The medical marijuana dispensary licensing process has drawn a lot of criticism. Allegations of favoritism started almost immediately. That is common in states where there is a high barrier to entry to open a medical marijuana dispensary, and there are a limited number of licenses to go around. Medical Marijuana of Massachusetts was originally granted three licenses for medical marijuana dispensaries, but those licenses were later revoked after bad publicity about the approval process started to come out. A judge in Massachusetts recently overturned the State's decision to deny the licenses after the fact. Per Marijuana Business Daily:
The ruling came after the company, Medical Marijuana of Massachusetts, sued the state, alleging that officials improperly denied the business licenses last June for three dispensaries it planned to open, according to The Boston Globe.
Former congressman William Delahunt used to head the company, and his involvement sparked allegations that the state engaged in favoritism.
The company initially won three provisional licenses and was told by the state that it scored the highest of 100 applicants. But health department officials - under fire for how they handled the licensing process - came back five months later and yanked the initial approval.
Originally, the dispensaries had been set up to deliver 50% of their revenues to a management firm run by Delahunt and his business partners. The arrangement drew criticism after it was made public, and the number was lowered to 25%. Delahunt resigned in September.
Winning a medical marijuana dispensary license is important to large companies that are trying to enter the marijuana industry. Whenever a license is denied, especially when it was approved originally, lawsuits are sure to follow. We are seeing a similar situation unfold in Illinois, where it seems like lawsuits are popping up almost every week. When licenses are limited, and populations are large, there is a lot at stake, and companies will fight to the end to get in on a piece of the action.