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Judge puts further awards of Arkansas medical marijuana licenses on hold while lawsuit is pending

by Rachel Herzog | February 3, 2022 at 3:10 a.m.
Medical marijuana is displayed in a glass case for customers at Green Springs Medical Dispensary in Hot Springs on March 26, 2020. - File photo by The Sentinel-Record

A circuit court judge has temporarily blocked the Arkansas Medical Marijuana Commission from issuing more dispensary licenses until a lawsuit alleging racial bias in the panel's selection process is heard.

Pulaski County Circuit Judge Alice Gray issued a temporary restraining order Tuesday evening in a lawsuit filed Monday by Absolute Essence, a Black-owned company that alleges in the suit that it did not receive a dispensary license after applying in 2017 despite being highly qualified, while less-qualified applicants did receive licenses.

Earlier this month, the Medical Marijuana Commission endorsed a rule change that would enable it to issue the two remaining licenses permitted under the state constitution and has been awaiting approval from the Arkansas Legislative Council and anticipating issuing the two licenses in March. Rules approved by the Legislative Council go into effect 10 days later.

Gray's order requires the state to maintain the status quo until a further order from the court, enjoining the commission from implementing or acting under the proposed rule change and from issuing any further dispensary licenses.

The order states that the plaintiff faces irreparable injury if the status quo is not maintained until the case can be heard and decided on its merits.

Medical Marijuana Commission spokesman Scott Hardin said Wednesday that the order doesn't prevent the Legislative Council from approving the rule change.

Hardin said he doesn't expect the temporary restraining order to affect the timeline of issuing the licenses unless it is made permanent. He said the state expects Gray to call a hearing in the next couple of weeks to address the case.

Arkansas voters approved amending the state constitution to legalize cannabis for medical use in 2016. Amendment 98 allows the state to license up to 40 dispensaries; the Medical Marijuana Commission has issued 38 licenses across eight geographic zones so far.

The proposed rule change provides for the two remaining licenses to be issued to dispensaries selected from the top of the reserve list of unselected applications.

Those are Green Remedies Group in Zone 6, which covers Scott, Polk, Montgomery, Garland, Perry, Saline, Hot Spring and Grant counties; and T&C Management in Zone 8, which includes Howard, Sevier, Little River, Hempstead, Miller, Nevada, Lafayette, Columbia, Union, Ouachita, Calhoun, Clark and Dallas counties.

Absolute Essence, the plaintiff in the lawsuit, is an applicant in Zone 6. The company scored 20th out of 29 applicants in that zone, while Green Remedies Group scored fifth, according to information provided by the Department of Finance and Administration.

In the suit, attorneys for Absolute Essence argue that the commission failed to uniformly apply its own rules between Black-owned and non-Black owned businesses, and that the licenses that have been issued thus far are the product of a racially discriminatory process.

The litigation aims to ensure that the remaining licenses, and any future licenses that are issued, are "issued pursuant to a fair and impartial vetting and scoring process free of racial bias."

Hardin said the agency has a policy of not commenting on the specifics of ongoing or active litigation.

Print Headline: Lawsuit puts marijuana dispensary licenses on hold

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