Pot License Denial Isn’t ‘Contested Case,’ Ga. Panel Says

By Theresa Schliep ·  Listen to article

Law360 (October 13, 2023, 9:11 PM EDT) — The Georgia Court of Appeals on Thursday rejected a challenge from a group of cannabis companies to the denials of their bids for medical cannabis production licenses, saying state administrative law doesn’t allow the courts to review such decisions.

The three-judge appellate panel said the Georgia Administrative Procedure Act does not allow for court challenges to cannabis licensing decisions by the Georgia Access to Medical Cannabis Commission, or GMCC.

Under state law, judicial review is only available for those disputing an agency’s decision in a “contested case,” the appeals court said.

A post-award protest “differs from a contested case because the protest here is not designed to resolve which applicant is awarded a production license; instead, it merely offers the protestor the opportunity to demonstrate some error on the part of the GMCC in the evaluation and selection process,” the opinion said.

A few of the companies’ challenges were also mooted by the GMCC’s issuance of some of the licenses to other businesses, according to the opinion.

The companies sued after the GMCC rejected their bids for Class 1 licenses, which permit 100,000 square feet of indoor cultivation, and Class 2 licenses, which permit 50,000 square feet of cultivation.Those licenses allow businesses to grow cannabis for low tetrahydrocannabinol oil and produce THC products.

The GMCC in 2020 began the process of selecting companies that the state would contract to produce THC oil and released instructions for companies to pursue protests if they were denied licenses, the opinion said. Those protests would include oral argument and briefing.

GA Bioscience Research Inc., Curaleaf Georgia Holdings LLC and ACC LLC sought both Class 1 and Class 2 licenses, according to the opinion, while Symphony Medical LLC and Pure Peach Organic Inc. sought just Class 2 licenses. They were denied, and the companies pursued court challenges under the Administrative Procedure Act, according to the opinion.

The appeals court said that the GMCC has already issued the Class 1 licenses, rendering moot the court challenges based on that category.

And the Class 2 challenges can’t get reviewed by the court because they lack the attributes of a “contested case” under the APA, since there weren’t subpoenas or witnesses, among other things, the opinion said.

Kristen Goodman of Hall Gilligan Roberts & Shanlever LLP, who is representing Symphony Medical, told Law360 she and her client are “disappointed” with the ruling and are reviewing post-judgment options.

Jake Evans of Greenberg Traurig LLP, who is representing GA Bioscience, likewise said they’re evaluating their appeal options. Jonathan L. Bledsoe of The Minor Firm, representing ACC, said the licensing issue remains because of still-pending litigation.

Meanwhile, S. Derek Bauer of BakerHostetler, an attorney for one of the businesses that successfully got a license, told Law360 the decision gets “Georgia another key step closer to getting more medicine to Georgia citizens.” 

Vincent R. Russo of Robbins Alloy Belinfante Littlefield LLC, representative for another successful business, said “it is unfortunate that these groups have used the judicial process in a manner to intentionally delay the issuance of the licenses.”

Samuel S. Olens, representing Botanical Sciences LLC, declined to comment.

Representatives for the other cannabis businesses and the Georgia Attorney General’s Office, who is representing the GMCC, did not respond to requests for comment.

Earlier this year, legislation that would have more than tripled the number of cannabis cultivation licenses in Georgia and mooted litigation over the handling of the applications failed by one vote. Georgia’s Hope Act created the GMCC and allows it to issue six licenses to produce the THC.

Symphony Medical is represented by Kristen W. Goodman and Keri M. Martin of Hall Gilligan Roberts & Shanlever LLP.

GA Bioscience is represented by Jake Evans and Mikayla Mobley of Greenberg Traurig LLP.

Pure Peach Organic is represented by Les. A. Schneider, Rhonda L. Klein and Sheri E. Oluyemi of Wimberly Lawson Steckel Schneider & Stine PC.

Curaleaf Georgia is represented by John P. Jett and Ava J. Conger of Kilpatrick Townsend & Stockton LLP.

ACC is represented by Jonathan L. Bledsoe and Azurae K. Orie of The Minor Firm.

FFD GA Holdings LLC is represented by S. Derek Bauer, Kurt E. Lentz and Jacqueline T. Menk of BakerHostetler.

The GMCC is represented by Christopher M. Carr, Margaret K. Eckrote, Daniel Walsh and Jeffrey W. Stump of the Georgia Attorney General’s Office.

Botanical Sciences is represented by Samuel S. Olens, Mark A. Silver and Sean M. Kirwin of Dentons US LLP.

Trulieve GA Inc. is represented by Jeremy T. Berry and Joseph J. Siegelman of Chilivis Grubman LLP.

Natures GA LLC is represented by Jeffrey A. Zachman and Sarah E. Trevino of Dentons US LLP.

TheraTrue Georgia LLC is represented by Vincent R. Russo, Matthew T. Parrish, Javier Pico Prats and Anna Edmondson of Robbins Alloy Belinfante Littlefield LLC.

Treevana Remedy Inc. is represented by William C. Collins Jr. and Joseph H. Stuhrenberg of Burr & Forman LLP.

The cases are Symphony Medical LLC v. FFD GA Holdings LLC et al., GA Bioscience Research Inc. v. Georgia Access To Medical Cannabis Commission et al., Pure Peach Organic Inc. v. FFD Holdings LLC et al., Curaleaf Georgia Holdings LLC v. Georgia Access to Medical Cannabis Commission et al. and ACC LLC v. Georgia Access To Medical Cannabis Commission et al.; case numbers A23A0862, A23A0877, A23A0920, A23A1017, A23A1018, A23A1091 and A23A1092; in the Court of Appeals of Georgia, Fourth Division.