Proposed partial settlement agreement between suing dispensaries and the City of Menominee

This document was drafted by Rize U.P. Attorney Mike Cox. Details are subject to change pending negotiations.

SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (“Settlement Agreement”) is made by and between: (1) Plaintiffs Adam Michaud, Committee to Stop Unlimited Marijuana Shops (“Referendum Committee”), First Property Holdings d/b/a RIZE (“RIZE”), and The Fire Station (“TFS”) (all four plaintiffs are collectively, “Plaintiffs”); and (2) Defendant City of Menominee (the “City). The Effective Date of this Settlement Agreement is January __, 2024.

Unsealed document shows possible terms of Menominee marijuana settlement

WHEREAS, Plaintiffs initiated this action on August 17, 2023 to seek redress for claims related to Michigan’s Open Meetings Act, the Michigan Regulation and Taxation of Marijuana Act, and the Menominee City Charter.

WHEREAS, the Court presided over a 20-month prior litigation involving the same parties, some of the same claims, and some of the same facts between 2021 and 2023. That case is Menominee Circuit Court No. 21-17036-CZ.

WHEREAS, the Court has presided over a number of hearings and other proceedings in this case since its inception.

WHEREAS, all parties to this case, including the Intervening Defendants, participated in court-ordered mediation on January 20, 2024 before (Ret.) Hon. Daniel Ryan.

WHEREAS, following discussions between the Plaintiffs and City (the “Settlement Parties”) during mediation, the Settlement Parties have agreed to a partial resolution of Plaintiffs’ claims in this case (Menominee Circuit Court Case No. 23-17544-CZ), as described below in this Settlement Agreement.

NOW THEREFORE, in consideration of the mutual promises, covenants, and other good and valuable consideration contained in this Settlement Agreement, the Settlement Parties agree as follows:

Section 1

City Actions and Permissions

1. Introduction of Zoning Amendment. Within 14 days of the Effective Date of this Settlement Agreement, the City Council shall introduce for consideration by the City Council an amendment to the Marihuana Establishments Zoning Ordinance that the City Council adopted on August 21, 2023. The amendment would, if adopted, require all Marihuana Retailers to which the City has awarded a Municipal License to Operate as a Marijuana Retail Sales – Adult (“Municipal Marihuana Retail License”), with the exceptions described in this Settlement Agreement, to comply with the following buffer zones:

1.1(a):  A minimum 1,000-foot buffer zone from pre-existing public or private school properties providing education in kindergarten or any of grades 1 through 12.

1.1(b):  A minimum 1,000-foot buffer zone from any daycare, child care, and playground properties.

1.1(c):  A minimum 1,000-foot buffer zone from all properties owned or used by any religious organization.

1.1(d): A minimum 1,000-foot buffer zone from any properties used, owned, or occupied as a Marijuana Provisioning Center or Marihuana Retailer.

1.1(e):  A minimum 500-foot buffer zone from any residential property.

1.1(f):  A minimum 1,000-foot zone from all properties owned or used by the City of Menominee for municipal operations.

In addition to these buffer zones, the proposed amendment to Menominee’s Marihuana Establishments Zoning Ordinance would prohibit all Marihuana Retailers awarded a Municipal Marihuana Retail License, again with the exceptions described in this Settlement Agreement, from operating on properties within the City of Menominee located south of 30th Ave.

The proposed amendment to the Marihuana Establishments Zoning Ordinance would further provide that the restrictions described in this Section 1.1 do not apply to any Marihuana Retailer to which the City awarded or agreed to award a Municipal Marihuana Retail License before August 21, 2023. Any Marihuana Retailer to which the City awarded or agreed to award a Municipal Marihuana Retail License before August 21, 2023 shall be permitted to continue operating at their current locations without regard for the restrictions described in this Section 1.1.

1. Movement of Licensed Property. For a period of two years from the Effective Date of this Settlement Agreement, Plaintiffs RIZE and TFS may transfer all rights derived from or arising out of their current Municipal Marihuana Retail License, as well as any subsequent renewals, to any property in Menominee that is zoned C-1 or C-2, without regard to any buffer zones or other restrictions established by any amendments to the Marihuana Establishments Zoning Ordinance pursuant to Section 1.1 of this Settlement Agreement. Further, should Plaintiffs RIZE or TFS require any variances, special use permits, or similar permissions to operate on the property they select, the City shall provide such variance, special use permit, or similar permission on a timely basis and without unreasonable delay. Should Plaintiffs RIZE or TFS elect not to move locations during the two-year period described in this Section 1.2, they may continue operating at their present locations, without regard for any restrictions described in Section 1.1 of this Settlement Agreement.

   1. Temporary Use.  During the two-year period described in Section 1.2 of this Settlement Agreement, Plaintiffs RIZE and TFS may continue operating in the temporary facilities they currently occupy as of the date of this Settlement Agreement, without the need for any further license applications or renewals, and without regard for any restrictions described in Section 1.1 of this Settlement Agreement and as further described in Section 1.4 below.

   1. Release from Rubric Commitments. The City hereby acknowledges, agrees, stipulates, consents, and otherwise covenants that Plaintiffs RIZE and TFS are relieved and released from, and otherwise not subject to, the promises, plans, stated economic investments, and all other express commitments as set forth in their original application packets, or as required by the City, pursuant to Menominee’s October 2020 Marihuana Establishments Ordinance.

   1. License Fees.  For a period of five years from the Effective Date of this Settlement Agreement, Plaintiffs RIZE and TFS shall not be obligated to pay any license fees, including renewal fees, with respect to their Municipal Marihuana Retail Licenses or otherwise in connection with their operation as a Marijuana Retailer in the City of Menominee.

   1. Non-Assignment. The City shall not agree to the transfer of any kind by any person or entity of a Municipal Marihuana Retail License granted after August 21, 2023 to any other person or entity, including by a licensing or management agreement, joint venture, asset or stock purchase agreement, or any other form of assignment, sale, disposition, or other transfer of ownership interest or shares.

   1. Non-Disparagement.   The City agrees that any Menominee City Official, as that term is defined in Section 2-102 of the Menominee Code of Ordinances, shall not make, publish, or communicate to any person or entity any defamatory, derogatory, or disparaging remarks, comments, or statements concerning Plaintiffs or any of their employees, officers, owners, members, or other agents.

Section 2

Release

• Dismissal and Release of City. Upon adoption of the amendment to Menominee’s Marihuana Establishments Zoning Ordinance as described in Section 1.1 of this Settlement Agreement, Plaintiffs agree to dismiss, release, and forever discharge the City with respect to the following claims, including with respect to any costs and attorney fees Plaintiffs may be entitled to: (1) Counts I, II, and V of their First Amended Complaint in Michaud, et al. v. Menominee, et al., Menominee Circuit Court Case No. 23-17544-CZ; and (2) all counts, with respect to the City only, of Plaintiffs RIZE’s and TFS’s Complaint in RIZE, et al. v. Menominee, et al., Case No. 23-cv-00161 in the United States District Court for the Western District of Michigan.

  • Non-Opposition to Remaining Counts. Upon dismissal of the claims described in Section 2.1 of this Settlement Agreement, the City agrees not to make any filings, take any public position, or otherwise contest in any way Counts III and IV of Plaintiffs’ First Amended Complaint in any state judicial proceeding.

  • Release of Plaintiffs. Upon dismissal of the claims described in Section 2.1 of this Settlement Agreement, the City agrees to release and forever discharge Plaintiffs and their attorneys from any counterclaims, charges, complaints, claims, grievances, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, demands, costs, losses, debts, penalties, fees, expenses (including attorneys’ fees and costs actually incurred), and other damages, of any nature whatsoever, known or unknown, arising out of or related to the facts or legal issues presented in either of the cases identified in Section 2.1.

Section 3

Additional Provisions

• Good Faith. The Settlement Parties and their respective successors and assigns shall treat and cooperate with one another in good faith and shall not take any action which is contrary to or interferes with the terms of this Settlement Agreement.

  • Amendment. The terms of this Settlement Agreement may only be amended, changed, or modified by written agreement of the Settlement Parties and as approved and ordered by this Court.

  • Conflicts with Ordinances. To the extent that this Settlement Agreement conflicts with any City Ordinance requirements, the terms of this Settlement Agreement shall control.

  • Governing Law. This Settlement Agreement is made in the State of Michigan and shall be construed in accordance with applicable Michigan law.

  • Construction. This Settlement Agreement has been subject to negotiations and discussions between the Settlement Parties and their counsel. It has been, and shall be construed to have been, drafted by all Settlement Parties, so that any rule construing ambiguities against the drafter shall have no force or effect.

  • Authority. By their execution of this Settlement Agreement, the Settlement Parties warrant that they have the authority to execute this Settlement Agreement and bind their respective entities, successors, and assigns to its terms and conditions.

  • Entire Agreement. This Settlement Agreement contains the entire agreement between the Settlement Parties and supersedes all prior written or oral promises and representations.

  • Multiple Counterparts. This Settlement Agreement may be executed in one or more counterparts, all of which together shall constitute one agreement.

IT IS SO ORDERED.

This is not a final judgment and does not close this case.

Dated:______________________                 ____________________________

                                                            Hon. Mary B. Barglind

Circuit Court Judge

STIPULATED AND AGREED BY:

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