Arkansas ‘unlawfully’ awarded medical cannabis cultivation permit, judge rules

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Regulators in Arkansas “unlawfully” gave a Fort Smith hotelier a coveted medical marijuana cannabis license, a judge ruled.

Arkansas voters legalized medical marijuana in 2016, and state law caps the number of cultivation permits at eight.

By awarding a license to River Valley Relief despite a “nonconforming” application, the state Medical Marijuana Commission, the Alcoholic Beverage Control Division and the Department of Finance and Administration all acted “unreasonably, unlawfully, and capriciously,” Pulaski County Circuit Judge Herbert Wright Jr. ruled, according to Little Rock-based Arkansas Business.

Despite the finding and instructions to the state to “remedy” the situation, Wright did not revoke the license, saying state law did not grant him the authority.

The decision:

  • Stemmed from a lawsuit filed against state authorities by a competing company denied a license – 2600 Holdings of Little Rock, doing business as Southern Roots Cultivation.
  • Comes days before state voters decide Tuesday on an adult-use legalization initiative that gives medical growers the first chance to supply an adult-use market projected to be worth $500 million within three years.

The lawsuit is the latest twist in a contentious saga that’s included an FBI investigation and allegations of bribes and favoritism.

In a deposition, the current chair of the state Medical Marijuana Commission, which awarded the license, said that River Valley Relief’s application failed to meet minimum state qualifications.

In his ruling, Wright wrote that “It is difficult to come to any other conclusion” than the state commission was “committed” to awarding River Valley Relief the license, “notwithstanding any and all defects.”