The attorney defendants in two lawsuits claiming that they set up straw owners for two medical marijuana dispensaries fired back legally on Friday, filing their own suit against their accusers: their former law partner and the ex-CEO of the Arkansas Pharmacists Association.
The suit by prominent Little Rock lawyers Alex Gray and Nate Steel is the latest move in a case in which the registered owners of Enlightened Dispensary locations in Heber Springs and Morrilton have accused Gray and Steel of malpractice and fraud. They claim Steel and Gray set up sham ownership arrangements that deprived them of money from marijuana sales while saddling them with huge tax bills.
Gray, Steel and their firm Steel Wright Gray are now suing their former member, Marshall Wright, and pharmacist and lawyer Scott Pace, a former CEO of the APA, over accusations that include conspiracy and defamation. They are seeking an unspecified amount of damages.
Both suits concern SWG’s attempts to apply for medical marijuana dispensary licenses after voters approved a medicinal cannabis legalization amendment in 2016.
More: Read this week’s cover story on the lawsuit against Steel and Gray.
In lawsuits in St. Francis and Pope counties, Wright and Pace said Steel and Gray lined up slates of “owners” for the Morrilton and Heber Springs dispensaries to game the licensing process and meet a constitutional requirement that 60% of owners be Arkansas residents. The suits allege that SWG was actually working on behalf of an out-of-state client seeking to get as many licenses as he could.
In their lawsuit in Pulaski County Circuit Court, Gray and Steel called the complaints against them a “sham.”
Gray and Steel said Wright was the lawyer who “located and recruited businesses and individuals” as potential applicants for dispensary licenses, the suit said. They also listed five other unnamed “tortfeasors” as defendants who could be named later. Pace was listed by the state as a minority owner of the Morrilton dispensary, Wright a minority owner of the one in Heber Springs.
Gray and Steel claim Pace and Wright both knew that if dispensary licenses were granted, the licensees would do business under management agreements with out-of-state operators, namely Pure Health Products LLC, their lawsuit says.
The lawsuit, filed by attorneys John Tull III and Thomas H. Wyatt of Quattlebaum Grooms & Tull of Little Rock, said that Pace wanted to apply for a marijuana dispensary license, and Wright handled the licensing application for the business that Pace was working toward.
Wright also applied for a dispensary license and filled out the application on behalf of the business that he was to co-own, the suit said.
“Wright’s business was owned and operated independently and separately from SWG,” the complaint said.
The two dispensaries, officially Big Fish of North Central Arkansas LLC in Heber Springs and River Valley Dispensary LLC of Morrilton, both operate under the brand Enlightened Dispensary. Their operator now is Revolution Cannabis of Chicago, which bought Pure Health after its former owner, Edward S. “Eddie” Garcia, died in 2019, the Wright/Pace lawsuits say.
But Steel and Gray’s suit say that after entering into agreements with Pure Health, Pace and Wright “became adverse” to the company and turned to Gray and Steel for help finding buyers for their interests in the companies, the suit said. It added that Pace and Wright then asked attorney Scott Poynter, “a disgruntled former member of SWG,” for help in finding potential buyers.
Poynter told Arkansas Business on Friday that he was never a member of the firm but rather worked there under an “of counsel” arrangement, and said he wasn’t disgruntled.
Steel and Gray’s suit says Pace and Wright then “engaged in a systematic and targeted campaign” to defame them, tarnish their reputations in the legal and business world and interfere with their representation of clients.
Gray and Steel said that Pace lied about them to the Arkansas Pharmacists Association, leading it to dismiss SWG as its general counsel, work that provided a minimum of $2,500 a month, after Pace and Wright first sued Gray, Steel and SWG in November 2022.
In their suit, Steel and Gray also claim Wright and Pace defamed them to others “in the Arkansas business and legal communities,” damaging their reputations and costing them additional business.
Poynter Responds
Poynter told Arkansas Business he “shared office space” and paid rent to SWG, but was never a member of the firm. “I was never disgruntled,” he said. He left the space when Gray and Steel sought to raise the rent, he said.
Another factor in his departure was a business opportunity to put together an association of law firms with attorney Clarke Tucker of Little Rock, which he did, Poynter said.
“I didn’t take on these cases [with Pace and Wright and several other plaintiffs disputing their purported status as dispensary owners] because of some sort of sour grapes,” Poynter said. “I took on these cases because I believe that Scott Pace and the group that he was part of and that Marshall Wright and the group that he was part of were completely in the right. I’m positive I’m on the right side of this case.”
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