By: Scott F. Roberts and Andrew Haftkowycz
Whether we call it Marijuana, Marihuana, or Cannabis, Michiganders statewide have voted (several times now) to give themselves the right to have and enjoy Marijuana legally inside the state. But what does that mean exactly as far as the right to establish a business that grows, sells, and distributes cannabis (marijuana, or marihuana)?
What you may not know is how cannabis business licensing in your cities and counties work. For aspiring cannabis entrepreneurs, this is where things get complicated. Unless you live on the West Coast, many (and in some cases most) people in your town are still not too keen on having a fully operational cannabis store within city limits. Be it the smell, or the thought of little Timmy smoking weed on the corner, a lot of municipalities go to great lengths to make sure that their town will not have a cannabis dispensary.
What Are Your Options?
The Michigan Regulation And Taxation Of Marihuana Act (MRTMA) has a provision that permits all Michigan municipalities to “completely prohibit or limit the number of marihuana establishments” in their city, village, or town. This means cities can either “Opt-In” or “Opt-Out” of cannabis business licensing within their local government. While MRTMA (the state law) gives citizens the green-light to enjoy cannabis, these “Opt-In” provisions punt the question of cannabis businesses to City Hall – putting cannabis entrepreneurs at the mercy of the City Clerk and the City Council.
While booming metropolitan areas with younger, more liberal demographics have no problem telling the mayor “Yes” on dispensaries in their town, the opt-in/opt-out battle becomes more decisive in sleepier rural towns, as well as in more up-scale suburbs with more conservative demographics. To put this in perspective: just because Detroiters want legal marijuana, it doesn’t mean Grosse Pointe does.
Municipalities that have already voted to opt-out of marijuana licensing can cause lots of frustrations to citizens and prospective entrepreneurs alike. However, thanks to MRTMA’s language, the state allows citizens of these municipalities to be heard come Election Day.
Petition For a Greener Future
Initiatives and Referendums
Initiatives and Referendums processes are built into just about every city charter. These procedures allow citizens to:
- Draft an ordinance petition
- Gather signatures toward the petition
- File the petition with the City Council
- Get the petition on the ballot for voting
This is the standard route to change laws at the local level.
Word of Warning
If it sounds too good to be true, it is. While the petition process exists for cannabis entrepreneurs to change a city’s code of ordinances, it can be difficult to actually move your petition forward. Every city is different, and the Initiatives and Referendums section with a City Charter reflects the values of that city. Depending on the city, you may be at the mercy of the city charter’s obscure rules for gathering signatures and meeting deadlines. Some cities are very relaxed with their process, and other cities require the petition signature circulators (not just the signers) to all be qualified electors of that municipality. You need to go through this Initiatives and Referendums section with a fine toothcomb to make sure you are ready to commit to their standards.
Knowing exactly how your target city has written their Initiatives and Referendums clause will make or break your campaign to Opt-In for cannabis business licenses. Make sure you have experienced professionals that can properly research these regulations (and work tirelessly to make sure your signatures are gathered properly). If you do decide to take on your local government to adopt an Opt-In ordinance for cannabis business licensing, it will be your mission to become very familiar with the petition process.
Deadlines… Don’t Just Sit There, Stupid!
The Initiatives and Referendums process has built-in deadlines on purpose. Think of these deadlines as an immune system that protects the community from onerous citizens who want to change the law too drastically. However, issues arise when City Hall does whatever it can to subvert the will of the voters (using minority-rule so Main Street can’t have a dispensary).
Whether these cities operate above-board, or have ulterior motives, the plain text of that charter governs (mostly). For instance, some cities require a 10-day period for the City Clerk to officially file a petition once they receive it. That means if you get your petition in on-time, the City Clerk might wait an additional 9-days to “file” the paperwork (per the city charter), but then claim that the petition is non-compliant, and thus cannot be filed because it is past the deadline. Now imagine a city with a 45-day period…
Remember: Marijuana is still very taboo in polite society, and if a City Clerk or the City Council does not favor cannabis personally, they will pull every lever possible to avoid cannabis touching “their” Main Street.
To make sure the law is on your side, plan ahead with your petition. Start as early as possible with your petition circulation (up to 180 days before the deadline), so that by the time the City Clerk wants to use the built-in city charter period, you still have a good month or two to get latent signatures.
Home Rule vs. MRTMA
Cities do have an interest in protecting their communities, and to make laws that protect the community’s values. And this, like other things the government does, can be abused. The trick is to know when the city has overstepped its authority.
Home Rule City Act
The Home Rule City Act (HRCA) was established in Michigan to give cities agency and police power that reflected the citizens and the community. This act allowed cities to dictate, among other things, how elections and ballot initiatives operate. Put simply, it gave City Hall more power to enforce their laws, not just Michigan’s laws.
When petitions are involved, a city will claim that they have the power to make certain Initiatives and Referendums rules that are much stricter than what the state requires. Some cities can require upwards of 25% of qualified electors in the municipality to reach the signature threshold, however, this only applies to an issue that only touches interests of the city, not the state.
State Law Supersedes City Law
The HRCA does have its limits, which can be found right at the end of the HRCA statute stating “No provision of any city charter shall conflict with or contravene the provisions of any general law of the state.” So, for an issue like cannabis licenses that require CRA involvement, the HRCA must bow to the MRTMA’s requirements. This means that the MRTMA provision stating that cannabis business license ordinances will go to electors “at the next regular election when a petition is signed by qualified electors in the municipality in a number greater than 5% of the votes cast for governor by qualified electors in the municipality at the last gubernatorial election,” that means the city must comply.
If a City Clerk denies a MRTMA cannabis business licenses ordinance petition based on a signature threshold in conflict with MRTMA’s 5% threshold, the state law will trump the city law.
Befriend the City Clerk… or Die Trying
To become a consequential cannabis entrepreneur in a new municipality, you will need to demonstrate that you are a legitimate businessperson who the city can rely on. And that means you will be dealing with the City Clerk. A lot. It is important that you develop a rapport with the City Clerk (be it by email or in-person), because they are the gatekeepers in your quest to petition for a city’s Opt-In. Even if you fall out of their good graces, there are still ways to navigate these consequential waters.
One duty the City Clerk is trained to use against ne’er-do-well petitions is to canvas for improper signatures. Canvassing means to check that all the signatures are real and not just taken off a row of gravestones at the local cemetery. It is an important feature of our democracies, yet if a signature falls just outside strict compliance with the petition rules (think misspelling a street name strict), then the City Clerk can reject that signature (and petition) outright. The City Clerk can also wait the full 10-day period to let you know about the rejection.
Two remedies can be deployed to avoid this petition catastrophe. The first (mentioned above) is to give yourself ample time to get alternate signatures, but the second is to get as many signatures as possible. Even if 50 signatures get rejected, it won’t matter if you are 300 signatures over the threshold. Go big. Do not stop your signature circulation until your ballot has been officially approved by the City Clerk, and you have an official form stating your petition is on the ballot.
Another tactic the City Clerk might use is denying your petition on the content of the petition. Things get complicated when a municipality decides to fight a cannabis Opt-In petition, because the law is murky on what the City is actually allowed to do. Some courts have found that a City Clerk has a ministerial duty to canvas signatures, but that the duty ends at the signatures. Despite this duty, there are countless court cases where a City Clerk rejects the petition stating that it is illegal or non-compliant with the municipality’s laws. The thing is: the City Clerk is not authorized to make that determination (that is a mixed question of what the citizens think, and what the city attorney finds).
If you do find yourself in conflict with a City Clerk violating their ministerial duty, you may have a cause of action for a writ of mandamus, in which case you should find proper legal representation with a firm that is experienced in handling cannabis clients and cannabis litigation.
The experienced attorneys of Scott Roberts Law Firm have been servicing the legal needs of business owners in the cannabis industry since 2014, making them a top choice to address any cannabis business problem. Our team can help you get your company moving in the right direction.