Southern Roots Sues Over Cannabis Cultivation Licenses

Southern Roots Sues Over Cannabis Cultivation Licenses

The state’s marijuana cultivation industry has been rife with lawsuits practically since Arkansans voted to legalize medicinal cannabis in November 2016.

And last month brought an addition to the litigation derby.

2600 Holdings LLC of Little Rock, doing business as Southern Roots Cultivation, filed suit in Pulaski County Circuit Court challenging the state’s decision-making when it expanded licensing from five cultivation companies to eight growers last summer.

The amended complaint, filed Feb. 10 by attorney Brett W. Taylor of Cross Gunter Witherspoon & Galchus in Little Rock, asks the court to revoke the state’s July 2020 approval of one new grow operation, River Valley Relief Cultivation of Fort Smith. It also asks to receive one of the new licenses. Defendants are the Arkansas Department of Finance & Administration, its Alcoholic Beverage Control Division, and the Arkansas Medical Marijuana Commission.

The state initially granted growing licenses to five Arkansas companies in early 2018. Those licensees, in Newport, Pine Bluff, Berryville, Cotton Plant and White Hall, have all sued the state in a separate action, arguing that state officials never proved additional cultivators were needed, as required by state regulations governing expanding the system.

That case, in Carroll County, is pending.

The Southern Roots filing had not drawn an answer from the state as of Thursday, but the suit asks the court to command that the state revoke River Valley’s grow license and grant a permit to Southern Roots, or as an alternative force the Medical Marijuana Commission to issue rulings on many specific complaints the plaintiffs have made about River Valley’s documentation and the state’s licensing process.

Southern Roots, incorporated in 2017 by Daniel Joseph Rogers, claims it should have been next in line for any new licenses because it ranked sixth behind the five original licensees in the state rankings when permits were granted.

The suit alleges problems with River Valley’s initial proposed site, including evidence that a nearby juvenile facility was ruled as a school for purposes of a required buffer zone between cultivators and churches, day care centers and schools. Southern Roots also says River Valley dissolved itself as a business before unlawfully re-emerging to apply for the license it eventually received.

Arkansas Department of Finance & Administration spokesman Scott Hardin declined to comment on active litigation.