Ohio Medical Marijuana Dispensaries Sue State Over Denied Licenses

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Ohio Medical Marijuana Dispensaries Sue State Over Denied Licenses

As Ohio attempts to move forward in the process of setting up the infrastructure of the medical marijuana industry before its deadline on September 1st, it has come under fire. The selection process for distributing grow licenses has been called out for being faulty. Now 6 marijuana grow businesses who allege to have been erroneously denied a license are suing the Ohio Department of Commerce Director Jacqueline Williams, 3 scoring consultants and the 12 companies awarded large-scale grow licenses. The group of plaintiffs, led by Jimmy Gould of CannAscend Ohio LLC, also include Appalachian Pharm Products LLC, CannaMed Therapeutics LLC, Palliatech Ohio LLC, Trillium Holdings Inc. and Schottenstein Aphria LLC.

The Allegations of the Lawsuit

6 ohio businesses are suing over what they see as unfair licensing for cannabusinesses
6 Ohio businesses are suing over what they see as unfair licensing for rival cannabusinesses.

The complaint, which was filed with Franklin County Common Pleas court on Tuesday, claims that the Department made mistakes that led “to a fundamentally arbitrary, capricious, unfair, and flawed scoring process.” It states that the plaintiffs spent millions of dollars to comply with “rules the department did not properly enforce or follow.”

Violations of Pass-Fail Criteria

The complaint states that 5 licenses were given to companies that didn’t meet the basic pass-fail criteria. This includes being within 500 feet of a school, church, park or other restricted area as defined by the law. It also includes having the required amount of liquid capitol. The Department responded, saying that licensees had 9 months to comply with the laws. The plaintiffs, however, say that this was neither the intent of the law nor was it communicated to applicants.

Loose Interpretations of the Law

The law in Ohio states that 15 percent of licenses must be distributed to minorities. This is an attempt to make amends for the fact that minorities have been disproportionately targeted, arrested and negatively affected by prohibition. 2 of the companies who were given licenses under this rule, however, were not actually owned or run by minorities under the definition created by the law. Majority owners in some of the other companies that received licenses were from other states and one of these companies’ presidents is under federal drug investigation.

Scoring Errors

the suit alleges numerous ways ohio violated justice with its license distributions
The suit alleges numerous ways Ohio violated justice with its license distributions.

The plaintiffs also describe a host of scoring errors that indicate that at least 14 applications were evaluated incorrectly. There were applicants who were scored based on rules and regulations that didn’t appear in the state law. Some were penalized for failing to give data that didn’t appear as a rule until months after the application was submitted. This included an amended rule regarding packaging that wasn’t finalized until 3 months after applications were submitted. The plaintiffs’ attorneys even found that after reviewing 17 applications, 14 of them did not have their scores added correctly.

Conflicts of Interest

Another major complaint involved scoring consultants who were seen to have a conflict of interest, and therefore shouldn’t have been allowed to assist in the scoring process. The complaint also states that most of the scorers were state employees who had little to no background in working with medical marijuana.

All in all, plaintiffs claim that if the scoring process was managed correctly, they would have received licenses. With the case just beginning, it is only a matter of time before the plaintiffs will know, either way, where they stand within the industry in Ohio.

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