Cannabis law expert helps clients chart legal course

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By Sheila Pursglove
Legal News

Marihuana is a hot topic on the November 6 ballot—and one with particular interest for Charles Murphy, Of Counsel in Clark Hill’s Birmingham office. Murphy, who has a substantial medical marihuana practice, works to help businesses structure their companies, manage licensing, and navigate regulatory policies.

“Voters in some states are driving the liberalization of cannabis law through initiatives with rigorous regulatory best practices,” he says. “This November, Michigan and North Dakota have adult legalization measures on the ballot, Utah and Missouri have medical marihuana measures on the ballot, and Colorado has an amendment to its constitution relating to industrial hemp on the ballot.

“As more states permit either medical marihuana or adult use and the industry matures and scales up, pressure to change federal laws regarding banking, deduction of ordinary business expenses and de-scheduling marihuana will increase.” 

The initiative petition, the Michigan Regulation and Taxation of Marihuana Act, would legalize the possession, use, cultivation and sale of marijuana and industrial hemp for people 21 and older.

“Adult-use legalization in Michigan would expand the potential market from 270,000 registered patients to about 6.9 million adults, over twice the size of the Colorado market,” Murphy notes. “Municipalities have discretion to approve any number of licenses or may completely prohibit or limit the number of cannabis establishments.

New types of licenses are allowed, he adds, including a microbusiness license—where people can grow up to 150 plants, process the plant and sell the marijuana at that location; licenses that allow for sale and consumption in designated areas accessible only by people over 21 years of age (marijuana cafes), or for special events for a limited time, such as concerts and festivals.

“The ballot measure has a specific preference for 24 months for existing licensees under the Facilities Licensing Act, initially precluding persons not so licensed from the adult-use market initially,” he explains. “There are numerous other changes in the proposal if the voters approve this measure on November 6.”

Murphy, who has represented several cannabis industry entrepreneurs, met several more who became clients while he was running in 2016 for Oakland Community College trustee. His practice grew with the interest generated by the enactment of the Medical Marihuana Facilities Licensing Act that year.

He obtained a mandamus order compelling the City of Detroit to place a voter initiative for Detroit to opt-in to the Facilities Licensing Act on the November 2016 ballot after the Election Commission declined to do so; and he defended the voter initiative after it passed from several challenges. 

“Judge Robert Colombo dismissed two sets of plaintiffs for lack of standing leaving the City as sole plaintiff, struck the zoning portion of the initiative, and upheld the regulatory and licensing portion, which resulted in Detroit opting in. The case is on appeal,” he says. 

Murphy sued the City of Troy on behalf of three sets of plaintiffs to strike down a Medical Marihuana Grow Operation License Ordinance which conflicts with and is preempted by the Facilities Licensing Act and adversely impacted 78 previously licensed caregiver growers. He also brought challenges against several cities over the process of awarding municipal medical marihuana licenses.

Murphy, who had a deep interest in history and political science as an undergraduate at Wayne State University, originally set his sights on the law or a career as a history professor. But since the market for history professors was tight at graduation, while driving a taxi in Detroit he made the decision to return to WSU for law school.

“I’ve always enjoyed the Wayne State campus environment, a jewel in the midtown area,” he says. “I enjoyed developing friendships with many of the students and some of the professors and obtaining the foundation for becoming a lawyer at the next level.”

It’s been an interesting career for Murphy, with a myriad of fascinating cases. One of his more interesting trials was the Delphi-SEC securities litigation before U.S. District Judge Avern Cohn, in which Murphy defended Delphi’s Director of Capital Planning in the SEC enforcement action against Delphi and its former officers and related securities matters, in the Eastern District of Michigan.

“I represented a Delphi treasury officer and after many years and 6 weeks of jury trial we obtained a favorable settlement with the SEC,” he says. “I tried my first federal trial, a sex harassment case, as a young attorney before Judge Cohn. Each day in his courtroom is a challenge and an education.”

More recently, Murphy tried a FINRA securities arbitration involving a Ponzi-scheme within a Ponzi-scheme and obtained a $2.75 million award against several Florida brokers. 

He represented Hunt Construction, the general contractor for the Northwest Airlines Mid-Field Terminal Project at Detroit Metropolitan Wayne County Airport in numerous construction cases in federal and state court arising out of delays, scheduling, acceleration, and termination of sub-contractors with more than $100 million at stake.

“Hunt Construction was the general contractor for the McNamara Terminal construction project and there were numerous disputes arising out of this massive project,” he says.
“The disputes were varied and adjudicated in federal court, state court, arbitration and mediation.”

Some more “exotic” local cases include representing Winfred “Hotboy” Harris, a young Detroit-based middleweight boxer who is 17-1, trained by Ali Haakim and promoted by K.P. Boxing, George Kaltsas and Carlos Llinas.

“We plan to have Winfred fight a top-five ranked fighter within the year,” Murphy says.

In another case, Motown singer Martha Reeves noticed her songs were in the soundtrack of the movies “The Big Chill” and “Good Morning Vietnam,” but not appearing on her royalty statements.

“The Big Chill soundtrack was the number one soundtrack that year,” Murphy says. “We sued Motown Records and quickly reached a settlement.”

Murphy obtained an injunction and damages for famed sportscaster Ernie Harwell when some vendors were using his name and image on products without Harwell’s permission. 

Murphy also handled numerous matters involving securities’ investment litigation for other athletes and entertainers—including Detroit Tigers players Alan Trammell, Mike Heath, and Dave Bergman; Kronk Gym and boxing trainer Emanuel Steward; singer Ronnie Dunbar; the Oak Ridge Boys; country singer Conway Twitty; and Showboat Casinos.

“Showboat Casinos was very active in Michigan leading up to the legalization of casino gaming and I worked closely with Jim Reeder, a great friend, D.C. attorney and storyteller who was the narrator of President Barack Obama’s first Inauguration Parade,” Murphy says.

A Detroit native, Murphy makes his home in Bloomfield Hills, with his wife Lori. The couple has three adult children: Andrew, Bridget and Caroline.

Leisure pursuits include tennis, golf, skiing, reading, and travel; and Murphy gives back to the community by serving on the board of the Marvin Winans Academy for Performing Arts, a K-8 charter school in Detroit; serving as a public member on the Board of Radiology of the American Board of Physician Specialists based in Tampa; and he came fourth out of a field of 17 when he ran for trustee of Oakland Community College in the November 2016 election.


 

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