Ohio’s Medical Marijuana Program Moves Forward After Court Decisions

Photo Credit: David Horemans

A pair of Franklin County judges ruled this week against stopping Ohio’s medical marijuana program, siding with state regulators and patients who said any further delay in the program would prevent sick people from getting their medicine.

Unsuccessful applicants to grow medical marijuana wanted the court to pause the program while state regulators consider their appeals. The Department of Commerce, which oversees the cultivation part of the medical marijuana program, put all appeals hearings on hold and said it could take a year to get through all 67.

On Thursday, Common Pleas Judge Kim Brown dismissed most of a lawsuit brought by CannAscend Ohio LLC and four other companies because they had not yet exhausted all their appeals, including a Department of Commerce-sponsored administrative hearing.

On Friday, Judge Richard Frye concluded the Department of Commerce failed to give timely appeals hearings to rejected applicants and ordered the agency to hold an administrative hearing for Ohio Releaf LLC within 15 days. But Frye declined to order a preliminary injunction to stop the department from issuing final licenses to the 12 large-scale growers selected in November.

The pair of rulings is a win for the Department of Commerce, companies chosen to grow medical marijuana and patients who worried the lawsuits would slow down the already sluggish rollout of Ohio’s medical marijuana program.

“In two separate, detailed decisions, two separate judges have confirmed that Ohio’s medical marijuana program is operating appropriately and has a green light to continue,” Commerce spokeswoman Kerry Francis said in a statement. “The program that the General Assembly created in 2016 has never been done in Ohio before, has many moving parts and, above all, must be run with integrity. These rulings can reassure Ohioans that that is happening.”

Rob Ryan of Ohio Patient Network, which intervened in the CannAscend case, said patients have been waiting too long for the program to be delayed.

“It’s important for patients for this program to proceed without any undue delay,” Ryan said. “Stopping the program would have made a huge impact on people’s lives and whether or not they would still be alive.”

What did the judges decide?

The Department of Commerce awarded 24 provisional cultivator licenses in November — 12 for up to 25,000 square feet of grow space and 12 for up to 3,000 square feet. Losing applicants could appeal their scores to a hearing officer appointed by the department, and the agency’s director would have the final say on the outcome of the hearing.

But the department delayed hearings and later put them on hold so a third-party accounting firm could validate all scores.

Attorneys for the state argued lawsuits were premature until after applicants exhausted all other remedies, namely the administrative appeals.

Brown agreed and dismissed all claims except a few public records-related complaints in the lawsuit filed by CannAscend Ohio LLC, Appalachian Pharm Products LLC, CannaMed Therapeutics LLC, Palliatech Ohio LLC, and Schottenstein Aphria LLC.

Ohio Releaf argued that it could not get relief from an administrative hearing because the department wasn’t holding any. Because the commerce department’s rules limited the initial number of growers to 24, Ohio Releaf argued, it would be shut out of the industry by waiting months or longer to have its appeal heard.

Frye agreed but decided against putting the program on hold because it would hurt companies that have invested millions of dollars into cultivation sites and patients who have been waiting two years since Ohio passed its medical marijuana law.

“Halting ongoing licensing could result in significant harm to businesses that have already invested significant time and money premised on their provisional licenses, while not really aiding the plaintiff in its pursuit of a license,” Frye wrote. “Beyond these commercial realities, the court cannot disregard the risk to potential patients having one of the 23 specified medical conditions for which Ohio has concluded marijuana may be efficacious.”

What did the marijuana companies say?

A spokesman for Ohio Releaf said Frye’s decision prompting an administrative hearing is a win for the company.

“The judge recognized that the state refused to follow the rules that they created. The judge rightly held the state accountable and ordered them to hold a hearing,” spokesman Mike Gonidakis said.

Gonidakis said the state made it clear during the case that it can award additional licenses beyond the 24 limit. Earlier this week, the department awarded a 25th grow license to a company edged out of top applicants because of a department employee’s error.

Larry James, attorney for CannAscend, was surprised that Brown upheld the administrative hearing process. The CannAscend lawsuit alleged several missteps by department officials and application reviewers.

“Obviously, this is a major surprise and clearly from any reading of any of the testimony of that hearing and our presentation, [an administrative hearing] is not a viable option,” James said.