2018 ATC dispensary lawsuit medical cannabis

The lawsuit brought by medical cannabis applicants in the 2018 ATC lawsuit got their day in court on Tuesday.

Six medical marijuana vertical licenses for an Alternative Treatment Center (ATC) were awarded in 2018. Applicants who brought the suit said the grading of the 2018 applications for the six licenses were not consistently graded

“It was the equivalent of reading Tolstoy’s “War and Peace” three times a week for 11 weeks,” a lawyer for the appellants said regarding the need to review all the 194 applicants and how inconsistencies developed.

The process for appealing the decision has been quite elaborate. Moreover, there is no end in sight for either the 2018 or the 2019 lawsuit holding 24 medical cannabis licenses.

The 2018 ATC lawsuit was initially filed in late 2018 and has been an ongoing issue blighting the record of NJDOH Assistant Commissioner Jeff Brown in significantly improving the New Jersey Medical Marijuana Program (NJMMP) under the New Jersey Department of Health (NJDOH) under Governor Phill Murphy.

After the appeal to the NJDOH was denied, the appellants, they requested DOH conduct a hearing. They were denied that request. The appeals process has taken a long time over a complicated process.

Brown refuses to discuss pending litigation.

Joshua Bauchner, an attorney for Ansell, Grimm, and Aaron, has been leading the effort for the applicants. He said the appeals process started two years and will likely continue for another two years. However, Bauchner was “cautiously optimistic the appeal will be better” in terms of time.

He added the caveat that while he believes his 2018 lawsuit is important, lawyers with similar cases feel the same way.

“There’s a lot of appeals,” Bauchner said. “It’s the nature of the process.”

2018 ATC Lawsuit Scoring Problems

There were many problems with the scores of the 2018 ATC license round winner. MPX, under Beth Stavola, won a license in Atlantic City, which had a dispensary in the first place, ignores geographic diversity. iAnthus now owns MPX, and Beth Stavola left the company. They defaulted on the loan, and their dispensary has yet to open.

Overall, the process for scoring applicants was wholly inconsistent. The difference between the highest and lowest score for the same applicants was a 300-point range.

“The problems with scoring was quite obvious,” Bauchner said. “Why not correct for this problem?”

The NJDOH has not been transparent regarding the scoring methodology.

The appellants do not want to take the licenses of the 2018 ATC Lawsuit defendants but allow them additional licenses. They acknowledge they all scored well on the applications.

Bauchner is representing the cannabis company Green Growth Brand in the 2018 ATC lawsuit.

The scores varied widely for the same application by representatives from the different departments that scored them.

“How does DOT (Department of Treasury) score cultivation?” Bauchner asked rhetorically. “How does (The Department of) Ag know about finance?”

“Supply is not meeting demand,” Bauchner lamented. “It’s all because the DOH is obstinately refusing to resolve this.”

NJ Medical Cannabis License Issues

Bauchner blames Brown for the situation with the 2018 and 2019’s 24 medical marijuana licenses.

“He’s got everyone embroiled in litigation,” Bauchner said. “It doesn’t serve anyone.”

It does not bode well if Brown heads the Cannabis Regulatory Commission (CRC) to regulate medical and adult-use cannabis. Many expect he will.

Bauchner called the NJMMP “a disaster due to the DOH’s obstinance.”

The ideal situation would be for the appellants to have their applicants rescored and awarded licenses. The New Jersey Attorney General’s office serves as counsel to the NJDOH in the 2018 ATC lawsuit case. The applications would largely be the same except for real estate arrangements, Bauchner said.

He refused to speculate on how the case will ultimately be resolved.

“I’ve been doing this long enough to not predict when the court’s going to rule. I will say the judges on the panel seemed to express great doubts,” Bauchner said.

He did say that he was “cautiously optimistic” that they will remand.

Arguments in the 2018 ATC lawsuit were supposed to be heard in March. Instead, they were heard online Tuesday instead due to COVID.

There are now 12 dispensaries for 90,000 patients. It has led to long lines for expensive and mediocre medical cannabis.

“It’s heartbreaking,” Bauchner said regarding the NJMMP. “Patients are suffering. It’s a failure by any measure,” Bauchner said.

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Dan Ulloa
Dan Ulloa is the Editor and Publisher of Heady NJ, with a background in politics, journalism, and a passion for the cannabis community. He curates and publishes news, events, and insights on the industry. Dan has been a leading voice in the New Jersey cannabis scene, educating and informing the public about this rapidly evolving industry. He ranked #35 on the INSIDER NJ Cannabis Power List out of 100 in 2022.