COLUMBUS, Ohio -- Franklin County Common Pleas Judge Richard Frye ordered Friday the Ohio Department of Commerce to promptly give a cultivation company an administrative hearing, but he denied the grower's request that a portion of the program be put on hold.
The decision is a win for the state, which had argued a halt to the program would delay cannabis from getting to patients. Frye wrote the public's interest would not be served if the court interfered in the operations of the program.
The department in November rejected Ohio Releaf LLC's application for one of 12 provisional large-scale grow licenses, and Ohio Releaf requested an administrative hearing to appeal its case. The department has put appeals hearings on hold while a private-sector firm reviews its scoring on the applications, after an error was discovered. Ohio Releaf sued, saying the department was purposely delaying the hearings and preventing it from making its case to grow medical marijuana.
One of Ohio Releaf's requests was to halt the 12 large-scale grow licenses from operating until it received its hearing. The state had argued stopping the process would prevent patients from obtaining cannabis. The judge wrote in his order that there wasn't enough evidence to justify a halt in further work on permanent licensing of large-scale cultivators.
The litigation was filed because Ohio Releaf believed that only 12 large-scale licenses could be awarded. The state conceded in court last week that it has the authority to issue more licenses and they just issued a 13th Level 1 license this week. Furthermore, Frye noted that the medical marijuana program's rules allow additional licenses after Sept. 8, when the program is supposed to be fully operational -- although the state recently said not all growers and dispensaries will be open by then.
Ohio Releaf calls the decision a win.
"Everyone wants a successful medical marijuana program in Ohio," said Michael Gonidakis, a spokesman for Ohio Releaf, in a statement. "Since the state conceded that they can issue more than 12 Level 1 licenses, the Judge allowed the program to move forward as long as Ohio Releaf's rights are protected. That is a right to (an administrative) hearing."
The Ohio Department of Commerce also describes the decision as a win.
"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," agency 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."
On Thursday, another judge dismissed a separate lawsuit from cultivation companies that didn't win licenses.
Criticism of the state
Although the state doesn't have to halt part of the medical marijuana program, Frye did criticize the Department of Commerce for stalling on Releaf's administrative hearing.
The department promised Releaf a hearing but didn't provide one in a timely manner. The department has "abandoned any pretense of compliance with Ohio law," Frye wrote.
He suggested the department hold "mini-hearings" for the dozens of rejected companies that want to appeal, with time-limits such as a half day.
"Likely most applicants would welcome a short, quick 'mini-hearing' to satisfy themselves that no obvious, glaring error had been made by the Department, and to allow prompt responses to concerns raised by Department witnesses," he wrote.
Mini-hearings
He also wrote that administrative hearings could be expedited by videotaping some of the department's testimony ahead of time, since Ohio Releaf may not get to make its case until April 2019 - well before the Sept. 8 fully operational date.
Frye also suggested the department videotape its administrative hearing testimony at an April hearing. But the department objected to his suggestion.
"Unfortunately, suggestions in this regard fell on deaf ears," Frye wrote.
Since administrative hearings are supposed to be flexible, he decided to demand the department promptly give Releaf its hearing.
Legislative or executive branch intervention?
Frye outlined other potential concerns that emerged from testimony, including the error in scoring cultivation applications, the fact that nearly two-thirds of companies that applied for cultivation licenses were disqualified by the department - which is a higher number than in other states with medical cannabis programs - and the revelation that a Commerce employee who was involved in scoring applications had gotten rid of some of his personal notes.
"The court was frankly startled to learn that contemporaneous working notes had been destroyed," Frye said.
"Frye wrote that with the passage of time, the employee may need the notes to assist him in the administrative appeals hearings. .
"It is evident that the General Assembly or the Executive branch have a continuing opportunity to get involved if this new Program is mired in problems, but that does not preclude reasonable action by this court in response to this law suit," he wrote.