Lansing’s MD and Rehbel Industries sold for $2.25 million

FRIDAY, June 23 — The court-ordered receiver of marijuana businesses MD Industries and Rehbel Industries has agreed to sell the businesses, including their three marijuana licenses, for $2.25 million to a Farmington Hills-based company.

Court records show Ingham County Court Judge Joyce Draganchuk approved the sale of the three marijuana licenses — one for medical marijuana growing, one for recreational and one for processing — to Arboretum Michigan LLC.

Once the company has been approved to own the licenses by the city and the state, it will also enter into a five-year lease to continue operations on the converted third floor of the historic John Bean Building,1305 S. Cedar St. in Lansing.

Attorney John Polderman is the court-appointed receiver overseeing the liquidation of MD Industries LLC and Rehbel Industries LLC to pay off $12.5 million in debt. He said via email that the Bean Building does not yet have a buyer.

A court filing shows Polderman, an attorney at Simon PLLC located in Troy, sought and received approval to accept a $1 million loan from Arboretum Michigan. The loan would be used to pay for improvements required by the City of Lansing. The loan, according to the court filing, would be repaid at the time the building was closed.

A Grand Rapids real estate firm listed the 12.5-acre, 465,000-square-foot Bean Building for sale for $7.75 million, City Pulse reported in March. The real estate listing was updated on June 20, dropping the asking price to $6.4 million.

Without building improvements, including an expensive fire suppression system for the first and second floors of the building, the building could not obtain a certificate of occupancy. A certificate is required for any other part of the building to be put to additional use.

The marijuana operation has been allowed to operate without a certificate of occupancy due to an order from Draganchuk. Without that order, the marijuana licenses would not have been renewed because the city was refusing to sign off on its renewal due to safety concerns.

MD Industries and Rehbel Industries were operated by Michael Doherty, a self-styled marijuana magnate. In 2022, the companies had fallen behind in paying property taxes and loans, leading to his backers’ seeking an emergency order for a receivership. That order put Polderman in place and has led to a contentious series of filings and court appearances.

Doherty lost two attorneys in the previous year and opted to represent himself. However, Draganchuk struck all of Doherty’s filings because, she said, they were “offensive and inflammatory material, and are redundant, immaterial, impertinent, scandalous, and indecent, thereby warranting they be stricken.”

On April 4, Doherty was arrested and jailed on a criminal contempt by Draganchuk for arguing with her during a court hearing on a motion by Polderman to find him in criminal contempt for allegedly harassing a title agent who was overseeing the transfer of property owned by MD Industries. He was sentenced to 93 days in the Ingham County Jail.

He was released on June 20, Ingham County Sheriff Chief Deputy Darrin Southwell said.

Southwell said that while Doherty had served just 77 calendar days, and the court order required no early release, the motorcycle-riding entrepreneur was released under the sheriff’s good behavior policy. Doherty “conducted himself within the rules so not to have good time taken away,” Southwell wrote in an email.

On Wednesday, Doherty and Polderman were back in front of Draganchuk via Zoom, with Polderman arguing that the hearing on the criminal contempt motion was never completed.

Polderman was requesting a continuation of the criminal contempt process, but Draganchuk denied the motion because he had already served time for contempt and that she wished to “go forward in the hope that Mr. Doherty can take part in all the proceedings in a way that’s appropriate and allows the court to conduct proceedings.”

“I would also note that there are some procedures in place now so that Mr. Doherty cannot send 10 emails a day to all of the court staff harassing and annoying and frightening them,” the judge said, referring to his past behavior.