The Newport Economic Development Commission will receive $1 million and property from a medical marijuana cultivator as part of a settlement reached last week in two lawsuits over the relocation of a cultivator from Newport to Jefferson County.
“The City of Newport has established a very pro-business environment and we are excited to have this building back under local control so we can use it to recruit another company to our community,” Newport Mayor Derrick Ratliffe said in a statement.
The legal dispute started in November 2020 when the state Medical Marijuana Commission approved – within a matter of days – the sale of Natural State Wellness, a cultivator that planned to grow its product in Newport, to a group of owners who changed the company’s name to Good Day Farm LLC. The commission also approved Good Day Farm’s request to move the company to Jefferson County.
Jon Chadwell, executive director of the Newport Economic Development Commission, asked the commission to reverse its decision to relocate the facility because Newport officials weren’t given enough notice that Natural State Wellness was being sold. The request was denied.
The move to leave town didn’t sit well with the officials. The Newport-Jackson County Industrial Development Bond Board had sold Natural State 20 acres to build the cultivation facility for just $20 when the market value of the land was worth more than $870,000.
“And then the water and sewer utility extend their utilities to the building at no charge,” Chadwell said.
He said that since the cultivator didn’t start operating in Newport and create jobs, “they really owed us money back for that.”
In April 2021, David Couch, a Newport native and the author of the medical cannabis amendment that passed in 2016, filed a lawsuit for NEDC, the city of Newport and the Newport-Jackson County Industrial Development Bond Board in Jackson County Circuit Court. The suit was against the state Medical Marijuana Commission, Good Day Farm, Natural State Wellness LLC and Harvest Health & Recreation Inc. of Phoenix, which had an ownership interest in Natural State. (In 2021, Trulieve Cannabis Corp. of Tallahassee, Florida, acquired Harvest Health.)
The plaintiffs were suing for economic damages caused by the relocation of the facility to Jefferson County.
Later in 2021, Couch filed another lawsuit for the Newport-Jackson County Industrial Development Bond Board to recover the property transferred to Natural State Wellness, including the building constructed on the property by Natural State Wellness. The lawsuit against the property owner Harvest Health’s subsidiary, BRLS Properties AR-Newport LLC, was later moved to federal court.
Couch said the deed had a reverter clause that said the title to the property would return to the owner in two years if it didn’t operate a marijuana facility within two years of being deeded the property. The 35,000-SF building, with about 22,000-SF of greenhouse space, wasn’t being used while the case was pending.
Couch told Arkansas Business that the federal lawsuit went to mediation, where the total settlement was reached and valued at $2.5 million. The case pending in Jackson County will be dismissed. He said that Good Day Farm and Harvest Health & Recreation will pay the settlement.
“This dispute was primarily between Harvest Health and the City of Newport,” Good Day said in a statement to Arkansas Business. “Good Day Farm’s relocation to Pine Bluff clearly complied with Arkansas law.”
Trulieve was “pleased that we were able to achieve an agreed resolution of the dispute with Newport that was satisfactory to everyone involved,” said its attorney Steven W. Quattlebaum of Quattlebaum, Grooms & Tull PLLC of Little Rock.