New Jersey court tosses medical cannabis licensing issue back to state

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A court ruling in New Jersey could prompt regulators to resolve some of the lingering litigation over medical cannabis licensing in advance of the launch of a recreational marijuana program in the state.

A New Jersey appellate panel last week instructed the state Department of Health to reconsider the applications of companies rejected during the 2018 licensing round, according to Law360.

The ruling pertains only to appeals involving the state’s 2018 licensing round.

New Jersey also faces litigation over a 2019 licensing round to expand the state’s MMJ program. The lawsuit led to a freeze over additional licensing.

Licensing litigation could make it more difficult for the state to transition into an adult-use market legalized by voters in early November.

The standstill over additional medical marijuana licensing alone has led to concerns that existing operators won’t be able to meet pent-up demand when an adult-use market launches as soon as 2021.

New Jersey thus far has issued only 12 vertical MMJ licenses, and only 13 dispensaries are in operation.

The appellate panel called the scoring process during the 2018 licensing round flawed and sent the issue back to the state.

The panel added that it wouldn’t be satisfactory for the state to resolve the issue by awarding licenses to all the businesses that had appealed.

“We will not dictate to the department what it is that it should do following today’s remand, other than to hold that it must engage in some sort of additional process for receiving and considering the appellants’ contentions and must explain its determinations on those contentions,” the panel said, according to Law360.

Eight applicants alleged the scoring process was arbitrary.

Dawn Thomas, spokesperson for the state health department, told Law360 that the agency is reviewing the ruling.