Another aspiring cannabis license applicant has filed a lawsuit against the Maryland Cannabis Administration (MCA) and is seeking an injunction that could further delay the issuance of new adult-use cannabis licenses in Maryland. Unlike a previous lawsuit, which claimed that the denial of Social Equity status was an unconstitutional violation of the dormant Commerce Clause, this new litigation accuses MCA of denying the application from a qualified Social Equity Applicant due to a delay in providing Social Equity verification and computer system errors on the last day the MCA accepted first-round applications.
According to the Complaint that was filed in mid-February, an aspiring license applicant (KG Wellness) did not receive verification of her status as a qualified Social Equity Applicant until 19 minutes before the application deadline on December 12, 2023, despite having submitted an application for Social Equity status on November 101. Once KG Wellness received the verification, she attempted to quickly submit an application into Maryland’s One Stop portal for a standard dispensary license in Talbot County, but when she clicked the button to submit, her computer flashed a “portal timed out during the upload process” notification and the portal closed. According to the Complaint, KG Wellness immediately informed MCA of the issue and emailed the MCA a copy of her application. Unfortunately, the MCA refused to extend the application deadline and KG Wellness’s application was not accepted.
KG Wellness is now seeking a declaration that her application was timely submitted and an injunction to enjoin the MCA from holding the license lottery without first reviewing her application. The Complaint alleges that the MCA violated the Uniform Electronic Transaction Act and violated the Plaintiff’s due process rights. In KG Wellness’s motion for a preliminary injunction, the applicant makes clear that she is only seeking to enjoin the MCA from conducting the dispensary lottery in Talbot County. As of the date of publication, there has been no announcement from the MCA of when they intend to conduct any of the cannabis license lotteries and no decision regarding KG Wellness’s request for an injunction.
For now, Foley Hoag will continue monitoring this case for any developments, and we all will wait for further news from the MCA regarding cannabis licenses. The MCA has announced that it intends to move forward with at least some lotteries on March 14. It is unclear how they intend to proceed in Talbot County.
[1] The Complaint states that Maryland “began accepting requests for [social equity] verification on November 9, 2023, through the Maryland One Stop computer portal operated by the State.” However, according to the
MCA website, Social Equity verifications were accepted from September 8 through November 7, 2023. In addition, applicants who had not “completed the necessary information, including providing any required supporting documentation as of this date were provided until November 10 at 5PM to complete submission.” The license application period for standard and micro grower, processor, and dispensary licenses ran from November 13 through December 12, 2023.
