Marijuana companies warn against giving out more licenses
MENOMINEE - The marijuana companies chosen by Menominee to receive recreational licenses warned the city council last Monday that giving out more licenses now would cause more legal fights.
They asked why the city would pursue a settlement when the judge has a a court hearing next month. They also said that the council members who voted to give more licenses represent wards that did not vote to pass marijuana in 2018.
In the court hearing, Judge Mary Barglind will decide on whether to set aside a stay already in place for the lawsuit. She will also hear the motion for a new stay to allow time for settlement negotiations, said Matt Cross, litigation counsel for the city from Plunkett Cooney in Petoskey, Michigan. He said he has doesn’t know when the judge will rule on their lawsuit.
“It’s only going to delay the tax revenue that’s coming to the city,” said CEO and Owner of The Fire Station Logan Stauber. “It’s only going to create more lawsuits.”
His counterpart, CEO and Owner of The Fire Station Stosh Wasik, said the same thing.
“If you think for one second these other companies aren’t going to show up with their handout for a license the moment you hand out licenses to these five companies, you will be sorely mistaken,” Wasik said. “Why are you choosing to go down a path with more litigation and zero revenue for who knows how long.”
As the marijuana lawsuits continue, the city’s revenue remains without the marijuana company’s help, the council members and people in the town are left wondering why it’s taking so long to make marijuana available legally and local businesses are missing out on the increased traffic and revenue that the marijuana companies have a potential to bring.
The Menominee City Council voted 6-3 in March on a resolution expressing the city council’s desire to pass an ordinance to authorize seven marijuana businesses in Menominee. That would include The Fire Station and Rize, but would also add on the five companies currently suing Menominee because they weren’t awarded a license in the initial selection process.
“Why now? Why are we trying to fix something that’s not broken?” Stauber said.
The resolution was added to the agenda and voted on in a contentious debate among the city council because previous requests to add the resolution were not accepted, according to council member Jackie Nutter in the EagleHerald article covering the meeting.
Mayor Jean Stegeman, Donna Marineau and Michael DeDamos voted against it. In contrast, Bill Plemel, Josh Jones, Dennis Klitzke, Jackie Nutter, Doug Robinson and Joe Dulak voted for it.
Cross told the EagleHerald in November that the lawsuit would be settled in days or weeks.
Stauber said the city never talked to The Fire Station before considering a settlement. He also asked the city council to consider the $2 million The Fire Station and Rize have already spent on costs associated with the approved licenses and defending the lawsuit. He then discussed the Michigan Regulation and Taxation of Marijuana Act, the lawsuit’s primary focus.
“This settlement agreement is a clear violation of MRTMA,” Stauber said. “Based on the rubric, many of the plaintiffs suing the city are not the most qualified to operate under MRTMA. Many other companies ranked higher than the plaintiffs during the application process. Many of the plaintiffs don’t even have a place to put these stores anymore. They don’t own real estate, they don’t have leases and they haven’t invested in your community.”
Sid Rosen, director of operations at Rize, said they’re here to help the city with any problems and issues.
“This is not new to us,” Rosen said, mentioning Iron Mountain’s attorney and city council. “They stood by their decision and they stood by their rubric. See how they feel now.”
On the contrary, he mentioned Gaylord and the unlimited licenses they allowed. They said one license was closed in fewer than 14 days, and bad actors would show themselves by breaking compliance — something the city doesn’t want.
“There’s not really a lot of draw for us in Gaylord anymore,” Rosen said. “We’re business people. We know what we need to do. That’s why we choose locations where we can sell selectively.”
Tara Povich, who works for Rize as an executive assistant, said that if seven marijuana companies opened up, the city wouldn’t see the meaningful change that she’s seen her company provide for other communities.
“I also think it would create a cannabis culture that Menominee doesn’t want to be known for,” Povich said.
