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Cannabis conundrum (updated)

A technical problem with the state’s ATC license review process has left some applicants in limbo

It was another patient who introduced Cindy Ortiz to medical cannabis, about a year into her treatment for breast cancer. She could barely eat and had trouble gaining weight, and her hemoglobin was low enough to necessitate frequent blood transfusions as a result.

The other patient, who’d used medical cannabis to address similar issues, turned Ortiz onto her doctor, pushing the first domino for a great shift in Ortiz’ health: with cannabis, she could eat. She gained weight. The blood transfusions decreased. When she went in for surgery, she didn’t need additional pain meds outside of the hospital. After two decades of working in insurance, her career focus shifted — between treatments, in the middle of recovery — to trying to create a business that would bring medical cannabis to those in South Jersey, to help others like herself.

But a year’s worth of work, a cashed-out retirement account, and deep-seated passion were no match for a technical error in the New Jersey Department of Health portal that she and others say caused at least one of her files to be corrupted, thus nullifying her application altogether.

Cindy Ortiz's alternative treatment application was turned away due to a technical error in the New Jersey Department of Health's online submission portal in 2019.

Ortiz

“We put about a year’s worth of work, months, hours … and we were very diligent to make sure we followed all their guidelines. To find out that there was a technical error … couldn’t the state have said there was a technical error, and we need you to reload it,” Ortiz asked. “We would have addressed the issue at that point. We didn’t find out it was corrupt until November [after submitting in August].”

The issue with the portal created by the DOH to receive ATC license applications last summer prevented the DOH from opening files attached to certain medical cannabis business applications, which resulted in a court issuing a stay to the application evaluation process just before Christmas.

Ansell Grimm & Aaron PC Partner Joshua Bauchner, who represents a group of applicants subject to the same technical glitch as Ortiz and her outfit Bloom Wellness Center, said he believes that about 15 applicants were affected out of the pool of 196.

Upon learning of the issue, Ortiz collected the metadata on the forms she submitted to show they were completed before the submission deadline, and hand-delivered a letter with a printed application and all required attachments to Trenton. Then she got a letter from the DOH denying her request to be reconsidered.

“The DOH is arbitrarily eliminating candidates on [the file] corruption issue. Those may very well be the best candidates, so why should they deleted,” Bauchner asked. “The most fair and equitable way to resolve the whole problem [is] to allow the appellants to file any documents that were corrupt with certification that they weren’t changed and to score everyone’s application on merit.”

Bauchner does not represent Ortiz—she didn’t have the money for more legal fees, she told NJBIZ—his clients range from multi-state operators to small local outfits.

A cannabis leaf.

DEPOSIT PHOTOS

When the stay was granted in December, Bauchner told NJBIZ he believed oral arguments would begin in March, and vertical integration license applicant Travis Ally of 93 ID Inc. at the time said that a delay of even three months might be more than local operators like him, who expected decisions by December, can handle.

“A three-month delay as no big deal might be the case for multi-state operators, but to folks like us … local operators had to work hard to put together a complete application,” Ally said in December. “It’s not just the costs of the application and lawyers. You have to have site control. Right now we’re paying a lease on property in Orange, and we’re talking about 50,000 square feet of warehouse space. That’s costly. Now we have to pay another four to five months of leases at a huge cost, and we’re probably better off than some small agencies who maybe put their life savings [on the line].”

Now, oral arguments are expected in the fall, leaving folks like Ortiz in a rough spot. Six months after the court-ordered stay, her confidence that her real estate deal hasn’t fallen through is faltering, and at least $18,000 she could use to pay necessary bills is still tied up in an account she can’t touch before she knows if she’s an awardee or not.

But waiving the oral arguments won’t fast track anything, Bauchner said.

“Appellants have a right to constitutional process and the right to be heard. Even if it’s waived, it’s still not scheduled until the fall. It wouldn’t really make much of a difference. The court might want oral argument. I don’t think it’s fair to the appellants to have their rights compromised.

The process might be expedited if other applicants join in the request that the DOH conduct a merit-based review of any application booted due to the technical glitch. Instead, other applicants have filed motions against the court-ordered stay, causing further delay.

While the DOH is the defendant in the case, the agency is not benefitting from the delay in 2019 awards, according to Bauchner. Those who benefit, he said, are the current operators and the 2018 awardees.

“They’re getting a huge jumpstart on everyone else. They’re all expanding and demand is through the roof. It’s $80 for an eighth, which is two and a half times what it should be,” said Bauchner, who suggested the 2018 awardees received their licenses due to politics rather than merit. “You always look to see who benefits, then you know who’s pulling the strings.”

Ortiz is stuck in limbo. During and after cancer treatment, she put all her energy into the application for a cannabis dispensary license. The technical glitch that spurred the stay in the process happened, and COVID-19 put the rest of the world on hold just a couple months later.

As long as my application is reviewed and you tell me what I need in merit of the application,
I’ll be okay with that … then I know what I can work on, what I need to fix.
– Cindy Ortiz

“I’m going to try and find a job part-time and try to continue this until I see an end to the lawsuit and then decide then if I’m going to continue with what I really want to do with my life, or if I have to go back to work full-time,” Ortiz said. “I’m still passionate about the industry and the progress it’s making, but the amount of time [I can dedicate to pursuing that] will be dictated by what happens with this lawsuit.”

And if, after all this waiting, Ortiz doesn’t get a license anyway?

“As long as my application is reviewed and you tell me what I need in merit of the application, I’ll be okay with that … then I know what I can work on, what I need to fix. Right now, you’re telling me it’s a technicality that I have no control over,” Ortiz said. “That’s not, based on all the work I’ve done in the last year, what I should be judged on.”

Editor’s note: This story was updated at 11:46 a.m. EST on June 8, 2020 to correct a quote from Ansell Grimm & Aaron PC Partner Joshua Bauchner, which read “They’re getting a huge jumpstart on everyone else. They’re all expanding and supply is through the roof,” but should have read, “They’re all expanding and demand is through the roof.”

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Gabrielle Saulsbery
Albany, N.Y. native Gabrielle Saulsbery is a staff writer for NJBIZ and the newest thing in New Jersey. You can contact her at gsaulsbery@njbiz.com.

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