Lawsuit challenges racial quota for growing licenses

A Hilliard-based company that failed to win a state license to grow medical marijuana has filed a lawsuit against the state, arguing that its bid was rejected because of “an unconstitutional racial quota.”

PharmaCann Ohio Inc., one of dozens of applicants for 12 provisional licenses for large-scale growing operations, filed the lawsuit Dec. 13 in Franklin County Common Pleas Court.

The company has requested a temporary restraining order to prevent the state from using racial quotas in awarding the licenses. Common Pleas Judge Charles Schneider has yet to rule on the motion.

The lawsuit states that PharmaCann, under the ranking system created by the state Department of Commerce, finished 12th among more than 100 applicants but was bumped from the list of successful bidders by a requirement that 15 percent of the provisional licenses go to minority-controlled companies.

“Only because of (the racial quota), the lowerscoring Harvest Grows and Parma Wellness Center were announced as being awarded provisional (large-operation) licenses and plaintiff was denied one,” according to PharmaCann’s filing.

The requirement that minority-controlled companies be included among those granted licenses was a provision of legislation that legalized medical marijuana in Ohio in September 2016.

Such a provision “cannot be enforced unless the preference is supported by a study with historical data demonstrating discrimination in the industry” and includes “monitoring to determine when to end a temporary quota based on race,” the lawsuit states. The law’s quota “is unsupported by any study and is permanent in nature” placing it in violation of the equalprotection clause of the 14th Amendment.

The Department of Commerce has responded by filing a motion for dismissal of the lawsuit, arguing that PharmaCann has failed to pursue an appeal with the department and the quota isn’t a violation of the U.S. Constitution because “there is no federal right to receive an Ohio license to cultivate marijuana.”

The winning bidders were announced Nov. 30. Medical marijuana is expected to be available to Ohio consumers later this year.

“Only because of (the racial quota), the lowerscoring Harvest Grows and Parma Wellness Center were announced as being awarded provisional licenses and plaintiff was denied one.”

— PharmaCann