Pubdate: Wed, 29 Apr 2015
Source: Boston Globe (MA)
Copyright: 2015 Globe Newspaper Company
Contact: http://services.bostonglobe.com/news/opeds/letter.aspx?id=6340
Website: http://bostonglobe.com/
Details: http://www.mapinc.org/media/52
Author: Shelley Murphy

JUDGE ORDERS MARIJUANA LICENSES RESTORED

A judge has ordered state regulators to allow a company previously 
headed by former congressman William Delahunt to move forward with 
plans to open medical marijuana dispensaries in Mashpee and Plymouth, 
ruling it was improperly denied licenses last year.

In a 22-page ruling Monday, a Suffolk Superior Court judge found that 
the Department of Public Health failed to follow its own regulations 
in June when it rejected a bid by Medical Marijuana of Massachusetts 
to open three dispensaries, after initially supporting it.

The denial came five months after the company scored the highest 
among 100 applicants and was among 20 selected to move on to the 
inspection phase. It also paid a $50,000 registration fee for each of 
its three proposed dispensaries.

Suffolk Superior Court Judge Mitchell H. Kaplan concluded that the 
state launched an additional review of applications following a 
barrage of criticism about the controversial selection process, then 
ruled against Medical Marijuana of Massachusetts without allowing it 
to address concerns. By then, he said, the company had already 
invested significantly in its planned facilities.

Revisiting issues that had been previously disclosed by the company 
"and then 'non-selecting' the applicant based on that second look, 
caused MMM precisely the type of prejudice that the regulatory scheme 
was intended to prevent: the expenditure of substantial sunk costs 
that MMM has no means to recover," Kaplan wrote.

It is unclear whether the state will appeal the ruling. Scott Zoback, 
a spokesman for the Department of Public Health, said the agency is 
reviewing the decision and the medical marijuana program's "top 
priority is ensuring safe, appropriate patient access across the Commonwealth."

The judge said the state may still refuse to issue dispensary 
licenses to the company if it fails to correct deficiencies in its 
bid or pass inspection.

Delahunt, who resigned from the company in September and said he has 
no financial interest in it, on Tuesday called the selection process 
unethical and adversarial.

"The process was outrageous," Delahunt said Tuesday, adding that the 
state's failure to work collaboratively with applicants has delayed 
the opening of any dispensaries.

He said, "How many lives could have been saved if they administered 
it in a way. . . that wasn't adversarial but involved scrutiny, and 
people had the option to choose a well-regulated marijuana product, 
rather than oxycontins that are killing people?"

In June, state regulators notified Medical Marijuana of Massachusetts 
that it was denied licenses for not complying with nonprofit 
regulations because it planned to divert excessive revenues to a 
management company. The state also said it made incorrect 
representations on its application that suggested it had support from 
then-state Senate President Therese Murray.

Delahunt's initial application for a license stated that the 
dispensary intended to give 50 percent of its revenue to a management 
firm controlled by Delahunt and his business partners in the 
dispensary. The company revised that to 25 percent after the Globe 
detailed the original arrangement.

Delahunt said the rejection letter by the state was "unethical" 
because it only referred to the management firm's revenues, without 
listing its expenditures on behalf of the dispensaries. He said the 
company initially expected to operate at a loss.

He also called the allegation that the company misled the state about 
support from Murray "totally absurd."

Noting the state had approved applicants that had similar business 
structures, Judge Kaplan said Medical Marijuana of Massachusetts 
"should be given the opportunity to cure its deficiency by adopting 
reasonable terms equivalent to what would be negotiated in an 
arms-length transaction."

Kaplan's ruling only applies to the company's proposed dispensaries 
in Mashpee and Plymouth.

The judge said the company is no longer in a position to open a 
dispensary in Taunton because another firm won state approval and 
took over its proposed site.

Jonathan Herlihy, the chief executive officer of Medical Marijuana of 
Massachusetts, said he was hopeful that the company could win final 
state approval and be open for business by January in Mashpee and Plymouth.

"I'm going to do everything to make MMM successful for the people who 
want to use medical marijuana for health reasons," he said.

Since Massachusetts voters in 2012 overwhelmingly approved the 
medical use of marijuana, not a single dispensary has opened, despite 
the state's goal of having the first facilities open last summer. 
Fifteen licenses were awarded last year.

The selection process was delayed for months after news organizations 
and losing applicants raised concerns about misrepresentations, 
financial agreements, and conflicts of interest involving several 
companies that won initial approval.

The process sparked more than two dozen lawsuits against the health department.

Delahunt, who is now working with a group focusing on opiate 
addiction, said, "All I know is I was well motivated and I hope that 
medical marijuana moves forward."
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MAP posted-by: Jay Bergstrom