Judge: Legislature's failures created 'wild west' in medical marijuana market

Beth LeBlanc
The Detroit News
Matt Ruhle, purchasing manager, is seen weighing some product for customer Jim Shannon, 37, a caregiver who is purchasing the product for his patient, at Utopia Gardens in Detroit.

After four hours of arguments over Michigan’s medical marijuana facilities law Thursday, a Court of Claims judge continued a restraining order allowing some temporarily operating pot shops to stay open.

But Judge Stephen Borrello's decision came with a firm rebuke for Michigan legislators for failing to adequately address medical marijuana licensing in Michigan and essentially forcing him to legislate from the bench.

Borrello compared the current market of licensed and unlicensed medical marijuana facilities as the “Wild West,” a result of delayed legislation that forced the Department of Licensing and Regulatory Affairs to try “to make order out of the chaos.”

“There’s been a reluctance on the part of those with political power to enact when they should have,” said Borrello, arguing the regulated market should have been sorted out in 2008. “There’s no reason why in 2019, other than a lack of political will, we’re having to deal with any of these issues.”

The four-hour hearing followed continued extensions of a deadline the state had set for temporarily operating medical pot facilities to get licensed or risk sanctions to their license applications. The most recent deadline, March 31, was nixed again when Borrello issued a temporary restraining order.

Arguments against the deadline and other rules prohibiting the sale of caregiver product at licensed facilities have centered on an expected marijuana shortage those actions would create and the ramifications for patients who rely on the drug.

The temporarily operating provisioning centers that sued to stop the March 31 deadline argued Thursday that the deadline affecting roughly 50 facilities was “arbitrary and capricious” and ignored the due process rights of defendants applying for a license or appealing license denials.

Lawyers said, and Borrello agreed, that the state had created a type of “provisional license” for those facilities when it agreed last year to suspend disciplinary action while the facilities sought an operating license.

The state’s lawyers disagreed, arguing that the resolutions suspending sanctions provided a limited opportunity for those who were already operating to find their way into the regulated market.

“There has always been an end date,” Assistant Attorney General Erika Marzorati said. “…Plaintiffs decided to enter this industry knowing that they were not guaranteed a license.”

Borrello expects to make a decision on the case by next Friday but, in the meantime, continued the temporary restraining order on the March 31 deadline.

The principles at issue in the arguments, Borrello said, have more to do with the state’s administrative process and applicants' constitutional rights of due process than marijuana. But he said he was troubled “that we have a market that has licensed and unlicensed facilities” and that “some (marijuana) is tested and some is not tested.”

The Court of Claims hearing occurred the same day the Michigan House passed a bill 102-4 that would require the state to suspend a facility’s application process for a year if they continued to operate without a license past June 1.

Rep. Jim Lilly, R-Park Township, introduced the legislation amending the 2016 Medical Marihuana Facilities Licensing Act to crack down on medical pot business scofflaws who continue to operate in an unlicensed capacity to avoid the financial and regulatory rigors of the licensing process.

The substitute bill adopted Thursday appears to exempt the temporarily operating facilities at issue, but only if those businesses complied with certain requirements should they be denied a license.

Lilly’s legislation would join a recent law that created separated criminal penalties for unlicensed facilities that continued to operate past June 1.

Borrello took a dim view of the Legislature’s attempts to set a deadline at this juncture in the regulatory process, noting that lawmakers could run up against the same constitutional concerns expressed in court Thursday.

“These plaintiffs will just trot down to federal court and sue you,” Borrello said. “I don’t really understand why they’re even considering it, but that’s why we have three branches of government.”

It was unclear whether the judge was aware of the House's Thursday approval of the amended bill.


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