At issuе is whether the New Jersey Compassionate Use Medical Marijuana Act (Act), N.J.S.A 24:61-1 to -16, grants appellants, a for-profit corporation and its principal, an unqualified right to apply for permits to operate alternate treatment centers (ATCs) to cultivate and distribute marijuana and to have them applications processed and evaluatеd irrespective of need. Subsumed within this issue is the question of whether in limiting the initial permitting to the statutorily-mandated minimum of six ATCs, the Department of Health (Department) acted arbitrarily, unreasonably, or in contravention of the Act. For reasons that follow, we answer both questions in the negative.
By way of background, the Act, originally made effective six months after enactment
The Act charges the Department with responsibility to “ensure the availability of a sufficient number of [ATCs] throughout the State, pursuant to need____” N.J.S.A. 24:6I-7(a) (emphasis added). To this end, the Legislature fixed a statutоry minimum number of ATCs: “at least two each in the northern, central, and southern regions of the State,” ibid., and expressly designated they be operated by non-profit entities, ibid. No such restriction, however, attends subsequent permits, as they may be issued to either for-profit or non-profit entities. Ibid.
The Department also has discretion to determine the kind and amount of information necessary to process permit applications and to regulate the ATCs. N.J.S.A. 24:6I-7(b) and (i). In this regard, thе Act tasks the Commissioner of Health (Commissioner) with the responsibility to “promulgate rules and regulations to effectuate the purpose of this [A]ct, in consultation with the Department of Law and Public Safety.” N.J.S.A. 24:6I-16(a). In advance thereof, the Commissioner and the Director of the Division of Consumer Affairs are authorized to “take such anticipatory administrative action ... аs may be necessary to effectuate the provisions of this [A]ct.” L. 2009, c. 307, § 19.
To that end, on November 15, 2010, the Department proposed regulations for implementing the Act and establishing the medicinal marijuana program. 42 N..J.R. 2668(a) (Nov. 15, 2010). However, on December 13, 2010, the Legislature passed a concurrent resolution declaring that portions of the proposed rules werе inconsistent with the Act. S. Res. 130; Assemb. Res. 151; cf. 43 N.J.R. 340(a) (Feb. 22, 2011). Pertinent here, one of the proposed
While formal adoption of the regulations was pending, on or about January 13, 2011, the Department posted a Request for Applications (RFA) for ATC permits on its website and required that completed applications be filed by February 14, 2011. In the applicant eligibility section of the RFA, the Department provided that, consistent with the statute, applicants must be non-profit entities organized under the laws of the State of New Jersey
By February 14, 2011, twenty-one separate entities had submitted thirty-five applications for ATC permits. After evaluating the applications based on criteria in the RFA, the Department awarded six permits, all to non-profit entities: two permits in the north region, two in the central region, and two in the south region.
Preliminarily, we consider the appealability of this matter. Rule 2:2-3(a) provides that “appeals may be taken to the Appellate Division as of right ... to review final decisions or actions of any state administrative agency.” Apropos here, the Act expressly states that “denial of an [ATC permit] application shall be considеred a final agency decision, subject to review by the Appellate Division of the Superior Court.” N.J.S.A. 24:6I-7(e).
In this case, appellants never submitted a completed application to the Department and, thus, never received a final agency decision of denial from which to appeal. Nevertheless, it is undisputed that the Department would not accept, let alone process and review, applications for ATC permits from for-profit entities. This was made clear not only on the Department’s website and in its RFA, but as well, according to appellants, in representations orally made by the agency in response to their specific inquiries.
“Because many administrative decisions are not, as in the case of formally entered judgments, facially identifiable as final actions!,] ■ • • other indicia are required to determine whether an agency action is final.” Pressler & Verniero, Current N.J. Court Rules, comment 3.3 on R. 2:2-3 (2012). In this regard, it is well-settled that our “jurisdiction extends not only to State agency action but also agency inaction.” Pressler & Verniero, supra, comment 3.1 on R. 2:2-3(a)(2) (emphasis added); see also N.J. Civil Serv. Ass’n v. State, 88 N.J. 605, 612,
To be sure, the mаnner in which the Department proceeded visa-vis appellants and others similarly situated leaves a record barren of any factual and legal conclusions. See R. 2:4-l(b). But there is no doubt here as to the rationale for the agency’s inaction or the grounds upon which it must be judged, and the finality of its decision as it affects appellants is unmistakable. See In re CAFRA Permit No. 87-0959-5, 152 N.J. 287, 299-302,
In any event, “because the allocation to the Appellate Division is not jurisdictional in the strict subject-matter sense, [we] may, in the public interest, opt to address the merits of a dispute improvidently brought before [us].” Pressler & Verniero, supra, comment 3.2.2 on R. 2:2-3; see also Vas, supra,, 418 N.J.Super. at 523-24,
Appellants’ claim of arbitrary and unreasonable administrativе action is grounded in the assumption that the Legislature’s use of the term “shall” in N.J.S.A. 24:6I-7(e) means that the Department is mandated to accept and process all applications and grant ATC permits to every applicant who meets the Act’s qualifications. This interpretation, of course, would allow for an unlimited number of ATCs regardless of need. The plain languagе of the Act, however, belies appellants’ construction.
Although use of the term “shall” is generally indicative of the strength of the Legislature’s intent, it has been construed on occasion as directory, suggestive or instructive, rather than imperative, where it relates to the form and manner in which the law is to be carried out and more clearly implements legislative intent. See In re State Bd. of Education’s Denial of Petition to Adopt Regs. Implementing the N.J. High Sch. Voter Registration Law, 422 N.J.Super. 521, 532,
The statutory provision at issue here, considered in full, does not allow for automatic licensure. Nor doеs it express an explicit legislative commitment to an unlimited number of ATCs. On the contrary, the “shall issue” language in N.J.S.A. 24:6I-7(e) is restricted by the qualification: “if the [DJepartment finds that issuing such a permit would be consistent with the purposes of this [A]ct and the requirements of this section are met.” (Emphasis added). A principal purpose of the Act is to “ensure the availability of a sufficient
Here, in implementing the start-up phase of the program, the Department has decided to limit the initial number of ATC permits to the statutorily mandated minimum. Appellants have made no showing that this decision is arbitrary or unreasonable. Nor could they, given that the number of registered quаlifying patients in the State was, at least as of the time of rejection, unknown.
In the absence of any such showing, “a strong presumption of reasonableness” attends an agency’s exercise of its statutorily delegated duties. In re Application of Holy Name Hosp. for a Certificate of Need, 301 N.J.Super. 282, 295,
Our role in reviewing administrative decisions is therefore limited. In re Taylor, 158 N.J. 644, 656,
Governed by these principles, appellants simply have not shown that the Department acted unreasonably in limiting the initial issuance of ATC permits to the statutory minimum. As noted, the Act mandates that the Department issue the first six ATC permits to non-profit entities, but beyond that only requires the agency to issue ATC permits “if the [Department finds that issuing such a permit would be consistent with the purposes of this act,” N.J.S.A. 24:6I-7(e) (emphasis added), foremost of which is to “ensure the availability of a sufficient number of alternative treatment centers throughout the State, pursuant to need,” N.J.S.A. 24:6I-7(a) (emphasis added).
We do not consider it unreasonable to fix a minimum number at the outset of the program while gauging the need for additional ATCs once the program becomes operational. It is self-evident that in order to measure the demand for ATCs beyond
Thereafter, the Department, as with all other administrative agencies, “possess[es] the ability to be flexible and responsive to changing conditions.” Texter v. Dep’t of Human Servs., 88 N.J. 376, 385,
In these particular circumstances, and given the built-in statutory safeguards that “need” will be assessed on an ongoing basis, we defer to the Department’s threshold determinatiоn to institute the State’s medicinal marijuana program with no more than the statutorily prescribed minimum number of ATCs. This decision follows the law, violates no express or implied legislative policies, and has not been shown to be unreasonable. Consequently, the Department’s announced declination to accept applications from for-profit entities at the outset of the program was not improper.
Affirmed.
Notes
Thus, N.J.S.A. 24:6I-7(a) provides in relevant part:
The [Department shall accept applications from entities for permits to operate as alternative treatment centers, and may charge a reasonable fee for the issuance of a permit under this section. The [Department shall seek to ensure the availability of a sufficiеnt number of alternative treatment centers throughout the State, pursuant to need, including at least two each in the northern, central, and southern regions of the State. The first two centers issued a permit in each region shall be nonprofit entities, and centers subsequently issued permits may be nonprofit or for-profit entities.
[ (Emphasis added).]
N.J.S.A. 24:6I-7(e) provides in pertinent part:
The [D]epartrnent shall issue a permit to a рerson to operate as an alternative treatment center if the [Department finds that issuing such a permit would be consistent with the purposes of this [A]ct and the requirements of this section are met....
[ (Emphasis added).]
The statement accompanying the concurrent Resolution noted in pertinent part:
These prohibitions, when combined with the [Department's stated intent to initially authorize only two alternative treatment centers to cultivate medical marijuana, and only four to dispense it, will significantly limit patient access to alternative treatment centers that dispense marijuana. Such limited access was not intended by the Legislature when enacting the statute.
The regulations concerning ATCs are found in N.J.A.C. 8:64.
Specifically, the RFA provided that "[t]he first two ATCs issued a permit in each region shall be nonprofit entities organized under the laws of the State of New Jersey."
The RFA also included a section outlining the review and evaluation criteria that the Department would utilize to evaluate the applications, referencing, in this regard, N.J.A.C. 8:64 and "Rules Related to the Medicinal Marijuana Program." However, as noted, those regulations were not yet promulgated.
On February 10, 2011, the Association of Safe Access Providers (Association) filed an emergent application in this court to stay the Department's acceptance, review and processing of applications for permits to operate ATCs until properly adopted regulations were in effect to implement the Act. We denied that application, finding no irreparable harm and additionally that
the Act does not require formal adoption of regulations as a condition precedent to requesting proposals or applications to operate [ATCs]. The Act expressly provides for the Commissioner “to take such anticipatory administrative action ... as may be necessary to effectuate the provisions [of] this act."
In light of this disposition, we need not address appellants' further challenges to the RFA itself. As to their remaining argument that the application process was wrongly governed by proposed rules not yet adopted and in effect, suffice it to say the Department's treatment of appellants was soundly based on the Act itself.