Cannabiz Law Blog

The Michigan Court of Appeals recently upheld a circuit court ruling in Gamut Group, LLC v City of Lansing, No. 341754, 2019 WL 1265161 (Mich Ct App March 19, 2019), finding that the city violated a medical cannabis dispensary’s substantive due process rights.

According to the appellate and lower courts, the city improperly denied a rezoning application to fit within the revised zoning ordinance because the city failed to give any logical reason for its differential treatment toward the dispensary.

Gamut Group owned a building that housed a medical cannabis dispensary in the city since 2011. The property was zoned to permit “local convenience-type shopping” and parking. In 2017, the city passed a revised zoning ordinance that limited medical marihuana dispensaries to zoning districts outside the dispensaries location.

Aware of the ordinance amendment, Gamut Group tried to rezone its property to fit within the new zoning ordinance. Despite the city’s zoning administrator and planning board recommending approval of the rezoning request, despite any public objection, and despite the other three corner lots at Gamut Group’s intersection having been rezoned to Gamut Group’s desired zoning district, the city council denied Gamut Group’s request. 

In response, Gamut Group filed suit against the city, arguing that the denial of its rezoning request violated its right to substantive due process. The trial court agreed that Gamut Group had been treated differently than everyone else on the intersection and found no reasonable government interest was advanced by the denial of the rezoning application. The city  appealed the trial court’s decision.

The appellate court rejected all of the city’s arguments. Not only are rezoning denial challenges treated identically to existing zoning ordinance challenges, but a government entity can only restrict otherwise lawful land use in order to advance a reasonable government interest. For “a zoning ordinance to be valid, [it] must bear a direct and substantial relation to the objectives of police power, the preservation of the public health, safety, morals, and general welfare, of the community as a whole.”

The appellate court noted that the subject property had been occupied by a medical cannabis dispensary, which the city allowed to operate, since 2011. Additionally, the zoning administrator determined rezoning the subject property would have no negative impacts on vehicular or pedestrian traffic, would have no environmental impact, would not negatively impact future patterns of development in the area, and would be consistent with the commercial zoning already in existence. Interestingly, the only issue the city had with approving Gamut Group’s rezoning application was that the new zoning regulations were intended to take dispensaries out of neighborhoods and contain them in business corridors. The appellate court noted that the subject property was already in a business corridor.

In upholding the trial court’s ruling, the appellate court panel found  that the city’s rezoning denial arbitrary and capricious because the subject property was treated differently than the landowners on the other three corners of the intersection and no governmental interests were advanced by the denial.