BALTIMORE_A Baltimore judge put the state medical marijuana industry temporarily on hold Thursday, granting the request of a company that alleged state regulators illegally ignored racial diversity when picking companies to grow the drug.
Circuit Judge Barry Williams said the Maryland Medical Cannabis Commission is not permitted to grant any additional marijuana licenses for 10 days. He will decide after a June 2 hearing whether to extend that ban until the conclusion of a lawsuit that asks for the entire application process to begin anew.
The case has been watched closely by medical marijuana firms, regulators and patients because it has potential to upend the entire industry before it gets off the ground.
In his brief ruling, Williams said the 15 preliminary licenses to grow the drug could have been awarded in manner that was "potentially arbitrary and capricious and possibly unconstitutional."
The lawyer representing the commission, Assistant Attorney General Heather Nelson, declined to comment. Commission chairman Paul Davies said the ruling only applies to growers licenses. The commission will continue its work.
ForwardGro, the only company to secure a final cultivation license, will be allowed to continue growing marijuana during the temporary ban, but the company will have to argue in court next month why it should be allowed to continue.
ForwardGro won final approval to grow the drug last week, more than four years after Maryland first legalized a medical marijuana program. More than 6,500 patients have registered to receive the drug when it's available.
The industry has been beset by delays and disputes, including twin controversies over whether the commission properly tried to achieve racial and geographic diversity among medical marijuana growers, whose licenses are estimated to be worth millions.
A state law required the commission to "encourage" participation by minorities and to "actively seek to achieve racial, ethnic and geographic diversity when licensing medical cannabis growers."
Although the commission used geographic diversity as a selection criteria _ albeit in a way that's subject to another lawsuit _ the commission did not inquire about, nor consider, the racial or ethnic identity of applicants.
None of the 15 companies granted preliminary approval to grow the drug are led by blacks. Alternative Medicine Maryland, which is led by a black doctor from New York, was not ranked by the cannabis commission among the top 15 companies seeking a growing license and filed a lawsuit last fall challenging the award process.
Nelson, who represents the commission, argued in court that the law never expressly required racial diversity to be a selection criteria and that the commission satisfied the requirement to seek diversity by broadly advertising the program. She said Alternative Medicine Maryland's application was evidence the commission successfully reached a diverse pool of candidates.
"What they did was sufficient," Nelson said.
The Legislative Black Caucus disagrees, and has accused the commission of unfairly excluding blacks, who make up about a third of Maryland's population, from the industry.
Black lawmakers are lobbying the governor and presiding officers to recall the General Assembly to Annapolis to expand the industry to include more minority-owned companies.
Earlier this month, Maryland Gov. Larry Hogan issued an executive order to complete a disparity study that examines whether minorities face a disadvantage getting into the lucrative medical marijuana business. Such a study is a prerequisite to legally considering race when awarding state licenses.
Gail Rand, a spokeswoman for ForwardGro, said her company has not determined whether to argue in court next week.
"The key for us is to continue to focus on getting medicine to patients in Maryland," she said.
Brian Brown, an attorney for Alternative Medicine Maryland, said the company doesn't wish to delay the industry.
"It's our hope that this gets resolved quickly and expeditiously," he said.
The trade group representing pre-approved growers and processors called the ruling "incredibly disappointing."
Maryland's patients and families have waited nearly four years for access to these important medicines," said Jake Van Wingerden, the group's chairman. We are hopeful that the Circuit Court will rule against Alternative Medicine Maryland's frivolous legal filing when all the evidence is heard on June 2."
The trade association questioned whether Alternative Medicine Maryland would even qualify for a license if race had been considered, citing a redacted document filed by the state.
That document shows none of the top 60 companies proposed locating in Talbot County, where Alternative Medicine Maryland proposed starting a growing operation in a former Black and Decker plant in Easton. The document does not identify any of the top companies by name.
Although the commission filed that document, its attorney did not argue in court Thursday that Alternative Medicine Maryland was not among the top 60 applicants.
In this case and in another, the commission has argued it should not have to reveal any details the ranking process that led to the selection of the 15 companies that won preliminary licenses to grow the drug in August 2016, citing deliberative privilege.
