Members of a Mayflower family who failed to acknowledge their relationship on applications for dispensary licenses did not violate Arkansas Medical Marijuana Commission rules, regulators said on Wednesday.
The applications by Don Sears, his wife, Frankie, and son Todd were ruled flawed, and the state is demanding paperwork revisions, but the dispensary licenses for Todd Sears' THC Rx in West Memphis, Don Sears' Doctor's Orders Rx in Hot Springs and Frankie Sears' Pain Free Rx in Pine Bluff won't be affected.
The Searses each answered no to a dispensary application question about whether owners are "in any way affiliated" with any other dispensary or cultivation applicant. The applications included notarized signatures certifying that the applicants understood that any "misstatement or concealment of fact" could result in license revocation.
The state Alcoholic Beverage Control Division investigated the applications after Little Rock lawyer Quentin E. May complained in late January about them, saying it appeared the Sears relatives were trying to establish a "family monopoly" in the state.
More: Read the ABC order here.
On Wednesday, Alcoholic Beverage Control Division Director Doralee Chandler ruled that there was insufficient evidence to prove the Searses submitted false statements. Still, she ordered them to provide an affidavit stating that ownership is limited to the dispensaries under each of their names.
The family members have 60 days "to execute affidavit sufficiently divesting all equitable claim to or right in property of any dispensary license other than" the dispensary each member owns, respectively.
Members of the Sears family were awarded the following licenses:
- THC Rx Inc., 100 percent owned by Todd Sears, located in West Memphis;
- Doctors Orders RX, 100 percent owned by Don Sears, located in Hot Springs; and
- PainFree RX, 100 percent owned by Frankie Sears, located in Pine Bluff.
Scott Hardin, spokesman for the Arkansas Department of Finance & Administration, which contains the Alcoholic Beverage Control Division, told Arkansas Business in March that May's complaint wasn't the only one received by the ABC after the Searses were awarded licenses. He said an anonymous complaint was submitted, almost identical in scope, to May's.
May filed the complaint on behalf of Green Remedies Group, which applied for a dispensary in Garland County but was scored as the fifth-best applicant, with 361.72 points, in geographic Zone 6 by Public Consulting Group of Boston.
Doctor's Orders RX, Don Sears' dispensary, was scored third-best with 365.67 points. Four dispensary licenses were awarded for each of the state’s eight zones, so if Doctors Orders' license were revoked, Green Remedies could have received the fourth Zone 6 license.
Green Remedies is led by CEO Michael Butler, CFO Don Brewington Jr. and COO Brad Fausett.
A key element of the dispute hinged on the definition of the word "affiliated."
"The specific question seeks information regarding whether an applicant is 'affiliated' with any other applicant for dispensaries/cultivation centers," Chandler's order states. "Donald Sears submitted for consideration the definition as used in Black's Law Dictionary for the term involving corporations. However, it should be noted that the question seeks whether the applicant … is affiliated with any other applicants, not whether there are other corporate affiliations."
Chandler said Don Sears testified that he would still answer the question "No" based on his interpretation of the "affiliated." Chandler noted that, even if the family members had answered "Yes," "it would not have had an impact on [their] right to have the application scored or [their] ability to receive a license."