In the Matter of the Denial of Dispensary Permit Endorsement for Spectrym Consulting Group, LLC

CourtNew Jersey Superior Court Appellate Division
DecidedDecember 20, 2023
DocketA-1465-21
StatusUnpublished

This text of In the Matter of the Denial of Dispensary Permit Endorsement for Spectrym Consulting Group, LLC (In the Matter of the Denial of Dispensary Permit Endorsement for Spectrym Consulting Group, LLC) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In the Matter of the Denial of Dispensary Permit Endorsement for Spectrym Consulting Group, LLC, (N.J. Ct. App. 2023).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1465-21

IN THE MATTER OF THE DENIAL OF DISPENSARY PERMIT ENDORSEMENT FOR SPECTRYM CONSULTING GROUP, LLC, TO OPERATE AN ALTERNATIVE TREATMENT CENTER PURSUANT TO THE 2019 REQUEST FOR APPLICATION PROCESS. ____________________________

Submitted November 8, 2023 – Decided December 20, 2023

Before Judges Whipple, Mayer and Enright.

On appeal from the Cannabis Regulatory Commission.

Pashman Stein Walder Hayden, attorneys for appellant Spectrym Consulting Group, LLC (Gregg Howard Hilzer and Janie Byalik, on the briefs).

Matthew J. Platkin, Attorney General, attorney for respondent Cannabis Regulatory Commission (Melissa H. Raksa, Assistant Attorney General, of counsel; Jacqueline R. D'Alessandro, Deputy Attorney General, on the brief).

PER CURIAM Appellant Spectrym Consulting Group, LLC (Spectrym), (d/b/a The Helix

Center), appeals from a December 7, 2021 final agency decision issued by

respondent New Jersey Cannabis Regulatory Commission (CRC), denying its

application for a medicinal marijuana dispensary permit to operate an

Alternative Treatment Center (ATC). We affirm.

I.

We incorporate the background regarding the CRC's issuance of

dispensary permits to operate ATCs set forth in the back-to-back companion

cannabis permit cases presented to the panel on October 11, 2023. See I/M/O

Denial of the Dispensary Permit Endorsement for AP NJ Health, LLC, No. A-

0783-21, A-0943-21, A-1326-21 (App. Div. Dec. 8, 2023) (slip op. at 2).1 In

our consolidated opinion on these back-to-back cannabis permit cases, we

described, in detail, the process adopted by the CRC for reviewing permit

applications to operate ATCs.

1 While Rule 1:36-3 generally precludes reference to unpublished opinions, we may refer to an unpublished decision for case history. See Animal Prot. League of N.J. v. N.J. Dep't of Env't Prot., 423 N.J. Super. 549, 556 n.2 (App. Div. 2011) (citing Pressler & Verniero, Current N.J. Court Rules, cmt. 2 on R. 1:36-3 (2011)).

A-1465-21 2 Briefly, the Compassionate Use of Medical Cannabis Act, N.J.S.A. 24:6I-

1 to -56 (the Act), provides qualifying patients and their caregivers with

protection from arrest, prosecution, and other penalties for possessing cannabis

for medical purposes. N.J.S.A. 24:6I-2(e).2 The Act also protects those

authorized to produce, process, and dispense marijuana pursuant to the statute 's

terms. N.J.S.A. 24:6I-7. Initially, the Act charged the Department of Health

(DOH) with implementing New Jersey's Medical Cannabis Program (MCP).

This included creating a registry of qualified patients and issuing permits for the

operation of ATCs. N.J.S.A. 24:6I-4; N.J.S.A. 24:6I-7.1. The CRC has since

assumed management of the MCP. N.J.S.A. 24:6I-24(a).

N.J.S.A. 24:6I-7(h)(3) requires that the CRC "seek to ensure the

availability of a sufficient number of [ATCs] throughout the State, pursuant to

need." The CRC promulgated regulations, N.J.A.C. 17:30A-1.1 to -13.11,

providing the framework through which it issues Requests for Applications

(RFAs) for the operation of ATCs.

2 All citations to the Act are to its current amended form, L. 2021, c. 252.

A-1465-21 3 The Act was amended effective July 2, 2019,3 and now allows the CRC to

issue separate permits for entities to operate as medical cannabis cultivators,

manufacturers, or dispensers. N.J.S.A. 24:6I-7(a)(1); N.J.A.C. 8:64-7.1(e). The

new N.J.S.A. 24:6I-7.2(c), (d), and (e) set forth detailed lists of criteria the CRC

must use in evaluating applications for each type of permit.

On July 1, 2019, the DOH issued an RFA, seeking applicants for the new

types of permits that would soon be available: five cultivation endorsements, 4

fifteen dispensary endorsements, 5 and four vertically integrated (VI)6

endorsements. The RFA contemplated one VI, two cultivation, and five

dispensary endorsements each for the northern and central regions of the State,

and one VI, one cultivation, and five dispensary endorsements for the southern

3 See L. 2019, c. 153. Because the RFA was issued one day prior to the amendments' effective date, it is governed by the prior iteration of the Act. 4 These endorsements are the functional equivalent of permits. Thus, the terms were used interchangeably in the RFA. 5 The CRC subsequently doubled the dispensary awards issued under the 2019 RFA from fifteen to thirty "to keep pace with expanding patient enrollment." 6 VI endorsements allow an entity to grow, process, and sell marijuana as part of the State's MCP.

A-1465-21 4 region. The DOH received 198 applications for the various types of

endorsements, including 109 applications for dispensary permit endorsements.

The 2019 RFA described the application. Part A, titled "Mandatory

Information," included the applicant entity's organizational documents;

evidence of good standing with the Department of the Treasury; information

about principal officers, directors, owners, and board members; verification of

the approval of the municipality where the ATC would be located; evidence of

ownership or lease of the proposed site; and evidence of compliance with local

laws.

Part B consisted of the "Scored Criteria" upon which applicants would be

judged. These criteria asked applicants to describe their proposed operations,

experience, security and quality control plans, financing, and other aspects of

running an ATC. Applicants were directed to file a PDF or printed document of

not more than 100 pages for each endorsement they sought for Part B.

Once received, the DOH would "review [all applications] for

completeness and truthfulness" to determine "whether an applicant passe[d] or

fail[ed] a particular requirement in the mandatory section." If the DOH deemed

an application complete, its Part B would then be "reviewed and scored by a

selection committee" comprised of nine employees from the DOH, the

A-1465-21 5 Department of the Treasury, the Department of Environmental Protection, and

the Department of Labor.

In September 2019, the selection committee members attended a training,

which included instruction on how they were to review applications. They also

were given detailed instructions for scoring each criterion and measure. The

instructions informed reviewers what to consider when evaluating applications

and when it was appropriate to give a score of zero, the maximum possible

points, or any score in between.

To complete scoring of the applicants' Part B submissions, the CRC

divided the nine selection committee members into three teams of three, based

on their expertise, and assigned each team to review a specific group of criteria

and measures for which that expertise was relevant. Team One, which consisted

of Reviewers 2, 5, and 6, had experience in quality assurance, public health,

emergency preparedness, pharmaceutical assistance, fiscal management, public

affairs, and the management of environmental resources. This team reviewed

Criteria 1 through 5, which involved an applicant's "[a]bility to meet the overall

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