Fifteen marijuana businesses hoping to open dispensaries in Warren have been dealt a severe blow following a judge’s order to revoke their licenses.
In a ruling issued Tuesday, Macomb County Circuit Judge Carl Marlinga said the city’s Medical Marihuana Review Committee, which evaluated and scored the applications for dispensary licenses from more than five dozen companies last year, violated Michigan Open Meetings Act in multiple ways and on numerous occasions.
The marijuana review board committee held 16 secret, closed-door sessions from March through July 2019.
“The meetings did not even attempt to comply with the Open Meetings Act. The Marijuana Review Committee did not begin these meetings with an open session; it did not then announce the purposes for going into closed session; it did not then return to conduct the balance of the meeting in open session; it did not allow for public comment; and it did not keep minutes of what occurred in the closed session,” Marlinga said in his written opinion.
“This review committee was exercising a critical governmental function in narrowing down the number of applicants to those it believed were most worthy. Because that was the governmental function given them by the ordinance, the public had a right to be there and see the process as it happened,” the judge wrote.
“The old saying that ‘It’s hard to do dark things in bright places’ applies here,” Marlinga said.
Marlinga ruled the committee’s scoring and ranking of applications be vacated and invalidated, and that the City Council’s granting last October of medical marijuana dispensary licenses to the 15 applicants with the highest compiled scores are invalid and are no longer in effect.
None of the 15 companies that were awarded a dispensary license have opened yet.
One of the companies that were not granted one of the highly coveted, lucrative licenses last year, Happy Trails Group, is among 16 that sued the city because they were denied a license by Warren officials. Happy Trails and others alleged the marijuana panel violated the Open Meetings Act by, among other things, holding meetings that were closed to public.
Lawyers for the city, however, disagreed, saying the committee’s task and gathering and reviewing the applications – some of them hundreds of pages long – was a “ministerial” function and that the panel made a non-binding recommendation to the full City Council, and that council members were free to accept, reject or modify the rankings. Marlinga disagreed, saying in his written order this week that the five committee members – including three members of the council — had substantial influence because they individually and subjectively scored the companies and ranked them for final action by the full 7-member council.
The ruling is the latest in Warren’s controversial handling, and subsequent legal challenges, surrounding medical marijuana licensing.
In January, 2019, the city adopted an ordinance to authorize and regulate the growing and sale of marijuana for medical purposes. The ordinance created the medical marijuana review committee, composed of the Warren city attorney and the city’s public service director or their respective designees, and three members of the City Council.
The members of the cannabis board individually scored the 65 applicants on 17 criteria, with a score of 1-10 on each category.
“Since council eventually limited the number of licensees to 15, and since there were 65 applicants, the committee’s ranking was crucial,” Marlinga wrote, noting the committee members “had de facto authority under the ordinance to subjectively rank applicants as each member saw fit, with no criteria whatsoever to limit their individual subjective preferences.”
The criteria included such things as moral character, integrity and reputation, financial ability, and experience operating or maintaining a marijuana facility.
The final ranking from the committee was heavily impacted by committee member and councilman, Ronald Papandrea, who used a “pass/fail” scoring by consistently giving a 5 in various categories for applicants he did not favor, and regularly marking a 10 for applicants he liked.
Papandrea has defended his evaluation system, insisting he favored applicants who were looking to open a facility in areas hardest hit by blight, particularly in the southern half of the city. Marlinga said there was “nothing mendacious or improper” about Papandrea’s subjective evaluations because the ordinance allows for wide discretion that is part of the political process.
The judge explained in his ruling that if the marijuana board’s sessions had been open to the public, there would have been questions raised as to how such brief meetings could allow meaningful inquiry into matters such as the moral character, integrity, and reputation of an applicant; the community involvement of an applicant; and whether the applicant’s history or plan evidenced a holistic approach with medical use.
He added: “On the question of neighborhood compatibility, it would have been highly appropriate to have had members of the public from the affected neighborhood observe the session and to make public comment. If an applicant had a history of lawsuits, complaints, or tax issues, it would have served the public interest to see how the applicant answered questions as to how such matters were resolved. In the public comment section of the meeting (if there had been an open meeting) a member of the public might have been able to inform the committee of issues which the applicant was not willing to disclose.”
Marlinga also noted the public – including other members of the City Council — never had an opportunity to hear the presentations and deliberations on how the applicants and committee members dealt with the nuances and subjective judgments that went into the scoring of the 17 variables.
During a court hearing last year in which one firm successfully argued for an injunction that temporarily prohibited the City Council from awarding the licenses, Warren officials said some financial matters of applicants such as bankruptcies, were sensitive and were best kept private. In his ruling, Marlinga notes bankruptcy filings and other matters such as complaints and lawsuits are public.
“To take the small sliver of potentially confidential or proprietary information and use that sliver as an excuse to keep the public in the dark about the workings of the review committee is unacceptable. What the applicants said in their presentations, what the committee members asked, and how and why the committee members gave the subjective rankings they did are all matters which the public has a right to know — a right that the city totally disregarded in incorrectly classifying the work of the committee as merely a recommendation,” the judge said.
“The review committee was choosing winners and losers. The public had an absolute right to know how these decisions were reached.”
On Wednesday, Marlinga put enforcement of his order on hold after court motions were filed by multiple companies who – after learning of Tuesday’s decision by the judge — requested an emergency hearing to join the case as intervening parties because they feel they have a legal stake in the case, especially if their dispensary licenses are voided.
Andrea Pike, the lawyer handling Warren’s defense in the medical marijuana lawsuits, declined to comment Wednesday afternoon on Marlinga’s ruling that the city violated the Open Meetings Act. After reading the ruling that nullified the 15 licenses, Pike said she had been preparing Tuesday to contact the 15 impacted companies that, for now, still hold licenses. But after Wednesday’s decision to temporarily postpone the order, she stopped short of notifying the firms.
“We’re still trying to decide our next steps, to appeal or not to appeal, or what to do next,” Pike said. “We’re still looking into it.”
Christyn Scott, the attorney for Happy Trails Group, said she could not immediately comment on the case when asked by The Macomb Daily because policy at the law firm where she works, Dykema Gossett, prohibits lawyers from speaking to the news media about a case without prior approval from their clients.
Meanwhile, other legal issues remain unresolved, including claims by firms that their due process rights were violated.
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