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Detroit dispensary loses challenge to license denial at Sixth Circuit

Although two other medical marijuana dispensaries obtained licenses to operate in the same area, a three-judge panel found the city’s denial of Green Genie's application did not violate its constitutional rights.

CINCINNATI (CN) — A Detroit-area medical marijuana dispensary's due process rights were not violated when the city denied its application because it is too close to a school zone, a federal appeals court panel ruled Tuesday.

Green Genie Inc. and its owner, Alvin Alosachi, sought to open a medical marijuana dispensary in Grosse Point Park but were denied a license after the city of Detroit determined the location was within 1,000 feet of nearby St. Clare of Montefalco School.

Under city ordinance, a school and the 1,000 feet surrounding it is considered a drug-free zone.

Green Genie challenged the denial on several fronts and made the argument that the school itself was not within 1,000 feet of the proposed dispensary site, but that a neighboring church was the only piece of property inside the boundary.

The argument fared poorly and both state and federal courts rejected it based on statutory language that defined a property's border as the single tax parcel on which it sits.

Under that definition, the church and school are part of a single parcel and are considered a drug-free zone.

Green Genie appealed the dismissal of its federal lawsuit to the Sixth Circuit and argued before a three-judge panel earlier this month.

U.S. Circuit Judge Chad Readler, a Donald Trump appointee, swiftly disposed of the dispensary's due process claims in Tuesday's ruling and emphasized the city's discretion in granting the permit prevents Green Genie from asserting a protected property interest in the licensing process.

"The heart of Green Genie's argument, it seems, is that the city code's former use of mandatory language – 'shall' – entitles applicants that otherwise complied with locational specifications to consideration by [a] special committee," the judge wrote for the panel. "That contention ... runs headlong into unfavorable precedent. As we have said before, a plaintiff may not 'assert a property right in government procedures themselves.'"

Readler moved on to the dispensary's equal protection claim, based on the city's alleged mistreatment of the company when compared to two other dispensaries that were granted licenses in the same area.

One of these dispensaries now falls into the 1,000 foot drug-free zone of a school after it was combined with several other tax parcels, while the other is also located in Grosse Point Park and is within 1,000 feet of a grassy area used by St. Clare of Montefalco, although the zoning board was not aware of that at the time of the company's application.

The two comparators cited by Green Genie did little to help its case, as the unanimous Sixth Circuit panel determined it failed to prove any discriminatory intent on the part of the city during the application process.

"The city applied the same method of measurement to each comparable applicant," Readler said. "Many applications were rejected on that basis. True, Detroit Roots and Mack Wellness fared better. But that was due to an arguably improper application of the test, not the test itself. On balance, Green Genie fails to show that its application was a 'stark outlier' from the others."

Green Genie claimed several of the dispensaries whose applications were initially rejected ultimately received licenses, but Readler pointed out these reversals were based on the fact that the nearby schools were no longer operational and thus were not considered drug-free zones.

The company also claimed the city's failure to revoke the licenses of Detroit Roots and Mack Wellness was sufficient to support its equal protection claim, but the panel was not convinced.

"We fail to see how the city's subsequent decision to not try to put the genie back in the bottle and shut down Detroit Roots and Mack Wellness makes it more likely than not that the city intentionally treated Green Genie differently from all relevant comparators in reviewing initial applications," the ruling states.

Senior U.S. Circuit Judge Alice Batchelder, an appointee of George H.W. Bush, and U.S. Circuit Judge Richard Griffin, an appointee of George W. Bush, also sat on the panel.

Neither party immediately responded to requests for comment.

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