Maryland Cannabis Lottery Faces Potential New Delay as Social Equity Applicant Sues MCA

A new lawsuit against The Maryland Cannabis Administration could further delay the state’s cannabis license lottery, with a social equity applicant alleging exclusion due to technical issues and communication failures.

Full story after the jump.

Editor’s note: this article was contributed by LJ Dawson of The Outlaw Report, and has been republished with permission.

A new lawsuit filed against The Maryland Cannabis Administration threatens to delay the lottery after another separate lawsuit failed to get an injunction in February.

A previous lawsuit filed by Jeffery Jensen, a lawyer with a history of bringing social equity lawsuits against states, failed to get an injunction last month. Andrew Garrison, chief of the office of policy and government affairs at MCA, testified that the “[a]dministration anticipates that the cannabis license lottery will occur during or near the first week of March 2024.”

However, the lottery has not been launched this week, nor have qualified applicants entered in the lottery heard an update from MCA as of Mar. 5, 2024. MCA did not respond to request for comment about this new lawsuit.

A total of 1,708 applications were received by MCA’s deadline in December. 264 of those applications were for adult-use dispensaries.

Unlike the Jensen’s lawsuit which hinged on alleged unconstitutional denial of social equity status, this new lawsuit in Anne Arundel County accuses MCA of denying entry to a qualified social equity applicant due to computer system errors.

According to court documents filed mid-February, Kalil Traore, a 65% owner of KG Wellness #4 LLC, was not verified as a social equity candidate until 19 minutes before the application deadline on Dec. 12, 2023.

In lawsuit documents obtained by The Outlaw Report, her lawyers allege that the company contracted to complete social equity verifications refused to communicate with her via provided emails while Traore was traveling in Africa, significantly delaying her verification.

KG Wellness #4 is one of eight businesses under that name registered in early December. According to lawsuit documents, Traore and her investor, Shivana Persuad, seek to open a dispensary in Talbot County.

When Traore tried to upload the application to the MCA portal after verification, the deadline closed the portal before her application was uploaded. When MCA was contacted, Traore’s lawyers said that she was told that her application would not be accepted despite delays in verification and portal issues.

“Though MCA refused to extend the deadline, it has unilaterally extended the time for which it will be reviewing applications and holding the Lottery, originally set for on or before January 1, 2024,” the lawsuit alleges.

“We assert that pursuant to the Uniform Electronic Transaction Act, the application was legally received before the deadline and the application should be treated as such,” Stuart Cherry, her lawyer said in an email.

MCA has not responded to the lawsuit or the request for an injunction preventing the lottery from taking place. When MCA and the attorney general’s office were asked for comment, OAG’s press office responded in an email that they had no comment.

Traore and her lawyers seek for MCA to include Traore’s business in the upcoming lottery or a legal pause to the Talbot County lottery while the lawsuit is decided. Maryland’s lottery has now been delayed over two months while medical dispensaries who transitioned to adult-use in July 2023 continue to sell cannabis recreationally.

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