An Ohio appellate court is barely keeping alive an investigation into whether Ohio cultivator Standard Wellness may have illegally imported plants by directing a trial judge to reevaluate whether or not a subpoena from the state’s Board of Pharmacy should be allowed.
The Appellate decision ordered the trial court to reevaluate the subpoena under narrower guidelines than the trial court. It seems likely that the appellate court believes the trial court should quash the subpoena, by writing that the trial court’s “Decision rests on an understanding of board authority broader than the statutes permit.”
According to the opinion, the Board served a subpoena last October requesting documents and emails from cultivator Standard Wellness executives as part of an investigation into whether they violated state law by importing cannabis plants from out of state. The Board of Pharmacy typically regulates dispensaries, while the Department of Commerce regulates cultivators, but attorneys for the Board argued – and Ohio’s Tenth Appellate Court in Columbus disagreed – that the Board has wider statutory authority to enforce all laws related to the state’s medical cannabis program.
According to the decision issued May 12, an investigator for the Board claims to have evidence to support that a truck drove from Utah to Ohio in March 2020 to deliver plants to Standard Wellness and that the cannabis harvested from those plants has been sold in dispensaries.
The company seeks to toss the subpoena out, arguing that the Board had exceeded its authority, arguing that it falls to the Department of Commerce to investigate and regulate licensed cultivators like Standard Wellness.
Tim Johnson, a cannabis advocate and lobbyist, says that it is possible that Standard Wellness possibly received cloned flower from out of state – which he cites as legal – and is liable to happen in various programs.
“It’s a flaw in any cannabis program, I don’t care how tight security is,” Johnson said. “It can get through even with cops standing at the front door. It happens in every industry whether it’s Nike or Gucci. You won’t be able to stop every single one from coming in.”
Matt Close, executive director of the Ohio Medical Cannabis Industry Association, which filed an amicus brief in the case, told Law360 on Friday that cases like this reinforce the need for legislative reform in the state’s cannabis industry.
One such bill would be Senate Bill 261, which passed in the Senate but is stalled in the House. The bill would include a slew of reforms, including a plan to consolidate regulation under a single agency, increase the number of dispensary licenses, and a measure that would more than double the allowed square footage for small, Level II cultivators.
Greg May, founder and principal of CannaRev Solutions, says that cases like this are bound to happen with conflicting oversight and lack of expansion to the medical program.
“We need to expand not only the medical program, but introduce a fair recreational market as well,” May said. “The limited amount of licenses are causing supply issues as it is. But we also can’t stiff arm medical dispensaries out of existence either.”
Representatives from the Board of Pharmacy or Standard Wellness did not respond to requests for comment by publication.
