Menominee Moves to Dismiss Federal Suit Over Marijuana Dispensary Licenses

The Michigan city argues a federal court lacks jurisdiction over JGB Holdings' challenge to its retail cannabis licensing process, as a separate ballot fight over license caps heads to November voters

FILE — enforcement · Auckland Museum / CC BY 4.0

The city of Menominee, Michigan, has asked a federal court to throw out a lawsuit challenging the way it awards marijuana retail licenses, according to WLUK.

JGB Holdings filed the suit in July, arguing the city had promised it a retail license and challenging a waiver Menominee required of applicants, WLUK reported.

City Seeks Dismissal, Not a Defense

Rather than responding to JGB's specific claims, Menominee's motion this week asked the court to dismiss the case outright, according to WLUK's review of the filing. The motion states the city is moving to dismiss "under Fed. R. Civ. P. 12(b)(1) as the Court lacks subject-matter jurisdiction, and in the alternative, under Fed. R. Civ. P. 12(b)(6) as the Complaint fails to state a claim upon which relief can be granted," per the court document cited by WLUK.

The city also told the court that a related case covering the same issues is already pending in state court, and it argued JGB Holdings had signed a waiver giving up its right to pursue court action against the city, WLUK reported.

A Long-Running License Fight

Menominee has faced repeated legal challenges over its marijuana retail permitting, WLUK reported. A city referendum currently caps the number of retail marijuana licenses at nine, with eight issued so far, according to WLUK.

Separately, Menominee voters will decide in November whether to raise that cap to 13, after a judge rejected a challenge to that ballot question, WLUK reported. In an earlier report, WLUK said petitioners submitted more than double the signatures needed to place the measure on the Nov. 3 ballot, and that a group called "Menominee's Not For Sale" had sought to block the referendum from advancing. WLUK also noted that a prior referendum limiting licenses to nine was itself overturned and re-voted before winning approval in November 2025, and that a separate applicant, Puff Cannabis, has been tied to multiple lawsuits and hearings over its bid for a license.

State Backdrop

Menominee's dispute unfolds against a Michigan cannabis market regulators and industry watchers describe as under pressure. State licensing records show Michigan currently has 932 licensed retail marijuana outlets, along with 2,507 cultivation licenses, 334 manufacturing licenses and 37 testing labs statewide.

Official state sales filings show Michigan's monthly adult-use cannabis sales came in at roughly $258.9 million in August, down from about $270.9 million in July. That decline tracks with a report from MMJDaily, which said Michigan sales fell 5% even as neighboring Ohio's market surged 22%. Crain's Detroit has also reported that Michigan's cannabis tax revenue is running behind state projections, according to our database of related coverage.

The state has also taken a string of enforcement actions in recent weeks, including a $2 million fine and license revocation against a processor and a separate permit revocation and fine against a vape maker, according to Michigan Cannabis Regulatory Agency announcements in our database. Those cases are unrelated to Menominee's licensing dispute but reflect broader regulatory activity across the state's cannabis sector.

What to Watch

It remains unclear how the federal court will rule on Menominee's dismissal motion, or whether the parallel state court case will resolve the underlying licensing dispute first. The outcome of the November referendum on raising Menominee's license cap to 13 could also reshape the local market regardless of how the federal case proceeds. Given the city's history of overturned referenda and repeated litigation over its licensing process, further legal challenges appear possible, though neither WLUK's reporting nor available records indicate a timeline for a ruling.