Days after the Maryland Medical Cannabis Commission rolled out a new application to license four more medical cannabis growers in hopes of boosting production and industry diversity, one of the state’s 14 existing producers, Curio Wellness, is taking legal action to block the process.
In a lawsuit filed yesterday in Baltimore County Circuit Court, Curio says regulators have violated their own rules and promises to the first batch of licensed growers by not conducting a supply-and-demand study to prove a certain need for more weed.
“There is no needs study supporting, and no need—demonstrated or otherwise—for, those additional medical cannabis grower licenses,” the lawsuit says. “There currently exists a sufficient supply of medical cannabis and the current production and production capacity is more than sufficient to meet current and all reasonably projected or anticipated needs for medical cannabis.”
Regulators, growers and patients are none too pleased. Max Davidson, executive director of the Maryland Patient Rights Association advocacy group, called the action “despicable.”
“This lawsuit is just their next attempt to corner the market to screw over patients solely to line their pockets,” he wrote in a message to Baltimore Fishbowl. “Are they afraid [people of color] will grow better cannabis at a fairer price?”
Davidson and others have called for patients to boycott Curio Wellness products unless the company drops its lawsuit, which was first reported by The Sun.
Mackie Barch, chair of the Maryland Wholesale Medical Cannabis Trade Association and president of Culta, another vertically integrated Maryland cannabis company, said in a statement that the trade group “rejects” the lawsuit, and the new application process should proceed as planned.
“We fully support the ongoing efforts by the Maryland Medical Cannabis Commission and the Maryland legislature to achieve diversity through the current application process,” the statement said. “The actions of a single grower does not reflect the desire of the majority of companies in the industry to honor HB2 and support achieving a more inclusive cannabis industry in Maryland.”
Maryland Medical Cannabis Commission (MMCC) Executive Director Joy Strand said regulators are “very disappointed by Curio’s actions in filing this lawsuit.”
“The Commission’s full resources have been focused on outreach, education and application development in an effort to increase minority and women participation and inclusion in the program,” she said in a statement. “It is counterproductive to have to defend this lawsuit, when our efforts and attention should be focused on the new application process.”
MMCC Chairman Brian Lopez, named alongside the commission as a defendant in the suit, noted they’ve worked with lawmakers—including the Legislative Black Caucus of Maryland—and the industry for most of the last year on the effort to add more producers. “It is imperative for the new licensees to enter this industry as soon as possible,” he said. “The application and licensing process will continue as planned.”
Based on York Road in Lutherville and owned by Democratic benefactor Michael Bronfein, Curio Wellness has been growing, processing and dispensing cannabis since receiving its license from regulators in 2017. (The company also has higher-end offerings like a spa with acupuncture, massage and more, as well as a “holistic pharmacy.”)
But while Curio and 13 other companies (a 15th was pre-approved but later denied a full license) got the green light to grow, many, including the black caucus, balked early on when they learned not a single one of the firms was black-owned.
Last year Gov. Larry Hogan enacted legislation sponsored by Del. Cheryl Glenn (D-Baltimore) to create up to four new additional grower and 10 new processor licenses and roll out a new application accounting for minority and female ownership when picking new licensees. After much deliberation in 2018, and a few weeks’ delay this year, the new application went live this past Monday.
Curio Wellness spokesman David Nevins said in a statement that the firm “was compelled to file this action to protect their business investments and rights,” and to “enforce” MMCC regulations calling for Maryland to prove a need for added supply before opening up a new round of applications.
The lawsuit notes Curio has invested “in excess of $10 million” into its operation based on assurances that the state wouldn’t add more growers without that proof.
“Curio has no issue with additional licenses being issued,” Nevins’ statement said. He added that Curio “has been fully supportive of diversity and inclusion in all aspects of the industry. But that diversity and inclusion needs to be fostered within the agreed upon legal and procedural guidelines.”
Curio doubled down on its reasoning for the filing in another statement put out Wednesday afternoon on social media. “We did what we thought was right to uphold the law we all agreed on when the medical cannabis program was launched in Maryland,” it said.
Maryland did undertake a disparity analysis of its cannabis industry in 2017 under orders from Hogan. It found minorities are disadvantaged in the industry, and it’s therefore OK to consider race in applications for new cannabis-growing licenses.
While staying tightly regulated, Maryland’s industry has blossomed since the first dispensaries came online in December 2017. Revenue topped $96 million in its first full year, and as of this month there are nearly 62,000 certified patients buying cannabis from more than 70 shops operating across the state.
The commission’s new application round remains open through May 24, and regulators will evaluate submissions thereafter until July 24, according to a timeline sent out earlier this week.
This story has been updated.