NJ Medical Pot Hopefuls Say Agency Snubbed Court Ruling

Posted on February 23rd, 2022

Law360 recently reported on Ansell Grimm & Aaron, PC’s challenge to the New Jersey Cannabis Regulatory Commission’s decisions on remand after the Commission’s initial decisions were reversed by the Appellate Division on November 25, 2020. Below is the article.

By Sarah Jarvis

Medical marijuana permit applicants have urged a New Jersey appellate court to direct the state’s cannabis regulators to award them licenses to operate facilities, arguing the agency failed to change a single score after an appellate panel remanded the matter over the state’s flawed scoring system.

In Wednesday filings with the Superior Court of New Jersey’s Appellate Division, applicant GGB New Jersey LLC said the state’s Cannabis Regulatory Commission doubled down on previous flawed scoring and didn’t adjust any scores after GGB and other applicants made “comprehensive supplemental submissions” challenging the commission’s scores and their scoring process. The CRC also ignored concerns previously raised by the appellate court about a substantial degree of relative error “by declaring the concept inapplicable to its selection process,” GGB said.

“The commission asserted that the scoring is what it says it is and, strikingly, is beyond judicial review,” GGB said. “The commission’s cursory review also focused on only two of the numerous scoring criteria challenged by appellants, and either rehashed the same arguments that had already been rejected by this court or ignored appellants’ other arguments.”

GGB and the other appellants are seeking an order directing the CRC to award them licenses to operate alternative treatment centers, or medical marijuana dispensaries. Alternatively, they want the matter remanded to the CRC with the appointment of a special master to conduct an investigation, per the company’s filings.

Counsel for GGB called the CRC’s ruling on remand ridiculous and said the company coordinated with other appellants to file nearly identical briefs, but it wasn’t immediately clear Friday which parties had also lodged filings.

The companies had alleged in their initial appeal that the scoring process was inconsistent and arbitrary. The applications were scored on a 1000-point scale by a panel of six unnamed officials from the Department of Health and two other state departments, according to court records.

The appealing companies that received their scores after they were rejected found that the scores were hard to parse, with some judges giving full marks in sections where another judge gave zero points. The numbers were averaged, and the total score determined where the applicant fell in the ranking, so the zeroes brought the scores down dramatically, the companies said.

Once a score was awarded, there was no opportunity to challenge it, according to the companies.

In November 2020, a panel from the Superior Court of New Jersey’s Appellate Division handed down its decision in eight combined appeals from companies that failed to make the cut for the six dispensary licenses the state awarded in 2018. The panel said there were serious problems with the way regulators scored the applications and sent officials back to reconsider the applications of rejected companies, but didn’t specifically tell regulators how to handle the applications after the remand or how to change the application process.

But GGB argued Wednesday that the CRC carried out “a superficial exercise seeking only to justify its own prior, flawed conclusions without actually abiding by the court’s instructions or addressing any of the appellants’ concerns.” Last month, the CRC issued new final agency decisions reaffirming the denials issued to the appellants in the 2018 decisions.

“Despite this court’s opinion and the supplemental submissions, the commission concluded that the process this court found unacceptable had been free from error,” GGB said. “As a result, the commission continues to deprive appellants of due process and neither the public nor this court can have confidence in the commission’s licensing process and the final agency decisions it has reached.”

GGB argued among other things that a recommendation report issued last month by the CRC lacks substantive analysis of the scoring issues the appellants had raised, including “wildly divergent scores and/or zero or low scores” the appellants said were unwarranted compared to the high marks successful applicants received.

“This court should not have to act again in this matter, but the commission has proven that it cannot — and will not — conduct a full and fair review of appellants’ applications,” GGB said. “The commission has proven by its own actions that a further remand will be futile because the agency apparently regards itself as beyond the jurisdiction of this court.”

A representative of the CRC didn’t immediately respond to a request for comment Friday.

GGB New Jersey LLC is represented by Joshua S. Bauchner and Rahool Patel of Ansell Grimm & Aaron PC.

Counsel information for the CRC and other applicants wasn’t immediately available Friday.

The case is In the Matter of Application of Medicinal Marijuana Alternative Treatment Center of GGB New Jersey LLC, case number A-2219-18T4, in the Superior Court of New Jersey, Appellate Division.

–Editing by Dave Trumbore.