Court rules unlicensed pot dispensaries can remain open — for now

Michigan’s Court of Claims ruled Tuesday that unlicensed marijuana dispensaries in the state can remain open until Gov. Gretchen Whitmer’s new regulatory body rules on their licensing applications.

In a set of rulings Tuesday, Judge Stephen Borrello ruled largely in favor of plaintiffs in various cases against the state, agreeing with an earlier ruling that said the previous regulatory regime’s methods for licensing were “apt to sudden change, freakish or whimsical.”

“LARA [Michigan’s Department of Licensing and Regulatory Affairs] has repeatedly attempted to revoke operating status — on which applicant-plaintiffs were induced by defendants to rely — before ruling on the merits of many of the applications,” Borrello wrote. “The shut-down date has been ever-changing. … These bait-and-switch announcements effectuated by LARA were entirely arbitrary and capricious.”

That ruling categorically restricts any state agency from shutting a dispensary down before its application is approved or denied, citing the plaintiffs’ due process rights.

On April 25, the state’s Michigan Medical Marijuana Licensing Board disbanded. Experts told the Advance in January that the board, which was previously responsible for approving or denying dispensaries’ applications for licenses, acted “arbitrarily and capriciously” in such decisions.

A former LARA director applauded the announcement of that disbandment in March, saying that it failed to license the expected number of dispensaries during its brief existence.

Whitmer’s new Marijuana Regulatory Agency [MRA] is helmed by Andrew Brisbo, the director of LARA’s Bureau of Marijuana Regulation.

The MRA took control of the licensing approval process on Tuesday, as well. Officials said that they will start accepting applications for recreational business licenses by September.

State Rep. Jim Lilly (R-Park Twp.) has introduced House Bill 4440 that would shut down all unlicensed dispensaries by June 1. That bill passed the House on April 18 and is currently on the Senate floor.