With 51 applications in the mix, the competition for Virginia’s first five medical marijuana licenses is fierce.
When a makeshift panel of state regulators met in a Henrico County office park Tuesday to begin reviewing boxes upon boxes of paperwork to decide who will get to run Virginia’s first cannabis oil dispensaries, their first order of business was closing the meeting to reporters, lobbyists and advocates.
After a nearly 30-minute, closed-door discussion to discuss Virginia’s public-meeting law and how it does or doesn’t apply to the process, a Virginia Board of Pharmacy committee reopened the meeting. But it was only to announce that the application review process, which may take two days, will be kept confidential.
“The committee has decided to consider the applications in closed session,” said pharmacy board Chairman Rafael Saenz, who’s leading the committee made up of officials with medical licensing, economic development and legal backgrounds.
The General Assembly’s move to relax Virginia’s medical marijuana restrictions and open the door to legalized cannabis production has led to a first-of-its kind business competition, with Virginia-based entrepreneurs competing with more established national players in the medical marijuana industry. The first wave of dispensaries will produce only CBD oil (cannabidiol) or THC-A oil, both pitched as having therapeutic benefits without the high that comes with smoking or ingesting marijuana.
In June, the U.S. Food and Drug Administration broke ground by approving a CBD product designed to treat severe epilepsy. Though some claims about the products haven’t been verified by the FDA, proponents say the oils help relieve pain, inflammation, muscle spasms and nausea. Under Virginia law, the products are not fully legal, but certified patients who possess cannabis oils for medical reasons have an “affirmative defense” against prosecution.
The winners who receive conditional approval to open a dispensary, which may occur later this month, get the first crack at building the business infrastructure that could grow if Virginia lawmakers take further action to loosen the state’s drug laws.
The committee released an initial set of scores for the 51 applicants, but the companies were identified by numbers, not names.
When business interests compete for a government-issued asset such as public contracts or development rights, open-government laws usually require some level of transparency, typically after official decisions have been made. Legally, the medical cannabis applications aren’t treated the same as other business proposals. Instead, they’re being treated as medical license applications, which are exempt from the Virginia Freedom of Information Act even after a final decision is made.
“They can only be FOIA’d by the applicant,” said Caroline Juran, executive director of the Board of Pharmacy, who added that the board received legal advice from the attorney general’s office before deciding whether the review should be public or private.
Though regulators are keeping the paperwork secret, several companies that have applied have sought out media coverage of their business plans to build support for their bids.
Jenn Michelle Pedini, executive director of the marijuana reform group Virginia NORML, said she wasn’t surprised that the board opted for a closed process. She said other states that have gone through similar processes to establish medical marijuana programs have disclosed documents at the end of the process.
Regardless of how the legalities play out, Pedini said, Virginia patients have a right to know if they’re getting the best option available.
“It is in the best interests of patients, of consumers, for there to be transparency throughout this process,” Pedini said. “Patients deserve to know who is making their medicine, if that company has been operational in other states, if they have been compliant, if they have had to stop production or have been cited for other issues.”
Adding to the sensitivity of the situation, Pedini said, is the possibility of legal action from losing applicants that feel they didn’t get a fair shake in the scoring process. In Maryland, several companies that were denied licenses sued state cannabis regulators, in some cases arguing that officials didn’t take racial diversity into account when deciding who could and couldn’t participate in a potentially profitable industry.
“We see this state after state,” Pedini said. “Licenses are awarded and then the lawsuits begin.”