Medical cannabis regulators in Arkansas are sued over license sale

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

A medical cannabis company in Arkansas has initiated a lawsuit against three state agencies in regards to a failed attempt to bag a dispensary license. 

Filed in Pulaski County Circuit Court, Medicanna – a cannabis company located in Pine Bluff – filed the suit against the state Medical Marijuana Commission, Alcoholic Beverage Control Division and Department of Finance and Administration.

Details of the suit state that regulators ought to have provided Medicanna with a “replacement” license since the company boasted the second-highest application score. Medicanna is accused of accepting a 50 percent reimbursement of its application fee, which costs $7,500.

In lieu of this, the Medical Marijuana Commission  awarded the license to Nature’s Herb & Wellness. Based on the lawsuit, the process was “plagued by unlawful and inconsistent procedures.”

This isn’t the first argument contesting Arkansas’ poor handling of medical cannabis cultivation licenses, with the application process being harshly criticized in the past.

Currently, the lawsuit is being reviewed by  the state attorney general’s office and the Department of Finance and Administration, according to a spokesperson for the Department.

Arkansas medical cannabis provider sued by town mayor 

A separate lawsuit has been filed against Natural State Wellness Enterprises by the mayor of Newport, Arkansas, alongside a number of other private entities. Details of the suit allege that the defendant has breached its contract, and committed conspiracy and fraud.

Specifically, the owners of NSW changed their company name to “Good Day Farms” shortly after the business was purchased. Moreover, the license takeover was believed to have occurred just four days post-application submission, but two days prior to their incorporation.

Fighting against NSW, the plaintiffs responsible for filing the lawsuit argued that NSW, “represented itself as a legal entity before the [commission] when it knew or should have known that it was not a legal entity.”

Lead author of Arkansas’ medical cannabis legalization (Amendment 98), David Couch, represented the plaintiffs as their attorney. Collectively, the plaintiffs claim that the community was not informed about the sale and relocation of NSW.

“The corporation they gave the license to didn’t even exist on that day. They gave a license to Casper the Ghost,” Couch is quoted as saying to the Democrat-Gazette.

Listed below are a few of the plaintiffs:

  • Newport Mayor David Stewart
  • Newport Economic Development Commission Director Jon Chadwell
  • The Northeast Arkansas Charitable Foundation
  • The Newport-Jackson County Industrial Development Bond Board

The plaintiffs’ argument centers around the fact that Newport offered significant incentives to encourage Natural State Wellness to launch operations in Jackson County. NSW was asked to sell the land for just $20, as opposed to its $800,000+ market value. 

Moreover, NSW did not live up to its promise to pay the Northeast Arkansas Charitable Foundation 10 percent of company profits. 

With all of this in mind, the lawsuit contends that the charity is owed $2 million by Good Day Farms; based on the license sale’s $20 million valuation. 

Additionally, Good Day Farms is being asked to make a 10 percent donation from their profits once the move is completed.

Medical cannabis patients in Arkansas have forked out $880,000 daily for their medicine

Arkansans have purchased in excess of 40,000 pounds of medical cannabis since the first dispensary began ushering in customers back in 2019. Moreover, within the last 30 days, patients enrolled in Arkansas’ medical cannabis program have spent an average of $880,000 every day on pharmaceutical-focused plant purchases. 

 

The latest figures have been generated as a result of transactions recorded by the state’s existing 32 dispensaries. Impressively, 12 of the currently-operating dispensaries have logged almost 2,000 pounds in legal and licensed sales. 

The Releaf Center in Bentonville takes the lead for medical cannabis sales in Arkansas at a staggering 4,618.88 pounds. In the near future, six more medical cannabis dispensaries are set to open their doors.

Scott Hardin from the Medical Marijuana Commission says that, as of Sunday, April 11, 2021, state residents have spent $285 million to acquire 42,769 pounds of medical cannabis in Arkansas.