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Medical Marijuana

JM Farms sues state for nixing license

Says it ‘arbitrarily and capriciously’ rejected group’s application

SOUTH DEERFIELD — A locally based nonprofit that wants to sell medical marijuana in Franklin County has sued the state for “arbitrarily and capriciously” rejecting its application.

JM Farm’s Patient Group is suing the state Department of Public Health to halt the state medical marijuana selection process and to explain why it didn’t grant a license to JM.

The nonprofit has joined two other groups from the eastern part of the state, Beacon Wellness Center Inc. of Walpole and Mass Organic Therapy of Middleboro, in its complaint filed in Suffolk Superior Court in Boston on Monday.

In its suit, the unsuccessful applicants seek a declaration that “DPH acted arbitrarily and capriciously and without substantial evidence in not approving them in the first round of applications, by not providing any reason for those decisions, by not allowing them to participate in the second round of applications and by awarding licenses to other applicants who were less qualified.”

The nonprofits have requested an injunction mandating that the state provisionally approve their applications to run medical marijuana dispensaries and an injunction ordering the state to allow each nonprofit to submit applications for one of the open counties. The group has also asked the state be prohibited from awarding any provisional licenses in the open counties until their applications have been received and reviewed.

The applicants are also asking for an order to void the state’s final decision to deny Beacon, JM Farms and Mass Organic Therapy licenses to operate dispensaries based on its “capricious and arbitrary nature” and an award for fees and costs incurred by the nonprofits throughout the application process.

The state Department of Public Health’s Media Relations Manager Anne Roach released a statement in response, saying, “We are pleased that multiple courts have validated our comprehensive process to ensure patient access and public safety across the Commonwealth. We are focused on moving forward with our inspection phase and the open county process to fulfill the will of voters.”

Stopping the process

“We want the state to stop the process right now and re-look at the individuals that were deferred and identify why they deferred,” JM Farm Executive Director Theresa Creeden of Stoughton said. “Tell us why we didn’t get a license.”

The state has told the groups they can reapply for January 2015, but the groups argue it is unfair for them to redo their applications and pay another $30,000 fee before knowing what was wrong with their original applications, Creeden said.

The complaint comes within days of the Friday deadline for four companies specially invited by the state to apply for seven open counties, including Franklin County. Patriot Care Corp. was invited by the state to apply for a license for a dispensary in Greenfield at the American Legion building on Legion Way.

JM’s suit is one of several filed against the state for its selection process, which has triggered complaints about misstatements from other applicants and conflicts of interest and political connections.

It is been nearly two years since voters approved marijuana for medicinal purposes, making the state the 18th in the nation to allow a medical marijuana program. The state is required to have one dispensary and no more than five per county.

On Jan. 31, the state announced that it had granted preliminary approval to 20 nonprofit dispensaries, but after complaints of the process a more detailed review of applications was conducted. In June, the department announced that it had rejected nine of those original applications. Only 11 dispensary applicants were allowed to move forward with their plans with first dispensaries to potentially open this November.

In the complaint, the three companies allege that each received an evaluation from a panel of independent experts that said they were qualified or highly qualified. The three groups were among the highest scoring.

Mass Organic Therapy received a score of 158, the second highest overall score. Beacon scored 152, the fourth highest and JM Farm scored 141 and tied for 14th highest.

In January, the groups received identical letters stating their application was “deferred from proceeding further in the review process pending resolution of a matter discovered on a background check involving an individual identified in your application,” the complaint states. Each group was later told by the state DPH if they severed ties with the individual, their application would continue to be processed.

The three groups have also alleged that they have requested informal briefings with the state DPH and documentation relaying to the state’s actions against them. But each time, the state responds that they have not been selected and can reapply in 2015.

The groups argue that the failure to provide the informal hearings is a violation of the DPH’s regulations.

JM Farm — led by Creeden and Chief Operating Officer Nicholas Spagnola of Brighton — was the highest scoring of four applicants in Franklin County.

The group applied to open a dispensary and cultivation center in a 15,000-square-foot space at 10 Greenfield Road, which it still leases and pays rent on.

According to the complaint, the state advised JM Farm that it was considered a highly qualified applicant. But the group was deferred while provisional licenses were awarded to lower scoring applicants and Franklin County was left without a provisional license.

On Feb. 18, JM Farm met with the state DPH Assistant General Counsel Kay Doyle at the request of the state. At the meeting, Doyle advised JM Farm that the only reason its application was not approved was that the state was concerned about a “reported incident” involving a member of the executive team — namely an assault and battery and witness intimidation charge against James Pasiecnik of Whately. The case is still pending with a pretrial conference scheduled for Thursday.

Doyle recommended that JM Farm remove Pasiecnik from its management and resubmit its application with that change, the complaint alleges.

Doyle stated that if this was done quickly JM Farm’s application would be “provisionally approved for Franklin County and added to the list of applicants given provisional approval,” the complaint states. Two days later, JM submitted an updated application.

JM Farm also argues that the state approved provisional licenses for other applicants with whom the state had similar issues regarding the backgrounds of certain personnel. But once those applicants removed the individuals, they were granted provisional licenses unlike JM Farm.

Another lawsuit

In a lawsuit filed in state Superior Court in Boston on Tuesday, Brighton Health Advocates argues that the state’s June 27 decision to reject its application was not based on substantial evidence and should be voided.

The company, which proposed a marijuana facility in Fairhaven, had been among 20 applicants given preliminary approval in January to open a dispensary. In June, state regulators announced they had narrowed the list of applicants to 11 applicants following additional reviews.

Brighton Health Advocates accuses the state Department of Public Health of making “increasingly onerous demands for information to search for a pretext” to ultimately reject its application.

The Associated Press contributed to this story.

You can reach Kathleen McKiernan at: kmckiernan@recorder.com or 413-772-0261 ext. 268 On Twitter, follow @RecorderKatMcK

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