Administrative Procedures Act and the Ohio Medical Marijuana Program

The Department of Commerce and Board of Pharmacy are well underway to standing up Ohio’s Medical Marijuana Control Program, with the cultivator applications now submitted for the initial 24 licenses. Under the MMCP rules, the Department of Commerce, with the help of hired consultants, will determine which applicants will get one of the twelve small or twelve large cultivator licenses. A similar, competitive process will occur for the limited number of processor and dispensary licenses that will be issued by the Department of Commerce and Board of Pharmacy.

Under H.B. 523 (131st General Assembly), the Ohio Medical Marijuana Act (MMA), the rules governing each type of license are subject to Chapter 119 of the Ohio Revised Code, the Administrative Procedures Act (APA). In fact, state licensure and due process surrounding licensure is generally governed by the APA. While there are exceptions when a statute so specifies, no such exception appears in the MMA. In fact, several existing rules and soon-to-be-rules reference rights to prior notice, an opportunity for a hearing and other rights in relation to licensure, fines, suspensions, employee matters and rule violations.

The traditional state agency action against a licensed entity or individual has the hallmarks of due process – including notice that the state is going to take an action (e.g., deny or revoke a license, issue a fine or suspension against a licensee), and coupling it with the right to be heard (i.e., an opportunity for the target of the action to request a hearing within a specified timeframe to challenge the contemplated action).

Generally, the target of the action cannot go to court to collaterally challenge a state licensing agency’s decision. The proper forum is an appeal to the same department that took the action in the first instance. In the event the license applicant’s appeal is unsuccessful, that applicant may then appeal to a court of common pleas. The appeal can eventually get to the Ohio Supreme Court.

There are, no doubt, creative theories that lawyers have attempted to use through extraordinary remedies to side-step the APA, but courts are not creatures of innovative legal theories when long-standing statutes can provide an adequate legal remedy.

The Administrative Procedures Act can be procedurally and substantively tricky for a non-lawyer, or even a lawyer unfamiliar with securing a hearing, discovery, standards, preserving a record or filing an appeal. And yes, a denied license applicant or eventual licensee subject to a disciplinary action is essentially appealing to the same department that initiated or has taken the action being challenged.

To those considering any Federal court challenge, think long and carefully about options and a likely federal court interpretation of your requested remedy (i.e., medical marijuana is not legal), notwithstanding Ohio considering marijuana a Schedule II controlled substance under Chapter 3796.01 of the Revised Code. The APA may be the only viable option.

For any questions regarding the Ohio Medical Marijuana Control Program, contact members of the Kegler Brown team of lawyers at (614) 462-5477 or email [email protected].