Advocates for Arkansas’ emerging medical marijuana industry are in a quandary over what it will now take to get the voter-approved amendment off the ground following a Pulaski County Circuit Court ruling that the implementation process was flawed.
On Wednesday (March 21), Pulaski County Circuit Court Judge Wendell Griffen declared the state Medical Marijuana Commission’s (AMMC) process of scoring and awarding Arkansas’ first licenses to five pot cultivators as “null and void” under the constitutional amendment approved by voters in November 2016.
In his 28-page order – issued following a temporary restraining order filed March 14 preventing the regulatory panel from ratifying Arkansas’ first pot-growing licenses – Griffen rejected the process as requested by plaintiff Naturalis Health LLC of Little Rock.
Randy Bynum, a former Public Service Commissioner and attorney with Little Rock-based law firm Dover Dixon Horne, said he was surprised Judge Griffen decided to reject the entire process for scoring and awarding the highly-prized licenses.
“The decision was a bit of surprise to me personally because I thought his ruling today would be whether to keep the TRO (temporary restraining order) in place, (or) issue a preliminary injunction and to rule on the motion to dismiss by the state,” Bynum told Talk Business & Politics, noting his firm represented Acanza Health Group LLC of Little Rock, which had two medical marijuana applications that finished just out of the top 10 highest-score companies.
“I then thought he would set a schedule to further the proceedings on the merits. But he basically made a declaratory judgment today that the whole process is ‘null and void.’ Therefore, there are no further proceedings on this case so it is up to the commission to determine what happens next,” Bynum said.
What happens next is something on which Rep. Doug House, R-North Little Rock, the chief architect of more than two dozen medical marijuana bills approved by the legislature nearly a year ago, has thought long and hard. House told TB&P he expected the commission’s decision to award the state’s first five cultivation licenses for pot greenhouses to run into protests and eventually end up in court.
Following Griffen’s ruling, Department of Finance and Administration (DFA) spokesman Scott Hardin referred all questions to the office of Attorney General Leslie Rutledge, adding the Commission has not made any “next step” plans. Nicole Waugh, spokeswoman for the AG’s office, said the attorney general is reviewing the circuit court’s memorandum order and discussing it with ABC Director Mary Casteel and other appropriate state entities.
“I knew perfectly well that whatever decision was made, it would be protested. Then after the protest, then it would be appealed to the Circuit Court, because that’s what the (law) calls for. And now it will be appealed and end up in the (state) Court of Appeals or Supreme Court – I don’t know which one is appropriate,” said House, an attorney who has said he first didn’t support the ballot issue in 2016 to legalize medical marijuana.
“If they think it was done improperly, then we will start all over and do it again,” House said of likely future court rulings.
However, the idea of starting over again does not sit well with one of the representatives of Natural State Medicinals, the Little Rock partnership that received the highest score among the 95 cultivators that submitted applications to the commission.
“(This) decision is going to slow the process of getting medicine into the hands of Arkansans in dire need,” said Robert deBin, the newly installed president of the Fort Smith-based Arkansas Cannabis Industry Association.
The Little Rock native is co-founder of Natural State Medicinals. Earlier this week, deBin replaced cannabis industry advocate Storm Nolan, who stepped down after the ACIA board decided the association should be led by a license holder.
But that decision could prove premature if the commission is forced to or decides to restart the entire process. Nolan’s group, River Valley Relief Cultivation of Fort Smith, had filed one of the first letters of protest with the commission alleging that fifth-place finisher Delta Medical Cannabis Company of Jonesboro provided “misleading, incorrect, false or fraudulent information” to the panel.
“It is still unclear where it goes from here,” said Nolan, who served as the ACIA president since its inception in February 2017. “The real story here is the delay for patients. People are suffering every day they expected to have medical cannabis by now, and for goodness sakes we voted in November of 2016 … ”
If the commission begins the process anew, Bynum said it will need to address many of the concerns raised by Naturalis in the lawsuit filed March 13. Those issues include questions about tax delinquencies and fraudulent applications, as well as alleged conflicts-of-interests between commissioners and winning cultivators, and other bias that impacted how the 95 applications were scored.
Bynum and other industry advocates have raised the possibility of an independent third-party company scoring all the applications, but House said the Legislature discussed several ways to choose the winning cultivators but ultimately chose to give that oversight to the five-person AMMC board.
“We talked about issuing licenses to the highest bidder, we talked about … a lottery system and a number of other ways, and this is what we decided,” said House, an attorney. “It is perfectly OK for the Commission to hire any outside help they think they need if they go through the process of contracting that help, but they remain responsible for the decisions – not a third party.
“They can ask the guy down parking cars at the hotel if that is who they want to ask – I don’t care – but they are going to be responsible for whatever decisions are made,” said the North Little Rock legislator.
Last week, following Griffen’s restraining order, Gov. Asa. Hutchinson said the commission should have granted licenses to cultivators and dispensers the same way the ABC board does – by creating a set of qualifications and then awarding licenses through a lottery system involving all who qualify. After Wednesday’s ruling, Hutchinson spokesman J.R. Davis said the governor hopes a resolution is reached in a timely manager.
Before the Naturalis’ lawsuit on March 13, the commission was expected to ratify the scores of the five highest-scoring cultivators and to review several letters of protest presented by three of the 90 losing cultivators that participated in the highly-competitive sweepstakes for the state’s first legal pot cultivation facilities.
To date, the AMMC staff has only posted the scores of the top five cultivators that were awarded licenses at the February meeting. All five had met the state’s requirement to pay a $100,000 licensing fee and post a $500,000 performance bond to start construction on the state’s first cultivation facilities. Four of the 5 cultivators plan to build their pot greenhouses in the Arkansas Delta. They include:
• Natural State Medicinals Cultivation in Jefferson County
• Bold Team LLC in Woodruff County
• Natural State Wellness Enterprises in Jackson County
• Osage Creek Cultivation in Carroll County
• Delta Medical Cannabis Company in in Jackson County