Legal Battle Over Cannabis Market Heats Up in Menominee, Michigan

March 21st, 2024 Legal & Crime
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In the small Michigan town of Menominee, with a population of 8,300, situated on the picturesque shores of Lake Michigan's Green Bay and neighboring the state of Wisconsin, a complex legal battle is unfolding. This fight is over the control of the town's lucrative cannabis market, a battle characterized by allegations of unethical conduct and potential illegal activities among competing cannabis businesses. This conflict highlights the intense competition and legal intricacies faced by the cannabis industry in regions where the market is both lucrative and tightly regulated.

Menominee finds itself at the center of a dispute involving eight cannabis companies, entangled in legal proceedings that implicate the town's officials in alleged violations of the Open Meetings Act and covert operations to skew the local cannabis market in favor of certain businesses. This dispute underscores the town's strategic importance as a cannabis market, drawing significant attention from out-of-state customers, particularly from Wisconsin, where cannabis remains illegal.

At the heart of this controversy are accusations against corporate-backed "shadow" groups, which are said to be orchestrating efforts to limit the expansion of new cannabis shops through sham citizen committees, alongside allegations of political bribery and unethical maneuvers designed to manipulate market dynamics.

A notable moment in this ongoing legal saga occurred during a motion hearing at Menominee's 41st Circuit Court on March 20th, where a staggering 16 attorneys represented the various parties involved, extending what would typically be a brief proceeding into a marathon session lasting over four hours.

Joslin E. Monahan, an attorney from the Grand Rapids-based Miller Johnson law firm, represents Higher Love, a cannabis chain with a store in Menominee. Monahan addressed accusations that her client, among others, had engaged in bribing city officials for favorable market positio ning, a claim for which she asserts there is no evidence. These allegations, Monahan contends, not only lack substantiation but also tarnish the reputations of those implicated, potentially influencing critical decisions within the community.

The roots of the dispute trace back to 2021, when Menominee, after a competitive application process, issued cannabis retailer licenses to Rize and the Fire Station. This decision sparked lawsuits from multiple businesses that were not awarded licenses, alleging flaws in the selection process. Although these initial lawsuits were dismissed, the threat of appeals prompted a settlement agreement in 2023, effectively lifting the cap on the number of cannabis licenses in Menominee and granting priority to the previously contesting companies for new licenses.

Rize and Fire Station subsequently filed lawsuits in state and federal court, challenging the settlement's legitimacy and arguing that the removal of license caps contravenes state laws and undermines their initial business investments predicated on a market with limited competition.

Amid these legal battles, allegations of underhanded tactics have emerged, including the operation of "shadow" groups aiming to curtail the expansion of the cannabis market. It is reported that Rize and Higher Love contributed a combined $200,000 to a ballot initiative campaign, ostensibly led by citizens, to limit the number of cannabis stores in Menominee. Opposing attorneys have criticized this move as a deceptive strategy to influence public opinion and maintain market dominance.

As the legal proceedings unfold, Menominee Circuit Judge Mary Barglind has begun to address some of the disputes, dismissing resolved claims and allowing for the introduction of new allegations. With five cannabis shops currently operational in Menominee and several more planning to open, the outcome of this legal battle will significantly impact the town's cannabis market landscape, setting precedents for how business disputes and regulatory challenges are navigated in the burgeoning cannabis industry.

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