Pulaski County Judge Wendell Griffen on Tuesday temporarily barred the state Medical Marijuana Commission from issuing dispensary licenses as part of a lawsuit over the state’s process of selecting replacement dispensaries when the original licensees fail to open.
Arkansas Business this week reported that Medicanna LLC of Pine Bluff had filed a lawsuit Feb. 13 in Pulaski County Circuit Court, claiming that the state violated its right to be granted a replacement dispensary license as Zone 7’s fifth-best-scoring application.
The lawsuit named the commission, the Arkansas Department of Finance & Administration and its Alcoholic Beverage Control Division.
The commission granted four licenses in each of eight zones across the state a year ago, but the Medical Marijuana Commission voted earlier this month to grant a 33rd dispensary license.
Instead of going to Medicanna, led by Elizabeth Parker, the license went to Nature’s Herbs & Wellness, which plans to open a Pine Bluff store under the ownership of Arkansas hoteliers Chet Patel, Laxmiben Patel, Roshan Patel and Darshan Patel, as well as Jessica Johnson.
Griffen entered the order Tuesday pending a preliminary injunction hearing.
In the order, Griffen wrote that Medicanna’s complaint “asserts facts showing a substantial likelihood of success on the merits regarding the violations of the Administrative Procedure Act, due process and equal protection and that Medicanna, LLC will suffer irreparable harm absent entry of a temporary restraining order.”
Medicanna’s lawsuit said the license went to Nature’s Herbs capriciously, and that the commission’s decision was “plagued by unlawful and inconsistent procedures,” particularly in ruling out Medicanna on the basis that it had received a partial reimbursement of its license application fee.
More: Read more about the Medicanna lawsuit and why the commission added a license to Zone 7.
Reached for comment about the lawsuit last week, Scott Hardin, an ADF&A spokesman, said his department had been served with the suit and was “reviewing it along with our attorneys (the Attorney General’s office).”
Chris Burks of WH Law PLLC, who is representing Medicanna, told Arkansas Business on Tuesday that Griffen’s order “stopped the entire process” and signaled to the Medical Marijuana Commission that “it will have to follow its rules. This isn’t just about Medicanna LLC, but about all applicants who weren’t granted licenses.”
He said all applicants who were not granted licenses must by rule be refunded half their application fees. “That hasn’t happened, and the commission is holding onto application fees that it shouldn’t be.” He said once all the unsuccessful applicants get their fees back, “the next highest applicants” will be in line for any additional licenses.
“This isn’t important just to my clients, but to all other people who spent money in expectation of a license,” Burks said. “So it’s a money issue in that sense.”
He said his client had every expectation to claim a dispensary license after the Commission, seeing slow progress on Zone 7 dispensaries, decided to issue a fifth license in the zone. But the commission ruled that because Medicanna had reclaimed half its application fee, it was no longer a viable applicant. “The Commission is saying once you get a refund you’re no longer an applicant,” Burks said, “and that’s just not right. The next runner-up gets the license.”
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