The 2019 dispensary lawsuit against the NJ Department of Health (NJDOH) for unfair disqualification was finally heard in court yesterday.
The case regarding Alternative Treatment Center (ATC) licensers was heard in the Superior Court of New Jersey’s appellate division. One hundred and ninety businesses applied for 24 possible medical cannabis dispensary licenses in 2019. The license winners announcement has been stalled for 14 months after a two-month mad dash period to apply.
Attorney Joshua Bauchner represented Tetra Grow, Liberty Plant Sciences, Garden State Operations, Cannwell LLC, and Core Empowerment NJ LLC in the dispensary lawsuit court.
“It went very well,” Bauchner said regarding the day in court. He noted the same three judges who heard the 2018 case also heard this case. Thus they are very familiar with the issues.
Dispensary Lawsuit Issues
The problem was the NJDOH eliminated several applicants due to minor technical reasons. Applicants for an ATC license were rejected due to the NJDOH’s opening PDFs. The applicants argued they were corrupted after they were sent through the NJDOH’s digital portal, which was likely poorly constructed.
The NJODH claimed they investigated the issue and found it was the applicants’ fault the files were corrupted and they were subsequently disqualified. Bauchner explained that the NJDOH engaged Adobe in a “stillborn chat.” When Adobe asked for more information to address the situation, the NJDOH did not provide it.
According to the dispensary lawsuit, the Department replied, “[w]e can close the case [because] I don’t think there is anything that we can do further.” After that, they concluded the investigation.
“DOH’s purported investigation allowed it to selfservingly conclude the problem was with the applicants rather than the NJDOH portal,” Bauchner said.
Regarding NJ DOH Assistant Commissioner for Medical Marijuana Jeff Brown, Bauchner said “Mr. Brown is not an (Information Technology) IT expert,” Bauchner said. “No deference should be afforded to the DOH outside its purview like IT.”
The other issue in the dispensary lawsuit case was that the NJDOH required applicants to receive both community AND municipal approval. Bauchner argued the law states they need community OR municipal approval.
“You want to have the best candidates on a merit-based review, so score everyone based on merit without further delay,” Bauchner said regarding a possible remedy to the dispensary lawsuit.
Assistant Attorney General Jacqueline D’Alessandro, representing the NJDOH, argued they reasonably concluded that the tech issue was the fault of the applicants. However, she did not point to specifics as to why it was their fault, and had no response concerning the “OR” issue, according to Bauchner.
“It was very brief and to the point which was telling. She did as best as she could under the circumstances,” Bauchner said. “For whatever reason, the DOH has taken the long road and abdicated their role to provide medicine to the citizens of the state. Their refusal to resolve this expediently and amicably is inexplicable.”
Bauchner noted it is unclear when the court will decide the case. When asked if he was hopeful of winning, he said, “Very much so. The record is clear.”
The NJDOH and Cannabis
Bauchner won the lawsuit on the 2018 ATC dispensary lawsuit last fall, in which he argued his clients were unfairly disqualified. He lamented the NJDOH has not accepted the court’s decision and sent a letter seeking further proof there were issues.
“All they do is delay,” Bauchner said. “They blew it.”
He said they would likely end up back in court.
“They don’t seem to get it. They lost. It could not be handled any worse than it has been,” he said.
Brown has refused to comment on the dispensary lawsuit in the past and did not respond to an email by publication time.
The NJDOH under Governor Phil Murphy had sought to completely turn around the tiny, forced medical cannabis program that was begrudgingly developed under former Governor Chris Christie. New qualifying conditions were added, which, among other things, led the number of patients in the program to go from 15,000 to more than 100,000 since 2018 when Murphy took office. Many NJ cannabis leaders praise Murphy and Brown for this.
However, only 13 dispensary locations are open three years after they took office for all their touted progress.
When the NJDOH or Cannabis Regulatory Commission (CRC) announces another Request For Application (RFA), they’ll likely be sued again if there are any flaws.