Lawsuit That Could Further Delay Maryland's Medical Cannabis Program Proceeds
The state granted licenses to lower-ranking businesses to increase geographic diversity.
Published on October 13, 2017

Maryland's medical marijuana program has been fighting an uphill battle since day one, facing numerous legal challenges over lack of racial and geographic diversity among licensees. Now, a Baltimore judge has ruled that another case that could disrupt and delay the rollout of the industry should proceed to trial.

The case is being brought by two medical cannabis businesses that were denied licenses despite ranking in the top 15 applicants. State officials awarded these two licenses to lower-ranking businesses in order to increase the geographic diversity of growers in the state.

The lawsuit, filed on behalf of Maryland Cultivation and Processing and GTI Maryland, argues that the state acted arbitrarily and capriciously when denying them licenses. The companies argue that state regulators never told them that their proposed location would be a determining factor in whether or not they were awarded a license. “All of what was conveyed by the commission was they would pick the best, the cream of the crop,” said Alfred F. Belcuore, attorney for Maryland Cultivation and Processing. “If we would have been asked to move from Frederick County into Prince George’s County, we would have said yes.”

Assistant Attorney General Heather Nelson, who represents the state's medical marijuana commission, explained that a simple numerical ranking of the top applicants created an “unacceptable concentration” of licensees in the middle of the state. In order to increase the geographic diversity of the growers, regulators chose to remove GTI and Maryland Cultivation and Processing, which were the lowest-ranking applicants based in the center of the state. In their place, Holistic Industries in southern Maryland, and Shore Naturals Rx on the Eastern Shore were added.

Attorneys for Holistic Industries and the state argue that regulators were entitled to consider geographic diversity, and that their decision was neither arbitrary nor capricious. “There is nothing that anyone can point to that said they didn’t stay within the lines,” said Holistic Industries' attorney, Bruce Marcus. Attorneys for GTI and Maryland Cultivation and Processing are arguing that the process should have been made clear from the outset, and not decided upon in the middle of the licensing process.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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