Marijuana cultivation license in jeopardy for River Valley Relief after court ruling

The future of the River Valley Relief (RVR) marijuana cultivation center in Fort Smith is uncertain following a Pulaski County Circuit Court ruling Thursday (Nov. 3) that said state officials erred in granting River Valley Relief a license.

2600 Holdings filed a lawsuit in January 2021, asking the court to disqualify RVR and grant the license to 2600 or provide other relief through the Arkansas Administrative Procedures Act.

2600 attorneys allege that in June 2020, the Arkansas Medical Marijuana Commission (MMC) illegally granted RVR owner Storm Nolan a license during a second round of awarding cultivation licenses. The action was illegal because the incorporation in Nolan’s first application was no longer valid, and the proposed center was too close to the Sebastian County Juvenile Detention Center, according to the complaint filed by 2600. The law regulating Arkansas’ medical marijuana requires centers to be at least 3,000 feet away from a school, church or daycare.

The Arkansas Department of Finance and Administration (DFA) rebutted 2600’s complaint with a 36-page filing.

“Everything about the Plaintiff’s lawsuit is wrong – the wrong Plaintiff, the wrong parties, the wrong time, and the wrong arguments. There is no justiciable controversy for the Court to address. 2600 Holdings, LLC is not the real party in interest because it never applied for and cannot hold a medical marijuana cultivation license. Even if it were the right party to bring this suit, the Plaintiff failed to name and serve the eighth license holder, a necessary party in interest,” DFA noted in the introduction of the filing.

DFA also said it had taken action on deficiencies in Nolan’s second application and acted within its authority in that response.

“ABC has already acted upon the complaints made against Nolan, referred the complaints to ABC Enforcement, reviewed the results of its investigations, and issued orders. ABC exercised the discretionary authority granted by Amendment 98 and its rules to choose to fine Mr. Nolan rather than terminate, revoke, or suspend his medical marijuana cultivation license for failing to comply with the application requirement,” DFA noted.

The DFA arguments did not hold weight with Pulaski County Circuit Judge Herbert Wright. He noted in his ruling that 2600 has proven it should be given relief, and the MMC acted outside its authority – ultra vires – in granting the license to RVR.

“Plaintiff has, therefore, met its burden in showing that the undisputed facts of the case, viewed in a light most favorable to Defendants, prove that the plaintiff is entitled to relief. Defendants have acted unreasonably, unlawfully, and capriciously by awarding Nolan a license,” Wright noted, adding later in the ruling: “An effort was clearly made by the MMC to give Nolan thread to stitch up the holes in the RVRC application. Whether that was fair or unfair to any of the applicants, it was at minimum an unconstitutional and ultra vires act.”

Judge Wright also blocked Nolan, represented by the Fort Smith law firm Smith, Cohen & Horan, from participating in the lawsuit, saying Nolan and his attorneys should have sought to engage sooner in the litigation.

Nolan, who has previously estimated that his Fort Smith operation has around 50 employees, declined to comment on any legal moves they may take in response to Thursday’s ruling.

DFA spokesman Scott Hardin said they are reviewing legal options.

“We are reviewing Judge Wright’s Order today in coordination with our legal counsel to determine next steps. As a policy, we don’t speak to specifics of active litigation,” Hardin said in a note to Talk Business & Politics.