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Racial Bias Alleged In Dispensary Denial

3 min read

A Little Rock Black-owned business that sued the Arkansas Medical Marijuana Commission also has a case alleging racial discrimination against the firm that scored the applications for medical marijuana dispensary licenses.

Last month, Absolute Essence LLC sued Public Consulting Group LLC of Boston, Veracious Compliance Solutions LLC of Carson City, Nevada, and its managing partner, Chad Westom, claiming racial discrimination in scoring applications for medical marijuana licenses.

Absolute Essence “was a strong applicant and filed a strong application,” the suit said. It would have received a top score had the applications been scored “using consistent, evenhanded application of the scoring criteria required by the state. Instead, Defendants ascribed it arbitrary scores, both arbitrarily and using made-up criteria.”

The lawsuit is the latest legal battle in the state’s emerging $265 million-a-year medicinal cannabis industry. Absolute Essence has a separate suit against the Arkansas Department of Finance & Administration, Arkansas Alcoholic Beverage Control Administration and the MMC pending in Pulaski County Circuit Court. It said it wants a fair vetting process free of racial bias in medical marijuana licensing, according to the 45-page suit filed by attorney Matt Simmons of Rockville, Maryland. The company is also represented by Erin Cassinelli of Lassiter & Cassinelli of Little Rock and Timothy Giattina of Hodge Calhoun Giattina of Little Rock.

On Feb. 1, Pulaski County Circuit Judge Alice Gray issued a temporary restraining order against the defendants preventing them from issuing the state’s two remaining dispensary licenses until the matter could be heard. A hearing is set for Feb. 28 and March 1 on keeping the temporary restraining order in place.

Absolute Essence is seeking no monetary damages from the MMC. Scott Hardin, a spokesman for the MMC, said the agency doesn’t comment on active litigation, but last week the defendants asked that the case be dismissed, saying that the lawsuit is barred by sovereign immunity. That motion is pending.

Absolute Essence’s case against Public Consulting Group is based on allegations similar to those in its suit against the state. But Absolute Essence is seeking $1.04 million in actual damages and another $10 million in future lost profits from PCG and its fellow defendants.

Simmons, Absolute Essence’s attorney, also represented Carpenter Farms Medical Group LLC of Grady, the only 100% Black-owned applicant for a cultivation license. Carpenter Farms sued the state in 2018, saying a “scrivener’s error” in its rejected application was similar to minor problems in applications the state accepted. The Arkansas Supreme Court ruled in Carpenter’s favor, finding that the commission had violated equal protection requirements and discriminated against Carpenter Farms. The state, basically offered Carpenter Farms a license in exchange for dropping the lawsuit.

In 2016, Arkansans approved amending the Arkansas Constitution to legalize medical marijuana. Absolute Essence applied to sell medical marijuana in 2017 and paid a $7,500 fee, more than $205,000 in professional fees in applying and another $830,000 for a building.

The MMC took bids to outsource the scoring of the nearly 200 applications for dispensary licenses. Public Consulting Group won the contract with a bid of $99,472. The company that didn’t win the work, ICF Inc. of Fairfax, Virginia, estimated it would take more than 30 days to score the applications, Absolute Essence said in its lawsuit. PCG had it completed in two weeks, the suit said.

PCG assigned a mediocre score to Absolute Essence’s application, leaving its owners wondering. A series of Freedom of Information Act queries revealed more. The company discovered that one of the scorers was Westom, of Veracious Compliance Solutions. The suit said that despite signing an agreement saying he has no conflicts, Westom has a financial interest in one or more dispensary facilities, is a board member for one or more marijuana license holders and “makes a living off contracts from and relationships with established industry players — the very category of businesses who Westom knew would be pouring in to Arkansas,” the suit said.

Absolute Essence said the documents it received via the FOIA requests show that when scores did not meet the defendants’ expectations, they recalculated.

Absolute Essence is also suing the defendants for fraud and intentionally damaging its business relationship with a third party.

Veracious didn’t return a call for comment, and Westom didn’t respond to an email. Public Consulting Group also didn’t return a message for comment.

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