Fact Sheet on Regency Hills Grow House

November 2019 – Longtime owners sold house in question on Regency Hills Drive to a 23-year old male for $323,000.

December 2019 – Neighbors of house on Regency Hills Drive noticed suspicious activities at the house. These activities were reported to police and Regency Hill Board. Among the activities, trenching in easement at night, windows blackened out, second central AC unit was installed, and young men observed moving marijuana plants and grow lights into the house.

This house will be referred to as the “grow house” in the remainder of this fact sheet.

DTE and Shelby Township police converged on the grow house. Two dangerous illegal power taps were discovered between the transformer & neighboring homes. These power taps were supplying a large amount of power to the grow house, bypassing electric meters. This was power theft, and it was reported as such in the Crime Stoppers section of the local paper. We estimated with the amount of illegal power supplied to this grow house it could support up to $5,000,000 in medical marijuana annually.

Note: This grow house is 150 feet from a school bus stop.

Regency Hills Board members contacted Shelby Township Police and requested a meeting to discuss actions that could be taken to stop this operation. Chief Shelide set up a meeting immediately with Sargent Heisler and Regency Hills Board members. This meeting was attended by several residents also. Shelby Township Police were clearly very frustrated with these grow houses. However, they were unable to do anything about them because of the Michigan Medical Marijuana Act, and no local ordinance to prevent them. Highlights of meeting with Police:

  1. Michigan Medical Marijuana Act is vague on what is and is not allowed.
  2. Shelby Township enacted ordinance 284 several years ago, this prevented commercial grow and distribution in the township.
  3. Macomb County Prosecutor would not prosecute any marijuana cases.
  4. We were notified the MMMA allows one “caregiver” to have 5 patients, and each of the 6 people can have 12 “medical” plants, for a total of 72 plants. That’s not counting plants for “personal” consumption (an additional 12).
  5. Loophole in the MMMA: There is no limit to the number of caregivers and patients assigned to an address, thus enabling them to fill the facility with marijuana plants. Patients and caregivers were procured from social media and other avenues and being assigned to addresses.
  6. There was no limit on the amount of medical marijuana “caregivers” could supply licensed growers. Between the MMMA loophole and no restrictions on supply, large scale unlicensed commercial operations were operating under the guise of “caregiver operations”.
  7. Grow activity at the grow house was not prohibited by local or state ordinances, but they did have to follow laws and building ordinances.
  8. Experienced growers can “trick” their plant with grow lights into multiple harvests, increasing the yield significantly.
  9. It was up to DTE to press charges for the illegal hookup corrections and electricity theft. It was not a police matter if DTE opted not to press charges.
    Initial contact was made with a Regency Hills resident Attorney who specialized in HOA deeds and restrictions to get his opinion.
    DTE pulled the electric meter to the grow house until Shelby Township Building department could inspect the unauthorized interior modifications. 22 violations were noted upon inspection.

January 2020 – Electric meter was reinstalled on house by DTE to avoid “catastrophic” damages to building.

February 2020 – Discussion at annual RH Board meeting on topic, very few residents present. Discussion on adding a clause to deeds and restrictions, amendment would take a ¾ vote to pass.

Resident Attorney was to be asked to attend March HOA Board meeting to discuss topic.

March 2020 – Resident Attorney advised RH board the best course of action would be to work with the township to enact a local ordinance to prohibit grow operations in a residential area. Writing a clause into deeds and restrictions prohibiting caregiver medical grow operations without Michigan case law supporting it would most likely result in costly litigation to the subdivision, which we would more than likely lose without case law support.

Resident Attorney was subsequently advised later in the month of oral arguments heard by Michigan Supreme Court on this topic in October 2019, and ruling was forthcoming shortly (DeRuiter vs. Byron Township).

A letter was sent to Township Supervisor inquiring if any amendments to ordinance 284 were being drafted or considered to prohibit medical grow facilities in residential areas.

Renovations to basement of grow house were being dismantled & inspected step by step by the Building Department. Progress was being monitored via BSA online. It appeared to all that this grow operation had been successfully stopped.

April – Michigan Supreme Court ruled on April 23rd in the DeRuiter vs. Byron Township case. Decision was a local municipality could regulate medical grow activities in their jurisdiction, but not prohibit them. Ruling was sent to Resident Attorney for opinion.

Power outage in subdivision 4:10 am on 4/21/20. Large flash reflections were caught on security cameras on the neighboring homes of the grow house at the exact time of the outage. DTE classified the outage as “Public Interference of their Utility”. However, they would not expand on this. Nor would they provide information on the power theft at the grow house in December when asked. DTE has also declined to prosecute the homeowner for the earlier theft of electricity.

May 2020 – Grow house was sold on 5/4/20 by Land Contract to new owner for $370,000. New owner and previous owner were connected to the same address in Troy, raising suspicions immediately that something was still amiss.

On 5/26/20 the new owner submitted a project PE20-0071 to the township to convert the basement to a medical grow facility; project was approved.

Google search on the contractor listed on permit PE20-0071 revealed he was convicted of mortgage fraud in 2015 and was sentenced to 15 months in jail followed by 3 years probation + $758,000 in restitution.

Owner listed on permit PE20-0071 to convert basement to medical grow is the same individual that purchased the home in December 2019. Question arose over who has deed to the grow house.

A letter was drafted and sent to Shelby Township Trustees on the medical grow issue in Regency Hills Subdivision. Township officials were advised of the Byron Township vs DeRuiter Supreme Court ruling.

Some HOA’s in the immediate area were notified of issue to help pressure the Township if needed.

June 2020 – Received several responses from the Township. Township set up a cross functional committee to quickly study the issue and come up with recommendations.

June 2020 – Township were notified of new rules for MMMA going into effect June 1, 2020, limiting the amount of marijuana products “caregivers” can supply licensed growers. Starting September 30th, 2020, no “caregiver” marijuana products can be legally sold to licensed growers in the state of Michigan. Quick check on LARA website, there were no licensed medical marijuana facilities in Shelby Township.

The RHHA board questioned the Township why they would proceed with a building permit, as it would be an illegal enterprise if they sold the product after 9/30/20. Marijuana is still a controlled substance at the Federal level, shipping product out of state for sale at first glimpse appears to be a risky venture. DEA has not been contacted yet.

June 2020 – Security Cameras were being installed around perimeter of the house. Installation contractor was wearing a sidearm 10:00 am on a Sunday morning. Photos supplied to township.

July 2020 – Tim Woods (Head of ST Building Department) requested a 120-day moratorium on any permits for medical grow facilities. John Vermeulen motioned for moratorium & it passed unanimously.

The RHHA board had some concerns with the last clause in the moratorium because it excluded projects in process. We asked the Township for clarification, and more specifically, would the moratorium stop the basement conversion in the grow house in our subdivision.

August 2020 – Tim Wood (Building Department) responded with clarification on the moratorium. Unfortunately, the grow house in our subdivision would be excluded because the project was approved before the moratorium went into effect.

Township is receiving 2 -5 requests per day for medical grow facilities, and there are 60 currently in the township.

A letter was drafted and sent to Shelby Township inquiring if the building permit for medical grow could be revoked using home occupation restriction clauses for residential zones. The township zoning handbook specifically states that altering the interior of a home for a business / occupation is not permitted (permits were pulled to modify interior). Altering the exterior of a home is not permitted (windows blackened). Emitting noxious fumes or odors is not permitted (marijuana odors). No vibrations are allowed (extra AC + anticipate carbon dioxide generators will be required). Again, unfortunately, the Shelby Township answer was no, they would not revoke the permit.

A zoom meeting with Township, RH HOA, and some residents was scheduled for early September on this topic.

September 2020 – Highlights from Township Zoom call with residents and RH HOA:

  1. New ordinance will prohibit ANY caregiver operations in residential areas. Ordinance should be enacted prior to moratorium expiration. No more new grow houses will be allowed in Shelby Township.
  2. Permit for Medical Grow alterations on grow house was pulled on 5/26, prior to moratorium going into effect. Grow House is “grandfathered” in. Shelby Township cannot prevent medical grow operations at grow house without a possible legal battle the Township Attorney believes the Township would lose.
  3. Building permit cannot be revoked for violating residential zoning restrictions for home occupations / businesses.
  4. There is one caregiver and 5 patients tied to basement permit at the grow house. Question was asked several times “Can caregivers can be limited to one / household?” Township Attorney declined to answer in an open forum, they will discuss internally.
  5. Questions was asked “If grow house tried to expand operations, would a new permit for building alterations & electrical upgrade be denied because project / permit application is after moratorium was in place?”
  6. Everyone seemed to think the answer to this question above is “yes”. If that is the case, it appears the operation at the grow house would be limited to 72 medical plants, plus an additional 12 plants for recreational use. Originally, we calculated the grow operation could support upwards of 750 plants with the illegal power taps in place.
  7. It will be difficult to police activity inside the home, but any permits to increase electrical service or building alterations would be closely scrutinized. Home will be watched for unusual activities indicating a large grow operation.
  8. Township Attorney was appointed single point of contact for Township on this topic. We told Township we would do the same for the Subdivision.
  9. Grow house cannot sell product to licensed dealers after 9/30. As far as we can tell the only thing they can legally do with the marijuana after 9/30 is smoke it. Anything else would raise questions on the legitimacy of this operation.

Township has reacted to complaints from RHHA and residents with a moratorium, and soon, an ordinance to prevent medical grow operations in residential zones. However, activities at the grow house are still on track, albeit on a much smaller scale than originally planned (72 vs 750 plus plants). Policing the activities in the grow house by township officials will be difficult at best. This is a huge concern.

Construction is picking up at the grow house basement project, but we are not aware of grow operations taking place yet. BSA online is showing 15 of 22 items pending on the basement project.

Residents in the subdivision have been instrumental supplying information to the HOA in this matter.

Next steps by the RHHA board have not been determined yet. Everything we know is in this fact sheet. New information will be posted on the Regency Hills website with a revision date as new information becomes available.

At this time, the RHHA board encourages concerned residents to contact the Township Supervisor and Trustees directly to express their concerns, and push for the new ordinance prohibiting any new “medical / caregiver grow houses” in areas zoned Residential before the end of the existing 120-day moratorium in October.