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Pot dispensary suit transferred

Cut off by three cultivators, Hot Springs seller contends by Rachel Herzog | May 13, 2021 at 3:23 a.m.

A lawsuit claiming that three medical-marijuana cultivators unfairly refused to sell to a Hot Springs dispensary and asking the state to enact regulations preventing those alleged practices was transferred to Pulaski County on Wednesday.

The complaint from Green Springs Medical, which was originally filed in January, claims that Osage Creek Cultivation of Berryville, Delta Medical Cannabis Co. of Newport and Bold Team of Cotton Plant stopped selling cannabis to the business to retaliate against the dispensary's CEO, who asked the Arkansas Medical Marijuana Commission last year to issue more cultivator licenses.

Green Springs Medical is seeking about $5 million in damages, attorney Q. Byrum Hurst said Wednesday. The Medical Marijuana Commission, Arkansas Alcoholic Beverage Control and the Arkansas Department of Finance and Administration are also named as defendants.

The dispensary is seeking a mandatory injunction to require the state to establish rules prohibiting cultivators from engaging in "market manipulation by conspiring to trade with a limited number of licensed medical marijuana dispensaries," as Green Springs Medical alleges, according to the complaint.

In February, the three cultivators asked the court to dismiss the suit, arguing that their licenses don't require them to sell medical marijuana to any particular dispensary and no state law prevents them from refusing to do so, and that Green Springs Medical's complaint falls short of meeting legal standards to allege retaliation, civil conspiracy and the violation of federal antitrust laws.

In April, Garland County Circuit Judge Lynn Williams granted a motion to transfer the suit from Garland County to Pulaski County, which was requested by the three state agencies through Senior Assistant Attorney General Jennifer Merritt. According to Arkansas code, state courts are required to transfer the venue of civil actions against the state to Pulaski County upon request, the motion states.

Hurst said he would likely file a motion next week to request that the case be severed and the legal action against the cultivators continue in Garland County, because the lawsuit arose out of transactions that occurred in that county.

Under Amendment 98, the constitutional amendment that legalized marijuana for medicinal use in Arkansas, the state may issue licenses to up to eight cultivation facilities. All eight of the licenses have now been issued, and five of those cultivators are currently operational.

Last June, Green Springs Medical CEO Dragan Vicentic urged commissioners to issue the full number of licenses allowed, because there were only three cultivators producing at the time and the business did not have adequate supply to serve its patients, the Hot Springs Sentinel-Record reported. The commission had reserved those three licenses in case of a medical marijuana supply shortage and issued them last summer.

Vicentic told the Sentinel-Record in January that the three cultivators named in the suit "blackballed" him after other licenses were approved.

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