Medical cannabis firm sues Md. commission over licensing

One of the applicants passed over for preliminary approval to grow medical marijuana in Maryland is suing to restore its position among the top-ranked applicants after state regulators removed them from contention.

GTI Maryland LLC filed a lawsuit in Baltimore City Circuit Court Monday demanding that the Natalie M. LaPrade Maryland Medical Cannabis Commission allow it to proceed with the second phase of the licensing process after the company was dropped from the rankings to promote “geographic diversity” among the license awardees.

“This is a case about a state commission setting rules and then, inexplicably, failing to follow them,” GTI’s attorney, Phil Andrews of the firm Kramon & Graham, told reporters at a news conference Tuesday. “GTI Maryland earned its pre-approval on [its] merits and relied on the fact the geographic diversity was not relevant, based on the commission’s own statements.”

A spokeswoman for Maryland Attorney General Brian E. Frosh, whose office represents the commission, said the office would not comment on pending litigation.

The suit is the first legal challenge to the licensing process, which recently came under fire for a lack of racial and ethnic diversity among the applicants who were granted preliminary approval last month.

Bethesda-based GTI Maryland is the local branch of a Chicago-based company licensed to grow and dispense medical marijuana in Illinois, Nevada and Massachusetts.

GTI, which planned to operate a facility in Washington County, was initially among the top 15 grower applicants ranked by Towson University’s Regional Economic Studies Institute, or RESI, whose report formed the basis for the commission’s decisions.

The RESI report removed all identifying information from the applications in an effort to allow commissioners to vote in an objective, “double-blind” process in which prospective licensees were judged solely on the merits of their proposals.

While the subcommittee examining grower licenses initially and unanimously approved the top 15 choices — GTI was No. 12 — at a meeting July 27, the panel reconvened via conference call 48 hours later and altered the list by a vote of 4 to 1, citing the need for greater “geographic diversity,” according to the complaint.

While the subcommittee used a map dividing Maryland into five agricultural zones to achieve geographic diversity, when it moved GTI out of the top 15 it left a lower-ranked applicant from the same agricultural zone on the list, according to the complaint.

GTI and a Frederick County company were bumped from the top 15 and replaced by lower-ranked — and less-qualified, GTI contends — applicants from the lower Eastern Shore and Prince George’s County.

But GTI contends that commission had previously made clear to applicants that their location was irrelevant and wants to know what happened between the July 27 and July 29 meetings that prompted the subcommittee, led by commission vice chair and Cheverly Police Chief Harry “Buddy” Robshaw, to change its mind about the initial vote.

Robshaw and the commission declined to comment on the pending litigation Tuesday, but Robshaw previously told The Washington Post that the decision to reshuffle the applicants was an agonizing one but the most fair solution commissioners could come up with.

In the complaint, GTI argues that the commission posted on its website in October 2015 that the proposed location of a growing facility was not relevant for the first stage of the application process.

Attorney Lanny Davis of Davis Goldberg & Galper, who is also representing GTI, told reporters Tuesday that it appeared Robshaw agreed with this assessment on July 27 but not on July 28.

“What happened in 48 hours to change your mind, Mr. Robshaw?” Davis said.

GTI also argues that while two winning applicants for processor licenses were given the chance to relocate their businesses before the preliminary approvals were granted; however, grower applicants like GTI weren’t given the same opportunity — meaning GTI’s application was not “fairly and lawfully” given the consideration that other applicants received.

GTI’s investors include former Baltimore Raven Eugene Monroe, who told reporters that the commission effectively changed the rules after the game had been played.

Andrews said that GTI was not trying to delay the next stage of the licensing process for other grower applicants, just restore its place among them.

“The last thing we want to do, as a business that serves thousands of people across three states, is further distress sick patients,” said GTI Maryland CEO Pete Kadens.