| Asbury Park Press
TRENTON – The supply-and-demand issues hindering the state’s 12 medical marijuana dispensaries and 100,000 medical marijuana patients could worsen after a judge ruled that the process for issuing state dispensary licenses was rife with flaws.
Appellate Judge Clarkson Fisher, Jr. ruled in favor of eight losing dispensary applicants who argued the state Department of Health hadn’t appropriately considered their 2018 applications, stating that the “arbitrary, capricious and unreasonable” process was full of errors.
There were “numerous, indisputable anomalies in the scoring of the appellants’ applications prevent us from having sufficient confidence in the process adopted by the Department or its results for the approval of (medical marijuana dispensaries) in this important industry,” Fisher wrote in the Nov. 25 decision.
“We have considerable concerns about the Department’s processes and the results produced that – without further agency proceedings and explanation – would leave us to conclude that the decisions in question are arbitrary, capricious and unreasonable,” he added.
What led to the medical marijuana decision?
The DOH awarded six medical marijuana licenses in 2018 — two each in North, Central and South Jersey — after a months-long process of reviewing 146 applications from 103 different companies looking to win a dispensary.
That round of licenses was supposed to be the first of many, an attempt by the state to begin quashing supply-and-demand issues that had hindered the New Jersey Medical Marijuana Program virtually since its inception.
Instead, the process prompted a lawsuit by eight losing applicants that had already resulted in an injunction that stopped the DOH from issuing any more licenses, including those the state was supposed to award last year.
With Fisher’s opinion now calling the entire system into question, attorney Joshua Bauchner said the state should award licenses to the plaintiffs — he represents five of them — involved in the lawsuit to ensure the market can begin to rebound.
“Our clients want a licenses, first and foremost. How they get there is up to the DOH,” he said.
“The path of least resistance is to award licenses to these applicants. There’s no dispute they’re all qualified – it was just a limited number of licenses available and, if you correct for one (of many) variables, you have different winners.”
Bauchner said that he’d had preliminary conversations with the state over settling his clients’ issues and awarding them licenses.
DOH spokeswoman Donna Leusner said the department was “reviewing the court decision” and declined to comment further.
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A growing industry
There are more than 100,000 registered medical marijuana patients in the state, but the DOH has only awarded dispensary licenses to 12 “alternative treatment centers” since the program started, including the 2018 licensees.
Of those six new licensees, only three dispensaries — TerrAscend in Phillipsburg, RISE in Paterson and Columbia Care in Vineland — have opened.
In total, New Jersey has just 12 dispensaries operated by nine companies or nonprofits, including satellite locations.
The result is a limited stock of options for patients — many of whom require specific strains and specific forms, such as edibles or oils — where the cost-per-ounce is often more expensive than a plane ticket.
“The supply just isn’t meeting the demand. Rather than litigate or fight it out, we know we have these appealing applicants who are qualified, ready, willing and able,” Bauchner said.
“Let’s give them a license and let them do what everyone wants, build a robust cannabis market in the state of New Jersey.”
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Scoring flaws draw scrutiny
There were numerous, across-the-board issues with the application scoring, the court found.
In one category, applicant Pangaea Health and Wellness received a perfect score by some application judges but a zero by others.
The zeroes should have been rendered moot, Fisher wrote, as the DOH told its review committee to reserve zero-point scores for instances where the applicant did not submit the required document or didn’t answer the question.
It came into play during another category in which Pangaea received some zero-point scores when asked to submit a floor plan.
Since the company did submit a floor plan, it should have been protected from a zero, the court and plaintiffs argued.
The court also called into question the expertise of those chosen to score the dispensary applications, which included four DOH employees and one each from the Treasury and Agriculture departments.
“Despite this cross-over into areas not likely within a member’s bailiwick, each member’s vote was equally weighed,” Fisher wrote. “In other words, the Agriculture member’s vote on financial matters possessed the same value as the Treasury member’s vote on that same subject.”
The appellate decision could also have an impact on the state’s future of legal weed for recreational purposes.
While the ballot measure to legalize marijuana passed with a 2-to-1 margin, the first recreational dispensaries are unlikely to open until 2022.
In other states, medical marijuana dispensaries have been allowed to sell recreationally in the meantime.
That is unlikely to happen in New Jersey.
The medical marijuana program floundered under former Gov. Chris Christie, who opposed the program.
Under Gov. Phil Murphy, the program has expanded exponentially but was hamstrung by the lawsuit, injunction and legislators’ frequent insistence of grouping in medical marijuana with previous attempts to legalize weed.
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Mike Davis has spent the last decade covering New Jersey local news, marijuana legalization, transportation and basically whatever else is going on at any given moment. Contact him at [email protected] or @byMikeDavis on Twitter.