Three family members who received medical marijuana dispensary licenses provided "false information" in their applications, according to a lawsuit filed Wednesday in Pulaski County Circuit Court.
Donald, Mary and Todd Sears each answered no when asked on their applications if they were "in any way affiliated" with any other applicant for a dispensary or cultivation center, according to a letter that Quentin E. May of Little Rock, the attorney for Green Remedies Group LLC, sent on Jan. 30 to Doralee Chandler, director of the Arkansas Alcoholic Beverage Control administration.
"Each of the three dispensary applications contains false statements made under oath by the Sears family," according to the letter. "Specifically, Donald L. Sears, his wife Mary Sears and their son Todd Sears are attempting to obtain licenses by creating three separate corporations, each owned by a separate family member."
Two of the applications show that Donald and Mary Sears are "presumably married and live at the same address in Mayflower," according to May's letter.
The Sears family also has "multiple business affiliations with each other," May wrote.
"I believe they are actively conspiring to create a family monopoly owning dispensaries in three separate zones of the state," according to the letter.
In the lawsuit, May requested that the three applications be disqualified. The Sears family isn't mentioned by name in the lawsuit. May's letter to Chandler was filed as an exhibit in the case.
According to the letter, Todd Sears is the principal of THC Rx Inc., which was licensed in Zone 3; Donald L. Sears is the principal of Doctors Orders RX Inc., which was licensed in Zone 6; and Mary Sears is the principal of Pain Free RX Inc., which was licensed in Zone 7.
In the lawsuit, May wrote that the three businesses are "wholly owned" by each respective family member, listed as father, mother and son.
On Jan. 9, 2018, the Arkansas Medical Marijuana Commission approved dispensary scores provided by a consulting group. Arkansas was divided into eight zones, with the top four scorers in each zone receiving a dispensary license.
Green Remedies Group of Garland County scored fifth in Zone 6, so it didn't receive a license. But if Doctors Orders RX Inc. is disqualified, Green Remedies Group would presumably move into the fourth position in Zone 6 and receive a dispensary license.
In the lawsuit, May wrote that Alcoholic Beverage Control, which oversees the commission, had failed or refused to investigate his allegation. His Jan. 30 letter was hand-delivered to Boyce Hamlet, director of Alcoholic Beverage Control's Enforcement Division, but Hamlet recused from the investigation Feb. 6, according to the lawsuit.
Hamlet passed the investigation off to Sharon Reed, special agent in charge of the central district.
"We have pulled an agent from working on alcohol to handle this complaint," Reed wrote in a Feb. 8 email to May. "He will be off next week [Feb. 10-16]. He will return back to work on 2/18/19. I will update you on the process after next week."
The factual allegations of the complaint would take a few hours to research and confirm, May wrote.
"It has now been two weeks with no movement whatsoever in the actual investigation of plaintiff's complaint," according to the suit.
The delay prompted the lawsuit, he wrote.
"If an administrative agency unreasonably or capriciously delays any action, the Arkansas Administrative Act allows a party who believes itself to be injured by that delay to file suit with the circuit court for an order demanding that the agency take action," according to the lawsuit. "The enforcement director intentionally delayed disclosing his personal relationship with one of the individuals named in the complaint for almost a week, despite the fact that he was aware of the individuals named in the complaint when he received it.
"Furthermore, the investigation was later curiously assigned to an investigator who would be out of the office for the entire week in which licenses were to be signed and delivered."
May wrote that the defendants should be restrained and enjoined from issuing dispensary licenses that are under investigation. Defendants in the case are Alcoholic Beverage Control, the commission and the Arkansas Department of Finance and Administration.
The commission chairman was to sign the licenses Wednesday, and they would be available for pickup after that time, according to the lawsuit.
But Scott Hardin, a spokesman for Alcoholic Beverage Control and the commission, said the licenses were effectively issued last week, when each of the 32 recipients paid their $1,500 licensing fees and posted $100,000 performance bonds.
"While we are unable to discuss details of an ongoing investigation, ABC Enforcement has several agents committed solely to these investigations (dispensary protests)," Hardin wrote in an email. "Upon initial review of this case, Mr. Hamlet voluntarily recused himself in an effort to maintain full transparency. It is now overseen by Sharon Reed, ABC special agent in charge of the central district. Upon completion the results will be provided to ABC's Director for consideration of potential violations, with penalties ranging from a fine to revocation of a license. There are currently four active investigations regarding dispensaries."
Donald and Mary Sears didn't return messages left on voice mail at the telephone numbers listed on their applications.
Circuit Judge Mackie Pierce issued an order of recusal Thursday, asking that the case be reassigned to another division in the 6th Judicial Circuit.
State Desk on 02/15/2019