Georgia Today: State's Opaque Licensing Process Has Marijuana Companies Crying Foul
Georgians with certain medical conditions have been permitted to take cannabis oil to ease their symptoms for six years, but it was illegal to purchase in Georgia. The state has finally approved six licenses for companies to produce and distribute medical marijuana oil in Georgia. However, many companies whose applications were not accepted are calling foul play, protesting the licensing process which can delay the production and distribution of medical cannabis oil for many Georgians in need.
Steve Fennessy: For six years, Georgians with certain medical conditions have been permitted to take cannabis oil to ease their symptoms for some patients, especially those suffering epileptic seizures. The oil has been nothing short of miraculous. There's just one problem: With nowhere in Georgia to actually buy the stuff, they've been forced across state lines to get it, meaning they run afoul of federal laws.
[TAPE VOA NEWS]: It may mean meeting at a gas station on 285 or, you know, coming to somebody's workplace or at home. I mean, you do what you have to do to meet up with somebody to get them the medicine that they need.
Steve Fennessy: Finally, though, Georgia has approved licenses for six companies to produce medical marijuana oil. But hold on: Many of the companies whose applications were rejected are claiming the process was unfair and the controversy could push back the day even further when cannabis oil will be sold here. To help make sense of all this, I'm joined by Mark Nisse, a reporter at the Atlanta Journal Constitution.
Steve Fennessy: So, Mark, as we talk today, I understand that there are 36 states right now that allow for at least some use of marijuana or cannabis products for certain medical conditions. But I'm a little unclear. Is Georgia one of them or not?
Mark Niesse: Well, we're counting Georgia as one of the 36, even though Georgia's medical marijuana program isn't quite up and running yet.
Steve Fennessy: OK, so let's — let's go back a little bit. Help me understand how we got to this point, because I know that there are a lot of states throughout the country that are very far along in terms of allowing medical marijuana, but we're kind of breaking up the tail end. Why is that?
Mark Niesse: Well, it's because it took a while for legislators to agree to make a medical marijuana law and medical marijuana program in Georgia. It started in 2015 when Georgia did pass a bill allowing patients with severe illnesses to take medical marijuana oil.
[TAPE WMGT 41NBC]: The wait is over. Gov. Nathan Deal signed the state's medical marijuana bill into law today.
[TAPE WMGT 41NBC] Nathan Deal: Upon my signature, immediately, the law will become effective.
Mark Niesse: But even though that law passed in 2015, people had no way to be able to obtain this medicine or this drug. And that only changed when a 2019 law passed, setting up this licensing and distribution system that is now getting closer to getting up and running.
Steve Fennessy: What are some of the conditions that the cannabis oil specifically can address?
Mark Niesse: There are quite a few. I believe it's more than a dozen. There's the most common treatment is for severe seizures or epilepsy. And that's where you hear from patients, especially children who weren't able to function in a lot of ways because of epilepsy or seizures. And their parents would talk about how they would try going to hospitals, they would try different medicines, they would try different doctors. And they just didn't have any success until they tried low-THC oil, which is what they call the brand of medical marijuana that's allowed in Georgia.
[TAPE WTVC 9 ABC]: This is a 12-year-old, Zoe Gilli. She suffers from a disorder that causes her to have seizures every day. At one point, she would have up to 75 just in one day. Within the last year, though, she's found medicine that has reduced that number significantly.
[TAPE WTVC 9 ABC: I didn't think there would ever be a day that we could really engage with Zoe and see her play with her sister or engage with us.
Mark Niesse: Their seizures having been reduced almost to nothing or very little. And so that's the most common usage. There's also Parkinson's disease, serious end stage cancers, multiple sclerosis, Crohn's disease, sickle cell disease, AIDS, post-traumatic stress disorder, a number of other conditions. But those are the main ones.
Steve Fennessy: So when we talk about these various conditions, is it the oil specifically that addresses each of them or are we also talking about actually inhaling marijuana, lighting marijuana?
Mark Niesse: No. Inhaling or vaping or smoking marijuana remains illegal. In Georgia, only medical marijuana oil is permitted in Georgia and only if it has less than 5% THC, which is the psychoactive component of marijuana.
Steve Fennessy: And is it the THC that science scientists understand to be the effective component when it comes to addressing these medical conditions?
Mark Niesse: They believe it plays a role. You know, in Georgia, you'll see it everywhere. We already have hemp and CBD stores selling it, selling product just to anybody off the street. And that product, CBD, does not have any THC component in it. It's the THC that's illegal, but it's also the THC that has some of these health benefits for people. CBD oil also has some of the chemicals that are believed to help the CBD combined with the THC. That seems to make a difference for patients that actually do have real issues that need treatment.
Steve Fennessy: The law was passed in 2015 under Gov. — then-Gov. Nathan Deal that allowed the medical exemptions for consuming such a product. And then you say several years later, we actually started to implement the mechanism by which we could introduce the — the manufacture of this stuff.
Mark Niesse: That's right. And that's where we are right now, is that six companies have been approved to manufacture and distribute medical marijuana oil in Georgia.
[TAPE 11Alive]: Tonight, we're hearing from parents after six Georgia companies were given the green light to start growing marijuana in our state of Georgia. Now those companies will receive licenses to grow medical cannabis to be used in oils. The announcement is a long time coming for the thousands of patients across the state who have been approved to use it in oils since 2015.
Steve Fennessy: And how many people are we talking? About who — who might benefit from this?
Mark Niesse: According to the Department of Public Health, right now, there are 20,000 patients registered to consume low-THC oil. A lot of legislators and advocates in the industry and patients, they all think that that number will grow greatly once Georgia actually gives them a way to buy it.
Steve Fennessy: And for the companies that are producing the oil, it's — it's obviously a business opportunity.
Mark Niesse: That's right. And the companies that will operate in Georgia, you have some large companies that have a lot of stores and other states already. And then you have a few companies that we don't really know too much about that are just getting started in this industry.
Steve Fennessy: Who decides that you, Company A, can come in, but you, Company B, cannot.
Mark Niesse: In 2019 and at the Georgia apitol, there was this long and difficult process and a lot of negotiation and debate before they finally arrived at this piece of legislation, this law that ultimately did pass and that Gov. Brian Kemp signed into law.
[TAPE 11Alive]: Last April, Gov. Kemp signed a bill to legalize medical marijuana production and distribution. Late last year, the governor set up the Georgia Access to Medical Cannabis Coalition to figure out how to run the medical marijuana business in the state. But they only met once before the pandemic hit.
Mark Niesse: Allowing for this process for only six companies, no more and no less, to produce and distribute medical marijuana. In Georgia, two of those six companies will be larger companies that are allowed to grow medical marijuana on 100,000 square feet of indoor growing space and the other four licenses will be allowed to grow medical marijuana on 50,000 square feet of indoor growing space. What we ended up with isn't perfect by anyone's perspective, but it's the middle ground that was able to pass.
Steve Fennessy: The number six, to me, sounds arbitrary. What's the logic behind that specific number?
Mark Niesse: It is somewhat arbitrary. It's a number that legislators agreed on so that the market wouldn't be limited to just one or two companies and by leaving out other competitors. But, you know, it's not like some states allowed an unlimited number of companies to be licensed to produce medical marijuana oil.
Steve Fennessy: So, presumably then, fewer than six might suppress competition. Many more than six might be hard to oversee and regulate.
Mark Niesse: That's right. And also, I think part of the reasoning for having six is you have a backup plan. If some of these companies don't work out, the other companies would still be able to produce and also these companies will be able to get it going in a hurry. There was some thinking among legislators that if you limit the competition to just six companies, you'll get some of these large companies that have experience and will be able to get a whole new industry up and running because they've done it in other states already. The legislation was crafted to try to attract companies that kind of know what they're doing now. Whether or not that's what we as citizens of Georgia will end up getting is another matter.
Steve Fennessy: Dozens of companies applied to the state to be one of just six ultimately approved to sell THC oil in Georgia. Why was the process shrouded in such secrecy? We'll be right back. This is Georgia Today.
This is Georgia Today. I'm speaking with Mark Nisse, a reporter at the Atlanta Journal-Constitution who's closely covered the cannabis oil licensing process here in Georgia.
Steve Fennessy: So 2019, Georgia basically says to the industry, “Wait, we're going to be open for business, so if you're interested, apply to be one of these six businesses.” What did that application process look like? What were they asking of these companies?
Mark Niesse: There were a number of criteria. They included business plan, for example, a seed-to-soil tracking plan to make sure that they could keep track of this drug and not have it fall into the wrong hands. There's requirements for inspections, for business operations, for growing space and facility requirements. So there's a whole list of these requirements that companies had to meet, mostly surrounding their business capabilities and their business plans and their ownership profile. Really getting to the point of will these companies be able to deliver for the patients that are already legally allowed to consume this drug?
Steve Fennessy: Mark, you reported it. At least one company's application was 774 pages or something. I'm — my gosh, it sounds like that's a Defense Department contract to build a Harrier jet. What takes 774 pages?
Mark Niesse: Some of these applications are more than 2,000 pages, but it's hard to tell because so much of them are redacted. The public can't really see very much at all about what's in these applications, which is abnormal for a public government award process where it's picking and choosing which businesses can operate in the state. What we know about most of these companies is we usually know the name of the CEO. We usually know where they will open their facilities. But we don't know a whole lot else about these companies because they were heavily redacted, which was by design. That was written into this 2019 law passed by the legislature. However, now we're seeing protests and complaints about the procurement process,
[TAPE 11Alive]: Another potential roadblock in the push to begin producing medical marijuana: In Georgia, 15 producers are now protesting the state's decision to award licenses to six companies, calling the process unfair.
Steve Fennessy: I'm a little confused. I could see if there was some sort of trade secret involved in creating the oil that maybe you don't want it disclosed for competition purposes. But when it comes to “This is how many employees we want to hire” or basic information, why in the world is that redacted?
Mark Niesse: Businesses don't like disclosing their confidential information. And perhaps there was a thought that if businesses have to disclose less information, perhaps they'll be more willing to come forward with the details of their business operations than if they would be if everything were to be made public, as it would in a normal state government procurement or licensing process. Of course, this information is not confidential from the Georgia Cannabis Board that evaluated these companies.
Steve Fennessy: And how many companies did apply for a license?
Mark Niesse: Sixty-nine companies applied.
Steve Fennessy: And as you were reviewing these applications, what stuck out to you that you could actually see that wasn't redacted?
Mark Niesse: What's most interesting to me is that you have a mix of companies that I've heard of and then new companies that were totally different or unknown, winning these licenses going into the process. I expected most of these licenses to go to the big multi-state companies, the companies that are well-established, that already operate in states like Florida or Colorado or New Jersey or Massachusetts or California. And there are a couple of those. But there's also some companies that were only incorporated just last year in 2020 in Georgia.
Steve Fennessy: Mark, is there anything you can tell us about any specific of these upstarts that kind of popped out to you?
Mark Niesse: Well, sure. The best-known one of all of them is Trulieve, a Florida-based company that operates a lot of dispensaries and does big business in Florida and a few other states. So that one wasn't too big of a surprise. You know, it's a publicly traded company that everybody's heard of. But then you saw some other companies. You know, the other Class One license for a 100,000-square-foot growing facility, went to a company called Botanical Sciences, which was a new company to me. I hadn't heard about it previously, but we do know that it has a spinal and pain management doctor as its CEO. And we were also able to find out that on its board of directors, has former U.S. Representative Tom Price, who was also health secretary in the Trump administration,
Steve Fennessy: Tom Price, Republican Tom Price, what was his position been on — on medical marijuana?
Mark Niesse: Generally speaking, when he was in Congress, he voted against medical marijuana bills that would expand use of the medicine in states. Where it was allowed to be consumed, and that raises the concerns of patients who are wondering, hey, what's going on with this bidding process where a powerful former congressman in Georgia is able to be on the board of a company for a product that he never publicly supported before, and that company was able to rise to the top of this very competitive licensing process.
Steve Fennessy: Sounds like a good question. What's the answer?
Mark Niesse: It's hard to tell because we can't see the application. We don't know. It's hard to compare the companies. It's hard to know why one company was chosen over another because their applications are so heavily redacted. And so we're just left with all these questions about did the best companies really win this license?
Steve Fennessy: And did former Congressman Price talk to you?
Mark Niesse: Only to decline comment and direct me to the company CEO. I did talk briefly to the CEO of the company. He said he would call me back and I didn't get any response from him.
Steve Fennessy: Mark, what can you tell us about the commission itself, the state commission whose members were appointed by the governor and others to actually make these decisions? Who are they?
Mark Niesse: The commission was appointed by Gov. Brian Kemp, Lt. Gov. Geoff Duncan and House Speaker David Ralston. The chairman of the commission is Dr. Christopher Edwards. He is a spinal surgeon and doctor. And then you have other members of the commission. You have a police chief from Austell. You have the owner of a Massage Envy franchise. You have a few other doctors and pharmacists on the board, as well as other business owners.
Steve Fennessy: And is there any record that — that's available that would give us some insight into their deliberations over all these, the 60-plus companies that applied?
Mark Niesse: The only record that really sheds light on why one company was chosen over another is a sheet that shows the final scores each company received. But it doesn't — isn't broken down to show how the companies received those scores. In a normal procurement, you'll be able to see how each company scored on each section of the application. In this case, all we see is the aggregate score and we see that the companies that scored highest were the ones that received the licenses.
Steve Fennessy: As we talk about the six companies that were accepted, there were, of course, 60 or so that were rejected. What has been the reaction of some of those companies to being rejected in their application to operate in Georgia,
Mark Niesse: Fifteen of the losing companies are protesting and they filed a protest document. And by filing a protest, they're able to submit the reasons that they believe they should have won the award. And then that protest will be reviewed by an administrative hearings officer appointed by the Georgia Access to Medical Cannabis Commission.
[TAPE 11Alive]: State recently announcing six companies would get licenses. But some businesses not approved are complaining the state misread their applications.
[TAPE 11Alive]: In several instances, Information on the fate that is in our proposal was either disregarded or missed by the reviewers. And as a result, Peach State’s score is lower than it should have been, significantly lower than it should have been
Mark Niesse: if there were scoring errors or if there were inconsistencies in how these licenses were awarded. But let's say a company fulfilled all the requirements of one of the sections of of the application, and they can prove they did every requirement that they could have possibly done. But they were docked points without justification. You know, they could argue, well, we only got 80 points, we should have gotten 100 points. And if that extra 20 points puts them above one of the six companies that did win, well, then they would be in line to get one of those six licenses.
Steve Fennessy: And I understand that one of the companies has a board member, Allen Peake, who was a state representative who was very vocal for quite a while, and in advancing the medical marijuana cause, specifically in Georgia.
[TAPE AP Archive News]: Republican lawmaker Allen Peake, who championed the state's legalization of medical cannabis in 2015, took matters into his own hands.
[TAPE AP Archive News] Allen Peake: We now have, for all practical purposes, a distribution network where we will funnel this product to families who are properly registered with the state and have the legal right to possess up to 20 ounces.
Steve Fennessy: What's his reaction been?
Mark Niesse: He's certainly disappointed. Former Rep. Allen Peake, he was the godfather of Georgia's medical marijuana program. He's the one who pushed this legislation through the process in 2015, and the years afterward. And a lot of the patients he worked with use a product called Haley’s Hope, which is a low-THC oil that many patients started with and continued with because they found it to be effective. Peake was disappointed by what he saw as some potential unfairness or lack of transparency in the process.
Steve Fennessy: But of course, these 15 companies that are protesting the outcome, they don't have access to to the reasons in the same way that you and I don't have access. Right?
Mark Niesse: The companies know their own application and how they were scored so they can be able to argue to the Cannabis Commission that they were not evaluated as well as they should have been.
Steve Fennessy: So the lack of transparency that the industry was pushing maybe back in 2019 is working against those that lost out.
Mark Niesse: That's right. Because, you know, normally in a state government process, it does have to be public unless the General Assembly writes it into law that it doesn't. And that's what happened in this case.
Steve Fennessy: So with these protests, what does it mean for — for when the day will arrive? When someone who holds one of these medical marijuana cards can actually buy something in the state of Georgia?
Mark Niesse: It's really open-ended right now, how long this process is going to take to resolve. Each of these 15 companies are entitled to be heard by the administrative hearings officer and that person will have to respond, will have to come up with a decision. And only when that process is completed can licenses be awarded to the six winning companies. Even then, there might be lawsuits to contest the awards process if there were discrepancies or reason for that. And then after the licenses are finally awarded to these six companies, they have one year to begin operations and distribution. I think what's most important is that the patients be kept in mind most of all. They're the ones who have been advocating for this medicine for years and years, and they're frustrated that they've been having to — many of them have been obtaining it illegally, even though they're allowed to use it ever since. Georgia has had a medical marijuana program for six years now, it just hasn't been up and running. The law says they can use it, but it prohibits them from buying it. In their view, it's kind of open-and-shut that the patients are the ones who need this product. The law says they can use it, but they've been delayed and delayed and delayed. And now this process is getting bogged down with protests and disputes and redactions and secrecy over whether the right companies won licenses or not. I think the patients don't care as much which company wins. They just want to have a product that they can buy legally without having to worry about any potential prosecutions and just focus on getting treatment for these medical conditions.
Steve Fennessy: My thanks to Mark Nisse, a reporter at the Atlanta Journal-Constitution. The 15 companies that have lodged protests with the state after failing to get a license to grow here aren't the only ones upset about the process. Some farmers in Georgia have also complained that one of the criteria for applying, that a producer have $1.5 million in cash on hand, meant small growers never stood a chance. For more Georgia Today, go to gpb.org. I'm Steve Fennessy. Georgia Today is a production of Georgia Public Broadcasting. Subscribe to our show anywhere you get podcasts. Don't forget to leave us a rating and review on Apple. Jahi Whitehead produced this episode. Jesse Nighswonger engineered it. Thanks for listening. See you next week.