Michigan regulator wants out of RICO case

Brian Hanna, the executive director of Michigan’s Cannabis Regulatory Agency (CRA), is asking a federal court to dismiss him from a Racketeer Influenced and Corrupt Organizations Act claim that included him in his official capacity alongside four other defendants.

This case concerns a property dispute between James and Carrie Draper and Michigan licensee HiCloud LLC. The Drapers allege that HiCloud is emitting unpleasant smells that interfere with their use and enjoyment of their land.

The couple filed a complaint in December alleging that Newfield Township and its officials allowed HiCloud to illegally expand its operation on a residential property neighboring the Drapers’ to punish James Draper for opposing cannabis legalization in the town. That suit also named HiCloud, its owner Endrit Cali, Newfield Township and zoning administrator Steven Micklin.

The Drapers also assert that HiCloud was subject to multiple formal complaints filed by the CRA for alleged violations of the Michigan Regulation and Taxation of Marihuana Act and/or related administrative rules. They claim that despite the CRA’s issues with HiCloud, the agency continues to renew the company’s license.

The complaint stated that HiCloud applied for a special use permit, seeking to expand its existing commercial marijuana operation onto a neighboring property zoned for residential use, which was approved by the town.

The Drapers are asking the court to shut down the operation:

The overwhelming smell of these emissions typically starts in June and continues to build in intensity thru October. This is the best time of year to be outside; however, the Drapers have to leave their home to enjoy the outdoors due to the noxious emissions coming from the enterprise. When they are home, the Drapers cannot open their windows, but instead have to keep the house sealed up during the summer and early Fall as a result of the noxious emissions.

Hanna stated in his Motion to Dismiss that his only connection to the company is the CRA’s issuance of a license. He stated that he has no financial interest in HiCould, nor does he have any managerial or administrative responsibilities to the company.

Hanna also pointed out that in the Drapers’ original civil case against HiCould, they don’t have a single mention of his name. In February, the couple amended their case filed in December to add Hanna’s name.

Hanna argues that Draper’s case against him has no likelihood of success and that the couple can’t demonstrate that their harm is caused by Hanna.

In March, the couple filed suit asking for a preliminary injunction to shut down the operation. Hanna also argued that the Draper’s request to shut down HiCloud be denied, saying that such a move would interfere with the CRA’s ability to regulate its licensees under state law.

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