Bill allowing cannabis licenses advances

ATLANTA — In a move to drop lawsuits from companies that weren’t selected for medical cannabis licenses last year, a Georgia House committee advanced a bill that would allow more licenses.

House Bill 196, sponsored by Republican Rep. Alan Powell, passed in the Georgia House Judiciary Non-Civil Committee in a 7-5 vote after being sent back to the committee with slight alterations.

In July 2021, the Georgia Access to Medical Cannabis Commission — created through a 2019 law — issued two Class I licenses and four tentative Class II licenses for medical marijuana after scoring more than 70 applicants.

The tentative licenses are still on hold due temporary restraining orders issued after lawsuits from nine applicants that weren’t awarded licenses alleging unfair and inconsistent scoring by the commission.

Powell said he, too, believes that the scoring was “not right,” but the commission’s scoring records are sealed from public access as permitted by the commission’s bylaws.

“I will still refute that claim that these people who file suit, they’re the ones that are keeping it tied down right now, because they had rights to litigate,” Powell said. “They felt they were wronged, (they) had their investments into their applications. So (the bill) is all about moving forward.”

HB 196, if approved, would allow the commission to award up to four more Class I licenses that allow growing, cultivating and manufacturing THC oil in an indoor space no more than 10,000 square feet; and up to seven more Class II licenses, that allow up to 50,000 square feet of indoor space for growing, cultivating and manufacturing low THC oil. The bills state the total number of Class I and II licenses can’t exceed 14.

During a hearing for the bill, attorneys for the companies with official and tentative licenses from the commission urged against its passage.

Jeremy Berry of Trulieve Georgia Inc. — which received one of the Class I licenses and will soon operate out of Adel, Ga. — said the law would set bad precedent for future bidders in Georgia. Trulieve is waiting on its dispensary license from the commission.

“We should not reward protesters with additional licenses. They knew the rules going into procurement,” Berry said at a Feb. 22 subcommittee hearing. “…In 2014, I represented someone bidding on the state health benefit plan. My advice will be keep suing until the legislature throws you a lifeline because that will be the message if this bill passes.”

Berry referenced Administrative Law Judge Stephanie Howells’ decision in June that ultimately ruled against the cases from the protestors.

“They had hearings, they had opportunities to submit evidence and without fail, the judge denied every one of those protests. It is time to move on, and it is time to bring low THC oil to the patients of Georgia who deserve it desperately,” he said.

Derek Bauer, attorney for FFD Georgia LLC, one of the four companies tentatively awarded a Class II production license, agreed. He implied that state lawmakers should not tinker with legislation that is under litigation in court.

“We have a superior court judge who’s about to decide whether Judge Howells and the commission got it right or got it wrong. and we have court of appeals judges that are going to decide whether the process that you all decided would be used to do those appeals was right or wrong,” Bauer said. “If you pass this bill, what you are going to do is merely invite more litigation because you are changing the rules of the road midstream. All 70 of those applicants relied on the rules that you created. They followed them.”

Sam Olens, attorney for Botanical Sciences LLC, which will operate in Glennville, agreed with the precedent the bill could set. He also argued that the protestors had low scores and may not be suitable to be in the medical marijuana industry to assist the some 20,000-plus Georgians who have a medical card to receive the product to treat illnesses.

Botanical Sciences received a 971 out of 1,000 from the commission, while one of the protestors received a 578, Olens said. He compared the score to taking the law school admissions test.

“That doesn’t get you to becoming a lawyer in Georgia. That doesn’t get you much, but it would have given them a license to grow medical marijuana,” Olens said. “It’s really important that in fact, there’ll be a rigorous and thorough process to determine who gets the licenses because this is a quality health issue. When those patients buy the low THC oil, you as a representative of the state are telling them it’s safe.”

But because of the limited access to records by fellow applicants and redacted application information, Kristen Goodman, a lawyer representing four of the losing bidders, said her clients may be just as qualified for a medical marijuana license as those selected by the GMCC.

“Judge Howells had no business determining without any expert testimony whether these applications had been granted properly, whether they had been evaluated properly,” Goodman said. “If she had, maybe some of the testimony you’ve heard today about the scoring disparities would also be eliminated because they have assumed every time they’ve told you about low scores, that their scores would have been the same. But what we know is that this was a flawed process, and that there is no guarantee that any of these scores would have been the same.”

Responding to threats of potential lawsuits from the current licensees if HB 196 passes, Goodman pointed to the contract signed by the licensees selected by the committee. The contract, in part, states that the licensees agree to abide by all rules, laws and regulations “as amended” by the GMCC or the general assembly.

“There are very specific limitations in these contracts and very specific statements that every person receiving a license has to abide by any changes made by this body or the GMCC,” Goodman said. “They don’t get to say you can’t change the rules. That’s not a fair statement of the law. It’s not an accurate statement of the law. and it’s not an accurate statement of the contract that they’ve already signed.”

The current version of HB 196 approved Feb. 27 by the committee would allow applicant appeals to go through the Georgia Statewide Business Court, and allow licensees to sell products from others manufacturers. The bill would also make the commission subject to the Administrative Procedure Act and laws governing open meetings and open records, and establishes a legislative oversight committee.