(Photo credit: Kelly & Kelly P.C).
A federal appeals court has revived key constitutional claims challenging Georgia’s medical marijuana licensing process, ruling that a lower court improperly dismissed the case over questions stemming from federal marijuana prohibition.
The U.S. Court of Appeals for the 11th Circuit issued its decision September 2 in a lawsuit brought by Georgia Atlas Inc. and Atlas Illinois Inc. against officials with the Georgia Access to Medical Cannabis Commission. Georgia Atlas applied for a license to cultivate and sell marijuana for medical use under state law but was denied.
Atlas sued, alleging that the licensing process violated the Due Process and Equal Protection clauses of the Fourteenth Amendment, as well as the Commerce Clause. Among other allegations, the companies argued that officials failed to establish standardized evaluation criteria, did not use blind grading and failed to maintain transparency in the licensing process.
Atlas Illinois also challenged Georgia’s residency requirements, arguing that they prevented the out-of-state company from competing for a license on equal terms. The company said it was forced to divide resources and recruit Georgia owners and managers in order for Georgia Atlas to apply.
A federal district court dismissed the claims after concluding that because marijuana remains federally prohibited, Atlas had no legally protected interest in obtaining a state marijuana license.
The 11th Circuit rejected that reasoning, saying the lower court improperly treated a potential problem with the merits of Atlas’ claims as a question of whether the companies had standing to bring them.
“Whether federal law ultimately defeats Atlas’s asserted constitutional interests may determine whether Atlas can prevail, but it does not determine whether Atlas has standing to press those claims,” the court said.
The appeals court said Georgia Atlas sufficiently alleged that discriminatory practices and unconstitutional procedures harmed its ability to compete for a license. It also found that Atlas Illinois adequately alleged injury from the state’s residency restriction.
The judges emphasized that their decision does not determine whether Atlas will ultimately win its constitutional claims. The court specifically noted that Atlas is seeking a state license, not a federal ruling authorizing marijuana cultivation or distribution, and said the impact of federal marijuana law on the underlying claims is a question that can be addressed later in the case.
The court did uphold dismissal of a separate claim seeking to invalidate Georgia’s Hope Act under the Supremacy Clause. Judges concluded that eliminating Georgia’s medical marijuana licensing system would not remedy Atlas’ alleged injuries because it would leave no license for the companies to obtain.
The ruling sends the Due Process, Equal Protection and Commerce Clause claims back to the U.S. District Court for the Northern District of Georgia for further proceedings.
Georgia’s Hope Act was signed by Governor Brian Kemp in 2019 and created the Georgia Access to Medical Cannabis Commission to oversee in-state production and sales of medical marijuana products to registered patients. State law authorizes six production licenses, including two Class 1 and four Class 2 licenses, all of which are currently active.
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