Michigan House approves new incentive programs amid business warnings

Detroit marijuana law likely unconstitutional, federal judge says

Robert Snell
The Detroit News

Detroit — A federal judge Thursday said the city's marijuana ordinance gave "likely unconstitutional" advantages to long-time Detroit residents and temporarily blocked the city from processing applications for recreational marijuana licenses.

The opinion by U.S. District Judge Bernard Friedman and a preliminary injunction comes three months after resident Crystal Lowe sued the city, arguing a new city ordinance regulating licensing for recreational marijuana shops was unfair.

Mayor Mike Duggan, with Councilman James Tate, talks about the ordinance for Detroit Medical Marijuana facilities and Adult-Use Marijuana establishments in October.

Lowe argued the city “has almost certainly denied" her chances to obtain a license because the city's "licensing scheme favors certain Detroit residents over other Michiganders based on the duration of their residency” there. The ordinance gives preferential treatment to "legacy" residents of Detroit who have lived in the city for at least 10 years.

In a 19-page opinion Thursday, Friedman issued a preliminary injunction "because 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."

City staff are reviewing the judge's order and developing "a revised plan to address the judge's concerns," Kim Rustem, the city's director of the department of Civil Rights, Inclusion and Opportunity said in a statement Thursday.

"In the meantime, one thing is for certain: The city will not issue any recreational licenses unless there is legal assurance that Detroiters will receive a fair share of those licenses," Rustem added. 

Lowe's lawyers also could not be reached for comment.

After two years of debate, the City Council in November unanimously approved the ordinance that gives special preference to residents under a certification the city calls "Detroit Legacy."

Applicants could qualify for the "legacy" certification if they've lived in Detroit for 15 of the last 30 years; lived in Detroit for 13 of the last 30 years and are low-income; or lived in Detroit for 10 of the last 30 years and have a past marijuana-related conviction.

Residents, like Lowe, who have lived in Detroit for 10-14 of the past 30 years, must meet additional conditions to qualify for a license. Those conditions include being low-income.

Under the ordinance, legacy Detroiters also would be able to purchase city-owned land at 25% of the fair market value and that all application fees be slashed to 1% of the total cost.

The city was supposed to start accepting license applications for 75 licenses on April 1 but Lowe obtained a temporary restraining order. But by the time Lowe sued, the city had determined 400 applications were entitled to the legacy preference.

The ordinance allows up to 75 licenses and at least 50% have to be granted to Detroit legacy applicants, without a cap on those awarded to that group. 

Detroit Deputy Mayor Conrad Mallett previously told The Detroit News state law gives local municipalities the ability to approve or prohibit adult use of recreational marijuana within its boundaries. Through legislation sponsored by Detroit Councilman James Tate, the city acted on that authority, he said.

The judge Thursday wrote that Lowe showed a substantial likelihood that parts of the ordinance discriminated against applicants who had not lived in Detroit for at least 10-15 of the past 30 years, violated the fundamental right to inter- and intrastate travel and impeded interstate commerce.

"At a minimum, the ordinance must pass rational basis review to be deemed constitutional under both the United States and Michigan constitutions," Friedman wrote. "However, the challenged provisions of the Detroit ordinance do not appear to be rationally related to the stated purpose of rectifying the harm done to city residents by the war on drugs."

Tate said he was disappointed by the judge's order.

"Our intention for crafting such legislation was never to prevent anyone from participating in the recreational marijuana industry but to ensure that the long-standing residents of this city — residents who have endured ill effects of the nation’s “War on Drugs” through mass incarceration, punitive hiring policies, blight and generational poverty — have a fair shot of participating in a potentially lucrative opportunity for Detroit," Tate said in a statement.

rsnell@detroitnews.com

Twitter: @robertsnellnews