$40M Cannabis Redevelopment Site In Pontiac Michigan Ends In Massive Federal Lawsuit

A huge cannabis development site is up for sale as Pontiac and the property's developer battle it out in federal court.

The bitter litigation marks the likely end to a $40 million development plan that sought to turn an abandoned Kmart into a site for cannabis and other retail businesses. In addition to the legal kerfuffle, allegations of bribery by the city's current administration against previous officials, including a former mayor have seeped out.

What happened

In 2019, Michigan-based Rubicon Real Estate Holdings, LLC entered into a purchase agreement for a former Kmart site, which a year later was rezoned to allow for cannabis businesses, according to Crain’s Detroit. 

As part of the development agreement, there would have been two medical marijuana (MMJ) licenses. But the City Clerk denied issuing MMJ grower and processor permits, claiming the property was not zoned for marijuana businesses.

Rubicon alleges in its lawsuit, filed in Oakland County Circuit Court, that the city of Pontiac delayed issuing a permit for almost four years, causing the developer's lender to withdraw some $45 million in loans, which led to the loss of several tenants for the proposed development, reported the Green Market Report.

Tired Of Waiting

Now, the developers have said they're no longer willing to wait for the legal battle to be resolved and have put the property up for sale. The sale price is not yet known, but it is likely to be significantly less than the $40 million the developer originally paid for the property.

The sale of the property is a setback for the city of Pontiac, which had hoped to see the site developed into a major economic driver. However, the legal battle has made it too risky for any developer to move forward with the project.

It not clear when the case will go to trial, which is currently in the discovery phase.

The legal battle has cast a shadow over the development of the former Kmart property, which has been vacant for years. The property is located in a strategic location near downtown Pontiac, and its redevelopment could have had a significant impact on the city's economy.

The case is also notable because it raises questions about the role of corruption in the city's marijuana licensing process. The city has been accused of dragging its feet on approving medical marijuana licenses. The allegations of bribery could further muddle the process.

Read more at Crain's Detroit.