MENOMINEE, Mich. (WJMN) — As newly-unsealed documents show for the first time what terms two dispensaries in Menominee have for dropping the majority of their lawsuits, the city’s mayor says the time for talk has all but passed.

Menominee Mayor Casey Hoffman’s claim comes one month after Judge Barglind ordered all parties to mediate, and about a week after plaintiffs Rize U.P. and The Fire Station submitted their opening proposal for a partial settlement with the city.

Cannabis companies trade blame as 70+ budtenders left jobless

Filed last August, this lawsuit follows Menominee’s “uncapping” of the limit on marijuana shops in the city, which was itself the product of years in court against several other dispensaries.

“I think that there is room for conversation, but that window is closing rapidly,” said Hoffman. “We’ve been talking for years. I mean, there quite literally [have] been lawsuits in Menominee for years.”

Hoffman told Local 3 the proposal was not fair to the city, calling it a “Trojan Horse” of future litigation. Hoffman said he is instead looking to press the companies into signing away their right to pursue the lawsuit with a settlement clause on the application to renew their marijuana licenses.

Rize Attorney Mike Cox provided a statement to Hoffman’s accusation, saying “the court ordered everyone to mediate. We did. The City did. We reached an agreement in good faith. We hope the City Council votes to approve it.”

We also spoke with Matt Cross, an attorney for the city. Cross disagrees with Hoffman’s “Trojan Horse” interpretation, saying that while the settlement wasn’t ideal, it is a fine place for negotiations to start.

City Council Member Michael DeDamos was surprised to hear Hoffman’s stance, doubtful that Hoffman’s idea would gain momentum due to his understanding that “the council is not looking to be hostile.”

What exactly is on the table?

Cannabis dispensaries Rize U.P. and The Fire Station along with Adam Michaud and the Committee to Stop Unlimited Marijuana filed a lawsuit against the city claiming harm due to violations of the Open Meetings Act, Menominee City Charter, and Michigan Regulation and Taxation Act committed during the “uncapping” of the limit on marijuana business permits.

Menominee City Council votes to explain Open Meetings Act allegations

The proposal offers to drop all counts but the two that concern the Michigan Regulation and Taxation Act. Additionally, the companies are willing to give up its Federal civil lawsuit, which among its accusations allege city officials and lawyers representing other local dispensaries conspired against them in the uncapping process—a claim which all defendants deny.

In return the dispensaries are not seeking compensation, but are asking to be excused from paying licensing and other city fees for five years.

The bulk of the proposal focuses on zoning law changes and exceptions.

An end in sight? Unsealed docs show possible terms of Menominee marijuana settlement

The settlement asks city leaders to consider a zoning amendment that would create 1,000-foot buffer zones around schools, daycares, playgrounds, churches, city properties, and other dispensaries. Only a 500-foot buffer would be needed from any residential property.

The current offer exempts all current dispensaries, and gives Rize and The Fire Station the ability to move locations to any C-1 or C-2 property without regard to buffer zones.

Another provision would release Rize and The Fire Station from the commitments they made to the city when its application in 2019 was submitted under the assumption they would be only one of two dispensaries in town.

Full draft of proposed partial settlement agreement

You can read the full draft of the proposed partial settlement here.

Insight into Hoffman’s opposition

Casey Hoffman’s election last November came in part with a mandate to get the marijuana lawsuits under control. While the proposal may be the result of mediation, Hoffman says it isn’t a step in the right direction.

“Their offer is so vague and amorphous that we don’t currently know what they would try to attack us with in the future,” said Hoffman. “This is a way of a lawyer offering a trick to a city council to make them think that they’re entering into a peaceful settlement. But in reality, they’re giving away the farm.”

In a Friday conversation with Local 3 Hoffman shared his plan to shunt the offer and instead deliver an ultimatum.

“Part of our licensure agreement says you can’t sue. You got to behave. You got to knock it off,” said Hoffman. “That’s why Rize and The Fire Station don’t want to sign that, but we are going to make them sign it if they want to stay in Menominee.”

The provision near the end of the Marijuana Business Permit Renewal Application requires the company to “agree to completely release and forever discharge the City of Menominee [and others] from any and all past, present or future claims, demands, obligations… on account of, or may in any way arise out of your application for a marijuana facility permit and, if issued a permit, your operation of a marijuana facility.”

Hoffman says if either business fails to sign, the city would shut the stores down on March 1.

“They may pay lawyers to make those arguments [that the renewal clause does not apply to the current lawsuit] in Court—but they will be shut down and not making profits in the process—which is the opposite of what they want,” Hoffman said. “The reality of them being shut down will motivate them to submit their license renewals and peacefully rejoin the Menominee community, albeit by force.”

If they do sign, Hoffman thinks the agreement would lead to their grievances in court being dismissed.

Rize Attorney Mike Cox declined to comment on whether the plaintiffs agree that the renewal clause would be consequential.

At risk with the closure of Rize and The Fire Station are the jobs and financial security of the dozens of people who work there. To this, Hoffman doubled down on his stance, saying “the medicine is harsh, but the patient requires it to survive.”

City council member, attorney weigh in

After learning Hoffman’s stance toward the settlement proposal, Local 3 reached out to a number of Menominee City Council members. “This is the first I’m hearing about it,” said Council Member Michael DeDamos, “I’m shocked he took such an aggressive approach.”

Three others responded, saying they were familiar with the proposal but unaware of Hoffman’s stance.

“I have my doubts we have the authority or will to shut them down.”

While DeDamos shares Hoffman’s desire for the city to appear strong, he also was not against talking about the offer. “If there’s a good deal on the table that makes sense for everybody, I’m not an unreasonable person.” DeDamos also said he would be surprised if a majority of the council shared Hoffman’s view, in part because of the people whose jobs were at stake.

Another point of disagreement was the claim that closing the companies down would end the litigation sooner, reasoning that “when people think of selling marijuana, they think Cheech and Chong. But that’s not what they are, these are ruthless corporations with deep pockets.”

Attorney for the city Matt Cross expressed similar views as DeDamos, telling Local 3 that he expected the settlement to move forward. On Hoffman’s hard line, Cross unequivocally that efforts toward another shut-down would create more legal trouble, not less.

The Menominee City Council is set to hold a special meeting at 6 p.m. on Feb. 14 to discuss the proposal. The next scheduled event in the case is Feb. 6.

This is a developing story. Stay with Local 3 online and on-air for the latest updates.

For the latest news, weather, sports, and streaming video, head to WJMN – UPMatters.com.