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DPH Disqualifies 9 Planned Medical Marijuana Dispensaries

BOSTON — The pool of 20 medical marijuana dispensaries the state announced it had provisionally approved back in January is now down to 11. And dispensaries likely won’t start opening until late this year or early next year.

In the last five months, the dispensary selection process has been clouded in controversy, with accusations the state Department of Public Health didn’t properly vet applicants’ backgrounds and their claims of community support.

On Friday, DPH announced it has eliminated some of the companies it originally named as qualified to run the dispensaries.

“Only those applicants deemed ready to meet the highest standards of safety, access and quality are advancing from the verification phase,” said Karen van Unen, director of the state’s medical marijuana program. “Those who did not meet those standards will not move forward.”

Six medical marijuana companies DPH originally selected as among the best did not make it through to the next phase in the process. They were planning to open nine dispensaries between them.

Among those disqualified is Medical Marijuana of Massachusetts, the company of former Congressman and Norfolk County District Attorney William Delahunt. DPH faced criticism for originally approving Delahunt’s team for three provisional licenses and giving it the highest score out of all applications. Some observers questioned whether Delahunt’s political ties contributed to his success.

Delahunt spoke with WBUR the day the news was announced:

“I’d like to know what the unfair advantage was. I don’t even know the individual who actually made the final decision. But this was a very rigorous process. It clearly was done in a way that it eliminated any political influence whatsoever,” Delahunt said on Jan. 31.

All disqualified teams received letters Friday outlining the reasons. In the one that went to Delahunt’s group, DPH said the company’s plan to give 25 percent of gross revenues to a separate for-profit arm of the company violated the requirement that dispensaries be nonprofit.

DPH also accused Delahunt of incorrectly representing support from state Senate President Therese Murray.

In a statement on Friday, Delahunt said his team “worked very hard to get this right at every turn, legally and ethically.”

Also eliminated from the original group: Good Chemistry and Green Heart Holistic, both of which were planning dispensaries in Boston. That leaves Boston without a proposed dispensary. Good Chemistry, which also planned a dispensary in Worcester, said in a statement that the company is one of “high standards, professionalism, and integrity,” adding: “To the extent that we made any mis-statements in any of our application materials, we disclosed them as soon as we were aware of them.”

In DPH’s letter to Good Chemistry, it accused the company of misrepresenting support from state legislators in Boston and meetings with the sheriff and chief of police in Worcester that never happened.

“The important thing here is that we are focusing on the next step and moving to the inspection phase with 11 applicants and being able to help them set up their operations so they can make their services available to patients,” van Unen said.

The “verification phase” that’s been going on since January included detailed background checks, verification of statements of support from local political leaders, and interviews.

Jack Nichols, director of Creative Services, Inc., which conducted the background checks, says they included international and national reviews encompassing financial backgrounds and fraud and abuse complaints.

“Over 4,748 civil and criminal searches were done on the applicants in that initial phase of the process,” Nichol explained.

Rep. Jeffrey Sanchez, who was appointed by House Speaker Robert DeLeo to review the dispensary selection process, says despite Friday’s announcement, he’s still waiting for answers to questions he’s been sending DPH since March.

“I can appreciate that they felt the need to move forward, because we need to live up to the will of the voters,” Sanchez said. “At the same time, we do want to understand how they arrived at this decision making, especially around their scoring system and the issue around administrative approval.”

Asked whether she wishes DPH and the dispensary selection committee more thoroughly vetted the applicants the first time around, van Unen wouldn’t concede any mistakes.

“In no way do we have regrets,” van Unen said. “We’re super excited about being able to move forward to the next phase with 11 applicants.”

The dispensaries approved to move on to inspections receive a provisional certificate of registration. But that leaves seven Massachusetts counties without a dispensary in the works. A separate group of five companies that scored well will now get to apply for spots in those open counties. And a totally new round of dispensary applications will begin next year. That will be open to anyone, including teams now disqualified and totally new ones.

DPH says disqualified applicants can appeal the decision. Any appeals will end up in Superior Court.

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