The Volokh Conspiracy

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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

| 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.