Faced with restraining order, Md. cannabis commission delays approval process

Listen to this article

ANNAPOLIS — An expected awarding of pre-approvals for new medical cannabis licenses has been delayed, with the panel’s chairman publicly claiming a desire to ensure diversity but making no mention of a restraining order issued by a judge in Montgomery County a day earlier.

Lawyers for Remileaf LLC successfully argued Wednesday in Montgomery County Circuit Court that they were unfairly rejected despite successfully submitting applications in May and paying $4,000 in fees. Brian Lopez, chairman of the Maryland Medical Cannabis Commission, said the panel had hoped to make the preliminary awards that were meant to increase diversity within the fledgling industry before the commission is restructured on Oct. 1.

Black lawmakers arrived at the meeting and met briefly with Lopez before the commission began its public meeting. Outside, those same lawmakers complained that efforts to award new licenses and increase diversity were flawed.

Following the meeting, Lopez told reporters that the commission had planned on delaying the preliminary approvals before the issuing of the restraining order. He said requests for additional information from the top tier applicants would take longer to receive. Notifications of rankings went out to applicants early in the week along with requests for additional information. Applicants have 14 days to respond.

“It was a very aggressive timeline to try and beat the clock,” said Lopez, explaining the commission wanted to make the announcements before Oct. 1, when the commission is reconfigured.

Lopez made no mention of the restraining order Thursday and only mentioned “pending litigation” against the commission when he announced the panel would close a portion of Thursday’s meeting to consult with its attorney.

An attorney representing the commission argued Wednesday against the restraining order and told Rubin that the commission planned on making the preliminary awards in less than 24 hours.

“When she was arguing that, she was 100 percent correct,” Lopez said. “We were very much focused on trying to get to a pre-approval today. That was our goal because the commission turns over Oct. 1 and we wanted to have this completed by this commission. It became apparent we had too many issues to overcome in that amount of time almost simultaneously as she was arguing in court.”

The commission expects to publish the rankings as early as Thursday night. Top tier candidates could be disqualified if they are found to have put inaccurate information on their applications.

Montgomery County Circuit Court Judge Ronald Rubin issued the temporary restraining order before 7 p.m. on Wednesday after a hearing in which a lawyer for the commission argued against it for more than two hours. The firm, owned by an African-American woman, is represented by Megan Benevento and Timothy Maloney, a former legislator and partner at Greenbelt-based Joseph, Greenwald & Laake P.A.

Maloney declined to comment for this story.

The commission last week voted to accept a scoring and ranking of more than 200 applicants vying for four grower and 10 processing licenses that was conducted by Morgan State University. But Lopez said the commission is delaying preliminary awards because of concerns about information provided on the applications of some of the highest ranking groups seeking licenses.

Lopez said there were also concerns raised by the leaders of the Maryland Legislative Black Caucus that some top tier applicants misrepresented their minority business participation on applications.

Dels. Cheryl Glenn and Darryl Barnes, Democrats from Baltimore City and Prince George’s County, respectively, appeared at the Thursday meeting and said some applicants had complained to them about a lack of fairness in the process.

“We feel frustrated that we are at this point because we worked extremely hard to help write the regulations to say that our people have the opportunity to go after these licenses,” said Barnes.

Barnes, who chairs the Legislative Black Caucus, said he and Glenn are concerned prospective licensees that are primarily based in Maryland were overlooked for “out-of-towners.”

“We have a problem with that,” said Barnes. “We wanted to stop this process to ensure fairness.”

Glenn said lawmakers “made it clear in Maryland state regulations that residency meant something. House Bill 2 was not for the purposes of expanding the footprint to hedge fund companies out of Maryland and even out of the country.”

Barnes said there was “impropriety going on” in the process, but he and Glenn declined to elaborate.

“I am very happy with the process. We had 90 percent of the applicants qualified as disadvantaged equity applicants,” said Lopez. “We certainly had a huge amount of minority participation.”

Lopez said he was not yet able to disclose if any of the top applicants were minority-owned businesses.

There’s a lot of rumors out there and we are working to clarify,” said Lopez.

Concerns about racial, ethnic and gender diversity have plagued the state’s medical cannabis industry since the awarding of its first licenses. Two years ago the commission faced criticisms and lawsuits over the lack of African-American-owned grower and processor licenses in the state. A disparity study of the industry bolstered calls by Glenn and others for an expansion of licenses to improve minority ownership.

Glenn said success for House Bill 2, which became law, means “minority ownership of growing and processing licenses.

“Particularly, I will even break it down and say African-American ownership,” said Glenn. “Federally we have to say minorities but we know as a result of the disparity study, it was supported that African Americans are the ethnic group that has been most disproportionately affected by marijuana laws for years, and so it’s time for Maryland to set the standard in this country to say that African Americans can have a part of the ownership of medical marijuana.”