Longtime Detroit Residents Have Advantage In Cannabis Licensing Process, Michiganders Beware Of Marijuana Scams

Legal obstacles facing the rigorous Legacy Detroiter preference program for long-term residents seeking entry into the cannabis industry is picking up steam, a month after a judge dropped two lawsuits challenging the license application process, reported the Detroit Free Press.

Wayne County Circuit Judge Leslie Kim Smith called the city's 2022 marijuana ordinance "a complicated scheme" in an opinion in the first lawsuit filed in May by a group of medical cannabis dispensaries including House of Dank, Herbal Wellness, TJM Enterprises Services and Detroit Natural Selections Enterprises. The judge said that ordinance is unambiguous and provides a fair licensing process, which "comports with the mandates of the [Michigan Regulation and Taxation of Marihuana Act]."

The judge's opinion in the second lawsuit from JARS Cannabis which sought to do away with the ordinance was that equity applicants are in a better position compared to non-equity applicants who can apply for recreational cannabis licenses at the same time.

Cannabis business owner Arden Kassab has joined forces with medical marijuana company PharmaCo and filed a lawsuit on Sept. 28 seeking to invalidate the ordinance and stop the city from green-lighting applications for dispensary, microbusiness and consumption lounge licenses.

The Detroit City Council approved a revised adult-use ordinance in April after a U.S. district judge blocked the city's previous attempt to license recreational cannabis businesses in 2021.

James Tate, a sponsor of the legislation, called the program "the best opportunity possible for equity applicants and Legacy Detroiters to compete for these licenses."

He also stressed the importance of strategically identifying "how this industry can and should go in Detroit" instead of a more "shotgun" approach where whoever wants a license gets one.

The ordinance initially sought to allow entrepreneurs to receive "Detroit Legacy" status when applying for recreational cannabis permits, those who have lived in the city for a certain number of years and are low-income or have past marijuana-related convictions.

According to the revised ordinance, social equity applicants, long-time Detroiters and those with records would receive half of the available licenses, while other residents and non-residents will be part of a separate process.

Kassab's lawsuit claims that "Detroit has essentially rebranded the 'legacy' program as a 'social equity' program."

CRA: Cannabis Scams Are On The Rise 

Meanwhile, the state's Cannabis Regulatory Agency (CRA) warned of an uptick in fraudulent activity within the industry over the past two months.

According to the CRA's press release, the scams have the following in common:

• Companies are contacted by phone or text message by an individual placing an order of cannabis or cannabis product on behalf of a license.
• The individual is often familiar with the process of placing an order and gives a license number related to a licensed marijuana business to place the order.
• Once the secure transporter arrives, the delivery location is not a licensed cannabis business.

CRA cautioned licensees and applicants to notify the regulatory body and the police within 24 hours after learning they've been part of a fraud.

Photo: Benzinga Edit, Source: Shutterstock