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Legislative Black Caucus: Hogan should intervene in medical cannabis licenses

Losing applicants cite lack of diversity among companies picked by Maryland medical cannabis commission.

The head of the Legislative Black Caucus of Maryland is asking the governor to intervene in the awarding of medical cannabis licenses because the selected companies lack diversity, denying minorities the opportunity to get in on the ground floor of an emerging industry.

"I am completely disappointed with the medical marijuana commission and the decision that they have made in terms of awarding licenses," said Del. Cheryl D. Glenn, chairwoman of the black caucus. "Clearly, there was no effort at all to factor in minority participation and make sure that it's inclusive of everybody in the state of Maryland."

Members of the black caucus and others have raised concerns that the 15 preliminary licenses for growing medical cannabis and the 15 licenses for processing the drug, which were awarded this month, mostly went to companies led by white men. Lawmakers and some losing applicants are mulling legal action.

According to the Maryland Cannabis Industry Association, one license went to an African-American-led company and two went to companies led by women. Some critics note that African-Americans are disproportionately prosecuted for marijuana use and now are being shut out of profiting from the legalized industry.

Members of the Legislative Black Caucus plan to discuss the issue with Gov. Larry Hogan during a meeting Thursday.

"We're hoping the governor will work with us to fix this," said Glenn, a Baltimore Democrat. "I think this would be a black eye on the state of Maryland, and I'm sure the governor doesn't want that for this brand-new industry."

Hogan spokesman Douglass Mayer said the governor is concerned about diversity, but there's nothing he can do about the decisions made by an independent government commission.

"The governor's office has absolutely zero role in this process," Mayer said. "The legislation was passed under a previous administration. Every single commissioner was appointed by the previous administration."

The state cannabis commission received 146 applications for licenses to grow the drug and 124 applications for licenses to process it. The applications, with identifying information removed, were reviewed and ranked by Towson University's Regional Economic Studies Institute before the commission voted.

The commission plans to reveal the rankings of the top applicants this week, but not the scores or reasoning behind the rankings.

Racial diversity was not a factor in deciding which applicants were awarded the licenses. The commission did take geographic diversity into account, bumping up two lower-ranked companies in order to improve the geographic distribution of the licenses, but did not say which companies got the leg up.

Darrell Carrington, executive director of the Maryland Cannabis Industry Association, said it was frustrating that so few minority-led companies won licenses — especially because scant information on how decisions were made has been publicly revealed.

Carrington, a lobbyist and consultant, worked with companies that were successful and weren't successful in getting licenses. With the amount of effort and money put into the applications, he said all companies deserve to know where they stood in the evaluation process.

"It's very simple: The state must immediately release the rankings, the scoring and the evaluation tools, or people are not going to have confidence in the process," Carrington said. "This is not up to them to keep it a secret."

Dr. Paul W. Davies, chairman of the medical cannabis commission, said the selections were made without commissioners knowing the identity or background of the applicants. He said he's "very happy" that some of the winning companies are run by women or racial minorities.

The commission does not have complete demographic information about the companies, which will be required to submit annual reports listing their minority owners and employees once they are up and running, said Vanessa Lyon, a spokeswoman for the commission.

Davies said the panel relied on the independent rankings to remove any bias from the licensing process.

"We wanted it to be independent and uninfluenced by the commission as much as possible," Davies said. "We're very happy with the way the process has worked."

The commission relied on advice from the state office of the attorney general, which said race can't be considered in awarding licenses if there's no proof of historic discrimination in similar programs in Maryland. This is the first program of its kind.

But the law that legalizes medical cannabis in Maryland requires the commission to "actively seek racial, ethnic, and geographic diversity" among licensees.

Glenn, who was a co-sponsor of the legislation passed by the General Assembly in 2013, said the black caucus could consider a legal challenge on the grounds that the diversity requirement was not met.

The commission plans to announce the rankings of the top 20 grower license applications and the top 30 processor license application this week.

Dr. Greg Daniel, who had proposed growing and processing medical cannabis in Easton, said he's disappointed that the winning companies lack racial diversity. His company, Alternative Medicine Maryland, did not receive a license and is seeking reams of information about the decision-making process.

Daniel, an African-American doctor from upstate New York, is the majority owner of Alternative Medicine Maryland. Two of his local investors also are black, he said.

"It boils down to an issue of fairness," Daniel said. "We have had to face many issues in the country ... with regards to lack of diversity in housing, jobs and everything else. The state had an opportunity to begin to address that concern, and they totally missed the boat."

Daniel questioned why the state's medical cannabis commission considered geographic diversity in selecting permit winners, but not racial diversity.

"How could the commission consider one type of diversity and not another? It gives pause to the process when only one type is considered," Daniel said.

He said it's frustrating that so few minorities got licenses while so many African-Americans are prosecuted for using the drug.

"Why are we persecuted for the use of it on one hand, then when there's a benefit to be achieved from the medical management of it — especially when you have black physicians who are quite concerned — you cannot be found," Daniel said.

Alternative Medicine Maryland sent a lengthy Maryland Public Information Act request to the cannabis commission on Friday afternoon, seeking more information about the process, including how the applicants were scored, which applicants have minority ownership, and any correspondence from politicians supporting applicants.

John Pica, a lobbyist representing Alternative Medicine Maryland, believes the commission should have considered race as a factor, given that minorities, including African-Americans, have largely been shut out of the medical cannabis industry across the country.

"What we saw was these licenses went to major connected players in the state of Maryland. ... There should have been some grow licenses given to African-American businesses," Pica said.

Some say geographic diversity wasn't achieved, either.

Jim Martin, who was not awarded a license to grow medical cannabis on his farm in St. Mary's County, noted that none of the growing licenses were issued in Southern Maryland and just one processing license was awarded in that part of the state.

Martin said other rural parts of the state — Western Maryland and the Eastern Shore — each have more grower and processor licenses than Southern Maryland.

He also suspects that none of the winning applicants have a farming background.

"The way they did this is totally not right or fair. There is not one blue-collar applicant out there in their decision," he said.

Alternative Medicine of Maryland put together a strong application, Pica said.

"I don't know what else this group could have done to put together a winning application," said Pica, who is considering appealing the commission's licensing decision in court.

Davies, the commission chair, acknowledged legal challenges are possible but believes the commission's decisions will hold up.

"Every step of the way, we've sought multiple legal opinions to make sure what we're doing is appropriate," he said.

pwood@baltsun.com

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