Medical Marijuana

PharmaCann Challenges "Racial Quotas" for Ohio Medical Marijuana Licenses

A company that wants to cultivate marijuana in Ohio alleges the state's licensing rules are unconstitutional

|The Volokh Conspiracy |

Cleveland.com reports that PharmaCann Ohio, LLC, has filed a constitutional challenge against the states minority set-aside requirement for the issuance of marijuana cultivation licenses. The firm claims that it was denied a license in favor of other, lower scoring firms because state law requires that a minimum proportion of licenses are awarded to members of racial minority groups.

From the report:

PharmaCann Ohio, LLC wants the court to order the Ohio Department of Commerce to award licenses to the top-scoring applicants, including PharmaCann, and is seeking a temporary order to stop the department from issuing provisional licenses to the two minority-owned companies.

The lawsuit was the first filed challenging the results of a months-long, expensive process of applying for a limited number of grow licenses. At least one other losing applicant has said it plans to sue the state. . . .

PharmaCann scored 158.56 points in a competitive application scoring process, ranking 12th of eligible applicants. Parma Wellness Center, LLC and Harvest Grows, LLC scored less than PharmaCann, ranking 14th and 23rd, respectively.

The provision at issue in the Ohio Revised Code provides:

The department shall issue not less than fifteen per cent of cultivator, processor, or laboratory licenses to entities that are owned and controlled by United States citizens who are residents of this state and are members of one of the following economically disadvantaged groups: Blacks or African Americans. American Indians. Hispanics or Latinos, and Asians.

Qualifying licensees must meet other specified requirements, but need not be among the highest scoring applicants.

According to PharmaCann's complaint, this provision operates as an impermissible "racial quota" in violation of the Equal Protection Clause of the Constitution.

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  1. Prior to 1954, elementary schools across the United States had racial quotas.

    I wonder why that became no longer the case.

    1. Many still have racial quotas, they’re just different quotas than they had prior to 1954.

      1. Amazing that schools still try to find a way to get around Supreme Court rulings they do not like.

        1. It’s more like they’ve gone too far in trying to comply with anti-segregation decisions.

          1. Thank goodness we have color-blind, post-racial, Christian-charity-driven Republicans and conservatives to advocate for persecuted whites in an America that has been too kind to blacks.

            1. If a white person is denied a benefit or protection due to a racial classification, it violates the 14th Amendment.

              1. if my aunt were a man, she would be my uncle.

  2. “economically disadvantaged groups”

    “Asians”

    err…

    1. asians are disadvantaged. just because theyre doing relatively well despite this doesnt mean they shouldnt be doing better. a study of stem companies found that asian men and women had the biggest executive parity disparity out of all racial groups. disproportionately fewer of them reaching leadership roles despite dominance at lower levels.

      “By 2015, despite being outnumbered by Asian men and women in the entry-level professional workforce, white men and women were twice as likely as Asians to become executives and held almost 3x the number of executive jobs.”

        1. facts arent impacted by your laughter.

  3. If the state was going to hold back licenses for MBE’s, why were the put in the pool with everyone else? Why not have a separate pool just for minority owned businesses?
    The state is going to lose this one.

    1. While I agree that the state should lose this one (though I’m not as confident that they will), creating a separate pool would not have solved the legal problem leading to this challenge. 1, if the state had created a separate pool of licenses for MBEs, the allocation of licenses into the two pools would itself been a challengable quota. And 2, that approach would almost certainly lead to reverse quota problems sooner or later. What if, for example, the state used the same 15% quota but for whatever reason, minorities constituted 25% of the best applicants? Your separate pool approach would exclude them because they’re locked into the MBE pool.

      Of course, the better approach would be for the state to abandon this licensing operation altogether. We don’t set quotas for grocery stores or gas stations. Let the market sort it out.

      1. Is this true (re lack of quotas) for, say, liquor stores, bars, etc? In other words, for businesses that focus on selling drugs. My–completely uninformed–opinion is that these types of businesses are indeed strictly limited. At least, here in California. I know that, for many restaurants, their entire chance for success is whether or not they are successful in getting a liquor license, since (a) the profit margin is so high for booze sales, and (b) many potential patrons will avoid a restaurant with no license and instead eat at a place that can sell them a cocktail or glass of wine with their meal.

      2. I mean, there’s no reason not have licensing based on some objective qualifications that we believe they should have. But limited-number licensing is absurd.

  4. seems to me that minorities have historically been over represented in the production and distribution of marijuana. So these racial quotas simply continue the status quo

    1. While it is almost certainly true that minorities have been over-represented in the population of people IMPRISONED for the cultivation and distribution of marijuana, that does not necessarily indicate that they are over-represented in the entire population of people engaged in those endeavors. It MIGHT only mean that they were over-represented among those targeted by law enforcement for criminal charges. Be very careful drawing inferences from statistics when dealing with human activity.

      1. Yeah, the cops target blacks. Do you really believe that when a cop sees a white dealer on the street, he ignores him until he can find a black dealer? Get real.

        Do the victims of crimes, who identify their attackers as black, also engaged in targeting blacks for imprisonment?

        1. yes, that is precisely what hey do. independent studies of police departments in different states has found that police are more likely to find contraband while searching white people. but search black people more often for it anyway.

        2. Are there any other conditions — other than bigotry or profound ignorance — that would incline an American to deny racial disparity in policing?

          Thank you.

          1. Well, we can take the word of then-Attorney General, now-Senator Kamala Harris.

            http://www.mercurynews.com/cal…..ala-harris

            “Local law enforcement must be able to use their discretion to determine who can carry a concealed weapon”- Kamala Harris

            If there was a racial disparity in policing, then we would not be able to trust law enforcement to “use their discretion to determine who can carry a concealed weapon”, and as such the Attorney General of California would not say such a thing, because attorney generals are experts in all matters related to law enforcement. Since she did say that, the original premise- the existence of racial disparity in policing- must be false.

            1. thats a non sequitur, michael. saying its ok to discriminate does not mean discrimination doesnt exist. thats actually self-contradictory, makes no sense. youre trying too hard.

  5. Sounds pretty clear cut: They’re explicitly not treating people equally, on the basis of race.

    1. Color-blind, right-wing birthers to the rescue?

      1. Oh, right, can’t block the Arthur brigade here. Oh, well.

        Ultimately, either race is a legitimate basis for governmental discrimination, or it isn’t. There’s no “reverse” discrimination, there’s just “discrimination”.

        Persuading the majority that the minority should be entitled to equal rights wasn’t easy, but we won that battle, because the justice of it was obvious. Persuading the majority that the minority should be entitled to superior rights? Never going to happen, if the majority ever accept that racial discrimination is legitimate, they will demand racial discrimination in their own favor, not somebody else’s.

        The demand for racial quotas is just another example of the truth of Nietzsche’s aphorism: “He who fights too long against dragons becomes a dragon himself; and if you gaze too long into the abyss, the abyss will gaze into you.” The “civil rights” community are becoming increasingly draconic.

      2. As usual, Arthur, your logic is impeccable.

        1. How much logic is required in the context of “libertarians” who endorse Ted Cruz and the authoritarian conservative platform?

    2. except its not on the basis of race: “disadvantaged groups.” whites can be in there too, just depends on the circumstances. if you aim to protect a thing from a particular vulnerability, its on the basis of that vulnerability, not on the basis of that thing being that thing.

      1. Yeah, with federal procurement, an economically disadvantaged group is a pretty squishy definition and being white in theory you can be considered that if you can demonstrate the disadvantage convincingly. I’m not sure how or whether that same system applies in Ohio considering they use the term but then go on to define it as being comprised of specific groups. Maybe the actual text of the law would expand upon the flexibility of the program, just not seeing and don’t care enough to look it up.

  6. Affirmative Actions violates 14th amendment as well.

    1. not really. if anything it helps enforce the 14th amendment. take the abigail fisher case for instance. when they checked the numbers, 89% of the kids admitted with qualifications equal to or lower than hers were white–and this was with affirmative action. the tax payers subsidizing that public school are nowhere near 89% white.

      1. gender and race based privileges is a violation of U.S. constitution there is no other interpretation of inequality of races.

        1. then the violation in abigail fishers case was whites making up 89% of the undeserving admissions.

  7. Self-identify as a minority. Transracialism FTW.

  8. Whites are the only group that implement nonsense policies like this. You’ll never see Asians, Africans, or anyone else worried about quota representation in any other minority group.

    1. Off the top of my head, India and Malaysia. Granted, in Malaysia it’s affirmative action in favor of the majority.

      1. India’s program is targeted as historically under-represented castes and tribes, not racial quotas. But yes, OP said “minorities” so technically true that India has something similar.

        1. Those are just words for “very small races”

  9. Government contracting has similar quotas/preferences. They usually are based on goals, not as minimums, and allow a larger company to involve smaller minority or disadvantaged businesses in the bidding process.

    It will be interesting to see how this plays out…

    1. Goals vs minimums; Not actually a lot of difference between the two, if you’re not allowed to fail to meet the minimums.

      1. “Goal” is Latin for “thinly disguised quota”

  10. Does anyone know if the statute can be challenged on factual grounds? Why are Hispanics considered a disadvantaged group? Almost all of them are post Civil Rights Act immigrants or children since the Act was passed, and Ohio would not have a history of discrimination against Hispanics, because there were virtually none in the state until a few decades ago.

    This aspect seems to me to be a violation of equal protection simply for the purposes of political pandering. Substitute “Irish” for “Hispanic” and it becomes immediately apparent.

    1. “Almost all of them are post Civil Rights Act immigrants or children since the Act was passed, and Ohio would not have a history of discrimination against Hispanics, because there were virtually none in the state until a few decades ago.”

      I can’t speak for Ohio, never having lived there, but growing up in Illinois in the 1960s and ’70s, I doubt this speculation to be accurate. In the 60s and 70s, in at least several of the larger towns in Illinois – Peoria, Galesburg, the Quad Cities, etc., and, I suspect, Chicago, there were two distinct populations of Hispanics; (1) those Hispanic families that migrated north from Texas after the Texas War for Independence from Mexico and before and during the Civil War, where they found employment on the Railroads, the Horse and Mule industry (yes, that was still a big thing until the advent of affordable automobiles), and river transportation along the Mississippi, Ohio, Illinois, and Missouri Rivers, as well as in newly emerging industry in farm implement manufacture; and (2) the later arrivals. Group (1) was largely assimilated, they spoke only English, and they looked down on Group (2) as the newly arrived “wetbacks.” Yet both groups were treated the same by whites – they were all “Mexicans”, even though most of the Group (1) population had been Americans farther back that the whites’ own ancestors, and there was discrimination.

      1. My mostly-of-Mexican-descent grandfather, who was born and raised in Arizona, moved full-time to Ohio after WWII. (He was stationed for about a year at a small college in Ohio that was transformed into a non-commissioned officer training, and he met and married my grandmother while he was stationed there.) His mother-in-law–my great-grandmother–referred to him as “that wetback” for years instead of by his name, only stopping when my dad and his brothers asked her what “wetback” meant.

        My great-grandmother was a second-generation American. My grandfather’s family had been in Arizona since the 1700s.

  11. I’m not big on this provision myself.

    Assuming that there are valid reasons for requiring a state license, it’s not clear why the number should be limited. Wouldn’t it be better to just lay out the requirements and grant a license to those who meet them?

    Reading the linked article, it sounds as if political influence played some role in the awards. Shocking!

    1. The states are bowing to popular pressure about pot but want to still restrict [and hamper] through licensing.

      My view is legalize and have nothing but regular sales tax on unlimited sellers, like of the shelf non-prescription medicine.

      1. That could be, or it could be the politicians see an opportunity to grant some privileges to their current or hoped-for patrons.

      2. Bob, I’m about as pro-legalization as anyone else (and moderately anti-regulation), but I can see the need for some pharmaceutical-esque regulation of purity, contamination, truth-in-labeling, diversion, etc…

        Of course, no one sets up a system where only so many stores can get a license to sell Ibuprofen …

  12. “applying for a limited number of grow licenses”

    Well, there’s your problem. Figure out the objective criteria for licensees — environmental review, responsible labeling, contamination checks and so forth. Then apply them to all applicants.

    By arbitrarily decided that no matter who qualifies, you’ll only accept some number, Ohio is turning what would be an otherwise mundane regulatory matter into a zero-sum hunger games.

    1. Yes. And before long there will be issues of whether the licenses are transferable, and fights if the state wants to increase the number, or whatever. Silly law.

    2. Limiting the number of licenses also creates pressure for these kinds of set-asides. After all, most people are going to know, or believe, that the awards will not in fact be purely merit-based.

      Once there are some individuals who have an unmerited advantage in the process, there is going to be pressure to hand out other advantages as well. It’s hard to argue that set-asides should be avoided as unfair when there are other unfair aspects of the whole thing.

  13. Count your blessings y’all. At least Ohio passed a medicinal marijuana law. I will expect that to happen in my state the next time I see a pig with wings fly past my window. Texas where any mind altering substances that do not contain ethanol are generally thought to be at the root of all human evil.

  14. I agree with Mr. McCarthy about 99 percent of the time, but this time I think he’s too optimistic about Mr. Mueller’s investigation. True, Mueller got rid of the highly biased FBI official, but he didn’t do that until the Inspector General simultaneously informed him and Mr. Rosenstein in a meeting. At that point, he had no real choice. On top of that, his charges against Paul Manafort don’t seem to have anything to do with alleged Trump campaign collusion with Russia. As such, they apparently go beyond Mueller’s authority to investigate violations “arising out of” such alleged collusion. Instead, Mueller seems to be prosecuting or threatening to prosecute people (and perhaps even their close relatives) for totally unrelated offenses if he thinks that will force them to provide information to incriminate Trump or his campaign officials. It may well force them to provide something probative of a conspiracy, but there’s also a risk it could also result in the production of some perjured testimony.

  15. How can federal courts possibly adjudicate such a case. Imagine a marijuana customer who claims he was discriminated against on the basis of race. Such a person would have no standing, because there could be no relief. Federal Courts can’t order a marijuana dealer to sell marijuana to someone. Selling marijuana is illegal. Courts can’t order the performance of an illegal act.

    The same issue would apply here. Federal courts could not order the state of Ohio to facilitate the plaintiff’s sale of marijuana, because they cannot violate federal law. So the plaintiff could not obtain any relief. And with no prospective relief, there is no Article III standing.

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