneys Brian Etzel and Jeremy Manson of Williams, Williams, Rattner and Plunkett P.C. in Birmingham, Mich. The company also wants to be reimbursed for its costs.

GreenPharm’s complaint said the city’s marijuana ordinance does not comply with Michigan law. “The ordinance, as written and approved, is contrary to the preempting law under Michigan Regulation and Taxation of Marijuana Act (MRTMA). Section 4 of the Scoring Rubric violates MRTMA since use of a currently existing building versus use of newly constructed building would not aid in determining which applicants are best suited to operate in compliance with MRTMA,” the filing said.

In a Tuesday order, 41st Circuit Court Judge Mary Barglind enjoined, or barred, the City of Menominee from issuing approvals of marijuana licenses and permits, GreenPharm’s lawsuit was filed after Barglind consolidated four other complaints from marijuana companies that didn’t receive the retail licenses they wanted.

They are NU Group, Highwire Farms, OI Holdings/Higher Love and Attitude Wellness/Lume. Two other companies awarded adult-use recreational marijuana retail licenses—The Fire Station Cannabis Co. and First Property/Rize—have filed motions to intervene in the consolidated case. But GreenPharm’s case could be considered separately because it was filed after the lawsuits in the consolidated case.

GreenPharm received 44 points on its marijuana application out of a possible 50, but said in its complaint it should have received more points because the city made a mistake in the way it scored its application. It wasn’t given credit for some of its plans, which the company said is an error.

The company proposed to demolish a portion of an old, outdated structure to provide more parking at 1235 10th Ave., which the city described as the H&R Block Building.

It also proposed to make significant improvements to the exterior of the structure, including a state-of-the-art green roof, an art mural on one side of the building, and “Welcome to Menominee” and “WELCOME TO PURE MICHIGAN” greetings. GreenPharm also proposed to construct a new facility but wasn’t awarded four points in that category, the lawsuit said.

The lawsuit said no “facility,” as defined by the city’s ordinance, exists at the property. “While an existing building does stand at the property, the act of building and putting materials together is required to turn that existing building into a ‘facility,’” the complaint said.

The word “facility” also was an issue for other companies, and the Menominee City Council discussed whether the language in the ordinance was clear enough.

GreenPharm’s complaint raised an issue about how the rubric assigned points for constructing a new facility versus using a currently existing building or structure. The lawsuit also said the company was denied its right to due process.

In the complaint, GreenPharm said the city breached its legal duty and violated the Open Meetings Act in the way it reviewed and scored applications and awarded retail marijuana licenses.

In an earlier interview with the EagleHerald, Mike Bahoura, an attorney specializing in cannabis licensing and representing GreenPharm during the application process but who may not be involved in the lawsuit, said consumers often decide how many marijuana stores an area will support. “If you do a good job, have a good product at a good price, you’re probably going to have success,” he said.

When a city puts a limit on the number of license it will issue, it must use a competitive process to decide which companies will receive licenses.

The competitive process typically lengthens the approval process. Besides the city’s fee of $5,000 per application, Bahoura estimated companies spent at least $50,000 on applications for retail licenses in Menominee.

Cool Nails nail salon’s regular business hours at the Pine Tree Mall do not include Saturdays. However, when a close friend of Mary Hawlay (left) passed away, she missed her scheduled appointment at the salon. However, Cool Nails’ associate Derek Ho (left) agreed to lend some holiday grace and opened the store on Saturday to help out Hawlay, a long-time and loyal customer.