Owners of Fort Smith-based River Valley Relief have taken legal action to block a Dec. 8 Zone 4 dispensary license decision by the Arkansas Medical Marijuana Commission (AMMC). The action also seeks to reinstate River Valley Relief’s application.
AMMC members on Dec. 8 were to vote on three remaining dispensary licenses which were in Zones 4, 6 and 8. Prior to Dec. 8, there were 31 active dispensaries in Arkansas, with six dispensaries being approved but not yet open. The medical marijuana constitutional amendment approved by Arkansas voters in 2016 allows for 40 dispensaries and 8 cultivation (growing) licenses. All eight cultivation licenses have been approved, with five active growers and three in the process of opening.
The commission approved the Zone 4 license and in a last minute twist, awarded the license to 3J Investments which is 60% owned by Jeffery Fitch and 40% by Jeremy Ruiz. The dispensary will be located in the Johnson County town of Lamar. River Valley Relief (RVR), owned by Storm Nolan and Kane Whitt, was the highest scoring dispensary for the Zone 4 license, but Rose Law Firm attorney Michael Goswami told the commission the RVR application was invalid because the entity had not renewed its business license with the Arkansas Secretary of State’s office.
The legal action from Nolan and Whitt, filed in Pulaski County Circuit Court, seeks a temporary restraining order preventing 3J Investments from being awarded the license, and asks to “reinstate Storm’s application to stand as an eligible and qualified application.” The lawsuits – one seeks a temporary restraining order and the second seeks to reverse the AMMC decision – allege the commission acted “arbitrarily, capriciously, in bad faith, and/or in a wantonly injurious manner” and violated Nolan’s right of due process.
Specifically, the lawsuits argue that the River Valley Relief LLC charter was created as a legally “perpetual” business, and that the “four statutorily-specified events” required to dissolve an LLC never happened. The action also notes that Goswami was able to address the commission about the River Valley Relief charter, but Storm and his attorney were not given the chance to respond.
“The Commission acted upon a suggestion that a corporation had dissolved, and did not allow Storm to speak in opposition to that suggested circumstance,” noted the filings.
Stephen Smith and Matthew Horan with the Fort Smith-based law firm of Smith, Cohen & Horan are representing River Valley Relief.
Scott Hardin, spokesman for the Arkansas Department of Finance and Administration, the agency under which the AMMC operates, provided this statement when asked for a response to the lawsuits: “As an extremely competitive industry with dispensary licenses valued at several million dollars, new litigation is certainly not a surprise. While we can’t speak to the specifics of active cases, we can confirm 3J paid the fee and posted the performance bond within the required time frame for licensing.”
Hardin said the license has already been awarded to 3J Investments.
Arkansas has 31 active dispensaries for 60,013 active licenses, or a dispensary for 1,935 licensed medical marijuana patients. By way of comparison, Oklahoma has 1,924 dispensaries serving 360,741 active licenses, or a dispensary for 187 licensed medical marijuana patients. Total sales since the first dispensary opened in May 2019 were $200.7 million – and 30,648 pounds of medical marijuana – as of Dec. 17.