Ethics filing claims bias by Arkansas Medical Marijuana commissioner

An unsuccessful medical marijuana growing facility applicant filed an ethics complaint Friday alleging one of the commissioners tasked with grading the applications had a conflict of interest.

In other medical marijuana-related news earlier Friday, one of the companies that successfully applied for a cultivation license announced that it would place its facility in northeast Arkansas rather than Jefferson County as announced.

The complaint was filed by retired Arkansas Court of Appeals Judge Olly Neal of Marianna against Arkansas Medical Marijuana Commission member Travis Story, a Fayetteville attorney. The 220-page complaint detailed Story and his law firm's legal work for Jay and Mary Trulove -- the owners of one of the five companies awarded a cannabis growing license based on scores from the commission.

That work, according to the complaint, caused Story to have "a direct or indirect interest" in certain cultivation applications. Story's association with the Truloves was reported by several news outlets this week, including this newspaper Friday.

[APPLICATIONS: Read the applications from each of the five winning firms]

Other commissioners scored the application for Trulove-owned Osage Creek Cultivation of Berryville higher than Story did, but the company tied for the second-highest score among Story's evaluations.

Ethics complaints typically aren't made public until they've been investigated by the Arkansas Ethics Commission, but the Arkansas Democrat-Gazette obtained a copy Friday. Ethics Commission officials couldn't be reached by phone Friday evening.

[DOCUMENT: Read the full ethics complaint]

Neal, reached by phone late Friday, confirmed the authenticity of the complaint, saying that Story should have resigned from the commission after he knew he'd be scoring a company owned by the Truloves.

"The way Mr. Story gave points and his relation with [the Truloves], he should've stepped aside," Neal said.

Neal's company, Delta Cannabinoid Corp., received the ninth-highest score from the five-member commission; only the top five will be awarded licenses for now.

The state Department of Finance and Administration, which provides administrative support to the marijuana commission, "depersonalized" all 95 cultivation applications by redaction before giving them to commissioners in an attempt to prevent biases and conflicts of interest.

However, the names of the people involved in the business filings of the cannabis-growing companies were publicly released by the Arkansas secretary of state's office and finance department.

In an interview Thursday, state Rep. Bob Ballinger, R-Hindsville, who is Story's law partner, said that the Truloves approached the firm about potential legal work for their medical marijuana business. But Ballinger said the firm drew a "bright line," declining to do any marijuana-related work for the Truloves due to Story's capacity on the commission.

Neal's complaint notes Ballinger's comments to this newspaper.

Ballinger, in a phone interview Friday night, said the key issue surrounding Neal's complaint is whether Story ever stood to benefit financially from the medical marijuana industry. The answer to that question is "no," Ballinger said.

Story's and Ballinger's firm, which has helped the Truloves with a handful of corporate filings and represented them in a land-use dispute case, has continued to do legal work for other Trulove-owned businesses.

In Thursday's interview, Ballinger said Story sequestered himself from public discourse once applications were submitted, avoiding any news stories or information about medical marijuana applicants, and he didn't think Story's past work for the Truloves had any "undue" influence on Story's evaluations.

Ballinger added that he's known the Truloves for a long time, and Story's firm only began to handle legal work for them when Ballinger joined the firm in 2015. Any work Story handled for the Truloves, Ballinger said Friday, occurred when Ballinger was in Little Rock for his work as a state legislator.

Attempts to reach Story via phone and email weren't successful this week, including Friday evening. He and the other commissioners have avoided speaking publicly outside commission meetings since the application process began.

Neal's complaint also detailed a web of political connections between the Truloves and Ballinger. It noted a $1,000 contribution in June from the Truloves to Ballinger's current campaign for a state Senate seat and a $625.75 Ballinger campaign expense made at Mary Trulove's embroidery/graphic printing business, Sports Corner in Berryville.

The complaint also acknowledges Ballinger and the Truloves had ties to lobbyist Chase Dugger. Dugger is listed as a lobbyist on Osage Creek Cultivation's application, according to the complaint; Ballinger's campaign in July paid Dugger's consulting company $1,600.

Ballinger said Friday that Arkansas is a small state with a limited number of lobbyists. He said it was possible that Story didn't even know Dugger had worked on Ballinger's campaigns. Regardless, Ballinger said, Dugger's work on his campaign and the Truloves' application had nothing to do with Story's work on the commission.

Dugger didn't return a phone message left late Friday; Jay Trulove declined to comment when reached Thursday.

If the Ethics Commission determines a state commission member violated state conflict of interest laws, the Ethics Commission has a variety of actions available to it, ranging from a public letter of reprimand to removing the member.

Earlier Friday, a medical marijuana cultivation facility announced it will locate in Jackson County -- a reversal from an earlier announcement that it would locate in Jefferson County.

Natural State Wellness Enterprises submitted two winning applications -- one for Jackson County and one for Jefferson County -- to the Arkansas Medical Marijuana Commission, giving it the freedom to choose between the two Delta counties.

Earlier this week, the company and Jefferson County officials announced the facility would be built near Pine Bluff, citing the county's central location and economic incentives. However, the company, which includes former Attorney General Dustin McDaniel as an investor, attorney and lobbyist, said Friday it decided to locate in Jackson County, about 110 miles northeast.

One of the leaders of Natural State Wellness' group is Hank Wilkins V, the son of Hank Wilkins IV, county judge of Jefferson County.

"Leaders of both counties want the investment and jobs that will come with this facility," McDaniel said in a statement. "Until Wednesday, we fully believed that we would locate in Jefferson County."

McDaniel added that leaders in Jackson County continued to lobby hard for the company to locate its operations there.

"This was a complicated decision based on many factors that were more than just dollars and cents," McDaniel said. "We are grateful to the leadership of both counties. We are now eager to get to work on construction."

Jackson County will be the only county with two cannabis growing centers; economic developers there had sought to lure potential cultivators.

The other cultivation facilities are Natural State Medicinals Cultivation in Jefferson County, Bold Team LLC in Woodruff County, Osage Creek Cultivation in Carroll County and Delta Medical Cannabis Company Inc. in Jackson County.

The Department of Finance and Administration said Friday that the five companies each paid the $100,000 licensing fee and posted the $500,000 performance bond required by the state to be licensed as cultivation facilities. A Finance Department spokesman said the companies can begin operating after the Medical Marijuana Commission formally licenses them at its Wednesday meeting.

The winners of 32 dispensary licenses are expected to be announced later this year.

Metro on 03/10/2018