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Marijuana in Minnesota
Matt Sepic and Feven Gerezgiher
Minneapolis
Updated:

Applicants sue Minnesota’s Office of Cannabis Management over disqualification

cannabis products on display
A variety of cannabis products are displayed during the grand opening for the general public of the Sweetest Grass Dispensary by Leech Lake Cannabis Company of the Leech Lake Band of Ojibwe on June 6 in Walker, Minn.
Erica Dischino for MPR News

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Several prospective marijuana business owners who were barred from participating in a license lottery are suing Minnesota cannabis regulators.

The Office of Cannabis Management announced Friday that it will hold a drawing on Tuesday to determine who will operate the state’s first legal marijuana businesses.

The OCM turned to a lottery because more than 1,800 applicants had sought 282 licenses. The first to apply are those considered social equity applicants under the law. They include people who live in high poverty areas, those harmed by the war on drugs, and military veterans. 

This week, regulators disqualified two-thirds of the applicants for a variety of reasons.

In a lawsuit, Jodi Connolly alleges that OCM gave no reason for denying her application. Connolly’s co-plaintiff Cristina Aranguiz said she received only a cursory explanation.

The two call the rejections “arbitrary and capricious,” and they want a judge to stop the lottery while their lawsuit is pending.

In an email to MPR News on Friday, a spokesperson for the Office of Cannabis Management said the department still plans to move ahead with the scheduled lottery.

In a statement released late Friday, OCM officials did not mince words about the lawsuit, saying it’s a tactic aimed at “using the judicial process to thwart the ambitions and dreams of legitimate social equity candidates who have a once-in-a-lifetime opportunity to get a head start in this industry.”

“The individual filing the suit is the face of a scheme to use hundreds of straw applicants to gain unfair advantage in the lottery,” OCM said in the public statement. “This attempt to flood the zone and place their thumb on the scale at the expense of legitimate social equity applicants is disturbing.”

The OCM filed a motion on Friday to have that lawsuit dismissed.

However, seven other rejected applicants also filed lawsuits on Friday seeking to stop OCM’s license lottery.

One called their rejection “arbitrary and patently unfair” to the plaintiff, “a bona fide social equity applicant.”

The other, a joint lawsuit, argues the OCM did not follow statutory requirements regarding application denials and writes the vetting process “must be transparent, clearly communicated, and structured to eliminate opportunities for corruption and arbitrary government malfeasance.”

A judge is expected to hear arguments from attorneys involved in two of the lawsuits on Monday.