Vertically integrated medical cannabis company PharmaCann LLC has walked a tumultuous path to winning its provisional Level-1 medical marijuana cultivation license in Ohio.
In February, state commerce officials discovered that an employee had accidentally downloaded one set of application scores twice—an error that affected the scores of 10 Level-1 cultivation applicants. The Department of Commerce hired accounting firm Ernst & Young to review the medical marijuana cultivator scoring process and recalculate the indicated score for each application. Ernst & Young found that PharmaCann should have been the eighth highest scorer, despite ranking twelfth after initial scoring was completed in November. PharmaCann was the only company affected by the error.
“We brought [Ernst & Young] on to verify and validate our scoring process to move forward with [a lawsuit hearing] process to ensure everybody is not only comfortable but are certain moving forward that these are the accurate scores,” said the Department of Commerce’s assistant director of communications, Stephanie Gostomski.
Ernst & Young has completed an initial review, and the Department of Commerce will release a full report once its validation is complete, Gostomski said, adding that she is unsure how long it will take the company to finish.
Prior to the discovery of the scoring error, PharmaCann sued the Department of Commerce over what PharmaCann’s director of regulatory affairs, Jeremy Unruh, called a “constitutionally impermissible race-based quota” that the state put in place when scoring the medical marijuana business applications.
State regulators were to initially award 24 cultivation licenses—12 for up to 25,000 square feet of grow space and 12 for up to 3,000 square feet—and the state’s medical marijuana law required state regulators to issue at least 15 percent of the licenses to businesses that are majority-owned by “economically disadvantaged” groups.
When PharmaCann was originally scored No. 12, the