Officials in Massachusetts have disqualified nine marijuana companies that were initially approved for licenses under the state’s medical weed program.

That amounts to nearly half the licenses issued so far. The decision came after a review sparked by discoveries that many in the business had lied on their applications or had conflicts of interest.

Dispensaries raided and closedThe dispensaries rejected June 27 include three run by a business whose owners include former U.S. Rep. William Delahunt. The company secured licenses to operate three pot shops in three counties. Those licenses were among the nine that were disqualified.

Delahunt’s bid was rejected on review because the company falsely claimed to have the support of state Senate President Therese Murray and planned to divert 25 percent of its revenue to a management company.

A dispensary “must operate on a non-profit basis for the benefit of registered qualifying patients,” Van Unen said.

Problems Delay Opening Day

Just 11 dispensaries remain after the first round of applicants. More shops may be given licenses in later rounds. The medical marijuana law passed by voters in 2012 requires the state to license at least 14 dispensaries, one for each county, with a maximum of 35.

Opening day has been pushed back to November at the earliest, with officials saying most shops won’t open until February. The state had originally planned to make medical weed available by this summer.

The 20 dispensaries that were selected for provisional licenses in January were given an expanded review after multiple problems surfaced with some of the applicants. Those 20 licenses were issued in January to 16 businesses.

Companies were rejected because of background checks, misrepresentations, detailed financial and business reviews, and facts revealed in personal interviews.

Process Plagued by Misrepresentations

Van Unen said Delahunt, a longtime former prosecutor, admitted during an interview that he had misrepresented Murray’s statements about the licenses.

William Delahunt, former U.S. Representative and current dispensary owner.
William Delahunt, former U.S. Representative and current dispensary owner.

A meeting he held with the Senate president “was simply informative and no request was made for her support,” she said. “The only explanation Mr. Delahunt offered was that he should have read the application more carefully.”

The combination of scandal and public policy is nothing new in Massachusetts, but the allegations by losing applicants and the media were enough to force changes.

The state has acknowledged that officials failed to verify applicants’ statements before licenses were announced in January, even though they spent more than $600,000 on background checks.

Conflicts of Interest Raised Hackles

Health officials said they plan to release records showing how they selected applicants in the first round. They have refused to provide those numbers in the past.

Problems in the medical marijuana selection process have led to lawsuits and a legislative investigation. And they’ve battered the image of the state’s new MMJ program.

Conflicts of interest were a particular issue for officials. Delahunt has political ties throughout state government, including the Public Health Department. The agency’s commissioner, Cheryl Bartlett, is one of his longtime friends and hosted political events for him in the past.

Bartlett disclosed her connection to Delahunt only when the licensing process was nearly done. Bartlett, who had planned to choose the winners, handed the job to Van Unen after the disclosure became public.

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