Court fast-tracks company’s marijuana license application

A lawsuit to strip a Fort Smith medical marijuana grow facility of its grower license is set to be decided by a Pulaski County circuit judge amid accusations that state regulators , including their attorneys, deliberately lied or engaged in other unethical practices.

Additionally, attorneys for the Little Rock company that claims to be legitimately entitled to the license argue that the state, represented by Attorney General Leslie Rutledge’s office, has technically dropped its defenses, so the judge should side with them. in summary judgment.

At stake is the eighth and final licensed producer license under the 2016 voter-approved constitutional amendment legalizing medical marijuana.

Presiding Judge Herb Wright has given Rutledge’s lawyers until midnight Monday to respond, indicating he could resolve the litigation by the end of this week, but intends to decide the case before the next election. , which will include a referendum on marijuana regulation.

The plaintiff’s attorney, Abtin Mehdizadegan, of Cross, Gunter, Witherspoon & Galchus PC in Little Rock, requested that the case be expedited. He said on Friday that the litigation had been partially extended by the attorney general’s office, offering the prospect of a settlement that never materialized.

But in addition, with voters poised to consider legalizing recreational marijuana, they need to see how regulators operate now, he said.

The judge overruled the state’s objections to the speed of the proceedings and denied the attorney general’s request to be relieved as counsel for the defendants, the Arkansas Department of Finance and Administration, of its liquor control division and the Arkansas Medical Marijuana Commission. Agencies want time to find new lawyers, according to court documents.

“Due to recent disagreements between the defendants regarding the best course of action in this case, it has become impossible for the Arkansas Attorney General’s office to continue representing them,” Senior Assistant Attorney General Kate Donovan wrote in a recent plea. “Defendants are asking that the Arkansas Attorney General’s office be removed as counsel.”

The lawsuit filed by plaintiffs 2600 Holdings LLC, which operates as Southern Roots Cultivation, was launched in January 2021 against state medical marijuana regulators after awarding River Valley Production LLC, of ​​Fort Smith, the latest producer license.

Doing business as River Valley Relief Cultivation and owned by Fort Smith hotelier Storm Nolan, the grower began delivering its product to dispensaries last February.

The lawsuit claims that River Valley should never have been considered for a license because its proposed site was too close to a school to meet state requirements. Beyond that, Southern Roots attorneys argued that there was no legal business entity to grant the license to because Nolan had shut down River Valley prior to the licensing.

Now, Southern Roots says the farm is growing marijuana on a different site, one that regulators haven’t properly reviewed. Nolan did not respond to an email sent to his property management and property investment company, CSK Hotels.

Southern Roots wants the judge to void the license issued to River Valley and order state regulators to restart the review and award process. The judge declined to intervene immediately last year, refusing to stop authorities from giving the license to River Valley.

But in July 2021, he rejected state arguments that the lawsuit should be thrown out on sovereign immunity grounds. State attorneys then claimed that regulators were lawsuit-proof because what Southern Roots is trying to do is use the courts to control the operations and administrative decisions of state agencies. State.

State attorneys appealed the judge’s decision, taking the dismissal to the Arkansas Supreme Court. That appeal took about eight months before the judges decided to side with the judge in July.

During the appeal, state attorneys missed a deadline to formally respond to the lawsuit, a failure under Arkansas civil procedure rules that give the judge the power to disregard the lawsuit. state’s response and decide that Southern Roots has proven its case, the company say attorneys in a recent motion for summary judgment.

Southern Roots argues that its evidence of state regulators “ “gross mismanagement and repeated violations” of the state’s Constitutional Amendment on the medical marijuana is unassailable.

Other litigation responses provided by the Marijuana Commission and the Liquor Commission “reflect a staggering and flagrant disregard for truth, facts, the rule of law and the most basic notions of fair play and substantial justice,” the lawyers wrote, describing as containing false and misleading denials [and] feigned ignorance. »

In its motion for summary judgment, Southern Roots, describing those responses as “maddeningly dishonest and deceitful,” lists 18 cases in which it says the marijuana board or the liquor board provided conflicting answers. litigation by denying facts that they had already admitted to be true.

The Southern Roots attorneys — Mehdizadegan, with co-lawyers Carolyn Witherspoon, Bonnie Johnson and Brett Taylor — say state attorneys have also “advanced inconsistent and inconsistent positions,” describing six occasions where state attorneys State have contradicted arguments they had made in similar prior litigation in defense of the regulators in the Southern Roots lawsuit.

Milton S. Rodgers