A rapid backlash this week forced a politically connected Baltimore County medical cannabis company on Friday to abandon a lawsuit it filed just four days ago to stop medical marijuana regulators from awarding several new licenses to future competitors.
Curio Wellness stated in its lawsuit filed Monday that the Maryland Medical Cannabis Commission’s new licensing process violates existing state regulations and jeopardizes the more than $10 million the company has invested to grow, process and sell marijuana products.
But reaction was swift and fierce from state lawmakers, regulators, other cannabis growers and patients. On social media and in other public venues, Curio’s critics said the lawsuit would derail a yearlong effort to increase diversity in an industry that largely cut out minorities from winning licenses. An “Occupy Curio” event organized by critics is scheduled for Saturday at the company’s cannabis store in Timonium.
“It’s simply not true this lawsuit was intended to challenge the effort to improve diversity in our industry,” said Curio founder and CEO Michael Bronfein, a prominent national and state Democratic Party supporter, in a statement Friday. “In fact, Curio has always supported this effort and will continue to do so.”
Bronfein said he decided to withdraw a lawsuit whose merits he still supports but that has thrust him and his company into a swirl of accusations that he and Curio do not support diversity.
“I raised my children here and built my life here, and nothing hurts me more than being at the heart of a conversation that divides our community,” he wrote. “I have seen the concerns from our customers on social media about racial insensitivity. I have seen comments and accusations that in no way reflect the values of this company and are not an accurate depiction of the hardworking people of all races and ethnicities I work with every day.”
University of Baltimore President Kurt Schmoke said Bronfein “was upset because some people called him a racist.”
“Nothing could be further from the truth,” Schmoke said. “Whatever issues one may have business-wise, you can debate that. But in terms of his character — he’s an outstanding citizen and absolutely not a racist.”
Curio’s lawsuit does not address diversity. Instead, it states that investors spent millions of dollars on the operation based on regulations that promised a “strictly limited number” of licenses. To award more licenses would jeopardize the investments of Curio and 13 other companies that have grower licenses.
The company, which also holds licenses to process cannabis products and to sell them, even acknowledged that the commission can award new licenses. But the lawsuit stated that the commission did not follow regulations that state that any such awards must be based on a market analysis that has not been conducted.
Commission Chairman Brian Lopez, who was named as a defendant in Curio’s lawsuit, said the law hashed out last year states that a demand study cannot be conducted until 2024 when the industry has “had time to mature.”
Lopez and Del. Cheryl Glenn, a Baltimore Democrat who has been involved for years in developing regulations for the industry, said that the state published a disparity study that examined the market and showed that minorities are disadvantaged.
Minority firms lost out in the first round of bidding for 15 medical marijuana growing licenses. Based on the disparity study’s findings, the General Assembly passed compromise legislation in 2018 to expand the marijuana growing operations to try to give minorities an ownership role.
Glenn said Curio and Bronfein have been “standing alone” with this lawsuit and that the rest of the industry “demands diversity.”
“No one wants in 2019 to have a trillion dollar industry be controlled by all white men,” Glenn said. “We have had widespread support.”
The Maryland Wholesale Medical Cannabis Trade Association, which represents growers and processors, rejected the lawsuit Monday and said “the current application process should continue.” One grower, the group said, “does not reflect the desire of the majority of companies in the industry” to support more diversity.
Glenn said Bronfein’s opposition to last year’s legislative compromise shocked her.
“I said, ‘Are you kidding me?’” Glenn said. “We don’t have any diversity in this industry and you want us to wait while you create a monopoly.”
Bronfein said in his statement that he supports efforts to improve diversity.
“At Curio, diversity is not just a goal we mindlessly put on paper, it’s not just about affirmative action or corporate social responsibility,” he wrote. “It’s who we are. It’s the values we live by. It’s our culture — from management to our store floor.”
He wrote that 36 percent of Curio’s employees are female and 38 percent are African American.
“But over the last several days I have heard from my team that they are hearing from friends and family that they work for a company that doesn’t want to see economic benefits extended to all corners of our diverse state,” he wrote. “My commitment to diversity is not a business decision but a personal commitment rooted in the belief that it’s simply the right thing to do.”
He said he and his wife established a scholarship at the University of Baltimore that awards between two and four scholarships for African American students majoring in accounting.
William Jews, a prominent African American businessman and former chief executive of CareFirst BlueCross BlueShield in Maryland, also issued a statement saying that Bronfein has long been an advocate for diversity.
“I have known Michael Bronfein for more than 25 years in business, professional and personal capacities,” Jews said in a statement. “Based on our many hours of conversation and my observations of his behavior I can say without equivocation that I am unaware of any comments or representations that would suggest a hint of bias. In fact, in my opinion, his advocacy for diversity and inclusion is consistent and strong, and he has sought my opinion on occasions to insure his lens was clear … and it always has been.”
Bronfein also wrote in his statement that the state has failed to uphold its commitment to the “regulatory promises it made to the people who invested in every Maryland medical cannabis cultivator, including Curio.”
“We sought to ensure that any expansion was conducted in accordance with demand, which is exactly what we were promised by the law when we agreed to invest in this important public private health program,” he wrote. “What matters most to me now and in the years to come is ensuring that Curio continues to be guided by its mission. Every employee should be proud to go to work every day. Every investor should be confident in doing business with us. And most importantly, every patient should feel welcome and safe when they choose Curio in their path to wellness.”
Scott Williams, owner of Hawaiian Cannabis Consulting, said he was canceling the “Occupy Curio” event that he began to organize after seeing “significant backlash” from patients who feared Curio’s lawsuit could limit competition that helps keep prices for products lower.
“Patients took it personally,” Williams said.