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Medical Marijuana Sales Applicant Sues State

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An applicant for a medical-marijuana dispensary and cultivation site has filed a lawsuit accusing the state of arbitrarily allowing some, while denying others, state operating licenses.

The lawsuit by Medical Gone Green, Inc., of Hobbs names Gov. Susana Martinez and Health Secretary Catherine Torres as defendants, alleging that the state failed to provide due process and equal protection in its licensing program for the production of medical marijuana, causing the plaintiff’s business attempt to fail.

“The Department of Health has … manipulated the licensing scheme and finally shut down (Medical Gone Green, Inc.),” said Reber Boult, an Albuquerque-based attorney for the plaintiff. “My client has had an application pending for almost three years … and then they shut down the production licensing totally, so my client was never able to open the business.”

A call to the DOH seeking comment was not immediately returned.

According to a lawsuit filed in state District Court, the plaintiff applied for a license to produce and distribute medical marijuana in October 2009 and was denied by the DOH on Feb. 28. At that time, only four of 102 applicants were told that their application met criteria, but even they did not get a license, being told that the state was not adding any new producers.

The lawsuit states that (DOH) practice is to not to disapprove any applications; rather, if an application is found to be deficient, a check mark would appear next to one of 31 items, with an explanation as to why it did not meet the criteria. The applicant would then be given a limited time to correct the deficiency.

But after the plaintiff submitted its final corrected version January 2011, it alleges that some of the rejections found deficiencies in items that were previously deemed adequate.

“The Department (of Health) also said that simply complying with the regulations was not sufficient,” the lawsuit stated. “Rather it was looking to license only ‘the best’ applications or applicants.

“The attributes of ‘best’ are nowhere publicly stated.”

Boult contends that this is an equal protection issue.

“They pick out one category, who knows how they define that category, to give licenses to while denying licenses to another category – we don’t know what those categories are, either,” Boult said. “This is one of the worst examples of licensing – picking and choosing who gets a license and who doesn’t – I’ve ever seen.

“To put it in one word, it’s arbitrary – and that’s corrupt or inviting for corruption.”

The plaintiff is suing for its license to produce medical marijuana, while seeking damages for loss of revenue and expenses. It is also seeking a declaratory judgment that the DOH’s licensure procedure is deficient.

According to the lawsuit, only 23 licensees are available to serve about 6,000 New Mexicans who have been approved to use medical marijuana.

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