Selection of Marijuana Alternative Treatment Center Operators Must Go Back to the Drawing Board

In re Application for Medical Marijuana Alternative Treatment Center for Pangaea Health & Wellness, LLC, ___ N.J. Super. ___ (App. Div. 2020). On this relatively quiet day before Thanksgiving, the Appellate Division issued an opinion, by Judge Fisher, that overturns the Department of Health’s selection of operators of Alternative Treatment Centers “to grow, process, and dispense marijuana as part of the State’s Medicinal Marijuana Program.” The panel found that the Department’s system for scoring applicants produced “arbitrary results that have gone unexplained” by the Department. The deficient scoring process led to other errors as well.

This case actually comprises eight separate appeals. Judge Fisher’s comprehensive opinion, which discusses in detail the numerous issues raised by the parties, runs 75 pages. It is well worth reading in full.

The parties disputed the applicable standard of review, but Judge Fisher stated that even under “the most deferential standard-of review,” the results under the Department’s flawed scoring could not stand. Some of the appellants, who were all applicants who did not “make the cut,” asked the court to expand the list of approved operators by adding them. The number of operators had been limited by law to six, and Judge Fisher declined to alter that, stating that “it is not our place to alter the amount of permits that may issue; such questions reside with the Legislature and whatever direction given by the Legislature to the Department.”

Moreover, Judge Fisher said, given the pervasive deficiency of the scoring process, “it is far from clear that any further proceedings will move any appellant into the top six.” Accordingly, the Appellate Division vacated the decisions of the Department and remanded for “further administrative proceedings in conformity with the spirit of this opinion.” Absent a petition for certification to the Supreme Court, let the next round of the battle among putative operators begin.