State v. Standard Wellness Co., L.L.C.

[Cite as State v. Standard Wellness Co., L.L.C., 2022-Ohio-1604.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

State of Ohio, :

Board of Pharmacy,

:

Plaintiff-Appellee,

: No. 21AP-606

v. (C.P.C. No. 21-MS-000127)

:

Standard Wellness Company, LLC, (REGULAR CALENDAR)

:

Defendant-Appellant.

:

D E C I S I O N

Rendered on May 12, 2022

On brief: Dave Yost, Attorney General, and Henry G. Appel,

for appellee. Argued: Henry G. Appel.

On brief: Mayle LLC, Andrew R. Mayle, Ronald J. Mayle,

and Benjamin G. Padanilam; Connell Foley LLP, Leo J.

Hurley, Jr. (pro hac vice), for appellant. Argued: Leo J.

Hurley, Jr.

On brief: Frantz Ward LLP, Patrick F. Haggerty, Gregory R.

Farkas, and Thomas Haren, for Amicus Curiae Ohio Medical

Cannabis Industry Association.

APPEAL from the Franklin County Court of Common Pleas

NELSON, J.

{¶ 1} Appellant Standard Wellness Company, LLC, a medical marijuana

cultivating enterprise, appeals the decision of the trial court that granted an application

from the State of Ohio Board of Pharmacy (the "board") to compel Standard Wellness to

produce documents pursuant to board subpoena. Because we conclude that the trial court

was guided in its determination by an overly expansive view of board powers, we will return

No. 21AP-606 2

the matter to the trial court for full evaluation of the request in light of the particular

authority that the statutes accord to the board.

{¶ 2} The October 20, 2021 Decision and Entry from which Standard Wellness

appeals recites that the board asks Standard Wellness to produce "one month of e-mails

[March 1 through April 1, 2020] from [or to] eight [we count perhaps nine] individuals

associated with the Company [as identified by some 11 separate e-mail accounts] * * *. The

Board seeks the information to determine whether there has been a criminal violation of

Ohio's Medical Marijuana Control Program ('MMCP')." Decision at 2. As we shall observe,

the legislature's charge to the board is not quite so sweeping as that last quoted sentence

might imply: the board has significant investigative authority in connection with the

medical marijuana program, but only within its purview as specified by statute and

corresponding regulation.

{¶ 3} The trial court's Decision begins, appropriately, with a review of the

"statutory background." Decision at 3-7. As the Decision notes, "[t]he MMCP regulates the

activities of 'cultivators,' 'processors,' and 'dispensaries.' A cultivator is defined as an 'entity

that has been issued a certificate of operation by [the Department of Commerce] to grow,

harvest, package, and transport medical marijuana as permitted under [R.C.] Chapter

3796.' See [Ohio Admin.Code] Rule 3796:1-1-01(A)(9). * * * * A dispensary is an entity

'licensed pursuant to sections 3796.04 and 3796.10 of the Revised Code * * * to sell medical

marijuana to qualifying patients and caregivers.' See O.A.C. Rule 3796:1-1-01(A)(14). Thus,

cultivators grow the raw plant material, * * * while dispensaries in turn sell [marijuana]

products to qualifying medical marijuana patients." Decision at 3.

{¶ 4} The Decision observes that "R.C. 3796.02 provides, in part, that the MMCP

is established 'in [the Department of Commerce] and the [Board].' R.C. 3796.02 goes on to

provide that Commerce 'shall provide for the licensure of medical marijuana cultivators and

processors' while the Board 'shall provide for the licensure of retail dispensaries.' " Id.

"Significantly," says the trial court, "R.C. 3796.02 goes on to provide that both Commerce

and the Board 'shall administer the [MMCP] program.' " Id. (emphasis in original).

{¶ 5} Although the Decision does not directly then refer to R.C. 3796.03, which

empowers the Department of Commerce to promulgate its rules regarding the medical

marijuana program, including "rules establishing standards and procedures for the

No. 21AP-606 3

licensure of cultivators," see R.C. 3796.03(A)(2), the Decision continues by reciting that

"R.C. 3796.04 authorizes the Board to promulgate rules that establish 'standards and

procedures' for the MMCP." Decision at 4. "These rules shall 'do all of the following,'

including but not limited to: (1) establishing licensing procedures [but only, we are

constrained to note, with regard to 'licenses and registrations it issues under this chapter,'

see R.C. 3796.04((B)(1) (emphasis added)]; (2) establishing the number of dispensaries to

be licensed; * * * (4) establishing training requirements for dispensary employees; and

(5) specifying the criminal offenses for which a person 'will be disqualified from

employment with a license holder.' In addition, the Board has the authority to issue rules

necessary for the 'administration and the implementation and enforcement of' the MMCP.

Finally, the Board has the authority to issue rules that consider[] the 'standards and

procedures' that have been found to be 'best practices' relative to the use of medical

marijuana." Decision at 4.

{¶ 6} The Decision further notes that "[p]atients and caregivers who seek licensure

under the MMCP are required to submit their applications for licensure to the Board. R.C.

3796.08. * * * * R.C. 3796.10 provides that the Board shall issue licenses to dispensaries if

all the conditions in paragraph (B) are met. * * * * R.C. 3796.11 provides that upon the

request of either the Board or Commerce, the Ohio Department of Taxation shall provide

information describing [the tax status of licensure applicants]. * * * * R.C. 3796.12

authorizes the Board to conduct a criminal background check into any applicant for a

dispensary license." Id. at 5.

{¶ 7} The Decision then turns to powers at issue here. "R.C. 3796.15 gives the

Board wide enforcement discretion," the trial court observes. Decision at 6. "For example,

paragraph (A) provides, in part, that if the Board has information that 'any rule adopted

under this chapter has been violated, it shall investigate the matter and take any action as

it considers appropriate.' " Id. at 6 (with emphasis supplied by the trial court). We pause

in our description of the trial court's Decision here to note that its phrase "in part" is doing

some heavy lifting. This part of the trial court's Decision omits the introductory sentence

of that Revised Code subsection, which reads: "The state board of pharmacy shall enforce,

or cause to be enforced, sections 3796.08 [regarding patient and caregiver registration],

3796.10 [dispensary license applications], 3796.20 [dispensary activities], 3796.22 [patient

No. 21AP-606 4

activities] and 3796.23 [caregiver activities] of the Revised Code." As we will discuss below,

the first sentence of the statutory subsection sheds light on the import of the second.

{¶ 8} "Also," the Decision continues (in reference, we think, to R.C. 3796.15(C)), "if

the Board has 'clear and convincing evidence of a danger of immediate and serious harm to

any person, [it] may place under seal all medical marijuana owned by or in the possession,

custody, or control of the affected license holder or registrant.' " Decision at 6 (emphasis

in original). We pause again to note that R.C. 3796.15(C) begins with the phrase "[i]f the

board suspends, revokes, or refuses to renew any license or registration issued under this

chapter and [determines clear and convincing evidence of danger] * * *." We read that

language to refer to licenses and registrations that the board itself issues—to patients and

caregivers, pursuant to R.C. 3796.08, and to dispensaries, pursuant to R.C. 3796.10, but

not, for example, to cultivators (as licensed by the Department of Commerce pursuant to

R.C. 3796.09). That is, we understand the first sentence of R.C. 3796.15(C) to run roughly

parallel to the first sentence in R.C. 3796.15(A).

{¶ 9} The Decision then reasons: "Thus, this Section [3796.15] gives the Board the

authority to enforce 'any rule' against an 'affected license holder' under the MMCP, not just

against dispensaries." Decision at 6.

{¶ 10} Having determined that "[c]learly, the Board has extensive statutory

authority to regulate medical marijuana under the MMCP," the Decision notes that the

board "also has its own inherent powers and duties proscribed by Chapter 4729." Id. at 6-

7 (with examples). Under R.C. 4729.24(A), the board has investigatory authority that

includes the power to issue subpoenas and to seek enforcement of its subpoenas through

application to the Franklin County Court of Common Pleas for orders compelling

production pursuant to the Rules of Civil Procedure. Decision at 7.

{¶ 11} The Decision further states that R.C. 4729.24(B) "provides, in part, that

before a subpoena is issued, the Board 'and the office of the attorney general' shall

determine whether 'probable cause exists to believe that' the investigation has revealed 'a

violation of this chapter or Chapters * * * 3796 of the Revised Code or any rule adopted by

the' Board." Decision at 7 (emphasis in original). Here, too, the trial court's phrase "in

part" is significant. R.C. 4729.24(B) begins by explaining the sorts of subpoenas to which

it applies, and reads in full:

No. 21AP-606 5

(B) A subpoena for patient record information may be issued

only on approval by the board’s executive director and the

president or another board member designated by the

president, in consultation with the office of the attorney

general. Before issuing the subpoena, the executive director

and the office of the attorney general shall determine whether

probable cause exists to believe that the complaint filed alleges,

or an investigation has revealed, a violation of this chapter or

Chapters 2925., 3715., 3719., or 3796. of the Revised Code or

any rule adopted by the board, that the records sought are

relevant to the alleged violation and material to the

investigation, and that the records cover a reasonable period of

time surrounding the alleged violation.

{¶ 12} After noting the board's statutory power to investigate potential violations of

Chapter 4729 (providing primarily for pharmacy regulation), the Decision finishes its

statutory overview by concluding: "Clearly, the Board has the authority to issue a subpoena

pursuant to an investigation into alleged violations of R.C. Chapter 3796." Decision at 7.

"With this statutory framework in mind," the Decision turns to the board's enforcement

application. Id.

{¶ 13} The Decision recites that the board "argues * * * that it is 'currently

investigating potential violations of' the MMCP and the regulations adopted thereunder.

The Board alleges that these violations have occurred 'in medical marijuana dispensaries'

and resulted from 'marijuana that was not grown in Ohio [and] was transported to medical

marijuana dispensaries licensed by the Board.' To perform this investigation, the Board

claims 'it will need' " the subpoenaed e-mails involving the nine specified individuals.

Decision at 8. Citing Ohio Elections Comm. v. Ohio Chamber of Commerce, 158 Ohio

App.3d 557, 2004-Ohio-5253, ¶ 19 (10th Dist.), the Decision states that an administrative

subpoena "will be judicially enforced so long as: (1) the inquiry is permitted by law; (2) the

records sought are relevant to the matter in issue; and (3) the records' disclosure will not

cause unreasonable costs and difficulty." Decision at 8. The trial court "finds that the Board

has satisfied all of these elements." Id.

{¶ 14} Reprising its previous statutory analysis, the Decision says that:

R.C. 3796.15 gives the Board wide enforcement discretion. For

example, paragraph (A) provides, in part, that if the Board has

information that "any rule adopted under this chapter has

been violated, it shall investigate the matter and take any

No. 21AP-606 6

action it considers appropriate." * * * Also, if the Board has

"clear and convincing evidence of a danger of immediate and

serious harm to any person, [it] may place under seal all

medical marijuana owned by * * * the affected license holder or

registrant." * * * Thus, R.C. 3796.15 gives the Board the

authority to enforce "any rule" against an "affected license

holder" under the MMCP, not just against dispensaries. In

addition, R.C. 3796.02 provides that the MMCP is established

"in [the Department of Commerce] and the [Board]." Finally,

R.C. 3796.02 provides that both Commerce and the Board

"shall administer the [MMCP] program." Consequently, the

Court finds that the Board's inquiry is allowed by law.

Decision at 8-9 (emphasis in original).

{¶ 15} The Decision finds the second prong of the test met because the affidavit of

board investigator David Gonzales "states that the Board has 'evidence that gives [it] a good

faith reason to believe that a truck drove from Utah to Ohio, delivering marijuana plants to

[Standard Wellness] and that marijuana harvested from those plants has been sold in

dispensaries.' * * * This Affidavit has not been rebutted[.]" Id. at 9.

{¶ 16} As to the third prong, the Decision finds that Standard Wellness has not

established that compliance would create an undue burden, and that trade secret issues will

be addressed by having documents filed under seal. Id. at 9-10.

{¶ 17} On that rationale, the trial court granted enforcement of the board's

subpoena. The following month, the trial court granted a motion by Standard Wellness to

stay its order pending appeal. November 19, 2021 Order Granting Stay. In its stay order,

the trial court underscored that it had construed the board's statutory authorization very

broadly:

[A]lthough the board now claims on page 1 of its Memo Contra

that the "primary focus" is to investigate individuals personally

licensed by the Board as dispensary associated key employees

and whether any medical marijuana dispensaries knowingly

sold marijuana sourced from outside Ohio's medical marijuana

program, this Court characterized the Board's investigation as

the pursuit of "information to determine whether there has

been a criminal violation of Ohio's [MMCP]."

Order Granting Stay at 8. Its enforcement decision, the trial court said, "did not address

whether the Board's investigation remained within the realm of an administrative

inspection or fell beneath the umbrella of an investigation of crime." Id. at 9; see also id. at

No. 21AP-606 7

8 (referring to a "probable cause prerequisite" set forth in R.C. 4729.24(B)). And "[p]erhaps

most important to the likelihood of success on the merits on appeal * * * is the fact that this

case brought before the Court novel issues of first impression regarding the Board's

authority to regulate Ohio's MMCP." Id. at 9.

{¶ 18} We credit the trial court's candor in its description of the earlier Decision.

That description is fully consistent with the stated rationale of the Decision itself, which

does appear to rest on reading the board's authority as extending to any potential violation

of the medical marijuana program by any state licensee.

{¶ 19} Standard Wellness submits four assignments of error:

I. The trial court erred in granting the Board's Motion to

Compel pursuant to R.C. 4729.24 since the Board failed to

present any evidence the Board and the office of the attorney

general determined that [for?] the Board's investigation

probable cause existed to show that any individual or entity had

violated Chapters 4729, 2925, 3715, 3719, or 3796 of the

Revised Code or any Rule adopted by the Board.

II. The trial court erred when it found that the Board's

investigation and accompanying Subpoena did not exceed the

bounds of its legal authority under R.C. 3796 and the

regulations adopted thereunder as part of the State of Ohio's

Medical Marijuana Control Program, under R.C. 4729, or

under 2925, requiring the court to deny the Board's motion and

to quash the Subpoena.

III. The trial court erred when it refused to consider whether

the investigation leading to the subpoena was criminal in

nature rather than administrative, which would have

independently required a finding of probable cause related to

the issuance of the Subpoena and would have required the

court to deny the Board's motion and to quash the Subpoena.

IV. The trial court erred when it failed to meaningfully assess

whether the scope of the documents sought by the Subpoena

were relevant to the investigation, requiring the court to deny

the Board's motion and to quash the Subpoena.

Appellant's Brief at 1-2.

{¶ 20} The first assignment of error is based on, and partially mirrors, the language

of R.C. 4729.24(B). That subsection reads in full:

No. 21AP-606 8

A subpoena for patient record information may be issued only

on approval by the board’s executive director and the president

or another board member designated by the president, in

consultation with the office of the attorney general. Before

issuing the subpoena, the executive director and the office of

the attorney general shall determine whether probable cause

exists to believe that the complaint filed alleges, or an

investigation has revealed, a violation of this chapter or

Chapters 2925., 3715., 3719., or 3796. of the Revised Code or

any rule adopted by the board, that the records sought are

relevant to the alleged violation and material to the

investigation, and that the records cover a reasonable period of

time surrounding the alleged violation.

{¶ 21} The trial court's gloss on this subsection was that it "provides, in part, that

before a subpoena is issued, the Board 'and the office of the attorney general' shall

determine whether 'probable cause exists to believe that' the investigation has revealed 'a

violation of this chapter or Chapter[] * * * 3796 of the Revised Code or any rule adopted

by the' Board." Decision at 7. (emphasis in original). That was one of the statutory

provisions cited by the trial court in its lead up to the conclusion that "[c]learly, the Board

has the authority to issue a subpoena pursuant to an investigation into alleged violations of

R.C. Chapter 3796." Id. Consistent with the language of its Decision, the trial court later

characterized R.C. 4729.24(B) as establishing a "probable cause prerequisite." Order

Granting Stay at 8.

{¶ 22} Standard Wellness submits under its first assignment of error that because

the trial court did not find and the record does not show that the board's executive director

and the attorney general's office jointly reached a probable cause determination, R.C.

4729.24(B) was not satisfied and the trial court therefore should not have enforced the

subpoena. See, e.g., Appellant's Brief at 20 ("the trial court admittedly ignored these

statutory burdens in issuing its Decision and Entry"); Reply Brief at 15-17.

{¶ 23} Quite understandably, Standard Wellness did not make this statutory

argument to the trial court in opposing the board's enforcement application. See June 4,

2021 Respondent's Brief in Opposition to Motion to Compel Compliance (advancing no

such argument or citation to R.C. 4729.24(B)). The text of the introductory sentence to

R.C. 4729.24(B) reflects that the subsection relates to "[a] subpoena for patient record

information," and there is no indication either on the face of the subpoena or in the record

No. 21AP-606 9

that the board subpoena seeking e-mails to and from various individuals associated with

marijuana cultivator Standard Wellness contained patient record information.

{¶ 24} Standard Wellness urges that "[t]he Board is wrong" to read the second

sentence of the subsection as limited to the context supplied by the first, Reply Brief at 16,

but its argument is entirely unpersuasive. The General Assembly has told us that statutory

phrases "shall be read in context and construed according to the rules of grammar and

common usage." R.C. 1.42. "Evaluating the context in which a word is written is essential

to a fair reading of the text: 'The words of a governing text are of paramount concern, and

what they convey, in their [textual] context, is what the text means.' " Great Lakes Bar

Control, Inc. v. Testa, 156 Ohio St.3d 199, 2018-Ohio-5207, ¶ 9, quoting Scalia & Garner,

Reading Law: The Interpretation of Legal Texts 56 (2012) (also quoting the same source

in reciting that " 'words are given meaning by their context' ").

{¶ 25} Here, the subsection builds upon the context provided in its topic sentence

by referring to the same officials—the board's executive director and the office of the

attorney general—in both (related) sentences. Even more significantly, the second

sentence—the one that Standard Wellness seeks to remove from the context of the first—

refers to "the subpoena," using the definite article. Which subpoena is that? The rules of

grammar and common usage suggest looking to the nearest referent—"[a] subpoena for

patient record information," as discussed in the preceding sentence. The legislative choice

to use the non-limiting indefinite article "a" in the subsection's first sentence and then to

use the limiting definite article "the" before "subpoena" in the second sentence is of

significance. See, e.g., Crosby-Edwards v. Ohio Bd. of Embalmers & Funeral Dirs., 10th

Dist. No. 06AP-1220, 2008-Ohio-762, ¶ 29 (endorsing point of Black's Law Dictionary

1477 (6 Ed.1990) that "[i]n construing statute, definite article 'the' particularizes the subject

which it precedes and is word of limitation as opposed to indefinite or generalizing force 'a'

or 'an' ") (other citations omitted).

{¶ 26} Indeed, and advisedly, the Ohio Medical Cannabis Industry Association

("OMCIA"), writing in support of Standard Wellness as amicus, emphasizes that

"paragraph (B) of this statute relates exclusively to subpoenas for 'patient record

information.' " Opening Amicus Brief at 12. That position permits the amicus to argue,

correctly, that far from implying that the board has plenary authority to launch

No. 21AP-606 10

investigations relating to any "violation of * * * Chapter[] * * * 3796" (as the trial court had

highlighted), instead "any authority granted to the Board under R.C. 4729.24(B) relates

solely to investigations for [sic] patient record information." Opening Amicus Brief at 12;

compare R.C. 3796.15(A) (empowering the board to enforce particularly specified statutory

sections including R.C. 3796.22, which governs medical marijuana activities for registered

patients).

{¶ 27} In any event, Standard Wellness did not make its R.C. 4729.24(B) pitch to the

trial court at the appropriate time, and cannot prevail on it here. See, e.g., Nunn v. Ohio

Dept. of Ins., 10th Dist. No. 18AP-114, 2018-Ohio-4030, ¶ 11 ("[i]t is well-established that a

party may not present new arguments for the first time on appeal") (citations omitted).

That the trial court did not resolve this interpretive question in its Decision (with no party

having raised it to that point) does not rescue the argument, such as it is, from having been

waived (and the Decision on appeal is not affected by briefing on the stay motion).

Compare Appellant's Reply Brief at 15 and fn. 3 (arguing otherwise).

{¶ 28} We overrule Standard Wellness's first assignment of error.

{¶ 29} We find that there is more to Standard Wellness's second assignment of error,

as endorsed in part by the opening and reply briefs of the OMCIA amicus. Our reading of

the trial court's Decision is that it was premised on a view that the board's powers in

administering the medical marijuana control program are coextensive with the authority of

the Department of Commerce and that the board is empowered to investigate any

"violations of Chapter[] * * * 3796 * * * and rules adopted thereunder." See Decision at 6

(emphasis in original); see also, e.g., id. at 7 ("Clearly, the Board has the authority to issue

a subpoena pursuant to an investigation into alleged violations of R.C. Chapter 3796"); id.

at 9 ("Thus, R.C. 3796.15 gives the Board the authority to enforce 'any rule' against an

'affected license holder' under the MMCP, not just against dispensaries").

{¶ 30} Even in its arguments to us, the board's briefing at times urges this sweeping

interpretation:

The statute gives very broad authority to the Board. The Board

"shall investigate" whether "any rule adopted under this

chapter has been violated[.]" Id. [R.C. 3796.15(A)]. By the plain

language of the statute, the Board is at least authorized to

investigate potential violations of "any rule adopted under this

No. 21AP-606 11

chapter." Id. Notably, this is not limited to rules promulgated

by the Board.

Appellee's Brief at 30 (emphasis in original).

{¶ 31} That understanding reaches too far, we think, to any extent that it allows

board investigation unrelated to entities licensed or registered by the board. Nothing

should have relieved the trial court from examining whether the subpoena in its various

component parts is directed to matters within the board's investigative authority. But in

determining whether the board's subpoena is "permitted by law" and "relevant to the

matter in issue" before the board, see id. at 8, the trial court did not seem to assess the

subpoena in light of the board's particular responsibilities and authorities under the

medical marijuana control program.

{¶ 32} Evidence submitted by the board indicated that it was "investigating whether

one or more individuals affiliated with Standard Wellness * * * improperly imported

medical marijuana into Ohio in or about March 2020." See Gonzales Aff. (found at June 4,

2021 Hurley Aff. Ex. K, attaching board's May 7, 2021 trial court brief and its Ex. E) at ¶ 4

(adding at ¶ 11 that investigator has "good faith reason to believe that a truck drove from

Utah to Ohio, delivering marijuana plants to [Standard Wellness] and that marijuana

harvested from those plants has been sold in dispensaries"). The evidence further tied "two

of the [nine] individuals whose e-mails were requested" to dispensary operations as

licensed dispensary employees. March 25, 2021 Application for Order to Compel at 3;

Gonzales Aff. at 6-10.

{¶ 33} We emphatically do not rule here that the board is precluded from seeking to

enforce third-party subpoenas properly related to matters within its statutory focus.

Compare, e.g., Petro v. North Coast Villas Ltd., 136 Ohio App.3d 93, 98 (9th Dist.2000)

(no statute "prevents the State Auditor from seeking documents in the possession of

private, third-party entities"); OMCIA Amicus Reply Brief at 1 ("OMCIA agrees that the

Board can issue subpoenas to third parties, but only if the subpoenas are relevant to

misconduct the Board is statutorily authorized to regulate and enforce") (emphasis

omitted). And we do not determine that the subpoena at issue strays outside the bounds of

the board's investigative purview: that is a question in the first instance for the trial court

to evaluate. But we do conclude that the evaluation must be undertaken in light of the

No. 21AP-606 12

particular authority that the legislature has given the board in this area—authority that is

something less than plenary power to enforce all aspects of Ohio's medical marijuana

control program and to oversee regulated entities that the board itself does not license.

(Thus, for example, the mere fact that Standard Wellness is licensed by the Department of

Commerce as a medical marijuana cultivator would not alone support investigation into its

practices by the board.)

{¶ 34} "[A]n administrative body * * * may exercise only the powers and authority

which have been conferred upon it by the General Assembly." Ohio Cent. Tel. Corp. v.

Public Utilities Comm., 166 Ohio St. 180, 182 (1957). That modest precept is essential to

the principles of limited government designed to safeguard our liberties. An administrative

board "has only those powers explicitly delegated by statute and must operate within the

limitations contained within its enabling statutes." See Ohio Am. Health Care, Inc. v. Ohio

Bd. of Nursing, 10th Dist. No. 13AP-1020, 2014-Ohio-2422, ¶ 58, citing Shell v. Ohio

Veterinary Med. Licensing Bd., 105 Ohio St.3d 420, 2005-Ohio-2423, ¶ 32 (same) (further

citations omitted).

{¶ 35} The text and structure of the statutory provisions establishing the medical

marijuana control program are, we think, reasonably clear. Pursuant to R.C. 3796.02, the

Department of Commerce is to license cultivators, processors, and testing laboratories,

while the board licenses dispensaries and registers patients and their caregivers. Although

both governmental entities thus "administer the program," they have distinct areas of

responsibility. As the board explained in its briefing to the trial court, the program is

divided into three parts:

The Ohio Medical Marijuana Control Program is governed by

three government agencies. The Department of Commerce is

responsible for the regulation of medical marijuana cultivators,

processors, testing laboratories, and employees of those

entities; the Board is responsible for the regulation of medical

marijuana dispensaries (and their employees), patients, and

caregivers; the State Medical Board of Ohio is responsible for

the regulation of physicians holding a Certificate to Recommend

medical marijuana. However, individuals are often licensed by

more than one agency. This is common where a vertically-

integrated company i[s] engaged in the cultivation, processing,

and/or dispensing of medical marijuana.

No. 21AP-606 13

June 11, 2021 Reply Brief of the Board at 5; see also Appellee's Brief at 32 (board "has

authority to discipline patients and caregivers * * * dispensaries * * *, and dispensary

employees).

{¶ 36} Thus, for example, the Department of Commerce establishes licensing

procedures for cultivators, R.C. 3796.03(A)(2), while the board establishes licensing

procedures for dispensaries, R.C. 3796.04(B)(3),(4). The board has authority to

"[s]uspend, * * * revoke, or refuse to renew a license or registration it issued," R.C.

3796.14(B)(1)(a) (emphasis added), while the Department of Commerce has the same

authority with regard to "a license it issued," R.C. 3796.14(A)(1)(a) (emphasis added).

Compare also R.C. 3796.14(A)(2) (department may inspect premises of cultivators,

processors, and labs) with R.C. 3796.14(B)(2)(b) (board may inspect dispensary premises).

Those authorities are parallel, and may from time to time overlap, but they are not

coextensive.

{¶ 37} And as the board has acknowledged in at least much of its briefing, that

division of responsibility has significant implications for enforcement authority. See

June 11, 2021 trial court Reply Brief of the Board at 6 ("The Board has never asserted it has

any authority to take administrative action against Standard Wellness"); Appellee's Brief at

32 (disclaiming intent "to discipline" a Department of Commerce licensee). Moreover, the

General Assembly has defined and thereby limited the board's investigative power with

reference to the scope of its defined disciplinary authority.

{¶ 38} The General Assembly spelled out the enforcement authority of the board in

R.C. 3796.15. The first sentence of R.C. 3796.15 authorizes the board to enforce specified

statutory sections within its particular purview, involving dispensaries and patient and

caregiver activities. The second sentence, which we read in the context of the first, grants

the board power to investigate potential violations of those specified statutory sections or

of "any rule adopted under this chapter." R.C. 3796.15(A). Consistent with the authority of

the board from the immediately preceding statutory section to regulate a license "it issued

under this chapter," R.C. 3796.14(B)(1), and consistent with the statutory limitations on

board enforcement to matters implicating the specified statutory sections involving

dispensaries, patients, and caregivers, we do not read this statutory provision to empower

No. 21AP-606 14

the board to investigate potential violations divorced from violations by board licensees and

registrants.

{¶ 39} The trial court in the analysis underlying its Decision does not appear to have

been informed by or focused on this same understanding. Compare Decision at 6

(describing board's "wide" enforcement authority by reciting—with emphasis in original,

but without reference to the immediately preceding statutory limitations—that "if the Board

has information that 'any rule adopted under this chapter has been violated, it shall

investigate' "); compare also Appellee's Brief at 31 (urging that "R.C. 3796.15(A) gives the

Board the power to 'investigate' any potential rule violation * * * ").

{¶ 40} And while the trial court also emphasized the board's authority to place under

seal marijuana controlled by an " 'affected license holder or registrant,' " Decision at 6

(emphasis in original), it did not acknowledge in quoting this part of R.C. 3796.15(C) that

the phrase "affected license holder or registrant" there connotes only a license holder or

registrant over which the board itself has regulatory control. Compare R.C. 3796.15(C)

(board may "seal" marijuana only "[i]f the board suspends, revokes, or refuses to renew any

license or registration" of the drug holder) with Decision at 6 ("Thus, this Section gives the

Board the authority to enforce 'any rule' against an 'affected license holder' under the

MMCP, not just against dispensaries").

{¶ 41} In promulgating its rules, the board has agreed that the statutes limit its

investigative authority under the program. Its own rule 3796:6-4-01, regarding program

"Enforcement generally," reads:

Pursuant to section 3796.15 of the Revised Code, the state

board of pharmacy shall regulate activities and enforce

compliance with activities as they relate to the dispensing of

medical marijuana and medical marijuana products to

registered patients and designated caregivers. The state board

of pharmacy shall investigate all activities related to Chapter[]

* * * 3796 of the Revised Code as they relate to dispensing

operations.

Ohio Adm.Code 3796:6-4-01 (emphasis added); compare Ohio Adm.Code 3796:5-6-01(A)

(authorizing Department of Commerce to investigate entities licensed by the department);

Ohio Adm.Code 3796:6-4-02 (board may investigate dispensaries and associated people).

No. 21AP-606 15

That highlighted restriction as recognized by the board itself does not seem to have

informed the Decision's analysis, which is phrased as predicated on far broader grounds.

{¶ 42} Similarly, the board recognizes what the trial court did not say in citing the

provisions of R.C. 4729.24(B) relating to subpoenas for investigations into potential

violations of Revised Code Chapter 3796: that "R.C. 4729.24(B) only applies in a subpoena

involving 'patient record information.' " Compare Appellee's Brief at 3 with Decision at 7;

Appellee's Brief at 22 ("[a] medical marijuana cultivator [like Standard Wellness] does not

have patient records because it does not sell directly to patients"). The trial court appears

to have used the language of R.C. 4729.24(B), untethered from its board-specific patient

focus, to bolster a far more sweeping take that "[c]learly, the Board has the authority to

issue a subpoena pursuant to an investigation into alleged violations of R.C. Chapter 3796."

Decision at 7.

{¶ 43} Here, where the matter at hand does not appear to involve board-registered

patients or caregivers, but does involve the cultivator Standard Wellness, the trial court's

conclusion that the statutory authorization of board enforcement of "any rule" extends

beyond "just * * * dispensaries," Decision at 6, provides just another signal that the Decision

rests on an understanding of board authority broader than the statutes permit.

{¶ 44} We review a trial court's grant of a motion to enforce a subpoena under an

abuse of discretion standard, except that "when a trial court's decision is based on a specific

construction of law [we review] the decision under a de novo standard." Ohio Elections

Comm., 2004-Ohio-5253, at ¶ 18. The board's argument to us that it "has statutory

authority to conduct an administrative investigation about whether dispensaries knowingly

sold unlawfully grown marijuana" may be fair enough. See Appellee's Brief at 29

(capitalizations and emphasis omitted). But the trial court's Decision does not suggest that

the trial court evaluated the requested subpoena in the limiting context of the board's

responsibilities under Ohio's medical marijuana control program. It is for the trial court in

the first instance to assess whether all the materials sought under the subpoena fall within

the scope of the board's lawful investigative authority. Because the trial court here does not

appear to have engaged in that analysis under a proper understanding of the statutes, we

are unable to conduct a meaningful review of whether it acted arbitrarily. Compare, e.g.,

MacDonald v. Authentic Invs., LLC, 10th Dist. No. 15AP-801, 2016-Ohio-4640, ¶ 47 ("In

No. 21AP-606 16

some circumstances, '[t]he trial court must set forth the basis for its decision with sufficient

detail to allow proper appellate review' ") (citations omitted). We therefore will return the

matter to the trial court for further evaluation within the statutory context we have

described.

{¶ 45} We sustain Standard Wellness's second assignment of error in part, to the

extent that the Decision failed to evaluate the requested subpoena in light of the board's

statutorily defined (and thus statutorily constrained) investigative authority. Because we

are not in a position to prejudge the outcome of that trial court review, which will involve a

match between factual submissions and the prevailing law, we overrule Standard

Wellness's second assignment of error to the extent that it postulates that the trial court

was required to deny the board's motion and to quash the subpoena. We will remand the

matter to the trial court so that it may perform its analysis consistent with this decision.

{¶ 46} Having sustained in part and overruled in part the second assignment of

error, and having determined to remand the matter to the trial court for further analysis,

we overrule the third and fourth assignments of error as rendered moot at this juncture.

{¶ 47} We reverse the judgment of the Franklin County Court of Common Pleas and

remand the matter there for further proceedings consistent with this decision that

subpoenas issued by the board on its authority under the medical marijuana control

program must be related to investigations within the board's statutorily specified purview.

Judgment reversed and cause remanded.

LUPER SCHUSTER, P.J., and JAMISON, J., concur.

NELSON, J., retired, of the Tenth Appellate District, assigned

to active duty under the authority of the Ohio Constitution,

Article IV, Section 6(C).

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