Michigan's highest court has agreed to review a lower court's ruling that a city violated state open meetings law when it held closed-door meetings to evaluate the applicants for a limited pool of marijuana business licenses.

On Wednesday, the state Supreme Court issued an order for oral arguments in Royal Oak, Michigan's appeal of an intermediate appellate decision that threatened to undo marijuana business licenses the city awarded to two companies in 2022.

Royal Oak was sued by Exclusive Capital Partners and Quality Roots Inc., which were both applicants for the city's only two marijuana retail licenses and challenged the city's decision to pass them over on a number of grounds.

In December, a Michigan Court of Appeals panel said all the applicants' claims failed except one: Royal Oak had violated Michigan's Open Meetings Act in the process of selecting the applicants that would be awarded licenses, according to the panel.

Royal Oak received 31 applicants for the two retail licenses it was planning to dole out in 2022. The city manager, who was tasked with administering the retail license program, formed a "workgroup" to assess the applicants, which met four times in closed-door sessions, according to the opinion.

The city manager ranked the top two applicants to recommend to the Royal Oak City Commission, and the commission ultimately voted to approve the licenses, according to the court records.

The Court of Appeals panel said that although the Royal Oak City Commission technically held the power to award the licenses, the commissioners had effectively rubber-stamped the city manager's licensing decisions.

"Because the city manager made a de facto policy choice for the City Commission, the city manager met the definition of 'governing body,' and, thus, was subject to the [Open Meetings Act]," the panel said. "It follows that the meetings that the city manager had with his workgroup should have been noticed and made open to the public."

The violations could result in the licenses being invalidated, the panel said, though it noted invalidation is not the only remedial option for open meetings violations. The city manager could also be ordered to redo the licensing process in compliance with the open meetings law.

In Wednesday's order, the high court asked for briefs addressing "whether the city of Royal Oak's city manager was a 'public body'" subject to the Open Meetings Act.

Exclusive Capital and Quality Roots had lodged other objections to the city's licensing program, including that the marijuana ordinance was vague and inconsistent with state marijuana law, which requires a competitive process, and that their due process rights were violated. The appellate court rejected the companies' other challenges to Royal Oak's marijuana ordinance and the city's process.

Lawyers for the parties did not immediately respond to requests for comment.

Exclusive Capital and Quality Roots are represented by Brian E. Etzel and William C. DiSessa of Williams Williams Rattner & Plunkett PC.

The city is represented by Anne McClorey McLaughlin of Rosati Schultz Joppich & Amtsbuechler PC.

The cases are Exclusive Capital Partners v. Royal Oak and Quality Roots Inc. v. Royal Oak, case numbers 168243 and 168244, in the Michigan Supreme Court.