Rutledge says court would likely defer to commission’s interpretation on cannabis facility near Newport school

An opinion by Arkansas Attorney General Leslie Rutledge on Thursday (Dec. 20) regarding the location of a marijuana-growing facility in the Delta concluded that a reviewing court would likely uphold the Arkansas Medical Marijuana Commission’s (AMMC) interpretation of a public school to exclude Arkansas State University at Newport.

Earlier this summer, Sen. Bill Sample, R-Hot Springs, asked for an opinion from the AG’s office on whether an application for a medical marijuana cultivator’s license for Delta Medical Cannabis Co. of Jonesboro should be thrown out because its proposed greenhouse is too close to a school.

The AG’s opinion can be found here.

At the AMMC’s last board meeting in late November, Arkansas Beverage Control (ABC) Board Director Mary Robin Casteel said the ABC legal staff believed Delta Medical’s application for a cultivation center near a high school on the campus of ASU-Newport meets all the requirements of ABC regulations enacted by the legislature.

In February, Delta Medical was the last out of the five cultivators selected by state regulators to grow Arkansas’ first legalized marijuana crop. At last month’s AMMC board meeting, Delta Medical representatives were told they would have to wait for an imminent opinion from the AG’s office before the regulatory panel decided if the planned location of its greenhouse near ASU-Newport meets the requirements of the commission’s voluminous rules

In the opinion released Thursday, Rutledge said her office and the courts would likely defer to the AMMC’s own interpretation of the Arkansas Medical Marijuana Amendment of 2016, known as Amendment 98, in response to Sample’s query in July before the Arkansas Legislative Council’s (ALC) executive subcommittee.

“The AMMC has been constitutionally charged with the responsibility to adopt rules necessary to . . . perform its duties under the amendment, including rules governing the manner in which it considers applications for . . . licenses of dispensaries and cultivation facilities,” Rutledge wrote. “The AMMC has adopted such rules, and in them, has defined school for purposes of dispensary and cultivation facility siting to not include postsecondary institutions of higher education [and] community colleges and applied that definition to dispensary and cultivation facility licensing applications.

“The Arkansas Supreme Court gives great deference to an agency interpretation of a statute rendered by the agency charged with administering it, as the AMMC is charged with administering the relevant provisions of Amendment 98, and will not overturn the construction of a state statute by an administrative agency unless it is clearly wrong. The AMMC’s interpretation of ‘school’ in Amendment 98, far from being clearly wrong, is clearly permissible. A reviewing court, therefore, would likely defer to it.”

At the July ALC meeting, where the legislative panel also approved a measure to allow the AMMC to hire to hire an independent consulting firm to review and score more than 200 applications to operate marijuana dispensaries, Casteel offered a similar clarification that Delta Medical’s application would meet all the requirements of ABC regulations enacted by the legislature in the 2017 regular session.

At the AMMC board meeting on Nov. 28, Delta Medical was the final cultivator to appear before the AMMC board to provide an update on the progress of its medical marijuana greenhouses and cultivation facilities. The four other cultivation licensees told the commission they hope to have their greenhouses up and running and cannabis products on the shelf sometime between April and August of next year.

However, instead of providing a timeline of when it hopes to have products available, Delta Medical President Don Parker offered prepared remarks asking the five-person regulatory panel to approve the partnership’s proposal to move its planned location near ASU-Newport to another Jackson County site across the street from the Arkansas Department of Corrections’ Grimes Unit prison.

“We simply want to prevent any further delays,” Parker said, adding later that his firm has spent more than $3.5 million to prepare plans for the Newport cultivation facility. The Jonesboro venture group also submitted applications to the AMMC for proposed dispensary franchises in Jonesboro, Fort Smith, Little Rock and Pine Bluff.

On Wednesday, the AMMC postponed a highly-anticipated meeting scheduled to announce the dispensary scores from a pool of nearly 200 applications until new board members are seated early next year.

Arkansas Department of Finance & Administration spokesman Scott Hardin, the AMMC’s media liaison, said the delay will give the regulatory panel time to brief incoming commissioners appointed to the board at the close of the year.

Outgoing Senate President Pro Tempore Jonathan Dismang, R-Searcy, on Monday appointed Benton Police Captain Kevin Russell to serve on the regulatory panel, replacing colorful and sometimes controversial board member Dr. J. Carlos Roman of Little Rock. The two-year board tenures of Roman and Dr. Stephen Carroll, a pharmacist from Benton, were set to expire on Dec. 31.

Hardin said while Carroll’s initial term will expire, the central Arkansas pharmacist is expected to remain on the commission pending a new appointment ahead of the Jan. 9 meeting. AMMC director James Miller, who holds the open seat on the panel, resigned on Dec. 12, Hardin said.

“But we expect a new appointment over the coming days,” he said.

The five members of the commission were first announced in December 2016 by Gov. Asa Hutchinson, Dismang and former House Speaker Jeremy Gillam, R-Judsonia. Dr. Ronda Henry-Tillman of Little Rock was appointed by Hutchinson to serve as chair in late 2016. Gillam then appointed Carroll and Travis Story, a Fayetteville attorney. Dismang appointed both Miller of Bryant and Roman.

Hardin also said representatives for the Boston-based Public Consulting Group (PCG) who were first hired in October to review and score dispensary applications were unable to attend the scheduled meeting less than a week before Christmas. PCG officials have since confirmed they would be able to attend the postponed board conference in early January.

The MMC board first began accepting bids on June 30, 2017, for up to five marijuana growing facilities and another 32 dispensary applicants to operate in eight quadrants of the state. In the earlier process to score and award licenses for the medical cultivation facilities or cannabis greeneries, it took the five commissioners more than three months to score and then award five licenses to Arkansas-based companies in late February from a pool of nearly 100 bids.

Delta Medical is one of four medical marijuana cultivators that plans to locate its marijuana-growing operations in the agriculture-rich southern region of the state that gave the Jonesboro venture group its name.  Osage Creek Cultivation, which has started has already construction on its pre-engineered marijuana-growing facility in Carroll County near Berryville, is the lone marijuana greenery in Northwest Arkansas. Osage Creek officials said construction on their facility is expected to be completed by early March with seeds in the ground shortly thereafter and marijuana growing by early summer.

Talk Business & Politics will update this story.