Medical Marijuana Company Sues Over Delays In Ohio Cultivator License Appeal Process

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An unsuccessful applicant to grow medical marijuana in Ohio wants a judge to force state regulators to turn over public records and schedule a hearing for its appeal.

Ohio Releaf LLC sued the Ohio Department of Commerce last week, claiming the department is not moving forward with administrative appeals hearings as promised nor complying with the Ohio Public Records Act.

The Department of Commerce in November announced 24 winners of provisional licenses to grow medical marijuana from 185 applications. Ohio Releaf was one of 68 applicants that decided to appeal the department’s decision through a Chapter 119 administrative hearing.

But the department has only held four hearings since December, according to a hearing schedule obtained from the agency by through a public records request. Seven have been scheduled for dates in May and June. The remaining hearings were put on hold after the department uncovered errors in how scores were calculated.

“Commerce is trying to ‘run out the clock’ on Ohio Releaf’s ability to meaningfully exercise its Chapter 119 hearing rights before it moves the improperly awarded provisional licenses to full licenses,” the complaint alleges.

The department responded to early criticism of its cultivator application scoring process by touting an administrative hearing process for appeals. And attorneys for the department argued two lawsuits challenging the scoring process were premature because the companies had not had hearings and therefore had not exhausted all their appeals outside of court.

State law requires the agency administering the hearing to set an initial date within 15 days but allows it postpone the hearing indefinitely. Ohio Releaf’s complaint says the department’s delays violate the spirit of the administrative hearing law.

“This is a case of government gone wrong,” Ohio Releaf spokesman Mike Gonidakis said in an email. “Ohio has longstanding laws for appealing government decisions, but the state is currently manipulating the process. We are trying to participate according to the law, yet the state is blocking us.”

The department did not immediately respond to a request for comment but has thus far declined to comment on any pending litigation.

In December, Ohio Releaf sought records about how the department created the scoring rubric and directed some 20 reviewers to examine and score applications.

Since then, much of the request has not been answered, according to the complaint, which attorneys say violates public records law requiring officials to “promptly” produce records within a “reasonable period of time.” The complaint alleges many of these records were given to Auditor Dave Yost’s office, which is conducting an audit of the scoring practice.

“These are records of how commerce performed its duties on behalf of the taxpayers and citizens of Ohio,” attorneys wrote in the complaint. “They are the people’s records; not privileged communications and/or the trade secrets of private parties.”

Three other lawsuits have been filed challenging the department’s cultivator application review and scoring process. In those cases, the losing companies allege a handful of the winners should not have been awarded licenses because the department made scoring errors or didn’t follow its own rules or because Ohio’s law is unconstitutional.

Ohio’s program is supposed to be fully operational by Sept. 8. But litigation and delays in licensing marijuana businesses have cast doubt on whether all aspects of the program will meet that deadline.