In New Baltimore, the landscape of the marijuana business is witnessing a significant change with the transition of ownership of Cloud Cannabis Co. The New Baltimore City Council, in a narrow vote of 3-2 on January 22nd, sanctioned a medical and recreational marijuana application from Stash Ventures LLC, which is set to become the new proprietor of Cloud Cannabis. This company is recognized for its substantial presence in Michigan, operating close to a dozen dispensaries, including one on Cricklewood Boulevard in New Baltimore.
Doug Manson, representing Stash Ventures LLC, emphasized that the visible aspects of the business, such as the branding, structural design, and overall appearance, would remain unchanged post-acquisition. "The Cloud name and the physical attributes of the facility will stay the same, ensuring a seamless transition for customers," Manson stated. He further explained that the primary alteration would be in the ownership, largely invisible to the public.
The process of ownership transfer is contingent on local and state approval, as elucidated by Manson. He noted that the state of Michigan does not directly transfer licenses but instead issues new licenses concurrently with the rescission of existing ones. The completion of the state application depends on the city council's endorsement.
Manson also mentioned that a state inspection is anticipated following the finalization of the application. The city officials will be notified of any discrepancies found during this inspection. However, he anticipates minimal issues given the business's history of passing previous inspections.
The council meeting saw an extended debate on the application process. Council member Ryan Covert remarked on the novelty of such a transfer for the council, emphasizing their aim for consistency in handling these applications. Some council members, including Jacob Dittrich and Jason Harvey, expressed a desire for a more rigorous review process for transfer applications, akin to the procedure for new applications. They highlighted the need for greater familiarity with the new owners and their operations.
Comparisons were drawn between this application and a liquor license transfer. City Attorney Tim Tomlinson pointed out similarities in the operational processes, underscoring the necessity for compliance with legal requirements. He also commented on the ongoing consolidation trend within the industry, noting the larger scale of operations of companies like Stash Ventures LLC and their adherence to legal standards.
Nonetheless, Dittrich called for increased oversight, citing the relative novelty of marijuana licenses compared to liquor licenses. Mayor Tom Semaan and Tomlinson addressed the procedural aspects, suggesting possible amendments to the current ordinance for future transfers.
The approval of the application was motioned by council member David Duffy and supported by Mel Eason, while Harvey and Dittrich opposed. Mayor Pro-Tem Flo Hayman was not present for the vote.
Bear Lake Village, located in Michigan, is actively exploring the possibility of welcoming cannabis businesses into its community. The village's President, Shelly Lynnes, is spearheading efforts to potentially revise local ordinances to permit marijuana sales or transportation operations.
During a council meeting on January 25th, 2024, the council members unanimously agreed to authorize Lynnes to consult with Rob Carson, the Regional Director of Community Development at Networks Northwest, or other relevant experts. This decision marks a significant step towards drafting an ordinance that could pave the way for cannabis businesses in Bear Lake Village.
Lynnes, recognizing the potential benefits of such businesses, noted that Bear Lake already has suitable buildings for this purpose. She highlighted that legalizing cannabis has not led to increased crime or negative impacts on communities. Instead, Lynnes pointed out that it has spurred growth in neighboring towns.
The council's meeting also included input from Trever Johnson of Authentic 231, a cannabis business based in Manistee. Johnson emphasized the economic benefits that a retail cannabis location could bring to the village, such as increased spending and community engagement, especially during local events like lake and music days.
Lynnes also reflected on the evolving public perception of recreational marijuana sales. She cited the growth and positive impacts observed in nearby counties, such as Benzie, Manistee, and Grand Traverse, that have allowed cannabis establishments.
Johnson discussed financial benefits from the Michigan Regulation and Taxation of Marihuana Act. Counties and municipalities hosting marijuana businesses receive annual funds from the state's excise tax on cannabis. For instance, in Fiscal Year 2022, Manistee City received over $259,000, Marilla Township got about $51,800, and Manistee County received approximately $311,000 for their respective licensees. These funds also contribute to the state's school aid and transportation funds, supporting education and infrastructure.
Furthermore, Johnson suggested that Bear Lake Village could explore cannabis transportation operations if a retail outlet isn't feasible. In Michigan, cannabis growers and processors are required to use third-party transport services, licensed through the Cannabis Regulatory Agency, to move their products securely.
This potential shift in Bear Lake Village's stance on cannabis businesses signifies a broader trend of communities reevaluating the role of cannabis in economic development and societal progress.
In a significant legal confrontation within Michigan's legal system, a lawsuit has been filed against the cannabis conglomerate TerrAscend Corp. by a woman alleging wrongful termination following her requests for medical leave accommodations. The case, which was initiated in a federal court in Michigan, highlights complex issues surrounding workplace accommodations and disability rights.
Kristina Emiry, the plaintiff in this case, has brought forward a lawsuit claiming wrongful termination by TerrAscend Corp., a prominent figure in the cannabis industry. Emiry alleges that her dismissal came after she sought accommodations for a chronic medical condition. According to the lawsuit, Emiry was employed by a company that was subsequently acquired by TerrAscend Corp. Around the same time, she began to experience a chronic health condition that significantly impacted her work life.
The lawsuit details Emiry's attempts to navigate her medical condition while maintaining her employment. She claims to have requested a protected medical leave under the Family and Medical Leave Act (FMLA), which was initially approved until mid-August of the following year. Despite this approval, Emiry alleges she received emails from her manager, Luke Espinoza, which threatened her employment and created a hostile work environment.
Emiry's efforts to seek clarity on her job responsibilities and her preference for written communication due to her condition were reportedly met with silence. Her termination, allegedly for attendance issues, came abruptly, raising questions about the company's adherence to federal and state laws regarding employee rights and accommodations.
The lawsuit against TerrAscend Corp. raises several legal issues, including alleged interference with FMLA rights, retaliation, and violations of Michigan's Persons with Disabilities Civil Rights Act of 1976, as well as the Fair Labor Standards Act. Emiry's legal representation, led by Noah Hurwitz of Hurwitz Law PLLC, argues that the case exemplifies a broader issue of employers failing to engage in an interactive process to accommodate medical conditions as required by law.
TerrAscend Corp. has not publicly responded to the allegations, and efforts to reach the company for comment have been unsuccessful. The silence from TerrAscend Corp. adds an element of anticipation as the legal proceedings unfold.
This legal battle is not just about one individual's allegations of wrongful termination; it underscores the critical importance of understanding and respecting employees' rights to medical leave and accommodations. It also highlights the potential legal consequences for companies that fail to comply with federal and state laws designed to protect workers with disabilities.
The case, filed as Emiry v. TerrAscend Corp., is being closely watched for its implications on employment law, particularly in the evolving cannabis industry in Michigan and beyond. As the proceedings advance, they promise to shed light on the challenges and responsibilities of employers in accommodating employees with health conditions.
In a concerning discovery, over thirty bags with marijuana residue were recently found in a trash pile near a homeless encampment, raising questions about compliance with Michigan's cannabis disposal regulations and potential health risks for the local homeless population.
The site was inspected, uncovering the discarded bags, each marked with barcodes and unique license numbers linked to various marijuana businesses. These identifiers suggest that the bags originated from a testing facility, a critical step in ensuring the safety and quality of marijuana products in Michigan.
State laws mandate that both recreational and medical marijuana undergo rigorous testing by independent laboratories. These tests check for harmful contaminants, including mold, mildew, and toxic chemicals, to protect consumers' health. However, the discovery of these bags indicates a possible breach in the disposal process outlined by state regulations.
Mike Karl, a homeless advocate, highlighted a troubling aspect of this situation. He observed that the local unhoused community has been retrieving these bags from dumpsters. This act poses significant health risks, particularly if the marijuana residue contains harmful substances that were initially being tested for, such as powdery mildew or other chemicals. Karl expressed deep concern over the potential medical complications that could arise from the homeless population smoking or handling these discarded substances.
Michigan's Cannabis Regulatory Agency (CRA) has strict rules regarding the disposal of tested marijuana products. These rules stipulate that all samples must be rendered unrecognizable and completely destroyed before disposal. Non-compliance with these regulations can lead to severe fines and penalties. However, the exact source of these bags remains unclear, despite the visible names and license numbers of various dispensaries on them. A CRA spokesperson declined to comment on this specific incident.
The discovery of these marijuana residue bags not only raises questions about the adherence to state disposal guidelines by some businesses but also highlights a critical public health concern. Immediate action and investigation are necessary to prevent further risks to vulnerable populations and to ensure that all marijuana businesses comply with state regulations.
Comco LLC, a cannabis company operating under the name Comco Wellness in Jackson, Michigan, is set to be auctioned following a court-mandated receivership process that has lasted nine months in the Jackson County Circuit Court.
The company's substantial assets are poised to be acquired by Bag Boys LLC, the designated stalking horse bidder. This entity is connected to Farm Marcellus, a marijuana cultivation company located approximately 30 miles southwest of Kalamazoo, which holds four Class C grow licenses.
Since August of the previous year, Farm Marcellus has been financially supporting Comco during its receivership. The company has proposed a bid of at least $1.9 million, aimed at settling creditor debts and securing ownership of Comco.
The specifics of the stalking horse bid include a cash payment of $1.031 million and an additional $862,000 allocated for creditor repayment over a 12-month period, as detailed in court documents.
David Dragich, the attorney representing the court-appointed receiver, Gene Kohut, noted that further details regarding the final purchase price are yet to be disclosed.
Additionally, Farm Marcellus plans to absolve the debt incurred by Comco during the receivership, estimated to be between $800,000 and $900,000, as per court records.
Under the proposed agreement, Bag Boys would acquire Comco's cultivation facility located at 12584 Wooden Road in Jonesville. This facility is equipped with four Class C licenses and a processor license. However, Comco's other property at 8891 Pulaski Road in Concord is not included in this bid and is expected to be sold separately, according to Dragich.
Interested parties have until February 16th to submit competing bids for Comco.
The company's entry into receivership in April of the previous year was precipitated by legal action from Anewsha Holding Group LLC, based in Puerto Rico, and New York's cannabis payment software firm, Fusion LLC, operating as LeafLink.
Anewsha claims that Comco and its real estate division, Byrson Enterprises—both under the ownership of attorney Peter Behncke—failed to repay loans and invoices exceeding $1.3 million.
Initially, in 2019, Comco and Bryson borrowed $1.35 million from Anewsha, with an 11.89% interest rate, due by October 31, 2022. However, by the fall of 2022, Comco defaulted on the loan and also accumulated overdue rent of at least $25,000 on its Jonesville property.
LeafLink's lawsuit alleges that Comco has approximately $5.6 million in unsettled invoices since February 2022.
The expected payments from Bag Boys or Farm Marcellus are anticipated to be directed primarily to Anewsha, a secured creditor, as opposed to the service provider, LeafLink, as stated by Dragich.
In a significant legal development in Michigan, an appellate court upheld a previous ruling dismissing a lawsuit filed by cannabis company Great Chicago Fire Inc. against law firm Dinsmore & Shohl LLP. The suit, alleging that Dinsmore missed the filing deadline for the company's Illinois cannabis dispensary licenses, was ruled as filed beyond the permissible time frame.
The crux of the lawsuit revolved around the company's claim that Dinsmore, hired in October 2019, failed to submit 10 dispensary license applications by the January 2nd, 2020, deadline. Great Chicago Fire Inc. contended that the law firm, overwhelmed with other clients, informed them less than two hours before the deadline, leaving them unassisted in the filing process.
When the company initiated legal action against Dinsmore and two of its attorneys in April 2022, it was more than two years past the application deadline. The lawsuit encompassed claims of breach of contract, legal malpractice, and tortious interference with a business expectancy.
However, the appellate court found that the alleged breach — Dinsmore's failure to file the applications — required action in Illinois. The panel referenced the Michigan borrowing statute, which mandates that cases involving out-of-state plaintiffs adhere to time limits set by both Michigan law and the law of the state where the action should have occurred.
The court highlighted that since the dispensary applications were to be filed in Illinois, the fact that the contract was drafted and signed in Michigan by a Michigan-based attorney did not bear significant relevance to the case. Furthermore, the panel noted that the plaintiff did not allege any breach related to the services provided by Dinsmore prior to the filing deadline.
Adding to the complexity, another attorney, who did not hold a Michigan law license and was not a signatory of the engagement agreement, had been involved in the case for several months, working from Ohio and Illinois.
This ruling came from a panel comprising Judges Michael F. Gadola, Christopher M. Murray, and Christopher P. Yates of the Michigan Court of Appeals. While representatives for the involved parties were not available for immediate comments, the case, Great Chicago Fire Inc. v. John D. Mackewich, case number 365666, has set a precedent in the intersection of legal services and the cannabis industry in Michigan.
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