Saying they did not follow their own rules, an administrative law judge scalded state health officials for the method used to grant highly coveted medical-marijuana licenses to nurseries last fall.
Administrative Law Judge John Van Laningham also made clear that he intends to recommend that the Department of Health issue another “dispensing organization” license because Alpha Foliage — already distributing medical marijuana — did not meet the legal criteria for the license it received in November.
Van Laningham’s harsh criticism of health officials came in two separate rulings in a case involving Three Boys Farm and Plants of Ruskin, which lost out to Alpha for a license.
The Department of Health in November awarded one potentially lucrative license in each of five regions of the state, with Alpha Foliage winning in the Southwest region. An additional license was later awarded in the Northeast region after a legal dispute. Van Laningham’s recommendation could lead to a total of seven licenses, if Gov. Rick Scott’s administration does not dispute it.
To determine who should get a license, a three-member panel — comprised of state Office of Compassionate Use Executive Director Christian Bax; his predecessor, Patricia Nelson; and Ellyn Hutson, a Department of Health accountant — used a weighted scorecard to rank each applicant in a variety of areas, including cultivation, processing and dispensing.
But in an unusual order issued Friday, Van Laningham accused health officials of ignoring their own rules, which required that the applicants receive a score.
“The applications were not, in fact, ever properly scored, but were merely ranked, which is not the same thing,” the judge wrote in a 16-page “informational order,” which he acknowledged was rare.
“The department in fact sorted by rank, but, by inverting the rankings and calling them scores, made it look as though the applicants had been scored in proportion to merit,” Van Laningham wrote. “It should not be thought, however, that the same results would have been reached had the department actually scored the applications, as the applicable rules require, because that is not necessarily true.”
The ranking system — in which each evaluator individually assigned a numeric value to each of 14 items on the scorecard — did not take into account qualitative differences between the applicants, Van Laningham noted.
“Missing entirely from the process was any determination regarding how much quality an application possessed in relation to the others with which it was competing — a determination without which no genuine score could be assigned,” he wrote. “The department’s process gave the impression of scoring, without accomplishing the reality of scoring.”
Van Laningham said he intends to “actually score” the applications of Three Boys and Plants of Ruskin “in the true sense of the word, so that the actual degrees of difference between them will be known.”
Van Laningham’s recommendation will almost certainly have no impact on Alpha. A law passed this year requires health officials to grant additional licenses to applicants who successfully file challenges against the state and also allows Alpha and other dispensing organizations awarded licenses last fall to keep their licenses.
In the challenge over the Southwest region license, Van Laningham said he does not intend to evaluate Alpha’s application, after deciding the nursery did not meet the statutory criteria for dispensing organizations.
Under the 2014 law that authorized non-euphoric medical marijuana, applicants that had operated for 30 continuous years as a nursery registered with the Department of Agriculture and Consumer Services and grew more than 400,000 plants were eligible for the licenses.
Alpha was incorporated in 1991, but the nursery had operated since 1983 as a partnership, according to court records, lawyers for the state pointed out during an Aug. 8 hearing in the case.
But the partners — John DeMott and Charles Buster — are not the same as the nursery, Van Laningham wrote in a 21-page order issued Monday.
The fact that Alpha has been registered with the state “and used by someone engaging in the nursery business over a period of 30 continuous years or more is irrelevant unless that someone is Alpha Foliage Inc.,” he wrote.
Lawyers for the state argued that, because the Department of Agriculture is “corporate-form agnostic” in registering nurseries, health officials must take the same view.
But Van Laningham resoundingly rejected that position.
“This particular contention manages to combine a non sequitur, a faulty comparison, and a red herring,” Van Laningham wrote, saying there was “no rational connection” between the nursery registration program and whether an applicant satisfied the statutory requirement.
The law passed this year also allows the dispensing organizations to grow “full-strength” marijuana, available for patients who are terminally ill. Under the 2014 law, the dispensing organizations are allowed to grow, process and distribute marijuana that is low in euphoria-inducing THC. Doctors can order the cannabis products for patients with chronic muscle spasms, severe epilepsy or cancer.
The dispensing organizations could vastly expand their markets after November, when voters will decide whether to allow medical marijuana for a range of debilitating illnesses.