An ongoing lawsuit alleges that the City of Grand Rapids’ Cannabis Social Equity Program and related nonprofit, Seeding Justice, have weaponized the equity program as an unlawful taxation scheme.
The claims of unlawful taxation and the exchange of an unaccounted sum exceeding $3 million were advanced in a lawsuit, Fluresh LLC et al. v. City of Grand Rapids et al.
Other cannabis sellers participated in the suit along with Fluresh: Ascend Cannabis, High Profile, and Skymint Cannabis.
According to the complaint, the city has used its equity policy to violate state limits on municipal cannabis fees, the Headlee Amendment, select constitutional provisions, and the Michigan Zoning Enabling Act.
The plaintiffs also claim that nobody can or will account for the millions of dollars collected by Seeding Justice Grand Rapids, a city-adjacent entity that collects equity fees for later redistribution.
The basis of their claim is that payments amounting to nearly $2.3 million from 2022 to 2024 were coerced out of them by the city under threat of losing licenses.
The Policy
The city adopted its Cannabis Social Equity Policy in July 2020.
According to the City of Grand Rapids website, the cannabis program “oversees municipal licensing and social equity commitment compliance (when applicable) for cannabis facilities within City limits.”
The policy was adopted in accordance with the city’s larger strategic plan’s efforts to “embed equity throughout government operations.”
“[I]t is critical,” the policy states, “that we support and incentivize a diverse, equitable, and inclusive cannabis industry.”
Specifically, the program aims to repair people who faced punishment in the past for marijuana-related crimes when the sale of the drug was illegal.
Participating retailers and suppliers are assigned scores on a point system, which quantifies a given business’s “social equity commitment levels.” Higher point totals lead to priority in city application reviews, faster processing, potentially longer license renewals, and other perks.
The point categories include local ownership—with priority for Neighborhoods of Focus—workforce diversity, supplier diversity, new minority-owned business development, or the contribution of a percentage of sales to Seeding Justice, which according to the program is supposed to use the money to “increase opportunities within our Neighborhoods of Focus.”
The program is officially “voluntary,” but once a business commits to a plan as part of its city zoning or licensing application, those commitments become legally binding conditions for operating.
It also permits businesses, if they cannot meet satisfactory social equity commitment levels, to instead pay a percentage of sales—up to 3%—into a fund managed by Seeding Justice to support community grants for favored neighborhoods.
But the plaintiffs claim the “voluntary” program is actually coercive extortion tied to their licenses, and that millions of dollars collected as fees have gone missing.
The Lawsuit
The plaintiffs filed a complaint with the Kent County Circuit Court in February 2025. The complaint was removed to U.S. District Court the following month.
The City of Grand Rapids subsequently denied all material allegations. In April 2025, Judge Hala Y. Jarbou denied the plaintiffs’ motion for preliminary injunction and temporary restraining order against the city, effectively allowing the program to endure.
“Plaintiffs have failed to meet the most important factors for preliminary injunctive relief,” Yargou wrote, noting that they failed to prove that the program had demonstrated that irreversible harm had been done to their businesses. Jarbou’s ruling did not address the constitutional arguments made in the ruling at length.
Last month, the plaintiffs filed an amended complaint in the Kent County Circuit Court, adding Seeding Justice Grand Rapids and Joe Jones, a former Grand Rapids City Commissioner from 2016 to 2022 who also serves as president and treasurer of Seeding Justice Grand Rapids, as defendants.
The new filing includes counts of fraud, civil conspiracy, and accounting claims over unaccounted funds, and it seeks over $3 million in refunds plus damages.
Write to jacob@grherald.com