Nebraska awards first license to medical marijuana businesses

The state desperately needs good medicine. I hope those who receive the licenses have good intentions.

By Zach Wendling, Nebraska Examiner

Nebraska Medical Cannabis Commission has issued its first cultivator’s licenses in nearly a month, almost a week past the October 1 deadline set by voters.

Commissioners unanimously offered the first two of up to four cultivator licenses, a move challenging the Nebraska Attorney General’s Office, which had threatened to sue the commission if it did so. Nancy Laughlin Wagner of Omaha was the first to receive a license on behalf of Midwest Cultivators Group LLC. Patrick Thomas from Raymond also received a license.

Five business days are allowed for the applicants to accept their license.

‘Do right by the people’

The person who answered the phone number given on the application stated that Laughlin Wagner did not have any immediate comments. Perry Pirsch told The Nebraska Examiner, Thomas’ lawyer, that Thomas was “grateful” for this opportunity.

Pirsch added, “I’m confident that he can make it work, with ethics, responsibility, within the limits of the laws, all the while doing right by Nebraskans.”

Thomas claimed in his job application to be a Nebraskan born and raised with over 20 years’ experience in the fields of agriculture, farming, and land administration. Thomas is owner and operator Thomas Construction. This contracting company specializes in large municipal water mains. Thomas’s request listed Sarpy County Assistant Attorney Lee Polikov.

Thomas holds a U.S. Department of Agriculture hemp cultivation permit, and he stated that he will give it up if he gets a license in his state to cultivate medical marijuana.

According to the application, Laughlin Wagner will be serving as Chief Executive Officer of Midwest Cultivators Group along with Frank Hayes from Omaha and Dave Kanne from Carroll, Iowa.

Laughlin Wagner is a nurse who has more than 20 years of experience as a leader in the hospital and managed-care industry, says her application. Hayes is the founder and president of Hayes & Associates LLC, a certified public accounting and consulting firm. Kanne is a co-owner and has been in the agricultural business for 30 years. She has owned a 1,200 acre family farm since 1993.

Midwest Cultivators Group’s leaders stated in their application that they were committed to aligning all of our operations with Nebraska law, the standards set by the Nebraska Commission, and maintaining the highest level of safety, compliance and patient care.

Any licensed cultivator can grow no more than 1,250 flowering plants at one time under commission regulations. Medical Cannabis Commission intends to issue licenses for transporters, manufacturers of products and dispensaries in the future.

Uncertain rubric scores

Commission also voted to reject two other applications, Casey Sledge for an establishment in Wayne and Crista Eggers for a Yutan facility. Eggers, executive director for Nebraskans for Medical Marijuana (Nebraskans for Medical Marijuana), is the leader of the ballot measure that was approved by 71 percent for the legalization of medical cannabis in 2024 and 67 per cent for the regulatory system.

The applicants needed to have an average score greater than 70 out of 100. Commissaries devised business metrics, but did not reveal how they were determined. The commission received 39 cultivator applications between September 4 and September 23, which were advanced for evaluation based on a random lottery system.

The average scores were 73.33 for Patrick Thomas, 72 for Nancy Laughlin-Wagner, 63.67 for Casey Sledge and 42.33 for Crista Eggers. The commission determined that an average score greater than 70 was required to be eligible for licensing.

Eggers’ application was the most varied, as evaluators gave it scores between 11 and 44 points.

Lorelle M. Mueting from Gretna is a Prevention Specialist with Heartland Family Service. She told reporters, after the meeting, that the commission’s regulations were followed closely. This included requirements such as a growing location, security, a financial and business plan and other things.

Mueting showed her annotated regulations. The regulations are all in this document.

The commissioners refused to reveal which of the three judges gave Eggers such a wide range of scores.

Weigh in the public

The first licenses were set to be awarded September 30 until the September 29 resignations of Commissioners Bruce Bailey of Lincoln and Kim Lowe of Kearney, both of whom were part of an internal three-member evaluation team. Bailey, who was the biggest supporter of medical cannabis that is regulated and more permissive for marijuana smoking, had resigned on September 29.

The emergency regulation of the commission, to be heard in public next week by the commissioner, prohibits future dispensaries from selling raw cannabis, edibles, or vapes.

Almost all of those who spoke before the commission were against the regulations. They argued, among other things, that medical cannabis laws approved by voters legalized the use of all cannabis forms, including smoking. Smoking, they argued, would provide quicker pain relief than using tinctures and pills.

Maggie Ballard also works as a prevention specialist for Heartland Family Service in Mueting. She thanked the committee on Tuesday for working to accomplish a difficult task, which she described “as hard” as washing a cat. She said that she appreciated the restrictions placed on smoking. Ballard testified in support of Gov. Jim Pillen (R) appointed Mueting as a member of the Commission in May.

Ballard stated, “I want to express my gratitude and that of the many Nebraskans who are unaware of or afraid of speaking up in these meetings because they realize how divisive this issue has become.”

Lanette Richards, Scottsbluff’s executive director at Monument Prevention, a drug prevention group, thanked also the commission for its regulations, which she believes protects children.

Richards: “Even though the commission has set guidelines on medical marijuana, it is clear that marijuana is not medical marijuana.

Christy Knorr from Omaha is a hospice nurse who said that a physician’s pledge to never harm anyone includes medication. Knorr spoke about her wife’s battle with multiple myeloma and how marijuana provided some relief. She spoke of her wife’s battle with multiple myeloma, for which Knorr said marijuana provided some relief.

Knorr said that “people deserve choice in the medication they choose to take.”

Lia Post from Springfield is an advocate of medical cannabis who says the medicine helps her stay away from opiates and other addictive substances. Post spoke on behalf of Eggers in her role as a mother trying to support her son. Post stated that whoever scored Eggers as an “11” should not be on the Commission.

Post stated, “I’d trade anyone in the room including me for Crista Eggers.”

Legal threats and next steps

The regulations of the Commission are under temporary emergency status. This can last up to 180 calendar days. On October 15, at 1pm, the rules will be presented for public comment for a maximum of three hours at Nebraska State Office Building. The commissioners will not be present.

After the hearing, commissioners will determine whether or not to finalize regulations. This would require Attorney General Mike Hilgers and Pillen’s approval.

Zachary Pohlman is a deputy attorney general in Nebraska. He told Nebraska lawmakers at a March legislative hearing about a different legislative bill, that the federal laws continue to criminalize marijuana. Pohlman stated that the Attorney General’s Office would challenge any licenses issued by the Medical Cannabis Commission if it “tried” to do so.

A spokesperson for the AG’s Office declined Tuesday to comment on that previous position, which Hilgers has shared in court filings and public events.

John Kuehn of Heartwell (R), a former state senator and longtime opponent of marijuana, is continuing to battle the laws through court. This includes a preemption lawsuit. A Lancaster County District Court judge dismissed Kuehn’s latest lawsuit in June, which he is appealing to the Nebraska Supreme Court.

In a letter sent to the Nebraska Supreme Court Monday, in the Kuehn matter, both the AG’s Office as well as a Medical Cannabis Commission outside attorney did not repeat their licensing arguments but rather suggested pursuing another legal avenue to reach the courthouse.

“The state itself could challenge Medical Cannabis Laws, if for example it accuses a defendant of having illegally possessed cannabis, but the defendant challenges the charges.” [Nebraska Medical Cannabis] The brief states that the Patient Protection Act can be used as a defence.

Since the voter-approved law took effect in December, patients have legally been able to possess up to 5 ounces of medical cannabis in Nebraska with a health care practitioner’s recommendation.

The AG’s spokesperson declined to say Tuesday whether the state plans to challenge patient possession or whether any related guidance has been issued to local law enforcement.

Medical Cannabis Commission member have convened closed-door sessions nearly at every meeting in order to discuss “imminent litigation” and “pending litigation”, including on Tuesday. Members of the Medical Cannabis Commission declined to comment about possible legal threats.

‘Good medicine’

Eggers did not address her license application but asked that the business grade rubric be released. In addition, she expressed gratitude to commissioners for advancing licensing.

Eggers stated: “I am hoping the licensees who are receiving these licenses have the best intentions to give good medicine and care to those in the state of California that desperately need it.”

Next scheduled meeting is at 1 pm on November 3, in Nebraska State Office Building.

Bo Botelho, general counsel for the Nebraska Department of Health and Human Services, which is assisting the Medical Cannabis Commission, said the rubric won’t be made public until after licenses are awarded. State agencies typically don’t disclose the evaluators’ scores on applications and contracts. This is partly to ensure that all applicants are treated equally.

Botelho stated, “Just like taking a quiz, if this particular question is more valuable, then you will put in more details, and you won’t have as much information for the others, yet they are equally important.” We don’t usually tell the students how their scores will be divided. We are looking for the best results across the board.

Botelho stated that “there is no public benefit” in revealing who scored which applicants.

The argument is that a purpose for the public can be made. But I’d be worried that it could be used as a way to intimidate an evaluator.

Nebraska Examiner published this article first.

Side Pocket Images. Image courtesy Chris Wallis.