NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2204-18T4

 A-2219-18T4

 A-2276-18T4

 A-2278-18T4

 A-2283-18T4

 A-2288-18T4

 A-2292-18T4

 A-2305-18T4

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA 

ALTERNATIVE TREATMENT CENTER FOR 

PANGAEA HEALTH AND WELLNESS, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER

FOR GGB NEW JERSEY, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER

FOR LIBERTY PLANT SCIENCES, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER

FOR ALTUS NEW JERSEY, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA 

APPROVED FOR PUBLICATION

November 25, 2020

APPELLATE DIVISION
2

A-2204-18T4

ALTERNATIVE TREATMENT CENTERS

COMPASSIONATE CARE FOUNDATION,

INC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER

FOR ALTUS NEW JERSEY, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER

FOR HARVEST OF NEW JERSEY, LLC.

_______________________________________

IN THE MATTER OF THE APPLICATION

FOR MEDICINAL MARIJUANA

ALTERNATIVE TREATMENT CENTER 

FOR BLOOM MEDICINALS OF PA, LLC.

_______________________________________

Argued October 20, 2020 – Decided

Before Judges Fisher, Moynihan and Gummer.

On appeal from a final agency decision of the New 

Jersey Department of Health, dated December 17, 

2018.

John W. Bartlett argued the cause for appellant Pangaea 

Health and Wellness LLC (Murphy Orlando LLC, 

attorneys; John W. Bartlett, Jason F. Orlando and 

Christopher D. Zingaro, on the briefs in A-2204-18).

Joshua S. Bauchner argued the cause for appellant GGB 

New Jersey, LLC (Ansell Grimm & Aaron, P.C., 

November 25, 2020
3

A-2204-18T4

attorneys; Joshua S. Bauchner, of counsel and on the 

briefs; Rahool Patel, on the briefs in A-2219-18).

Seth R. Tipton argued the cause for appellant Liberty 

Plant Sciences LLC (Florio Perrucci Steinhardt & 

Cappelli LLC, attorneys; Seth R. Tipton, of counsel and 

on the briefs in A-2276-18).

Kevin J. McKeon of the Pennsylvania bar, argued the 

cause for appellant Altus New Jersey (Hawke McKeon 

& Sniscak LLP, attorneys; Kevin J. McKeon, Judith D. 

Cassel and Melissa A. Chapaska, of counsel and on the 

briefs in A-2278-18 and A-2288-18; Rachel S. Cotrino, 

of counsel and on the briefs in A-2288-18).

Sean Mack argued the cause for appellant 

Compassionate Care Foundation, Inc. (Pashman Stein 

Walder Hayden, PC, attorneys; Sean Mack and 

Matthew Frisch, on the briefs in A-2283-18).

Maeve E. Cannon argued the cause for appellant 

Harvest of New Jersey LLC (Stevens & Lee, PC, 

attorneys; Maeve E. Cannon and Patrick D. Kennedy, 

of counsel and on the briefs; Wade D. Koenecke, on the 

briefs in A-2292-18).

Stuart M. Lederman argued the cause for appellant 

Bloom Medicinals of PA, LLC (Riker Danzig Sherer 

Hyland & Perretti LLP, attorneys; Stuart M. Lederman, 

of counsel and on the briefs; Diane N. Hickey, on the 

briefs in A-2305-18).

Jacqueline R. D'Alessandro, Deputy Attorney General, 

argued the cause for respondent New Jersey 

Department of Health (Gurbir S. Grewal, Attorney 

General, attorney; Melissa H. Raksa, Assistant 

Attorney General, of counsel; Jacqueline R. 

D'Alessandro, on the briefs in all appeals).
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A-2204-18T4

Christopher R. Gibson argued the cause for respondent 

Columbia Care New Jersey, LLC (Archer & Greiner, 

PC, attorneys; Christopher R. Gibson and Patrick M. 

Flynn, of counsel and on the briefs in all appeals).

George R. Hirsch argued the cause for respondent MPX 

New Jersey, LLC (Sills Cummis & Gross, PC, 

attorneys; George R. Hirsch and Kenneth F. Oettle, of 

counsel and on the briefs in all appeals).

Eric I. Abraham argued the cause for respondent GTI 

New Jersey, LLC (Hill Wallack LLP, attorneys; Eric I. 

Abraham and Henry T. Chou, of counsel and on the 

briefs in all appeals).

Benjamin Clarke argued the cause for respondent 

Verano NJ, LLC (DeCotiis, Fitzpatrick, Cole & Giblin, 

LLP, attorneys; Benjamin Clarke, of counsel and on the 

briefs in all appeals; Michael DiFazio, on the briefs in 

all appeals; and join in the brief of respondent New 

Jersey Department of Health in A-2276-18, A-2283-18, 

A-2288-18 and A-2292-18).

Robert A. Magnanini argued the cause for respondent 

JG New Jersey, LLC (Stone & Magnanini, LLP and 

Frank Newel, (Loevy & Loevy) of the Illinois bar,

admitted pro hac vice, attorneys; Robert A. Magnanini 

and Michael Clore, and Frank Newel, of counsel and on 

the briefs in A-2278-18, A-2288-18 and A-2292-18;

and join in the brief of respondent New Jersey 

Department of Health in A-2204-18, A-2219-18, A2276-18, A-2283-18, and A-2305-18).

A. Matthew Boxer argued the cause for respondent 

NETA NJ, LLC (Lowenstein Sandler, attorneys; A. 

Matthew Boxer and Steven Llanes, on the briefs in A2219-18 and A-2305-18; and join in the brief of 

respondent New Jersey Department of Health in A-
5

A-2204-18T4

2204-18, A- 2276-18, A-2278-18, A-2283-18, A-2288-

18 and A-2292-18).

The opinion of the court was delivered by

FISHER, P.J.A.D.

In these eight appeals, which have been calendared together, appellants 

contend the Department of Health made numerous errors in its selection of 

entities to operate Alternative Treatment Centers to grow, process, and dispense 

marijuana as part of the State's Medicinal Marijuana Program. Appellants 

Pangaea Health and Wellness LLC, Harvest of New Jersey, LLC, Liberty Plant 

Sciences LLC, Bloom Medicinals of PA, LLC, GGB New Jersey, LLC, Altus 

New Jersey, LLC, and Compassionate Care Foundation, Inc. complain about, 

among other things, the Department's selection process, including the criteria 

used, the manner in which their applications were scored, and the overall 

sufficiency and explanation of the final agency decisions. Because we agree 

with appellants that the scoring system produced arbitrary results that have gone 

unexplained, we intervene and vacate the final agency decisions in question, and 

we remand for further proceedings.

I

The Applicable Legislation. The Compassionate Use of Medical 

Marijuana Act, N.J.S.A. 24:6I-1 to -30, which was enacted on January 18, 2010, 
6

A-2204-18T4

protects qualifying patients and their caregivers from arrest, prosecution, and 

other penalties in New Jersey for possessing marijuana for medical purposes. 

N.J.S.A. 24:6I-2(e).1 To qualify, a patient must suffer from one of the 

enumerated conditions or from any condition the Department establishes as 

debilitating. N.J.S.A. 24:6I-3.

The Compassionate Use Act also protects those authorized to produce, 

process, and dispense marijuana pursuant to the statute's terms, N.J.S.A. 24:6I7, and charges the Department with implementing the State's Medicinal 

Marijuana Program (the Program), N.J.S.A. 24:6I-3. See Natural Med., Inc. v. 

N.J. Dep't of Health and Senior Servs., 428 N.J. Super. 259, 262 (App. Div. 

2012). This includes establishing a registry of qualified patients and issuing 

permits for the operation of Alternative Treatment Centers (ATCs). N.J.S.A. 

24:6I-4; N.J.S.A. 24:6I-7.1; Natural Med., 428 N.J. Super. at 262.

N.J.S.A. 24:6I-7(a)(3) tasks the Department with "ensur[ing] the 

availability of a sufficient number of [ATCs] throughout the State, pursuant to 

need" and requires that the Department issue permits for "at least two [ATCs] 

1 The Act has undergone significant revisions. See L. 2019, c. 153. Those 

amendments, however, did not go into effect until July 2, 2019, and have no 

bearing on our disposition of these appeals about the final agency decisions 

rendered in December 2018.
7

A-2204-18T4

each in the northern, central, and southern regions of the State." Beyond the 

mandated six ATCs, the Department "has discretion to determine how many 

ATCs are needed to meet the demand for medicinal marijuana and whether the 

issuance of a permit to a particular applicant would be consistent with the 

purposes of the Act." Natural Med., 428 N.J. Super. at 263. In ensuring the 

availability of a sufficient number of ATCs, the Department promulgated 

regulations, N.J.A.C. 8:64-1.1 to -13.11, which provide the framework through 

which it issues requests for applications for the operation of ATCs.

In 2011, to fulfill its obligation under N.J.S.A. 24:6I-7(a), the Department 

issued a request for applications to select entities to operate the State's first six 

ATCs. In re Inst. for Health Rsch. and Abunda Life Ctr., No. A-0069-11 (App. 

Div. Aug. 22, 2013) (slip op. at 1-2). A five-member reviewing committee 

consisting of three Department members, one member from the Department of 

Agriculture, and one from the Department of Community Affairs, evaluated 

thirty-five applications and awarded scores for each criterion. Id. at 2-3. At that 

time the Department decided that no applicant could hold more than one ATC 

permit and that two ATCs could not be opened in the same municipality, 

concluding this standard would promote accessibility to more patients and the 
8

A-2204-18T4

availability of more diverse products. Id. at 3-4. The reviewing committee 

chose two different high-scoring applicants for each of the three regions. Ibid. 

After the Department rendered decisions announcing the entities it had 

chosen to proceed with the ATC permitting process, several disappointed 

applicants appealed. Id. at 1. We concluded that the Department's proceedings 

were not arbitrary, capricious, or unreasonable. Id. at 7-9.

In January 2018, the Governor issued Executive Order 6, which directed 

the Department to review the Program's status with a mind toward expanding

access to medical marijuana. A few months later, the Department added new 

conditions to the list of those qualifying for the Program, including certain types 

of chronic pain, Tourette's syndrome, migraines, and anxiety. These additions 

caused a rapid increase in qualified and registered patients between March and 

July 2018.

The Request for Applications. In July 2018, to ensure that the growing 

population of qualified patients would be adequately served, the Department 

issued a second request for applications for the selection of six more entities, 

two in each region, to receive ATC permits.

The request for applications had two sections. Part A required information 

about:
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A-2204-18T4

• the applicant’s corporate form;

• proposed locations for grow sites and 

dispensaries and whether these locations 

complied with all local codes and ordinances;

• names of all managers, staff, contractors, 

vendors, landlords, and suppliers;

• whether the applicant held any medical 

marijuana-related licenses in other states; and

• disclosures of any regulatory violations, 

litigation, and criminal histories.

Part A was evaluated on a pass/fail basis; the application would be rejected if 

the applicant failed to respond sufficiently to each question.

Part B consisted of sixty scored criteria requiring applicants to provide 

narrative responses and to attach responsive documents. The criteria covered 

several topics, asking applicants about their experience, expertise, and plans to 

operate an ATC in New Jersey if selected, including but not limited to:

• cultivation policies and procedures and 

knowledge of botany and chemistry related to the 

growing and processing of marijuana products;

• mobilization plans and time estimates for 

producing first crops;
10 A-2204-18T4

• past business experience with medical marijuana, 

if any;

• quality assurance and quality control plans;

• plans for insect and disease control and 

sanitation;

• plans to assist scientific research;

• security plans;

• proposed facility floor plans;

• financial records, records of past taxes paid, and 

proposed budgets; and

• workplace and ownership diversity and collective 

bargaining agreements. 

The request for applications informed prospective applicants that 

responses to Part B would be evaluated by a review committee on a 1000-point 

scale; the request listed the maximum points that could be earned for each 

criterion. The total scores awarded to an applicant by the review committee 

would then be averaged, creating the applicant's final composite score. The 

request for applications also clarified that winning applicants would not be 

issued permits immediately; they would instead be "chosen to proceed in the 

permitting process."
11 A-2204-18T4

On August 9, 2018, the Department held a mandatory pre-submission 

conference for applicants to explain the scoring process. It also responded in 

writing to questions from prospective applicants in an official "Q&A" document 

made publicly available less than a week later.

By the application closing date of August 31, 2018, the Department

received 146 applications from 103 entities, with several entities applying in 

more than one region. For example, Altus applied in the central and southern 

regions, Bloom in all three, and Liberty in the northern and southern regions. 

Three appellants applied in only a single region: GGB in the northern region; 

Harvest in the southern region; and Pangaea in the central region.

The review committee. The Department chose a six-member committee 

to review and score all applications; this review committee was comprised of

four representatives from the Department, one from the Department of 

Agriculture, and one from the Department of Treasury. On September 5, 2018, 

before the scoring process began, the review committee members attended a 

workshop, which included a discussion about the Program, guidance on scoring 

applications, and training on diversity and bias. Each review committee member 

completed disclosure forms and signed certifications stating that neither they 
12 A-2204-18T4

nor any members of their immediate family had any financial or personal ties to 

any applicant.

The Department provided the review committee members additional 

printed scoring instructions for the sixty criteria. For each criterion, the 

instructions directed members to award points on a scale from zero to a

maximum number of points allowable, which varied. The instructions also 

stated that scores of zero should be reserved for "non-responsive" answers.

Review committee members were initially given sixty days from the 

application due date to complete their evaluations, but, when committee 

members expressed concerns about this allotted time, the Department extended 

the review period for six weeks. At times, members emailed questions to the 

Department about how to score some of the criteria, to which the Department 

responded.

On December 12, 2018, the review committee recommended six 

applications per region for "further consideration." Five days later, the 

Department issued final agency decisions to all applicants, expressing its 

acceptance or rejection of their applications. Included with these collective 

decisions was the Department's explanation that, as with the previous round of 

ATC permitting, it would not award more than one permit to any single 
13 A-2204-18T4

applicant, even if that applicant was one of the two highest scorers in more than 

one region. The Department believed that choosing six different entities would 

benefit patients because it would lead to a greater variety of products and would 

ensure that if one entity suffered a setback like a crop failure, only one ATC 

would be affected.

After identifying the region with the greatest need for medical marijuana, 

the Department chose two applicants for that region first. The Department 

explained, in its final agency decisions, that it had ordered the regions by 

greatest supply and demand by considering the

total population of the region divided by total statewide 

population . . . and, utilizing the Department’s Medical 

Marijuana Patient Registry, the current medical 

marijuana patient population in the region divided by 

total statewide medical marijuana patient population. 

The two calculations were averaged to determine the 

demand factor. The Department calculated a medical 

marijuana supply factor using data extracted from the 

inventory management systems of the current ATCs. 

The supply factor was the total current medical 

marijuana supply of the region in ounces divided by 

total statewide supply in ounces.

The Department then divided the two factors to determine the ratio of supply to 

demand for each region, with lower numbers expressing the need for greater 

supply to meet the care requirements of Program patients. In this way, the 
14 A-2204-18T4

Department ranked the regions according to need in this order: northern, 

southern, and central.

Once the applications were scored, the Department ascertained the regionby-region top scorers. For the northern region, the Department chose the two 

highest scoring applicants: NETA NJ, LLC, with 932.1667 points, and GTI New 

Jersey, LLC, with 927.3333 points.2 For the southern region, MPX and NETA 

scored highest, with 958.1667 and 932.1667 points, respectively, but because 

NETA had already been selected for the northern region, the Department chose

MPX and Columbia Care New Jersey, LLC, which came in third with 929 points. 

In the central region, MPX, NETA, Columbia, and GTI scored highest, but all

were bypassed because their applications were top finishers in other regions. As 

a result, the next two highest-scoring applicants were chosen: Verano, with 

920.8883 points, and JG New Jersey, LLC, with 913.3333 points.

The final agency decisions. Accepting those scores without further 

apparent scrutiny, and without allowing disappointed applicants any means to 

question or challenge their scores or the scores of those that were approved, the 

2 Appended to this opinion is a list of the top two scorers and others that finished 

close behind in each region.
15 A-2204-18T4

Department rendered final agency decisions. In its brief four-page decisions, 

the Department:

• recounted how the Department 

called for and received applications;

• described the review committee's 

formation but in no greater detail 

than we have explained here;

• stated that it first reviewed 

applications for completeness;

• identified the top six finishers in 

each region along with their 

composite scores;

• explained why it chose the top two 

finishers in first the northern and 

then the central and southern regions 

and provided a brief explanation for 

why there was an increased demand 

in that order;

• declared its bottom-line ruling on the 

application;

• informed applicants of the time 

within which an appeal could be 

filed; and

• mentioned that the fees provided by 

unsuccessful applicants would be 

returned.
16 A-2204-18T4

The final agency decisions did not explain whether or to what extent the 

Department may have reviewed or verified the scores rendered by the review 

committee.

The filing of appeals and attempts to expand the record. Following the 

final agency decisions, several unsuccessful applicants – including some of 

these appellants – submitted requests to the Department under the Open Public 

Records Act (OPRA), N.J.S.A. 47:1A-1.1 to -13, for copies of the winning 

applications, score sheets, and other related documents. The Department 

responded by creating an online library of materials, including redacted versions 

of successful applications. None of the appellants challenged the Department's 

response.

Pangaea, Harvest, Liberty, Bloom, GGB, Altus,

3

and Compassionate Care 

appeal the Department's final agency decisions. Motions for stays pending 

appeal were denied at the Department level, as well as in this court and the 

Supreme Court.

Pangaea, Liberty, and Bloom also unsuccessfully moved in this court for 

leave to supplement the record with expert reports in the field of statistical 

3 Altus has filed two appeals, separately challenging the unfavorable final 

agency decisions rendered on its central and southern region applications.
17 A-2204-18T4

mathematics. The Supreme Court denied Pangaea's motion for leave to appeal 

the denial of its motion to supplement. In re Application for Med. Marijuana 

Alt. Treatment Ctr., 240 N.J. 385 (2020).

II

Because appellants' many arguments are either similar or overlap, we 

heard the appeals together. We now decide these eight appeals by way of this 

single opinion.

Our response to many of the issues posed by appellants is informed by our 

view of the legitimate questions posed by appellants as to the scores assigned 

by the Department. In short, all roads lead to the same point: numerous, 

indisputable anomalies in the scoring of the appellants' applications prevent us 

from having sufficient confidence in the process adopted by the Department or 

its results for the approval of ATCs in this important industry that provides 

"beneficial use[s] for . . . treating or alleviating the pain or other symptoms 

associated with" certain medical conditions. N.J.S.A. 24:6I-2(a). It is for this 

chief reason that we remand to the Department to undertake further steps to 

ameliorate these concerns.

To explain our disposition of these appeals, we consider and first discuss

appellants' arguments about scoring because our view of those issues impacts 
18 A-2204-18T4

most of the remaining issues. Accordingly, we analyze in the following order:

(a) appellants' arguments about scoring; (b) the standard of appellate review; (c) 

the sufficiency of the record on appeal; (d) the lack of an intermediate step 

between the results achieved by the review committee and the issuance of final 

agency decisions; (e) the sufficiency of the Department's findings; (f) a handful 

of discrete issues; and (g) the remedy that we believe is necessary to instill 

public confidence in the Department's procedures and the results it achieved.

A

We first consider appellants' specific arguments about the scoring and 

their contention that, because the Department tolerated too great a degree of 

"relative error" in its scoring, its decisions were arbitrary, capricious and 

unreasonable. This argument, with which we agree, is demonstrated by 

numerous examples that simply cannot be rationally explained on the record 

before us.

As mentioned, the review committee consisted of six members who were 

required to provide a score on a given range – a range that started at zero and 

finished at various numbers depending on the particular criterion. The scores of 

each six members were then averaged to produce the applicant's final score on 

each criterion. The Department argues that by averaging the scores of six 
19 A-2204-18T4

diverse members, a fair and reasonable assessment of an applicant's score on 

each criterion would be obtained. But appellants argue, and we agree, that any 

averaging only slightly ameliorates anomalies and tends to produce inaccurate 

scores. They argue that there is such a large degree of "relative error" in some 

of the criteria that no one – not this court, not the applicants, and not the public 

– can have confidence in the final results.

In considering this relative-error concept, we emphasize that we are not 

suggesting that either the Administrative Procedure Act or the legislation in 

question somehow incorporates the world of statistics, cf. Lochner v. New York, 

198 U.S. 45, 75 (1905) (Holmes, J., dissenting and observing that "[t]he 

Fourteenth Amendment does not enact Mr. Herbert Spencer's Social Statics"), 

but we do suggest they require the application of common sense and strive to 

suggest a more accurate process than that which seems to have been adopted 

here.

Moreover, in expressing concern for the relative error of some of the 

examples provided by appellants, we do not mean to suggest that an agency 

engaging in a similar process may not tolerate an occasional error or mistake 

without running the risk of being labelled arbitrary or capricious. To the 

contrary, we expect that an administrative process may lead to imperfect 
20 A-2204-18T4

conclusions because the participants and the public expect speed and efficiency 

at that level. See, e.g., Texter v. Dep't of Hum. Servs., 88 N.J. 376, 385 (1982) 

(recognizing that administrative agencies necessarily "possess the ability to be 

flexible and responsive to changing conditions"). Nevertheless, the concept of 

relative error – in the face of the Department's failure to offer appellants a 

platform for arguing that the review committee made mistakes that ought to be 

examined and corrected – is an appropriate means for examining why, if left 

unexamined, uncorrected, or unexplained, the results of the Department's 

process must be viewed as arbitrary, capricious, and unreasonable.

Relative error is a concept that simply measures the extent to which a 

computation may be mistaken. It can range from a relative error of zero percent 

(everyone agrees) to 100% (one judge gives the lowest possible score and 

another gives the highest possible score). The higher the relative error, the 

greater the doubt about the accuracy of the score derived from averaging the 

scores. Stated another way, when six individuals consider the same criterion –

assuming the examiners use the same observational tools and share the same 

understanding about how to score what they see – one would expect that these 

individuals would produce the same or quite similar scores, meaning the relative 

error would be close to zero. So, any system that produces an extensive variety 
21 A-2204-18T4

of scores calls into question the accuracy or legitimacy of its results. For 

example, if four baseball umpires watch the same play – a fly out to centerfield 

– anarchy would soon follow if only one umpire said he saw a fly out to 

centerfield, while the other three claimed to have seen: the batter swing and 

miss; a groundout to shortstop; and a pop-out to the catcher. The two competing 

teams – and spectators that tuned in to watch – would rightfully find the judging 

system deeply flawed even if the "average" of those four calls amounted to an 

out. That approach would soon lead to chaos and cast grave doubt on the 

accuracy of the game's final score. The many scoring examples provided by 

appellants similarly lead us to question whether the Department has enacted a 

system that's producing non-arbitrary results that the Legislature intended in its 

enactment of the Compassionate Use Act and that the participants and the public 

have a right to expect.

Pangaea asserts that in eight of the sixty Part B scoring categories –

thirteen percent of the overall test – it received in the same category perfect 

scores as well as zeroes. That is, in thirteen percent of the overall test, the review 

committee's assessment was based on a 100% relative error factor; with the 

committee giving scores that consisted of an average of both perfect scores and 

perfectly bad scores.
22 A-2204-18T4

Three categories sought the applicant's floor plans or interior renderings 

for the proposed ATC's cultivation, manufacturing, and dispensary sites, and 

noted that "[n]o explanation is necessary"; these categories were scored on a 

range of zero to fifteen, with zero being assessed only as to applicants who had 

failed to provide the requested plan or rendering. Pangaea provided floor plans, 

yet one reviewer gave scores of zero, five, and zero on these three categories. 

Because Pangaea provided plans, one might expect perfect scores across the 

board, but with the unexplained low scores, and their inclusion in the calculus 

that produced the average for each of these categories, Pangaea's score was 

brought down considerably from what one would expect in light of the fact that 

the remainder of the group viewed Pangaea's response as near perfect. 4 Even if 

the Department's response was correct that Pangaea's floor plans were provided 

elsewhere in its application, and thus it was reasonable for a low score to be 

assigned, one can only wonder about the reasonableness of the other perfect 

scores.

4 Pangaea makes the further point that these scores are all the more surprising 

because some applicants – who secured higher scores – did not actually have a 

site for these facilities, but merely promised a particular type of facility in a 

specific location. Pangaea had actually leased property in Ewing and provided 

108 pages of architectural and engineering site plans in its application.
23 A-2204-18T4

Other Pangaea scores revealed similar anomalies. Noteworthy is the 

proliferation of zeroes despite instructions given by the Department to the

review committee that a zero should only be assigned when the applicant's 

answer was non-responsive.5 Additional inconsistency can be found in a 

snapshot of some of the other numbers on Pangaea's scorecard:

• 10 25 16 23 0 25

• 15 15 15 15 0 15

• 20 0 23 25 18 25

• 20 25 20 25 0 25

• 15 0 15 15 0 0

The zeroes are disconcerting, particularly when other review committee 

members awarded high or perfect scores when considering the same information 

on the same criterion. On this record, one can only wonder what it was that the 

review committee members on either side of this spectrum were or weren't 

seeing or considering when assessing Pangaea's application.6

5 The review committee members were instructed that "[a] score of 0 should 

only be used when [the applicant's answer was] non-responsive to the measure 

or criterion, unless otherwise indicated."

6 Some of the appellants argue this may not all be the fault of the review 

committee members, suggesting they were simply asked to do far too much in 
24 A-2204-18T4

Liberty Plant raises similar questions about its scores. On one category –

knowledge of botany, horticulture, and phytochemistry and the application of 

those sciences to the cultivation of medical marijuana – Liberty Plant observes 

that it received two perfect scores of thirty, a near perfect twenty-nine, a very 

high twenty-five, but then two scores of fifteen. The relative error of the scoring 

here was fifty percent. On another category – inventory management – the 

relative error was seventy percent, with review committee members giving a 

perfect twenty, a near-perfect nineteen, three above-average scores (a sixteen 

and two fifteens), and a sub-par six.

too short a period of time. To illustrate this claim of "reviewer fatigue," GGB 

asserts that each review committee member was charged with reviewing more 

than 100 applications consisting of more than 53,000 pages in a span of eleven 

weeks or, stated another way, each member was required to evaluate more than 

4800 pages per week (975 pages per day, excluding weekends and holidays). 

GGB argues that each reviewer was essentially "tasked with reading [the 1225-

page novel, War and Peace] nearly four times in a single week." In response, it 

has been argued that this allegation of "reviewer fatigue," even if true, does not 

necessarily mean that the review committee ended up scoring appellants too low; 

it is just as likely that it could have led to scoring them too high. But that only 

supports another argument that we will later discuss: that without an 

explanation for the inconsistent scores, no one can know for sure whether they 

were produced by "reviewer fatigue," a misunderstanding of the criteria, or the 

worth of the applicant's responses. Without an explanation from the 

Department, one can only speculate why inconsistent scores were so frequently 

rendered.
25 A-2204-18T4

Consideration of the applicant's past history of paying business taxes was 

judged on a scale of zero to twenty-five. The scores received by Liberty Plant 

had a relative error of ninety-six percent because it was awarded: twenty-four, 

twenty, three fifteens, and a zero. Altus received similar discrepant scores: 

twenty-four, twenty-three, fifteen, five, and two zeroes. Bloom's experience was 

not much different, receiving: two twenty-fives, a twenty-four, a fifteen, and 

two zeroes. Harvest received three twenty-fives, a twenty, an eighteen, and a 

zero.

In five categories, the scoring for Liberty Plant revealed a relative error 

of 100% despite the production of considerable information responsive to the 

question. In one of these categories – calling for certified financial statements, 

including a balance sheet, income statement, and a statement of cash flow –

Liberty Plant received two perfect twenty-fives, a twenty, a ten, and two zeroes. 

Harvest received two twenty-fives, two twenties, an eighteen, and a zero. Altus 

received a wide array of scores: twenty-five, twenty-three, fifteen, ten, five, and 

zero. Not one of the six review committee members had the same view of Altus's 

response as any other member.

Liberty Plant's response to a category about collective bargaining 

agreements was awarded two perfect tens, two eights, and two zeroes. On this 
26 A-2204-18T4

category, Harvest received two tens, a nine, a seven, and two zeroes. Similarly 

disturbing in its variety of scores from perfect to non-responsive, was the 

confusion about a category that sought information about whether the applicant 

was women-owned, minority-owned, or veteran-owned. Altus received: 

twenty-three, twenty, ten, and three zeroes. Bloom received two perfect twentyfives, an eighteen, two fifteens, and a zero. And Harvest, which asserted that its 

majority owner is an African-American woman, inexplicably received only one 

twenty-five, as well as a fifteen, a ten, and three zeroes.7

Another criterion that provide inconsistent scores was one that sought the 

applicant's plans to dedicate funding or other resources for research. Liberty 

Plant received four perfect tens and two zeroes.8

GGB had a similar experience but describes it in different terms that 

similarly persuade us there's simply something wrong with the scoring:

7 The confusion may arise – but ought to have been explained in the final agency 

decisions – from the fact that some applicants had applied for but had not by 

that time received certifications about minority ownership.

8

 To add to the scoring anomalies on this category, Liberty Plant refers us to the 

fact that in its identical submission in another geographic region, it received five 

perfect tens and one eight. This means that the two reviewers who assigned the 

same answer a zero in one region gave Liberty Plant a ten or eight when judging 

the same response for purposes of another region; put in statistical terms the 

same reviewers on the same applicant's identical answer had relative error of 

either 80 or 100%.
27 A-2204-18T4

[O]ne reviewer awarded GGB a total of 625 points

whereas two other reviewers awarded it in excess of 

900 points, a difference of more than 300 points. In 

other words, if these individual scores were placed on 

a traditional secondary school grading scale (0-100) by 

dividing the individual scores by 10, GGB received the 

equivalent of an "F" from one reviewer and an "A" from 

two others. More astonishingly, the delta between the 

lowest individual score (625) and the second-lowest 

individual score (782) is 157 points whereas the delta 

between the second-lowest individual score and the 

highest individual score (938) is slightly lower at 156 

points.

GGB does not limit its concerns to its own situation but points out that almost 

half of the 146 applicants had composite average scores that varied by more than 

300 points between the highest and the lowest and, for a handful of applicants, 

the composite average score varied by more than 600 points, an extraordinary 

discrepancy when considering that the total amount of points available on an 

application was 1000.9

Bloom's approach is similar. Bloom argues that one reviewer consistently 

gave it much lower scores on all categories than the other reviewers, noting that, 

collectively, five reviewers gave it scores of 912, 920, 942, 981, and 989, while 

9

 GGB also provided detail about the discrepancies between reviewers on 

various categories like those that we already discussed with regard to Pangaea 

and Liberty Plant. For brevity's sake we do not specifically mention those 

categories in which, like other appellants, GGB received both perfect scores and 

zeroes.
28 A-2204-18T4

the sixth gave it only a 625, and that when this anomaly is averaged with the 

other consistent scores, its average was pulled down and its final score finished 

out of the money.

The Department has done little to justify these anomalies or explain why 

they should be disregarded. We would characterize the Department's 

contentions as falling into two general assertions: (1) the divergent scores in 

some instances are the product of "each member appl[ying] his or her unique 

expertise to the scoring process," and (2) all applicants were subject to the same 

process and, therefore, all buoyed or dragged down by the varying scores. The 

former is unconvincing because it runs counter to the fact that the Department

provided each review committee member the same set of instructions that it 

presumably sought to have applied in the same way, as well as the rather obvious 

likelihood that the Department did not intend – nor should it have intended – to 

allow reviewers' personal views to enter into the calculus. We are also 

unpersuaded by the Department's false-equivalency argument. It is certainly 

true that the winning and losing applicants were subjected to the same review 

committee, and there may be evidence of similar inconsistent scoring of the 
29 A-2204-18T4

winning applications,10 but that doesn't mean that they were entirely treated the 

same way.

The Department also asserts that it ameliorated the consequences of an 

occasional outlying score by taking the average of all the scores of the six review 

committee members. To be sure, averaging will naturally reduce the impact of 

an outlier on the overall scores, but not so much when there are multiple outlying 

scores. Take, for example, one set of marks received by Pangaea that included 

three perfect fifteens and three zeroes. After the committee averaged those 

numbers, Pangaea received an average score of seven-and-one-half, a score that 

has no kinship with a single vote that Pangaea received.11

10 For example, of the scores of all successful applicants on the women-, 

minority-, or veteran-owned business criterion, some were relatively consistent 

but others weren't:

Columbia Care 2 0 0 22 0 25

GTI 15 20 15 24 0 0

JG 10 0 0 23 0 0

MPX 25 25 25 23 25 25

NETA 20 25 15 23 25 25

Verano 25 25 25 24 25 25

11 GGB and Bloom both argue that the Department could have avoided these 

types of anomalies – or at least reduced their detrimental impact on the accuracy 

of the review committee's work – by "censoring"; that is, by removing some of 

the data to produce a more reasoned result. Bloom suggests the Department 

should have eliminated the scores of one review committee member who 
30 A-2204-18T4

There is no escaping the fact that some of these scores simply "don't 

compute" and that, no matter how the Department and the other respondents may 

attempt to slice it, the results are still unsettling.

12

B

Having expressed our views about scoring, we turn to the parties' 

arguments about the standard of appellate review. As observed earlier, this is 

one of those issues influenced by our view of the scoring.

repeatedly gave Bloom lower scores than the other members. GGB appears to 

suggest removing particular outlying scores. Due to many factors, including 

bias, the scoring method in some sporting events – particularly during the Cold 

War – called for the removal of the highest and lowest scores and averaging the 

rest, thereby reducing the degree of relative error and rendering the score more 

accurate. The simplicity of that approach is appealing but it won't result in 

sufficient adjustments with some scores, such as where Pangaea received three 

perfect fifteens and three zeroes; the average remains the same even if one high 

and one low score are eliminated. In any event, if such adjustments are to be 

made, it is for the Department to make them. Our role extends to determining 

whether the Department's processes are or are not arbitrary, capricious, or 

unreasonable; we will not intervene to the point of imposing a better system or 

determining what a better system would be.

12 The Department and other respondents argue that we have already given 

approval of a similar selection method when reviewing final agency decisions 

rendered in 2011. See In re Inst. for Health Rsch., No. A-0069-11 (App. Div. 

Aug. 22, 2013). We need not recount the differences between the arguments 

posed in that case and those presented here. It suffices to observe that our 

decision in that case was not published and has no precedential impact or 

interest. R. 1:36-3. We have referred to this unpublished opinion elsewhere in 

this opinion only for historical-background purposes.
31 A-2204-18T4

Bloom, GGB, Liberty, and Pangaea argue that we need not afford any 

deference to the Department's evaluation process, the scores, or the ultimate 

selection of winning applicants. They claim the Department lacks specialized 

knowledge in the area of medical marijuana, lacks expertise because it has 

conducted only one prior request-for-application process related to ATC 

permits, and because, as Bloom puts it, the review committee members were 

"representative[s] of different State agencies and largely evaluated matters 

outside the scope of their individual skills and expertise." Because our view of 

the scoring issues requires a remand even if we were to apply the most 

deferential standard of review, we find it necessary to add only a few comments 

on this issue.

As a general matter, the judicial capacity to review agency actions is 

"limited." Pub. Serv. Elec. and Gas Co. v. N.J. Dep't of Env't Prot., 101 N.J. 95, 

103 (1985). An agency's "final quasi-judicial decision" should be affirmed 

unless there is a "clear showing" that it is "arbitrary, capricious, or unreasonable, 

or that it lacks fair support in the record." In re Herrmann, 192 N.J. 19, 27-28 

(2007). In examining a challenge to a final agency decision, we are generally 

limited to determining whether the agency action violates "express or implied 

legislative policies," whether the decision is supported by "substantial evidence 
32 A-2204-18T4

in the record," and whether, "in applying the legislative policies to the facts, the 

agency clearly erred by reaching a conclusion that could not reasonably have 

been made upon a showing of the relevant factors." Pub. Serv. Elec. and Gas, 

101 N.J. at 103. An appellate court's "strong inclination" must be to "defer to 

agency action that is consistent with the legislative grant of power." Lower 

Main St. Assocs. v. N.J. Hous. and Mortg. Fin. Agency, 114 N.J. 226, 236 

(1989). This inclination is strong "when the agency has delegated discretion to 

determine the technical and special procedures to accomplish its task," In re 

Application of Holy Name Hosp. for a Certificate of Need, 301 N.J. Super. 282, 

295 (App. Div. 1997) – as the Department claims here – and should be 

"construed liberally when the agency is concerned with the protection of the 

health and welfare of the public," Barone v. Dep't of Hum. Servs., 210 N.J. 

Super. 276, 285 (App. Div. 1986). But, "[t]he interest of justice" is always a 

valid invitation for intervention, and a reviewing court is free "to abandon its 

traditional deference . . . when an agency's decision is manifestly mistaken." 

Outland v. Bd. of Trs. of the Teachers' Pension and Annuity Fund, 326 N.J. 

Super. 395, 400 (App. Div. 1999).

In short, when we defer, we defer because of an agency's "technical 

expertise, its superior knowledge of its subject matter area, and its fact-finding 
33 A-2204-18T4

role." Messick v. Bd. of Review, 420 N.J. Super 321, 325 (App. Div. 2011). 

This rationale, however, "is only as compelling as is the expertise of the agency, 

and this generally only in technical matters which lie within its special 

competence." In re Boardwalk Regency Corp., 180 N.J. Super. 324, 333 (App. 

Div. 1981). See, e.g., Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 588 (1988) 

(deferring to Division on Civil Rights' expertise in recognizing acts of 

discrimination, but not to its findings on an employee's diagnosis of alcoholism, 

which it was "no better able to evaluate . . . than is a reviewing court"); Cooley's 

Anemia & Blood Rsch. Found. for Child., Inc. v. Legalized Games of Chance 

Control Comm'n, 78 N.J. Super. 128, 140 (App. Div. 1963) (recognizing that 

courts "generally defer to the special expertness and broad experience of an 

administrative agency in its general field, but not in the same degree in all 

cases[;] [i]t depends upon the issues . . .").

As we have already observed, the Department established a review

committee consisting of members purportedly possessing the Department's own 

expertise, as well as members of other disciplines, since it included a member 

from the Department of Agriculture and one from the Department of Treasury.13 

13 We see no reason to question this approach. The Legislature charged the 

Department with the task of ascertaining the best applicants, and we find nothing 
34 A-2204-18T4

Yet, each member was required to vote on all criteria, meaning that the 

Agriculture member was called upon to assess applicants' financial capacities, 

while the Treasury member was required to appraise applicants' horticultural

capabilities. Despite this cross-over into areas not likely within a member's 

bailiwick,14 each member's vote was equally weighed; in other words, the 

Agriculture member's vote on financial matters possessed the same value as the 

Treasury member's vote on that same subject.

We do not know who the review committee members were, nor do we 

even know what their backgrounds might have suggested about the caliber of 

their opinions concerning matters beyond what their Department affiliation

might suggest. Accordingly, it is unclear on this record the extent to which we 

should defer to the scores rendered by the review committee and adopted by the 

Department.

arbitrary, capricious, or unreasonable in the Department's fulfillment of that 

obligation in creating a multi-member review committee by enlisting 

representatives from other departments, including the Departments of 

Agriculture and Treasury. We are satisfied that the Department acted in 

accordance with the legislative mandate in taking this approach. We question –

but do not now decide in light of the remand we mandate today – whether the 

votes should have been weighted whenever a member voted on a matter outside 

the member's expertise or, if the Department chooses not to weight such votes, 

whether a score left un-skewed is entitled to deference.

14 The record contains nothing about the alleged expertise or background of any 

member because the Department has kept their identities confidential.
35 A-2204-18T4

The Department must address the numerous questions posed about its 

scoring procedures and explain the basis for its resolution of the remand 

proceedings before we can ever adequately review whatever final agency 

decisions come from those proceedings. So, we need not reach any definitive 

conclusion about the standard of appellate review applicable here. We would 

urge the Department, however, to make findings that take into consideration our 

concerns.

We commend to the Department the standard expressed by our Supreme 

Court sixty years ago. Even then, the Court recognized that this standard was 

nothing new; instead, the Court stated that it was already then "axiomatic in this 

State" that

an administrative agency acting quasi-judicially must 

set forth basic findings of fact, supported by the 

evidence and supporting the ultimate conclusions and 

final determination, for the salutary purpose of 

informing the interested parties and any reviewing 

tribunal of the basis on which the final decision was 

reached so that it may be readily determined whether 

the result is sufficiently and soundly grounded or 

derives from arbitrary, capricious or extra-legal 

considerations.

[Application of Howard Sav. Inst. of Newark, 32 N.J. 

29, 52 (1960); see also In re Issuance of Permit by Dep't 

of Env't Prot., 120 N.J. 164, 172 (1990).]
36 A-2204-18T4

Whether the Department's process may be labelled quasi-judicial is beside 

the point. The Department clearly relied in its final agency decisions on the 

values assigned by its review committee and the mathematical results that those 

values yielded; it claims those are its findings. In justifying the reasonableness 

of its determinations, the Department refers to its processes but without

explaining away the questions patently arising from them. The Department's 

final agency decisions provide only a net opinion by giving us nothing more 

than the computations made from the raw data lacking the "why and wherefore"

of the decisions rendered. Cf. Davis v. Brickman Landscaping, Ltd., 219 N.J. 

395, 410 (2014) (recognizing that an expert renders an inadmissible net opinion 

when failing to provide "the why and wherefore" that supports the opinion). 

Instead, the Department – by issuing final agency decisions without first 

allowing disappointed applicants an opportunity to challenge the findings at the 

agency level – has left it to us to hear those arguments for the first time while 

simultaneously arguing that we must defer to its findings and conclusions on 

issues it has not yet had the opportunity to hear. To ensure the production of a 

final agency decision worthy of deference, the Department must find a way to 

listen to and resolve questions from the disappointed applicants, and then 
37 A-2204-18T4

explain its resolution of those complaints before expecting our endorsement of 

the results.

C

Compassionate Care argues that the record on appeal is insufficient to 

provide a basis for review because the Department did not release the 

applications of the selected applicants without "heavy" redactions. GGB makes 

the same argument, and further complains that the Department redacted the 

names of the six review committee members, making it "impossible" for 

applicants to "ascertain whether any of the reviewers held [any] bias[es]."

Liberty Plant makes similar arguments.

By way of background on this point, we initially observe that the request 

for applications advised that applications would be "generally subject to public 

release pursuant to [OPRA] and/or [sic] the common law," but that "proprietary 

and other types of information contained in the applications may be exempt from 

public disclosure," and an applicant could designate "specific information" that 

it felt should be exempt from disclosure. The request for applications explained 

that if the Department withheld a designated part of an application when 

responding to an OPRA request, and the requester posed a challenge, the 
38 A-2204-18T4

applicant might be required to intervene and defend its assertion that the 

information was exempt from disclosure.

The Department also informed prospective applicants at the mandatory 

pre-application conference of their ability to designate portions of their 

submissions as "confidential, trade secrets, proprietary, commercial or financial 

information, or information which, if disclosed, would give a competitive 

advantage or disadvantage." The Q&A document stated that any disclosure of 

information by the Department would be "consistent with [OPRA's]

requirements" and that applicants would need to submit a memo delineating 

those portions of their applications they felt were confidential, proprietary, or 

otherwise exempt from disclosure if they wanted such portions redacted in 

responses to OPRA requests. The names of the review committee members were 

also redacted in the Department's response to OPRA requests.

In their submissions to this court, appellants have not provided full 

versions of every successful application, even with redactions. GGB and 

Liberty Plant, the appellants who have asserted that the Department should have 

released the winners' materials without redactions, included only portions of 

their own applications in their appendices: GGB submitted its entire application
39 A-2204-18T4

but with very significant redactions and many blacked out passages; Liberty 

Plant submitted just four pages of its application.

In considering these arguments about the sufficiency of the record on 

appeal, we first recognize that appellants were given notice of the possibility 

that if they filed an OPRA request asking for any other entities' applications, 

they might receive redacted versions. The request for applications afforded 

every applicant the opportunity to ask the Department to withhold specific 

portions of its application. Some applicants, including those chosen to proceed 

with the permitting process, apparently requested significant redactions of their 

submissions. The Department honored the terms of its request for applications 

and should not now be put in the position of dishonoring that understanding 

because of the happenstance of these appeals. In fact, N.J.A.C. 8:64-6.4 states 

that the record in an appeal from a final agency decision in this context "shall 

be" the applications at issue with attached supporting documents "excluding 

information deemed exempt pursuant to [OPRA]."

Second, N.J.S.A. 47:1A-6 provides that a person who is denied access to 

a record by its custodian may "institute a proceeding to challenge the custodian’s 

decision by filing an action in Superior Court . . . ; or . . . file a complaint with 

the General Records Council established pursuant to [N.J.S.A. 47:1A-7]." 
40 A-2204-18T4

Appellants did not avail themselves of either of these avenues to address their 

dissatisfaction with the redactions in the documents they received in response to 

their OPRA requests. Had they done so, the chosen tribunal could have decided

whether the winning applications or the names of the review committee 

members were exempt from disclosure under OPRA.

Third, even if the current appeals were an appropriate forum to address 

appellants' arguments, OPRA permitted the Department to withhold the 

information it had redacted. N.J.S.A. 47:1A-1.1 states that the definition of 

"government record" does not include: "trade secrets and proprietary 

commercial or financial information obtained from any source"; "emergency or 

security information or procedures for any buildings or facility which, if 

disclosed, would jeopardize security of the building or facility or persons 

therein"; "security measures and surveillance techniques which, if disclosed, 

would create a risk to the safety of persons, property, electronic data or 

software"; or "information which, if disclosed, would give an advantage to 

competitors or bidders."

The request for applications required applicants to submit several types of 

highly technical and scientific information about their marijuana strains, 

growing methods, pest-control methods, manufacturing procedures, and 
41 A-2204-18T4

available products. It also sought information about applicants' proposed site 

layouts, security measures, and financial information. While we can only 

hypothesize about the likely outcome, it seems reasonable to assume that any 

redacted portions contained information exempt from disclosure under OPRA. 

That GGB and Liberty Plant submitted heavily redacted or reduced versions of 

their own bids into the record on appeal suggests they view this information as 

proprietary and are unwilling to reveal to their competitors or the public the 

technical details of their operations. For the same reason, the argument that such 

information from others should have been included in the record on appeal is 

without merit.

In short, we must recognize that we are hampered by the record's 

limitations in our ability to assess whether the final agency decisions were 

arbitrary, capricious, reasonable, or unsupported by the record. Had – among 

other possible approaches – the Department conducted a brief internal review 

process after inviting those disappointed by the results to express their 

objections or questions and after allowing respondents an opportunity to respond 

to those exceptions – the Department could have pinpointed the areas of 

controversy and explained for us its view of the exceptions filed. That way, 

once an appeal was filed, we could have better appreciated the need for a record 
42 A-2204-18T4

containing those materials – whether still redacted or submitted confidentially –

that would assist our determination of whether the final agency decisions were 

arbitrary, capricious, unreasonable, or unsupported by the record.

So, while we draw no specific conclusion about appellants' arguments on 

this point, in remanding we leave the matter for the Department's further 

consideration with the hope that it will appreciate the difficulties we face in 

reviewing a final agency decision absent a full and understandable record.

We would add, however, that we see no merit in the argument that the 

Department was obligated to reveal the identities of the review committee 

members. N.J.S.A. 47:1A-1.1 exempts "inter-agency or intra-agency advisory, 

consultative, or deliberative material" from disclosure under OPRA. This 

deliberative process privilege "permits the government to withhold documents 

that reflect advisory opinions, recommendations, and deliberations comprising 

part of a process by which governmental decisions and policies are formulated." 

In re Liquidation of Integrity Ins. Co., 165 N.J. 75, 83 (2000). Upholding this 

privilege is "necessary to ensure free and uninhibited communication within 

governmental agencies so that the best possible decisions can be reached." 

Educ. Law Ctr. v. N.J. Dep't of Educ., 198 N.J. 274, 286 (2009). In this regard, 

the Supreme Court observed that 
43 A-2204-18T4

[f]ree and open comments on the advantages and 

disadvantages of a proposed course of governmental 

management would be adversely affected if the civil 

servant or executive assistant were compelled by 

publicity to bear the blame for errors or bad judgment 

properly chargeable to the responsible individual with 

power to decide and act.

 

[Id. at 286 (quoting Kaiser Aluminum & Chem. Corp. 

v. United States, 157 F. Supp. 939, 945-46 (Ct. Cl. 

1958)).]

Knowing that their identities could ultimately be revealed could have an 

impact on review committee members. Moreover, advance revelation of their 

identities could lead to mischief; applicants could use that knowledge to attempt 

to lobby or influence members. And even if we assume that these public 

officials would be beyond such influence, the mere potential of such lobbying 

could have the effect of diminishing public confidence in the committee's 

performance. 

We, thus, respond to the arguments about the content of the record by 

referring them to the Department for further consideration in light of what we 

have said. But we do reject on its merits the argument that the Department was 

required to divulge the identities of the review committee members.
44 A-2204-18T4

D

Bloom argues that the Department improperly failed to provide any 

agency-level procedure for unsuccessful applicants to protest the Department's 

rejection of their applications and selection of the six winners. GGB, Liberty

Plant, and Pangaea make the same argument. Harvest similarly argues that the 

absence of an agency hearing "violat[ed] longstanding tenets of New Jersey 

administrative law" and deprived disappointed applicants of a chance to 

"address errors or otherwise present law and facts challenging [the 

Department's] decisions."

We agree that the Department was required to do more than compile and 

tabulate the votes and declare winners based on that raw computation. As 

appellants have demonstrated, and as we discussed earlier, there are many scores 

that are patently discordant. Capable review committee members, armed with 

the same instructions, should not produce such inconsistent results. Red flags 

should have gone up in instances where, for example, two reviewers gave perfect 

scores, two reviewers gave middling scores, and two reviewers gave zeroes or, 

for that matter, anytime that a zero was scored on a criterion on which other 

reviewers gave high scores. N.J.S.A. 24:6I-7(e) imposed on the Department to 

"verify" its results, and we believe that charge required more than just checking 
45 A-2204-18T4

its arithmetic. The very nature of the undertaking required not just accurate 

computations but a search for odd or outlying scores that could unfairly skew 

the results. We have already demonstrated how in many instances the "relative 

error" in judging a criterion was too high to be acceptable, whatever the 

undertaking. And, beyond the Department's bald assertion that it engaged in 

quality control,15 there is no evidence of that in the record on appeal. We believe 

that the statutory obligation that the Department "verify" its results obligated the 

Department to invoke procedures that would allow parties to question their 

scores and obtain an explanation before the rendering of final agency decisions.

Some appellants have argued they were entitled to a full-blown hearing 

that would require the calling of witnesses and cross-examination. We're not so 

sure. It may be enough that the Department allow a brief period of time for 

disappointed applicants to assert what they believe are problems with the scores 

they and others received, allow for responses from successful applicants, and 

then engage in both an examination of those complaints and an explanation of 

15 In the review committee's recommendation report to the Department, it is 

asserted – without further explanation – that scoring was completed on 

December 10, 2018, and that the scoring "was subjected to a quality control 

review, which was completed on Wednesday, December 12, 2018." Absent is 

any evidence that the review committee or the Department attempted to 

harmonize the scoring discrepancies or to explain why those scores are not 

inconsistent or questionable.
46 A-2204-18T4

how those complaints were resolved or rejected. A further analysis and 

verification of the winning applicants may not require an evidentiary hearing, 

but we leave to the Department in the first instance to determine the best way of 

going about its statutory obligation to verify its results.

In the final analysis, we conclude that by failing to engage in such an 

additional process, the Department has essentially left it for us to field – in the 

first instance – appellants' objections to the scoring and to determine whether 

there is something wrong with the results without receiving from the Department 

an adequate explanation for why the scores aren't wrong or – in legal terms –

aren't arbitrary, capricious or unreasonable. We do not think the Legislature 

intended for this court to be the clearing house for any problems in the process,

or to determine the mathematical reasonableness of the results obtained through 

the process devised by the Department. In deferring to the idea that it is the 

Department that should decide who are the winners and losers, we decline the 

invitation to be the Department's quality-control committee.

In fact, in deferring to the idea that it is the executive branch, not the 

judicial branch, that must make the ultimate decision as to who should move on 

in the permitting stage, we will not dictate to the Department what it is that it 

should do following today's remand, other than to hold that it must engage in 
47 A-2204-18T4

some sort of additional process for receiving and considering the appellants' 

contentions and must explain its determinations on those contentions. We will 

not decide or impose on the Department whether it should conduct a plenary 

hearing, whether it should create a quality control committee to hear, consider, 

and make recommendations about appellants' concerns, or whether it should 

devise some other system for resolving appellants' complaints. We hold only 

that in the absence of some procedure for ensuring and verifying the reviewing 

committee's conclusions, the results previously produced and adopted in the 

final agency decisions must be deemed arbitrary, capricious, unreasonable, and 

untethered to the record, and cannot, therefore, be sustained at this time.

So, in this spirit, we conclude that appellants are correct that they were 

not afforded the process due under the applicable legislation and the 

Administrative Procedure Act, and we remand so the Department may provide 

that process. We intervene in the administrative proceedings that have taken 

place so far to ensure the public's confidence in both the results achieved at the 

agency level so far and to ensure that future similar proceedings will be likewise 

subjected to a measure of scrutiny at the agency level that will guarantee the 

process does not produce determinations that are arbitrary, capricious or 

unreasonable. We so hold not because it betters our ability to review the agency 
48 A-2204-18T4

decisions but because of the overriding public interest. As we have said before 

in bidding matters,16 "[b]oth the public interest and the public's perception" that 

the process is "fair, competitive and trustworthy are critical components and 

objectives." Muirfield Constr. Co. v. Essex Cty. Improvement Auth., 336 N.J. 

Super. 126, 137-38 (App. Div. 2000).

E

For the same reasons, it follows that the final agency decisions do not 

contain the type of findings sufficient to command appellate deference. As 

noted earlier, the final agency decisions in question outline the manner in which 

the Department went about its task and then set forth the raw scores that 

culminated in a rejection of appellants' applications. Those decisions present 

little more than sets of numbers that declare the appellants placed out of the 

money. Appellants argue that those sets of numbers inadequately express the 

decisions rendered. We agree.

As is well-established, if an administrative agency's findings are 

"supported by substantial credible evidence in the record as a whole," a 

16

 There are many similarities in the Department's manner of finding worthy 

entities to move on in the permitting stage to the way in which public bidding is 

conducted. We do not, however, need now to decide whether our approach in 

reviewing bidding matters is applicable in all respects here.
49 A-2204-18T4

reviewing court "must accept them." Outland, 326 N.J. Super. at 400. But, an 

agency's discretion "must be exercised in a manner that will facilitate judicial 

review." R & R Mktg., LLC v. Brown-Forman Corp., 158 N.J. 170, 178 (1999). 

As a result, when "acting quasi-judicially," the agency "must set forth basic 

findings of fact, supported by the evidence and supporting the ultimate 

conclusions and final determination." Howard Sav. Inst. of Newark, 32 N.J. at

52. This practice allows a reviewing court to "readily determine[]" whether the 

agency's decision is "sufficiently and soundly grounded or derives from 

arbitrary, capricious or extralegal considerations." Ibid.

In short, administrative agencies must "articulate the standards and 

principles that govern their discretionary decisions in as much detail as 

possible." Van Holten Grp. v. Elizabethtown Water Co., 121 N.J. 48, 67 (1990)

(quoting Crema v. Dep't of Env't Prot., 94 N.J. 286, 301 (1983)). And they must 

make findings "to the extent required by statute or regulation, and provide notice 

of those [findings] to all interested parties." In re Issuance of a Permit, 120 N.J. 

at 173. If "the absence of particular findings hinders or detracts from effective 

appellate review," a matter may be remanded to an administrative agency "for a 

clearer statement of findings and later reconsideration." In re Vey, 124 N.J. 534, 

544 (1991). See, e.g., Green v. State Health Benefits Comm'n, 373 N.J. Super 
50 A-2204-18T4

408, 416 (App. Div. 2004) (reversing and remanding where agency decision 

contained only "bald assertion" that certain care was not covered under 

insurance plan); Lambertville Water Co. v. N.J. Bd. of Pub. Util. Comm'rs, 153 

N.J. Super. 24, 29 (App. Div. 1977) (remanding where agency decision was 

"devoid of any analysis" explaining choice and use of formula for calculations). 

A court may also remand a matter "[w]here the agency record is insufficient," 

so that it may be "fully develop[ed]." ACLU of N.J. v. Hendricks, 233 N.J. 181, 

201 (2018).

In expressing our agreement with those appellants that have argued the 

final agency decisions do not contain sufficient findings or the expression of an 

adequate rationale for the conclusions reached, we again observe that the 

absence of any explanation for those scores that seem – on the present record –

at least in part inexplicable demands that we remand for further proceedings. To 

be sure, "[a]ll of the evidential data" before an agency "need not be repeated or 

even summarized, nor need every contention be exhaustively treated." Howard 

Sav. Inst. of Newark, 32 N.J. at 53. But an agency decision must reveal enough 

of the agency's thought process so that a reviewing court may determine 

"without question or doubt what facts and factors led to the ultimate conclusions 

reached." Ibid. We have traditionally striven to accept an agency's findings 
51 A-2204-18T4

even when they "are not nearly so clear, full and well organized" as they could 

be, but, in the final analysis, we must be able to "understand fully the meaning 

of the decision and the reasons for it." Ibid.

We have been given numerous reasons to doubt the sufficiency of the final 

scores that led to the decisions under review. As noted, these final agency 

decisions were the product of the scoring instructions given to the review

committee members. They were directed to "[e]valuate each application and 

assign a score up to the maximum point value for each measure," then "tally 

[those] scores on the paper copy" of the application. The instructions then 

directed the members to "provide a short[,] written description to justify the 

assigned score." The review committee's recommendation report did not include 

any descriptions of individual reviewers' scores, the final agency decisions 

distributed to applicants did not refer to any, and the Department's OPRA 

response did not include any documents like those described in the instructions.

The final agency decisions provide only the scores resulting from the work 

of the review committee. We do not have any evidence that the Department 

ensured that the members understood or followed instructions, and there is no 

evidence that the scores were either verified in some manner or whether 
52 A-2204-18T4

anomalies, which are revealed even in the limited record before us, have been 

harmonized in some reasonable, non-arbitrary way.

F

Appellants have raised some discrete issues that should not go 

unmentioned but, because we remand, will for the most part be left to the 

Department to consider further and provide an explanation for its disposition of 

these arguments:

(1) mainly Bloom, but others as well, argue some of the 

criterion are "vague and subjective" and confused 

applicants about what was being sought;

(2) Bloom, GGB, Liberty Plant, and Pangaea argue in 

various ways that some of the Department's criteria 

were based on regulations that had been proposed but 

not adopted by the time the request for applications was 

issued;

(3) Harvest argues that the Department acted 

improperly by deciding – after applications were 

submitted – to limit applicants for approval to one ATC 

permit;

(4) Compassionate Care argues that the Department's 

selection of MPX to proceed with the permitting 

process for an ATC in Atlantic City should be 

overturned because the Department did not take into 

consideration Compassionate Care's intention to open a 

satellite location in the same city;

(5) GGB argues that Verano engaged in misconduct that 

should have precluded its selection; and
53 A-2204-18T4

(6) Bloom's contention that the approval of NETA's 

application improperly authorized its operation of "a 

facility within 1,000 feet of a school zone."

As for those contentions we leave undecided here, we will endeavor to be brief 

because the Department should consider them during the remand proceedings.

First, we agree with appellants about the importance of a "common 

standard of competition," Twp. of Hillside v. Sternin, 25 N.J. 317, 323 (1957), 

and, for that reason, the request for applications should be "as definite, precise 

and full as practicable in view of the character" of the undertaking, James 

Petrozello Co. v. Twp. of Chatham, 75 N.J. Super. 173, 178 (App. Div. 1962)

(quoting Waszen v. Atlantic City, 137 N.J.L. 535, 537 (Sup. Ct. 1948)). We 

don't agree that the inclusion of subjective criterion necessarily runs counter to 

that goal. In revisiting these applications and appellants' arguments about the 

process, the Department should entertain appellants' arguments and provide an 

explanation for any criterion so criticized in the remand proceedings to follow.

Second, some appellants argue that this court should intervene because 

the Department used criteria that were either unadopted by regulation or 

inconsistent with existing regulations. Bloom argues that the Department 

improperly waived the requirement in N.J.A.C. 8:64-6.2(a)(2) that ATC 

operators be involved with an acute care hospital without engaging in formal 
54 A-2204-18T4

rulemaking, particularly when considering that the Department informed 

applicants that its evaluation of applications would be based on its then-current 

2011 regulations. Despite those representations, the Department – according to 

Bloom – improperly based several other criteria on new regulations proposed in 

2018 that had not been adopted by that time in accordance with the 

Administrative Procedures Act. For example, Bloom asserts that criteria 

seeking financial information from applicants "had no basis" in the 2011 

regulations and that the injection of criteria discussed in as-yet-unadopted 

regulations deprived applicants of "notice of the standard to which they were to 

be held." GGB and Liberty Plant make the same arguments. Pangaea makes the 

same arguments as well, while adding an argument that "[t]he development of a 

scoring system may itself be considered a rule-making."

The Department informed prospective applicants at its pre-submission 

conference that it had proposed changes to the medicinal marijuana regulations 

in 2018 but that the public comment period was not over and the changes had 

not been officially adopted. As a result, the Department declared that 

"applicants [were] subject to the regulations currently in effect" at the time of 

submission, meaning the 2011 regulations; this was reiterated in the Q&A 

document. The Department also stated during the conference that it was waiving 
55 A-2204-18T4

the requirement in N.J.A.C. 8:64-6.2 that a permit holder have "documented 

involvement [with] an acute care hospital," explaining that the Department had 

found this to be "somewhat impracticable" and advising that the formal repeal 

of this requirement had been proposed in the new regulations. At the pre-scoring 

meeting, the review committee was also told to evaluate applications in 

accordance with the original 2011 regulations.

N.J.S.A. 52:14B-4 mandates that prior to the adoption of a regulation, an 

agency must give at least thirty days' notice of its intended action and provide 

"an opportunity for all interested persons to submit data, views, or arguments in 

writing or orally." George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 18 

(1994). Any proposed agency rule that "revises, rescinds or replaces" an 

existing rule is considered a "new rule" subject to these provisions. N.J.S.A. 

52:14B-4.9. Once a regulation is in effect, it has "the force and effect of 

statutory law," and an administrative agency "ordinarily . . . may not disregard 

[it]." Van Note-Harvey Assocs., P.C. v. N.J. Sch. Dev. Auth., 407 N.J. Super.

643, 650 (App. Div. 2009).

While an administrative agency's actions must not exceed the powers 

conferred to it by the Legislature, "the breadth of an agency's authority 

encompasses all express and implied powers necessary to fulfill the legislative 
56 A-2204-18T4

scheme that the agency has been entrusted to administer." In re Application of 

Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422-

23 (2008). Thus, agencies are "allowed some leeway to permit them to fulfill 

their assigned responsibilities." Id. at 423. 

Notwithstanding, due process requires that substantive procedural 

standards control agency discretion. Crema, 94 N.J. at 301. The regulated 

community reasonably expects "that known and uniform rules, standards, 

interpretations, advice and statements of policy" will be applied by state 

agencies. Cath. Fam. & Cmty. Servs. v. State-Operated Sch. Dist. of Paterson, 

412 N.J. Super. 426, 442 (App. Div. 2010). An agency also may not use its 

power to interpret its regulations as a means of amending them or adopting new 

ones. Venuti v. Cape May Cty. Constr. Bd. of Appeals, 231 N.J. Super 546, 554 

(App. Div. 1989). Overall, when an agency's action "could not have been fairly 

anticipated or addressed" because neither the enabling statute nor applicable 

regulations provided for it, the action is not a proper exercise of discretion. 

Crema, 94 N.J. at 302. 

When the Department issued its 2018 request for applications, N.J.A.C. 

8:64-6.2(a) provided that a committee would evaluate applications for ATC 

permits "on the following general criteria":
57 A-2204-18T4

1. Submission of mandatory organizational 

information;

2. Documented involvement of a New Jersey acute care 

general hospital in the ATC's organization;

3. Ability to meet overall health needs of qualified 

patients and safety of the public;

4. Community support and participation; and

5. Ability to provide appropriate research data.

[See 50 N.J.R. 1398(a).]

The new version of this regulation, which became effective on May 20, 

2019, removed the requirement of an acute care hospital's involvement and 

added new criteria to be evaluated: "experience in cultivating, processing, or 

dispensing marijuana in compliance with government-regulated marijuana 

programs"; "history of compliance with regulations and policies governing 

government-regulated marijuana programs"; "ability and experience of the 

applicant in ensuring adequate supply of marijuana"; and "workforce and job 

creation plan, including plan to involve women, minorities, and military 

veterans in ATC ownership and management and experience with collective 

bargaining in the cannabis and other industries." N.J.A.C. 8:64-6.2(a).

In proceeding on the basis of anticipated changes in its regulatory scheme, 

the Department did not necessarily act arbitrarily, capriciously, and 
58 A-2204-18T4

unreasonably. N.J.A.C. 8:64-7.11, which was effective at the time of the request 

for applications, provides that the Department "may waive a requirement 

regarding the operations of [an] ATC" if it determines that it "is necessary to 

achieve the purpose of the [Compassionate Use] Act and provide access to 

patients who would otherwise qualify for the use of medicinal marijuana . . . and 

does not create a danger to the public health, safety or welfare." The Department

informed prospective applicants in advance of the submission date that it was 

waiving the requirement that applicants be involved with an acute care hospital 

before this requirement was formally removed by the 2019 update to the 

regulations because it was "impracticable." We reject the argument that this was 

improper in light of the Department's power to waive such an obligation under 

N.J.A.C. 8:64-7.11; indeed, the waiver increased the pool of possible applicants 

and may have raised the quality of the pool as well. Because applicants were 

advised of this in advance, the waiver was fair and treated all applicants equally.

We also reject the argument that the Department improperly considered 

elements of pending regulations. When the request for applications was issued, 

the Compassionate Use Act did not set forth any particular standards under 
59 A-2204-18T4

which the Department was required to evaluate applications.17 Instead, N.J.S.A. 

24:6I-7(b) stated that the Department must require that an applicant "provide 

such information as [it] determines to be necessary pursuant to regulations 

adopted pursuant to [the Compassionate Use Act]." The Department had set 

forth some mandatory evaluation criteria in N.J.A.C. 8:64-6.2, but N.J.A.C. 

8:64-6.1(b)(1) more generally provides that the Department must give notice of

"eligibility criteria and a statement of the general criteria by which [it] shall 

evaluate applications."

We agree that, as a general matter, the Compassionate Use Act afforded 

the Department considerable discretion in selecting applications. It did not 

"shackle" the Department to a set of specific standards but instead allowed it the 

"ability to be flexible and responsive to changing conditions." Natural Med., 

428 N.J. Super. at 271 (quoting Texter, 88 N.J. at 385). Because all prospective 

applicants were fully informed of the criteria in the request for applications, at 

the pre-application conference, and in the Q&A document, the criteria were 

"fairly anticipated" by the regulated community. Crema, 94 N.J. at 302. 

17

 N.J.S.A. 24:6I-7.2(c), (d), and (e), effective as of July 2, 2019, set forth in 

detail many criteria the Department must now evaluate when reviewing 

applications for cannabis cultivator, manufacturer, and dispensary permits.
60 A-2204-18T4

We further reject Pangaea's argument that the Department's scoring 

system could be considered "rulemaking" subject to the requirements of the 

Administrative Procedure Act. "Not every action of an agency, including 

informal action, need . . . be subject to the formal notice and comment 

requirements." In re Dep't of Ins.'s Ord. Nos. A89-119 and A90-125 and the 

Adoption of N.J.A.C. 11:3-16A, 129 N.J. 365, 382 (1992).

Third, Harvest argues that the Department acted improperly when it 

decided, after applications were submitted, that vendors could be approved for 

only one ATC permit and that it should have included its method for ranking the 

three regions of the state in the request for applications instead of waiting until 

applications were submitted. Harvest goes so far as to say this action "[left] the 

award process subject to . . . [the] possibility of partiality and fraud" because 

applicants that did not have the best scores in a region could be chosen, while 

applicants with higher scores could be passed over because they had already 

been chosen elsewhere, raising the possibility that reviewers could "steer[]" 

awards toward "favored vendors."

We reject this contention because the process was similar to that utilized 

in the first round of ATC permitting in 2011. In its final agency decisions in 

that prior proceeding, the Department explained that it had decided not to allow 
61 A-2204-18T4

any applicant to hold more than one permit; the fact that in this second round 

the Department informed applicants after the fact that they would be limited to 

one permit each was hardly surprising. The Department also explained its 

reasoning: a more diverse pool of ATC operators would limit the effects of one 

operator's crop failures or other difficulties on the Program as a whole. This 

rationale is not arbitrary, capricious, or unreasonable. The timing is a little more 

troublesome – the Department waiting until after applications were submitted –

but there is nothing in the record to suggest that Harvest or other applicants 

would have decided to apply in more or fewer regions if they had known they 

could hold only one permit.18

Fourth, Compassionate Care argues that the Department's selection of 

MPX to proceed with the permitting process for an ATC in Atlantic City should 

be invalidated because the Department improperly failed to evaluate whether 

applicants' proposed ATC locations would promote "geographic diversity" and 

"how the location[s] . . . will increase patient access across the state," which 

Compassionate Care argues it was "required to do."

18

 In fact, all other things being equal, had applicants been allowed to hold 

multiple permits, only three entities would have been chosen to proceed with 

permitting: MPX and NETA in the central and southern regions, and GTI and 

NETA in the northern region.
62 A-2204-18T4

Compassionate Care, one of the six entities selected in the first round of 

ATC permitting in 2011, operates an ATC in Egg Harbor Township. In April 

2018, the Department invited the original six ATC owners to submit applications 

to waive the prohibition on satellite locations in N.J.A.C. 8:64-7.9, so they could 

open dispensaries in additional places. Later that same month, Compassionate 

Care applied for "satellite waivers" for three dispensaries, one in Atlantic City 

and two in Camden County.19

In September 2018, Compassionate Care submitted a street address for its 

proposed location in Atlantic City and was quickly advised by the Department 

that it could pursue the permitting process for an Atlantic City dispensary. The 

following month, Compassionate Care told the Department it was 

"reconsidering its satellite locations and was looking at other potential sites."

Through the proceedings now in question, the Department selected for the 

southern region MPX, which planned to locate its dispensary in Atlantic City. 

When ruling on Compassionate Care's motion for a stay pending appeal on this 

issue, the Department stated that it did not consider "the potential locations of 

theoretical satellite dispensaries," not only characterizing that information as 

19 In May 2018, Compassionate Care advised the Department that it was no 

longer pursuing one of the Camden County locations but was looking into a 

location in Burlington County.
63 A-2204-18T4

"speculative," but also finding that Compassionate Care’s "conduct and 

discussions with the Department over the [previous] several months" showed a 

"lack of commitment to opening a satellite location in Atlantic City." 

Specifically, the Department referred to several pieces of information and 

documents Compassionate Care had not provided regarding its plan to operate 

the satellite dispensary. It declared that considering Compassionate Care's or 

any other existing ATC permittee's proposed satellite location when selecting

applicants under the 2018 request for applications would have been 

inappropriate because it would have allowed "maneuvering" by such permittees 

to limit their future competition's location options. We find no merit in 

Compassionate Care's argument.

N.J.S.A. 24:6I-7(a)(3)20 states that there must be "at least two [ATCs] each 

in the northern, central, and southern regions of the State." Nothing else in the 

Act or the regulations DOH has promulgated pursuant to N.J.S.A. 24:6I-16 

refers to the specific location of ATCs. It is true that the result of the 2011 

request for applications led to the Department choosing Foundation Harmony, 

the applicant with the highest score that had not yet been chosen in another 

20

 In the version of N.J.S.A. 24:6I-7 in effect during the administrative 

proceedings in question, L. 2013, c. 160, the same language was employed at 

subsection -7(a).
64 A-2204-18T4

region, as the first northern region winner. Because both Foundation Harmony 

and the next-highest scorer had proposed to locate their ATCs in Secaucus, the 

Department bypassed the second-place finisher and chose the next entity in line, 

explaining: "Taking into account the need for geographic diversity to improve 

patient access . . . [t]he Department does not believe that locating two ATCs in 

the same municipality to serve the seven-county [n]orthern region is in the best 

interest of the public." Inst. for Health Rsch., slip op. at 4. Compassionate Care 

argues that the Department has departed from this view by allowing an entity to 

operate in Atlantic City near where Compassionate Care has contemplated 

opening a satellite facility and has instead adopted a new view that geographic 

diversity may frustrate the purpose of the ATC Program.

In rejecting Compassionate Care's argument, we need not consider 

whether what was once deemed by the Department as important in 2011 

precludes a different view in 2018 or after. The fact is that the Department did 

not choose an applicant to operate an ATC in a municipality where another 

existed. MPX will be the first ATC in Atlantic City, which will further the 

Compassionate Use Act's mandate that the Department ensure a sufficient 

number of ATCs to serve the needs of eligible patients. When MPX was 

selected, Compassionate Care had not been issued a permit for a dispensary in 
65 A-2204-18T4

Atlantic City, and the record suggests that it was far from committed to opening 

a satellite facility there. It was not arbitrary or capricious of the Department to 

fail to consider the hypothetical possibility that Compassionate Care might 

pursue an interest in Atlantic City. Indeed, consideration of noncommittal plans 

by one ATC to open a satellite office in another location could have had the very 

undue affect of impeding worthy applicants. We find nothing arbitrary or 

capricious in the Department's approach on this discrete issue.

Fifth, GGB argues that Verano engaged in "highly unethical" or even 

"criminal conduct" in formulating its application and, therefore, should not have 

been selected to go forward with permitting in the central region. GGB 

specifically alludes to the fact that Verano's application revealed that it entered 

into "host community agreements" (HCAs) with Elizabeth and Rahway, where 

it intended to locate its dispensary and cultivation site, as part of its efforts to 

demonstrate the community support required by the request for applications. 

GGB claims these HCAs were unethical because they provided that if Verano 

was selected it would make contributions to these municipalities. GGB would 

have these donations characterized as "bribes" to the municipalities in exchange 

for written letters of support that Verano could use in its application.
66 A-2204-18T4

Among other things, the request for applications asked applicants to 

provide "written verification of the approval of the community or governing 

body of the municipality in which the [ATC] is or will be located" and for the

applicants to "describe their ties to the local community and history of 

community involvement," including but not limited to involvement with local 

non-profits and community organizations, business and investment ties, and 

local hiring plans. At the pre-application conference, the Department explained 

that it was "looking for some form of documentation that the municipal 

government [was] in favor of an [ATC] operating in that jurisdiction and 

[would] not . . . interfere and impede the [permitting] process."

Verano's HCAs with Elizabeth and Rahway state that in the event Verano's 

application was successful and it completed the permitting process to operate its 

dispensary in Elizabeth and its cultivation center in Rahway, it would make 

immediate "contributions" to those cities and further contributions at the end of 

every year it was in business. Verano also agreed to give priority to local 

businesses to provide services like plumbing and waste removal to its facilities, 

to hire local employees whenever possible, and to participate in "community 

cleanup/rehabilitation initiatives," and Elizabeth and Rahway agreed to work 
67 A-2204-18T4

with Verano to advise it regarding "research, community benefits, and employee 

training programs."

The HCAs, however, also stated that Elizabeth and Rahway were "under 

no obligation" to use Verano’s contributions "in any particular manner," but that 

they would use them "in accordance to prior conversations and agreements." 

They also explained that by accepting Verano's "donations," the municipalities 

made "no representation or promise that [they would] act on any license or 

permit request in any particular way other than by [their] normal and regular 

course of conduct and in accordance with their rules and regulations and any 

statutory guidelines." Verano also included an Elizabeth resolution in its 

application that stated the mayor and council believed Elizabeth would benefit 

from the location of an ATC within its borders, "subject to compliance with 

terms and conditions to be agreed upon, provision of an agreed upon host 

community benefit fee, and compliance with all applicable City Ordinances, 

Permits and Approvals."

Other applicants included materials in their applications related to 

agreements made with municipalities. For example, JG submitted a letter from 

Ewing Township in which the mayor expressed support for its application and 

stated that JG had shown a "commitment to invest in Ewing" and "collaborate 
68 A-2204-18T4

with the Township." JG’s application also included a "Letter of Intent for Host 

Community Agreement with Ewing Township," which is completely redacted in 

the record. Pangaea entered into a "memorandum of understanding" with Ewing 

Township in which it promised to "provide financial assistance" to the 

municipality for purposes of rehabilitating and upgrading local parks and 

recreational facilities in exchange for Ewing offering "support and assistance to 

Pangaea in securing facilities and necessary approvals" in the town to operate 

its ATC. Ewing issued letters stating its approval of Pangaea's intent to locate 

its operations in the town and passed a municipal resolution to that effect.

It is not readily apparent to us that there is something wrong or unethical 

about the HCAs in question. Indeed, such agreements are actually required in a 

similar Massachusetts program. Massachusetts requires applicants for medical 

marijuana permits to negotiate HCAs with municipalities where they propose to 

locate. 935 Mass. Code Regs. 500.101(1)(a)(8) – (2019). An HCA "may include 

a community impact fee for the host community," provided that the fee is 

"reasonably related to the costs imposed upon the municipality by the operation 

of the marijuana establishment." Mass. Gen. Laws ch. 94G, § 3(d) – (2017). 

Although the Compassionate Use Act does not contain those requirements, and 

New Jersey need not model its methods after Massachusetts's, it is worth noting 
69 A-2204-18T4

that another state has found HCAs valuable to the expansion of its program, 

rather than rejecting them as unfair tactics by permit applicants.

More importantly, the question posed by GGB has not yet been addressed 

by the Department in explaining the reasons for granting and denying the 

applications submitted under the 2018 request for applications. We think that 

GGB's assertion – assuming it has any bearing on its own application21 – should 

be in the first instance taken up in the Department, and we do not foreclose its 

consideration in the remand proceedings that will follow today's decision.

Sixth, Bloom has argued – in a footnote in its appeal brief – that NETA 

should not have had its application approved because it was seeking to operate 

a facility within 1000 feet of a school zone. Other than that bald assertion and 

NETA's equally bald denial – calling Bloom's allegation "unfair and untrue" –

we have little more in the record to consider whether this argument has merit. 

As we have for some of these other issues, we will leave this for further 

consideration in the remand proceedings.

21 We are unsure of the relevance of GGB's opposition to Verano's accepted 

application since GGB applied in the northern region and was not in competition 

with Verano in the central region.
70 A-2204-18T4

G

The parties have also offered different views about potential remedies or 

how the status quo should be altered or remain unchanged if – as we have now 

determined – a remand is required. Some contend that we should vacate the 

final agency decisions in question and remand for more fulsome proceedings in 

the Department. Others argue we should grant them approval in their chosen 

region or remand for rescoring. For example, Harvest argues – in relying on our 

bidding decision in Van Note-Harvey, 407 N.J. Super. at 651 – that we should 

simply "direct [the Department] to add Harvest to its list of approved 

applicants." Harvest argues that if its application had been properly scored, it 

would have been awarded one of the six top spots and that the equitable result 

is not to deprive one of the successful applicants of its award but to simply add 

Harvest to the list. One respondent – Verano – while seeking to vindicate the 

final agency decisions also expresses some support for application of the remedy 

imposed in Van Note-Harvey, arguing that "if the [c]ourt is inclined to grant any 

relief at all, it should be relief that expands the roster of licensed ATC operators, 

not relief that continues and prolongs the current bottleneck situation, which is 

contrary to the Legislature's declared policy of compassion." Verano's position 
71 A-2204-18T4

is that, whatever we do, we should not upset the progress made by the successful 

applicants to date:

The worst thing that could happen from these appeals, 

and the one thing that should not be allowed to happen, 

is to backslide or regress. The six selected applicants 

should be allowed to move forward with their planned 

operations, even if the [c]ourt finds Pangaea or any of 

the other applicants to be entitled to some relief.

There is some appeal in that argument, considering the long delays in 

implementing the Compassionate Use Act.

Granting appellants relief in the form of awarding them additional 

positions without depriving the successful applicants of their positions may be 

tempting, but it is too facile a result even when considering that voters just 

approved the legalization of recreational marijuana use22 that will likely generate 

an increased need for permits. But we think it is not our place to alter the amount 

of permits that may issue; such questions reside with the Legislature and

whatever direction given by the Legislature to the Department.

22 New Jersey voters were given the opportunity to answer the following 

question: "Do you approve amending the Constitution to legalize a controlled 

form of marijuana called 'cannabis'?" At the polls on November 3, 2020, twothirds of the voters said yes. See Tracey Tully, Recreational Marijuana 

Legalized by New Jersey Voters, N.Y. Times (Nov. 3, 2020), 

https://www.nytimes.com/2020/11/03/nyregion/nj-marijuana-legalization.html

(last visited Nov. 12, 2020).
72 A-2204-18T4

Van Note-Harvey is a narrowly-defined decision in inapposite 

circumstances. There, the Schools Development Authority requested proposals 

for site consultants for school construction projects for a three-year period. Id.

at 646. In ranking the applicants, the Authority took steps that we found were 

inconsistent with applicable regulations; those steps caused Van Note to fall in 

the rankings, ultimately depriving it of eligibility. Id. at 648. After finding the 

Authority had failed to properly apply its regulations, we considered the 

appropriate remedy and concluded "the fairest outcome" was to "expand" the 

Authority's list of eligible consultants to include Van Note. Id. at 651. 

Importantly, unlike what some appellants argue here, we did not override the 

agency's determination as to the number of eligible consultants that would be 

permitted. Instead, we noted that when the request for proposals was issued, a 

determination had not been made as to "the final number of site consultants to 

be selected," only an "estimate[] that up to nine firms might be chosen." Id. at 

646. After we compelled the addition of Van Note, the list of eligible 

consultants was increased to eight and, so, did "not expand the list of eligible 

contractors beyond the number that had originally [been] contemplated." Id. at 

651. 
73 A-2204-18T4

Appellants argue that we should take a similar approach here, but that 

would require us to disregard the Department's decision to limit licensing to six 

entities – two in each region. As we have emphasized throughout this opinion, 

our power to intervene is limited; to put it simply, we may determine only 

whether the agency proceedings and the results obtained were arbitrary, 

capricious, or unreasonable. We have no license to increase the number of 

successful applicants beyond six as the means for moving these proceedings 

more quickly to the next step. In fact, it is far from clear that any further 

proceedings will move any appellant into the top six. We are too far in the dark 

to approve or reject the final agency decisions, so how could we possibly 

conclude that some of these unsuccessful applicants should be permitted to move 

forward in the process?

Beyond remanding for further proceedings, we decline to impose any of 

the interim relief sought by appellants and otherwise leave the status quo 

undisturbed. We do not, however, preclude the Department from rendering 

relief to the appellants pending – or in place23 – of its fulfillment of our mandate.

23

 That is, we see no reason why the Department could not grant Van NoteHarvey-type relief to appellants rather than engage in the remand proceedings 

that we believe are otherwise required. We simply conclude that it is beyond 

our jurisdiction to impose that relief.
74 A-2204-18T4

III

For all these reasons, we have considerable concerns about the 

Department's processes and the results produced that – without further agency 

proceedings and explanation – would leave us to conclude that the decisions in 

question are arbitrary, capricious and unreasonable. We therefore vacate the 

final agency decisions in question and remand for further administrative 

proceedings in conformity with the spirit of this opinion. All requests for 

interim relief are denied without prejudice to the completion of any further 

proceedings, which we assume will occur expeditiously.

Vacated and remanded. We do not retain jurisdiction.

* * *

Appendix

Northern Region

*NETA NJ, LLC 932.17

*GTI New Jersey, LLC 927.33

Bloom Medicinals of PA, LLC 894.83

Liberty Plant Sciences, LLC 894.67

GGB New Jersey, LLC 823.67
75 A-2204-18T4

Southern Region

*MPX New Jersey24 958.17

#NETA NJ, LLC 932.17

*Columbia Care New Jersey, LLC 929

Harvest of New Jersey, LLC 911.17

Altus New Jersey, LLC 901.67

Liberty Plant Sciences, LLC 897.17

Bloom Medicinals of PA, LLC 894.83

Central Region

#MPX New Jersey 958.17

#NETA NJ, LLC 932.17

#Columbia Care New Jersey, LLC 929

#GTI New Jersey, LLC 927.33

*Verano NJ, LLC 920.67

*JG New Jersey, LLC 913.33

Altus New Jersey, LLC 901.67

Bloom Medicinals of PA, LLC 894.83

Pangaea Health & Wellness, LLC 801.67

24 The asterisk (*) denotes a chosen applicant. The pound sign (#) denotes a 

bypassed applicant selected in another region.