Marijuana oversight board frustrations in full bloom in debate over consultant hiring, faulty applications

The state Medical Marijuana Commission (AMMC), after long debate and lots of questions, gave the green light Wednesday (July 25) for state procurement officials to hire a third-party contractor to review and score applications for cannabis pharmacies across the state.

That decision came after rancorous debate earlier during the 90-minute meeting that led the commission to toss more than a dozen marijuana cultivator applications that did not make the final cut for pot greenhouse licenses that were awarded to five companies in late February.

Discussion on both issues came after the commission approved a legislative-backed proposal to keep all cultivation applications on file for 24 months. During the debate, the AMMC members’ uneasiness and frustration came out in full bloom after their legal counsel warned they could face lawsuits again if they held onto the application of a second-place company for one of the highly-sought after cultivation licenses.

In a seminal moment that highlighted the board’s rising frustration after nearly 20 months of facing numerous legal hurdles in implementing the state’s fledgling medical marijuana industry, AMMC staff attorney Danielle Hoefer told the commissioners that it would likely be unconstitutional to keep on file 13 applications that were not fully compliant with AMMC’s regulations.

“It is very possible that we can find ourselves back in (court),” said the AMMC’s legal counsel.

However, the sticking point with several commissioners was that Arkansas Beverage Control (ABC) Board staff had originally approved all the applications in a pool of 85 applications that were reviewed and scored by the commissioners in late 2017 and early 2018.

But Hoefer said the ABC staff later found errors after commissioners completed the months-long task of grading all the applications that had earlier been approved. Hoefer, who is also part of the ABC staff, then warned the five-person board from moving forward with a motion to approve the application of Carpenter Farms Medical Group LLC.

After the commission awarded cultivation licenses to five Arkansas startups in late February, the Grady-based marijuana startup filed a protest after it landed just outside the top candidates whose scores have now have been ratified. Since then, the ABC staff sought to disqualify the planned pot greenery with the sixth highest score after finding it had incomplete ownership data on its application.

“Yes, it has been disqualified by ABC staff, but the commission has the final authority to ratify disqualifications or overrule (them). That authority lies with (you),” Hoefer told the five commissioners.

After AMMC Chair Ronda Henry-Tillman asked the other commissioners to move forward with ratifying Carpenter’s final score, Hoefer shot back with the warning: “My earlier caution stands. To do so would be in violation of your rules and the (Arkansas) Constitution,” said Hoefer.

In the end, the board threw out the applications for Carpenter and the other dozen greenhouse applicants, but not before Henry-Tillman publicly expressed her anger with the legislature-backed rules that have governed the part-time regulatory board since November 2016.

“This is the problem I have with this whole thing. And I may be wrong, and I do not know the legality of how you guys do this because I am not a lawyer,” said Henry-Tillman, speaking directly to Hoefer. “But (Carpenter’s) application met all the qualifications and was scored and everything, and we get the scores and the application is there no longer.

“And no one has talked to any of us as a commissioner. No one. And it just bothers me for a reason and now we’re breaking these rules and breaking the law …,” said Henry-Tillman, who was appointed to her post by Gov. Asa Hutchinson.

After the board rejected Henry-Tillman’s proposal to keep Carpenter’s application on file, all the commissioners seemed sure that the board faced a legal dilemma because Carpenter and the other cultivators that were disqualified will likely file lawsuits in the future. It would certainly happen if the AMMC decides to add three additional cultivation under rules enacted by the legislature, they agreed.

“I bet … if you nitpick every last one of them, I bet you can find something wrong,” Henry-Tillman said as the sparse crowd laughed aloud.

HIRING A CONSULTANT
Later in the meeting, the commissioners also appeared unsure about hiring a consultant to grade the remaining 203 applications for dispensaries that have been tabled since September after months of lawsuits that led to a final decision with Arkansas Supreme Court in early July.

David Withrow, an attorney for the state Department of Finance and Administration’s (DFA) Office of Procurement, told the medical marijuana oversight board it would take a few days to prepare the scope of work and bid proposal.

It would then take another 30 to 40 days for bids to come back to the AMMC board to review and hire under the state’s lowest bid rules. Withrow said the commissioners could then hire and meet with the winning consulting firm before work on the more than 200 waiting dispensary applications could begin.

“We are all breaking new ground here,” said the DFA procurement officer.

Before taking a vote, however, AMMC Commissioner Travis Story asked the other board members to hold off hiring a consultant. The Fayetteville attorney said under rules enacted by the legislature after Arkansas voters overwhelmingly approved a ballot issue to legalize medical marijuana in the November 2016 election, the part-time oversight board has the sole authority to decide where pot greenhouses and pharmacies will be located.

“That’s my problem. I think that this (decision) is going to shut the whole thing down again,” Story said, adding the commission was abdicating its constitutional duty. “I don’t think this is right. We are going to shop out our jobs.”

Despite Story’s failed motion to reject hiring an independent consultant, the AMMC board approved a subsequent measure by a 3-2 vote to allow the ABC staff and DFA procurement office to do just the opposite.

Based on the discussion at Wednesday’s meeting, all the dispensary applications could be review and scored and handed back to the commissioners by the end of 2018, officials said. DFA spokesman Scott Hardin said last week that cultivation operators could have cannabis seeds in the ground by early 2019 and the designated pharmacies could have cannabis products on the shelf in eight quadrants of the state later that summer.

According to the Arkansas Department of Health, 5,641 medical marijuana registry cards have been issued to qualified patients and caregivers as of July 20.