Six Michigan cannabis operators say millions collected under Grand Rapids’ Cannabis Social Equity Program have effectively vanished, and they are turning up the heat in court. Their newly expanded lawsuit now names the nonprofit the city planned to use to park and distribute the money, plus a former city commissioner. The amended complaint, filed this month, claims transfer payments and other fees meant to fund equity work were collected but not properly tracked, and it asks a judge to order refunds and damages. The fight puts fresh scrutiny on a high-stakes local policy that operators say stopped feeling voluntary almost as soon as it launched.
According to Crain’s Detroit Business, the latest filing, submitted March 17 in Kent County Circuit Court, alleges that payments intended for Seeding Justice Grand Rapids “appear a significant amount … are missing or unaccounted for.” The amended complaint adds Seeding Justice and former city commissioner Joe Jones as defendants and seeks recovery of fees paid to the city, along with interest and other relief.
The companies’ earlier federal complaint and exhibits describe how the city’s 2020 equity framework let cannabis businesses earn required points by either meeting specific equity benchmarks or making transfer payments or contributions to a Cannabis Community Reinvestment Fund. Those filings detail individual commitments: Fluresh pledged more than $300,000; Ascend agreed to nearly $150,000; High Profile more than $200,000; and Skymint over $300,000. All told, the fees “amount to a tax” of more than $2 million since 2022, according to Justia.
What the complaint alleges
The plaintiffs say City Hall quietly turned what looked like voluntary equity promises into must-have conditions by tying CISEVA and MIVEDA forms to special-land-use and licensing reviews. In practice, they argue, operators who fell short on equity points could hold on to approvals only by “buying” missing points with payments into the reinvestment fund…