Cannabis firm denied license takes case to Alabama Court of Civil Appeals
Alander Rocha, Alabama Reflector A cannabis firm denied an Alabama medical marijuana license asked the Alabama Court of Civil Appeals last week to prevent a state commission from using prior results to award licenses. Specialty Medical Products, a Wetumpka-based medical cannabis firm that was denied a license for an integrated facility, alleged in a motion filed on Oct. 27 that the criteria used by evaluators are still unknown to applicants; that the commission failed to inform applicants what criteria they would be scored on in the application, and that the process was not properly adopted as a rule. “The application guide, however, does not set out the ‘minimum criteria’ for each exhibit,” the motion stated. “More importantly, the application guide fails to state what criteria are necessary to “exceed” or “thoroughly address” that minimum criteria. The company has been involved in the ongoing lawsuits, along with Alabama Always, another company denied a license. Montgomery Circuit Judge James Anderson on Nov. 3 denied a temporary restraining order to prevent the commission from using scores previously considered in the first two attempts to award the medical cannabis licenses. Anderson’s order denying the temporary restraining order did not specify a reason for the denial. The judge said in previous hearings that the commission should have the discretion to use or not use the controversial scores provided by the University of South Alabama (USA). USA brought in evaluators who reviewed the initial license applications. After the first award of licenses, the AMCC put a pause on the process following several “inconsistencies” in scoring the applications that would have led to “catastrophic” results if the licenses were issued. The companies asked the Alabama Court of Civil Appeals to weigh on whether a temporary restraining order should have been imposed. The restraining order would have prevented the commission from using rules issued that were not adopted in accordance with the Alabama Administrative Procedure Act. It also claims that the rules exceed the commission’s authority under the law passed legalizing medical cannabis. “The commission should be barred from using the scores, as the scoring system appears designed to award licenses [to] applicants who just simply cannot cultivate cannabis in 60 days, as the statute mandates,” said Will Somerville, an attorney representing Alabama Always, in a statement. The statute signed into law in 2021 states that cultivators and integrated facilities “demonstrate the ability to commence cultivation of cannabis within 60 days of application approval notification.” According to the motion from Specialty Medical Products, the application simply asked if companies could commence cultivation within 60 days, answered with “yes” or “no,” not “demonstrate” the ability to do so. “Dispensing with the scores is the best way to make sure patients in Alabama who can benefit from medical cannabis get the help they so desperately need,” he stated. The AMCC in October reset the medical cannabis licensing process and said all 90 applicants were back in the running for a license. The commission rescinded all awarded licenses and denials from an Aug. 10 meeting, which set the stage for a third round of license grants under rules adopted at a commission meeting in a previous October meeting. The new procedures allow commissioners to use the previous scores to decide on awards, and Chairman Rex Vaughn said at the meeting that commissioners had full discretion “when evaluating the suitability of all 90 applicants.” The new rules also give applicants an opportunity to contest deficiencies identified in their application and their score results. Presentations will be open to the public. Applicants can also respond to preliminary pass/fail and submit application material that were not previously filed due to the file size limitation. Brittany Peters, spokesperson for the commission, said they expect presentation to continue as scheduled. Presentations will take place between Nov. 27 and Dec. 8. A schedule of the presentation can be found here. Alabama Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Follow Alabama Reflector on Facebook and Twitter.
Reps. Terri Sewell and Robert Aderholt support keeping Birmingham-Southern College open
Birmingham Southern College (BSC) is probably going to close after Alabama Treasurer Young Boozer made the determination that the college is a bad credit risk and, therefore, refused to give the small liberal arts private college a bridge loan to keep its doors open last month. Congressmembers Robert Aderholt (R-AL04) and Terri Sewell (D-AL07) penned a joint editorial with the Alabama Medical Group arguing that keeping the failing liberal arts college open is good for Birmingham. “Although we represent different districts and different political parties in the U.S. House of Representatives, there are times that we agree when it comes to what’s best for Alabama,” Aderholt and Sewell wrote. “This is one of those times.” BSC is in Sewell’s district where the loss of 284 jobs would be keenly felt; while Aderholt is an alum of the school – as is his wife, Caroline. “When it comes to what is best for Alabama, we agree that keeping this 167-year-old college open and helping it achieve financial stability makes the list,” Aderholt and Sewell wrote. “We were glad when the Alabama Legislature passed SB278, which established the Distressed Institutions of Higher Learning Revolving Loan Program. Because Alabama had a once-in-a-generation, $2.8B surplus in the Education Trust Fund, setting aside $30 million for the loan program was accomplished without reduction to state-supported institutions. This was and is a great use of a small fraction of that surplus, giving BSC the operating capital it needs while it raises private funds to restore its endowment to a level that will sustain the College going forward.” “Without BSC, young people who want what BSC offers – a small, residential, nationally ranked college in a big Alabama city – will have to go elsewhere. And once they leave, they may not return,” Aderholt and Sewell wrote. “Alabama residents make up 60 percent of BSC’s student body. Half of BSC’s 17,000 graduates remain in Alabama, where their impact is seen and felt in every walk of life in every one of our 67 counties. We strongly urge Treasurer Boozer to rethink his decision to deny the bridge loan that was designed for this very situation: To help out a college or university in Alabama that brings significant value to its community, has been in business for more than 50 years, has assets sufficient to back the state’s loan, and has a solid plan for paying it back.” On Friday, BSC President Daniel Coleman insisted that the College would have enough money to finish out the academic year meaning that current students do not need to transfer as there will be a spring semester. “On August 15, the Birmingham City Council passed a resolution that charged Mayor Randall Woodfin with creating an economic development plan of up to $5 million to support Birmingham-Southern College,” Coleman wrote. “Since then, we have continued to work with Mayor Woodfin, who will formally present his plan to the Council on November 21. We are grateful to him and to the Council for their consideration of this critically important support.” “These developments give us confidence that, at a minimum, we will complete the academic year, during which we will continue to procure funds that will stabilize the College for the long term,” Coleman insisted. “That includes working with the Alabama Legislature, private donors, and other entities. Students, you should register for spring 2024 classes and continue with your plans for the January E-Term.” Montgomery Circuit Judge James Anderson dismissed BSC’s lawsuit attempting to compel Boozer to give them the loan. BSC has been in a long decline and today has fewer than 750 students. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Judge dismisses Birmingham Southern College lawsuit
On Tuesday, Montgomery Circuit Judge James Anderson dismissed the lawsuit brought by Birmingham Southern College (BSC) to force State Treasurer Young Boozer (R) to give the troubled college a bridge loan to allow the private college to stay open. In this past legislative regular session, the Legislature approved controversial legislation to help BSC. The Distressed Institutions of Higher Learning Revolving Loan Fund Act, passed by the Legislature and signed by Alabama Governor Kay Ivey (R), empowered the State Treasurer to loan money to failing private colleges. Boozer had the power to give BSC the money, but after evaluating BSC’s financial viability, Boozer concluded that there was little chance that BSC would ever be able to pay the state back. BSC responded by suing Boozer, arguing that the legislative intent of the legislation was to give the school the money. Alabama Attorney General Steve Marshall (R) asked that the court dismiss the lawsuit. Judge Anderson agreed with the state’s arguments. Daniel Coleman is the President of BSC. “We are disappointed with this ruling and are exploring our options, which may include an appeal to the Alabama Supreme Court with a request for an expedited briefing,” said BSC President Coleman in a statement. “While the Alabama Constitution provides for immunity to state officials, such immunity should not apply to those who act arbitrarily or capriciously, or in bad faith, or who have misinterpreted the law in question.” “Our good faith was betrayed over the several months of working with Treasurer Boozer to deliver this bridge loan to the College,” Coleman added. “The timeline of our interactions clearly demonstrates that his behavior was arbitrary and capricious. We also believe he is misinterpreting the language of the Act pertaining to collateral.” The legislation allowed Boozer to give BSC a $30 million lifeline, providing the College with operating funds for three years. BSC claimed that during those three years, it could raise an endowment of up to $200 million to ensure its long-term financial stability. BSC likely would have closed in the spring of 2023 if not for the passage of the controversial bridge loan legislation. In a letter dated October 13, Boozer notified BSC that their loan application had been denied; the letter arrived on October 18. BSC claimed that during months of discussions, Boozer gave them no indication that any aspect of BSC’s application was incorrect or that he would not act as the Legislature intended, Coleman said. Coleman claims that Boozer has provided inconsistent reasons for his denial. Judge Anderson ruled that the legislation gives Boozer discretion over who he grants a loan to and was within his rights to deny the loan. Anderson said he sympathizes with the college. However, given the Legislature’s language, past precedent, and sovereign immunity, BSC has no case. Thus, he granted Marshall’s motion to dismiss. BSC, which has been declining for decades, has been hemorrhaging students in recent years and is reportedly down to just 731 students, while the college still has 284 employees. The college decided to stay open for the fall semester pending receiving the money from the state’s loan. At this point, however, it appears that the college will have to close soon, perhaps as soon as the end of the current semester. BSC had initially asked the Legislature and local government for a cash bailout. That request was rejected, but BSC alum State Senator Jabo Waggoner (R-Vestavia Hills) sponsored the Distressed Institutions of Financial Learning Revolving Loan Fund Act to save the failing liberal arts college. The closing of a private college is not without precedent in Alabama. Judson College, the state’s only women’s college, closed four years ago when its income could not meet its liabilities. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Cannabis licenses might be issued in coming weeks
There is currently a temporary restraining order (TRO) on the Alabama Medical Cannabis Commission (AMCC) issuing medical cannabis licenses. However, that could change in the coming days for some license categories. On Wednesday, Montgomery Circuit Judge James Anderson heard arguments from attorneys for both the AMCC and the plaintiffs suing the Commission over cannabis license awards made in August. The state is issuing six categories of medical marijuana licenses: grower or cultivator (the term is used synonymously by parties involved), processor, transporter, laboratory, dispensary, and integrated facility. An integrator can grow, process, transport, and dispense cannabis. Applicants who were denied permits for processor, dispensary, and integrator have all filed suit against the AMCC, arguing, for various reasons, that their application was wrongfully denied and the Commission violated the state open meetings law in its August awards meeting. Those lawsuits have all been consolidated into one case challenging those award results. Anderson placed a temporary restraining order on the AMCC issuing any licenses in August and a stay on further AMCC action while the court considers the plaintiffs’ arguments. Under the AMCC’s current proposal before the court, the Commission will rescind the license awards for integrator, dispensary, and processor at its October 26 meeting. Meanwhile, the Commission would be free to issue the August awards for growers, transporters, and laboratories. Alabama Today asked AMCC Executive Director John McMillan if there was a possibility that some of those growers could build their facility, plant their marijuana crop, harvest that first crop, and then have nowhere to legally process it and no market for it to sell it as a grower’s license does not allow the grower to sell it to the public. “Hypothetically,” McMillan answered. Alabama Always, the original plaintiff in this case, was denied an integrator permit in the June and August awards meetings. Their attorney argued that the most important criteria for the award should have been how fast the applicant could get up and running with their first crop. Alabama Always began building a $7 million building a year ago, before the applications were even turned in. “I know since that some people have said that nobody told Alabama Always to build a structure, but they did,” the attorney stated. “In the fall of 2022, my client already began construction.” Alabama Always claims they began construction early to meet the AMCC requirement that an applicant must be able to start operating within 60 days of being issued a license. “They don’t give you a single point (in the scoring) for being able to commence growing within 60 days,” the plaintiffs’ attorney argued. “Some of these plaintiffs’ attorneys don’t know what they’re talking about,” McMillan told Alabama Today. “Getting started within 60 days is not that difficult. You could start a crop in here,” referring to the courtroom, by bringing in grow lights, irrigation, drainage, growing medium, and other greenhouse materials. McMillan said if the court allows, the Commission could issue the grower, transporter, and laboratory licenses as early as November. McMillan cautioned, “The Commission could do whatever it wants to do.” On the advice of counsel, McMillan said he expects the Commission to rescind the awards for integrator, processor, and dispensary at its October 26 meeting. Judge Anderson gave the applicants who were denied the grower, transporter, or laboratory licenses until October 26 to file a motion asking to extend the TRO on those three licenses beyond that date. Anderson said, “If they want to file something before the 26th, we will deal with it. “ The most desired license is the integrated facility license, but the statute limits the number to a maximum of five licenses statewide. Approximately thirty business entities applied for that license, and it seems like most of the two dozen that were denied have hired an attorney and joined the consolidated case. Attorney Bill Espy announced that he had a client joining the case on Wednesday. Anderson said the problem is the legislature did not allow enough licenses in the original statute. “The legislature could fix this,” Anderson said. “They don’t want us legislating from the bench.” The statute allowed the AMCC to award as many as twelve grower licenses. Only twelve applied, and of those, only seven were granted licenses. Alabama Today spoke with Antoine Mordican at Native Black Cultivation, who was denied a grower permit. Mordican said that, at this time, he is not interested in filing litigation. Mordican said that he is working to address the issues in his application that the AMCC said were deficient and that he hopes to be awarded a license when the AMC makes a second round of grower awards. “They are not following the statute,” Mordican, who is Black, said. “The statute requires that 25% of the licenses be awarded to minorities. Of the seven, only one is minority owned.” One of the roughly 20 plaintiffs’ attorneys objected to the growers being issued licenses, arguing that it was unfair to the five integrators because they could potentially lose market share. Several plaintiffs’ attorneys asked the court to bar the Commission from considering the scoring prepared by the University of South Alabama when considering the applications for integrator, processor, and dispensary. “We have been waiting for four months to do something about the scores,” said the attorney for Alabama Always. “The grading of the scores is inconsistent with the statute. If they are allowed to consider the scores, we are going to be back here again. You can avoid that.” “Unless the use of the scores is prohibited, we think that there will be a lot of tendency on the part of the commissioners to rely on the scores,” he added. Michael Jackson is an attorney for the AMCC. “They are not going to be happy with the scores unless they get an award,” Jackson said. “The Commission has absolute discretion on what they consider.” “If there is a problem with the scoring, it doesn’t matter,” Jackson continued. “If the scoring is wrong, it doesn’t matter. If the scoring is bad, it doesn’t matter.” “They are not articulating
Medical marijuana issue heads back to court on Wednesday
Litigants in Alabama’s ongoing medical marijuana litigation will be back in court on Wednesday to seek approval to reboot the awarding of marijuana licenses. The State Legislature passed, and Governor Kay Ivey signed, legislation legalizing medical marijuana in 2021. A number of business entities denied licenses to enter the state’s newest industry have sued over issues surrounding the license awards. Judge James Anderson is hearing those cases in Montgomery Circuit Court. Last Thursday, the Alabama Medical Cannabis Commission (AMCC) voted on a series of rule changes to address issues that plaintiffs have raised. The AMCC hopes that Judge Anderson will be satisfied with those changes and will allow the state to rescind those previous cannabis awards made by the Commission in June and August. Southeast Cannabis, which was awarded a license by the Commission in June and then had its award reaffirmed in August, is seeking a temporary restraining order (TRO) on the AMCC’s plan to rescind the awards and reconsider all of the applications. Judge Anderson last Wednesday dismissed a lawsuit by Verano, who was granted a license award in June and then denied in August, arguing that the license award was a property owned by Verano and, once awarded, could not be rescinded. Anderson ruled against Verano, accepting the AMCC’s position that a license, even though Verano paid the Commission $50,000 for the license, is a privilege and not a right; thus, the Commission does have the authority to rescind Verona’s license. Based on the Verano decision, it seems likely that Judge Anderson will rule against Southeast Cannabis’s request for a TRO. Alabama Always was denied a permit in the Commission’s June and August meetings. They are suing the state, arguing that the AMCC’s process was flawed and that the Commission violated Alabama’s Open Meetings Act when the commissioners went into a lengthy closed executive session. Other entities denied permits have since joined this litigation, and those suits have been consolidated into one case. Commission Chairman Rex Vaughn told reporters that, if the court allows, the Commission will rescind the awards and then hold hearings, giving the applicants the opportunity to present their case directly to the Commission. It is hoped that the Commission will be able to grant new awards in either December or January. The Commission is represented in the litigation by attorney Mark Wilkerson. Vaughn praised Wilkerson and the legal team representing the AMCC. “They have been a great asset to us, helping us wade through to where we are. They have done a magnificent job,” Vaughn said. The Commission has set a meeting for October 26. The legislation legalizing medical cannabis and creating the AMCC is the most restrictive in the country. The maximum number of marijuana grower, processor, transporter, laboratory, and dispensary licenses that the AMCC can award is limited by the 2021 legislation. The most sought-after license, the integrated facility (which can grow, process, and market cannabis all in-house), is limited to a maximum of five in the state. Due to the strict limits, most applicants will ultimately be denied. It will be some time well into 2024 before Alabamians with a demonstrated medical need will be able to legally purchase medical cannabis in the state as no crop can legally be planted until final approval is issued from the AMCC, and that can’t happen until the court lifts its hold on the issuing of the licenses. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Court to allow Marijuana Commission to make rule changes
On Tuesday, Montgomery Circuit Court Judge James Anderson allowed the Alabama Medical Cannabis Commission (AMCC) to proceed with its planned consideration of new rule changes at the scheduled Commission meeting on Thursday. “As I see it, we have a meeting of the Commission on Thursday,” Anderson said. There are two distinct cases. The first is the consolidated case where Alabama Always and other entities denied marijuana permits are plaintiffs objecting to how the AMCC made the awards. The second, separate case is the case brought by Verano, which was awarded an integrated facility license in the June meeting of the AMCC but had that taken away in the August meeting of the AMCC. Verano’s attorney said their “interest is distinct” from the parties involved in the consolidated case. “Verano is claiming that they were awarded a contract, a license, and the Commission cannot go back and claw that back,” Anderson explained. Verano’s attorney agreed with that explanation of the Verano case. “We were issued an invoice, and we paid a $50,000 fee,” Verano’s attorney said. “Our rights were simply taken away from us when they had no authority to do that.” “A license is a privilege, not a right,” Anderson said. “ Verano’s attorney said his client was denied in August because of a “mysterious story that has come up.” “My client has a right to being heard to refute it.” Anderson said, “The only thing that is fair is between first and third base.” The AMCC’s attorneys have filed a motion to dismiss the Verano lawsuit. Anderson gave both sides until noon on Wednesday to file their briefs for and against that motion. “I will have a ruling before the commission meeting,” Judge Anderson promised on the motion to dismiss. The plaintiffs in the consolidated case would like to see a new awards meeting held – in the hope that they do better in the third round of awards than in the previous two. The AMCC appears to be headed towards that outcome in its November meeting. Judge Anderson said there was a motion for a temporary restraining order (TRO) filed the morning before the hearing by Southeast Cannabis. Southeast Cannabis was awarded a license by the AMCC in both the June and August meetings by the Commission. They are represented by Patrick Dungan. “Our position is that it is an unnecessary delay,” Dungan said of the AMCC’s not going ahead and issuing the licenses to the award winners. “We have asked you to stop what they are trying to do on Thursday.” Dungan argued that the 2021 statute legalizing medical cannabis does not give either the court or the Commission the power to vacate the license awards once they were made in June. “I think in this pleading he agrees with the Verano position,” Verona’s attorney stated. Anderson said he would “defer to the commission and let them do what they are going to do on Thursday.” “I am going to allow everyone to have time to get ready for the hearing,” Anderson said. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Marijuana license awardees getting nervous as legal saga drags on
In June, a number of businessmen and women were awarded a limited number of medical marijuana licenses by the Alabama Medical Cannabis Commission (AMCC). If things had gone according to plan, in July, those men and women would have gotten their licenses formally issued, construction on new marijuana farms, factories, and dispensaries would be underway, and Alabama’s first legal marijuana crop would be growing in an Alabama greenhouse right now. Nothing went according to plan. Business entities not awarded a license by the AMCC began filing lawsuits within days of the awards being issued. The AMCC staff discovered errors in tabulating the scores, and the commission itself held an emergency meeting to stay issuing their licenses. Days after, Montgomery Judge James Anderson issued a temporary restraining order barring the AMCC from issuing the licenses. Rather than pressing ahead and finding a way to issue those licenses, the AMCC nullified its previous awards and held a new round of awards. Most of the business entities that received awards in June also received awards in August, but not all. Verona was one of five business entities awarded an integrated facility license by the AMCC in June. In August, they did not get the award. They are now suing on the grounds that the AMCC violated the Alabama Open Meetings Law. Verona is represented by lobbyist Curt Lee. “Verona had the highest scores both times,” Lee told the Mid-Alabama Republican Club on Saturday. “Obviously, we have some concerns about why, if you had the highest score, Verona didn’t get a license.” Some of the parties who were denied applications in both June and August are also suing, alleging that they were treated unfairly. Redbud – who couldn’t figure out how to upload their application, is also bringing litigation to be considered for a license. Judge Anderson has extended his temporary restraining order twice in past weeks. Over a dozen plaintiffs’ attorneys are in court-ordered negotiations with the AMCC. Those applicants who were awarded licenses are reportedly getting nervous as it increasingly appears as if the AMCC will vacate those license awards and instead award licenses for a third time. Sources report that some of those entities have engaged with an attorney on their own possible litigation to ask Judge Anderson to lift the temporary restraining order and urge the AMCC to issue the licenses. Chey Garrigan is the founder and executive director of the Alabama Cannabis Industry Association (ACIA). Alabama Today asked Garrigan about reports that the license awards winners have engaged with an attorney. Garrigan would not divulge any details of what was discussed but did acknowledge that there have been “discussions” in recent days. Some of the awardees and applicants have reportedly been in negotiations with Tru-Leaf – a marijuana company that is active in Florida and other states, but in recent weeks, Tru-Leaf has pulled out of the state due to the uncertainty. Licensees and applicants whose secret plan was to sell out to Tru-Leaf may have been left without a business plan if those reports are true. “I have heard that as well,” Garrigan acknowledged. “I can’t say with any certainty what Tru-Leaf is going to do.” The next regularly scheduled AMCC meeting is scheduled for September 19. The legislation creating the AMCC and making them the regulators of marijuana in Alabama is considered the most restrictive medical marijuana law in the country. “They talked with legislators in other states that opened it up too wide and regretted it,” Lee said of the Legislature’s thinking behind the bill. Lee was asked if the Legislature would intervene and just overturn the marijuana law, ending this experiment in medical marijuana in Alabama. “I don’t see it going away and being reversed,” Lee said. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Stay on marijuana licenses extended again
On Wednesday, lawyers representing all the litigants in the ongoing medical marijuana license legal saga attended a hearing in Montgomery Circuit Judge James Anderson’s courtroom. Anderson, with the agreement of all parties involved, extended his temporary restraining order (TRO) on issuing medical cannabis licenses until at least the next scheduled meeting of the Alabama Medical Cannabis Commission (AMCC). After much discussion and a couple of conferences between the various attorneys involved in a back room outside of open court, all the counsels for the parties involved agreed to a continuation of the TRO. “The parties are in agreement to continue the TRO until the Commission’s next regularly scheduled meeting,” an attorney for the AMCC said. “There will be a meeting and probably a series of meetings to discuss what is going to happen in that meeting.” Judge Anderson said, “There needs to be four days to comply with the agreement.” The Commission’s attorneys agreed that the agenda for that future meeting should be released four days before the meeting. The AMCC has issued its own stay on the issuance of the medical marijuana grower, processor, transporter, dispensary, laboratory, and integrated facility licenses in acknowledgment of the pending litigation. Attorneys for Redbud made a motion to allow the failed marijuana applicant to join the ongoing plaintiff’s lawsuit. Redbud had intended to apply for a medical marijuana license but could not figure out how to make the AMCC’s website upload their application. The Redbud group was represented by Albert “Bert” Jordan of the Birmingham law firm of Wallace, Jordan, Ratliff, & Brandt in Wednesday’s hearing. Jordan explained that his clients tried to upload their application but was prevented by the AMCC’s limit on uploading files to no more than ten megabytes of data. “The ten-megabyte limit, it is really strange,” Jordan said. Jordan said that other applicants went to the AMCC and were given a workaround method of getting their applications submitted. “If we had known there was a workaround,” Redbud would have done it and gotten their application in Jordan claimed. “We are asking you to open the door,” for consideration of Redbud’s application, Jordan continued. “I felt like the facts showed that Redbud did not attempt to file,” Anderson said. “The relief that you are asking for is too late. The horse is already out of the barn.” Mark Wilkerson is representing the AMCC. An attorney for the AMCC said that Redbud’s people “were in the portal for less than 15 minutes total and none at all on the day that the application was due.” “Your honor should absolutely deny this motion,” the AMCC’s counsel added. “We did not wait too long. We exercised due diligence,” Jordan said. Jordan claimed that the AMCC allowed other applicants to add to their applications and make changes after December 31. Anderson said he would rule on Redbud’s motion sometime next week. Another applicant told Alabama Today that they made their application fit the 10-megabyte limit by submitting less information than they would have liked to have submitted. If they had known that the AMCC had allowed a workaround method to submit more information in their application, they would have done so. Their competitor, who was allowed to use the workaround, was able to submit more information with their application and then scored just ahead of them when the AMCC scored the applications. Other applicants whose applications were not accepted by the AMCC by the deadline also brought legal action but were allowed to have their applications considered by the AMCC because the court felt that they made a reasonable effort to comply with the AMCC’s demands. Redbud appealed their decision to the Alabama Court of Civil Appeals. The attorney for Verona asked that they not be consolidated with the other lawsuits. “We object to being consolidated,” their attorney said. “My inclination would be to do that with all of them except Verona,” Judge Anderson said. Verona sought and was awarded an integrated license application by the AMMCC in a meeting in June. The AMCC then vacated those awards and made new awards in August. Verona was the only one of the five business entities who were awarded integrator licenses in June who were not also awarded a license in the August awards. Anderson asked, “Is there any objection from all the other cases to be consolidated?” “No sir,” the other plaintiffs’ attorneys responded. A Mobile attorney asked that his client, who had applied for a dispensary license, be added to the growing number of plaintiffs in the lawsuit. “The cutoff for interventions was August 23,” Judge Anderson said. “My order had a cutoff date.” There is a calendar meeting of the AMCC on September 19r 19. The TRO is extended through at least that date. At some point in the future, the AMCC will do the license awards for a third time, under our current understanding of this ongoing Alabama legal drama. In this next meeting, the AMCC will be instructed by the court to comply with the Alabama open meetings statute, which the plaintiffs claim the Commission did not do in its previous awards meetings. The AMCC is limited in the number of licenses it can award by the 2021 statute legalizing medical marijuana in Alabama. That statute created the AMCC and tasked it with writing the rules for issuing medical marijuana licenses in the state of Alabama and then regulating the new industry. The AMCC has been restrained by the court from issuing any licenses for now. No one may grow or even possess seeds to lawfully grow marijuana in the state of Alabama until those licenses are issued. All efforts to get the medical cannabis industry up and running in Alabama are effectively on hold while the TRO remains in place. Any Alabamian with a documented medical need that cannabis might alleviate will have to wait until 2024 to purchase Alabama medical cannabis products legally. Homegrown or individual possession of any cannabis plants or plant material outside of the AMCC’s licensees will remain illegal in the state of Alabama even after medical cannabis is legalized in the form of Alabama.
Medical Cannabis Coalition votes to stay license awards
On Thursday, the Alabama Medical Cannabis Commission (AMCC) once again voted to stay the issuing of medical cannabis licenses in Alabama. The AMCC is facing a growing host of lawsuits from applicants who claim that they were wrongly denied cannabis licenses by the Commission at their meeting on August 11. On Tuesday, attorneys for the AMCC told the court that they intended to “go back to square one” and award the licenses for a third time, addressing concerns that the procedures for the Commission had violated Alabama’s open meetings law. The plan was tentatively set to again award the licenses on September 19. That plan now appears to be on hold, and no date has been set for the third license awards meeting. Montgomery Circuit Court Judge James Anderson extended his temporary restraining order on the final issuing of the licenses to September 6. “The commission’s action today, while pausing the process, furthers that goal by attempting to avoid additional legal challenges,” said Commission Chairman Rex Vaughn. “We understand that litigation is an obstacle, just as it has been in every other state that has a medical cannabis program. However, we appreciate and join in the court’s commitment to seeing that Alabama’s program becomes operational sooner rather than later.” Chey Garrigan is the Executive Director of the Alabama Cannabis Industry Association (ACIA). “Every day, I get letters and emails from Alabamians who are seeking relief from medical cannabis,” Garrigan said. “We should have had this up and off the ground in September 2021. The people who were not in the courtroom today are not being represented. How many times are we going to have to go through these applications?” Marty Schelper is the President of the Alabama Cannabis Coalition. Schelper disagreed with Garrigan. “The Alabama Cannabis Coalition does not agree with Ms. Garrigan’s position on just hurry this up without fully resolving the matters at hand,” Schelper said. “This legislation was set up to fail because the state decided to create a “Legal” drug cartel, limiting licenses and picking who could participate (and yes, we know there was and is a grading process).” “Free Market Capitalism and competition in the market is good for business and the consumers,” Schelper continued. “Open the markets up to anyone who passes the “litmus test” to operate in Alabama, that has the capital to pay the exorbitant state licensing fees and develop their business model. The position of the Alabama Cannabis Coalition is that the Alabama Legislature needs to be called back to Montgomery in a special session and resolve this once and for all. These lawsuits will continue until this legislation is amended, and the sick, suffering, and dying citizens will remain the victims. Garrigan responded, “Calling a special session to amend the cannabis bill is not realistic. We need real solutions.” The Alabama Legislature passed, and the Governor signed landmark medical cannabis legislation in May 2021, creating the AMCC to regulate the new industry in the state. Most observers understood even then that applicants who were not awarded a license would turn to the courts to seek injunctive relief. That very predictable process is what is playing out now in the courts. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Judge extends restraining order on issuing cannabis licenses until September
On Thursday, a Montgomery Circuit Court heard arguments from plaintiffs that the court’s temporary restraining order (TRO) on the state’s issuing of medical marijuana licenses be extended. Montgomery Circuit Judge James Anderson gave permission to the Alabama Medical Cannabis Commission (AMCC) to meet on Thursday and vote to implement their own stay on the issuing of cannabis licenses. Anderson extended his temporary restraining order to a hearing on the afternoon of September 6. The AMCC initially issued the licenses in June but then halted the license awards after an issue was detected in the tabulation of the awards. One of the aggrieved parties, Alabama Always, sued to block the issuing of the awards, claiming that the Commission did not follow the Alabama Open Meetings Law. The licenses were awarded for a second time in August. Alabama Always’ application for an integrated facility license was again rejected by the Commission. Verona was awarded a license in June, but not in August. They have since filed suit calling into question the process by which the awards were made in August. Attorney Mark Wilkerson, who represents the AMCC, told Judge Anderson that the commission intends to go back to “square one” and issue the licenses again. An attorney who represents one of the groups awarded a processor license asked that since the suit has been brought by parties seeking integrated facility licenses, and that there has been no complaint from growers or processors, that the growers, processors, transporters, and dispensary licenses be allowed to proceed. An attorney who represents a hemp processor in the Phenix City area whose application was denied then stood up and said that she had filed Sunday to enter this case and was seeking relief from the court. Judge Anderson took no action to release the processor, grower, transporter, or dispensary licenses from the TRO. An attorney for the plaintiffs expressed his disappointment with the process, stating, “In the last two or three days, we thought we had something in place.” That proposed agreement became unraveled at a conference with the judge held earlier on Monday at 11:30. One attorney said, “The director is not here. The deputy director does not appear to be here. We don’t know where we are getting this information from.” “I don’t want to negotiate in public,” the plaintiffs’ attorney said. “…..but that is what we are doing,” Judge Anderson quipped. “I would like for the commission to put a stay in play so the court does not have to order it.” Chey Garrigan is the Executive Director and founder of the Alabama Cannabis Industry Association. Garrigan held a press conference at the conclusion of the court proceeding. “We got everybody in the state fired up, asking, ‘When am I going to get my card?’” Garrigan said. “Let the growers go ahead and grow, let the processors go ahead and process, and let the dispensers go ahead and dispense.” “Every day, I get letters and emails from Alabamians who are seeking relief from medical cannabis,” Garrigan said. “We should have had this up and off the ground in September 2021. The people who were not in the courtroom today are not being represented. How many times are we going to have to go through these applications?” At the close of the hearing, Judge Anderson said, “I heard that Mississippi passed this six months after Alabama did. I heard that they were issuing prescriptions in January, so for once, we can’t say thank God for Mississippi.” To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Alabama medical marijuana licenses put on temporary hold again
A judge said Thursday he will temporarily block Alabama from issuing licenses to grow and distribute medical marijuana as he reviews an allegation that the state commission illegally deliberated in secret before selecting winners. Montgomery Circuit Judge James Anderson said he will issue a temporary restraining order to block the issuance of the licenses for 10 days while he hears the complaint. He scheduled a hearing for later this month. The development is the latest legal skirmish in the battle over who will get the potentially lucrative licenses to grow and distribute cannabis for the state’s developing medical marijuana program. The Alabama Medical Cannabis Commission last week nominated and approved companies for the licenses. The public vote came after commissioners met behind closed doors for several hours. Alabama Always, a company that was not among the winners, said the commission violated the Open Meetings Act, which requires deliberations to be done in public. Attorneys for the commission argued commissioners acted properly. They said commissioners met in private to receive information about the name and character of license applicants — an allowed reason under the Open Meetings Act — but did not deliberate behind closed doors. It is the second time the licenses have been delayed because of a dispute over the process used to select winners. William Webster, attorney for the commission, in a moment of frustration, suggested that board members won’t retreat behind closed doors if they have to redo the vote. “We will put forth everyone’s dirty laundry, and everyone will hear about it,” Webster told the judge. John McMillan, director of the commission, said they had hoped to issue the licenses to selected winners later this month, but that will be postponed. Anderson cautioned during Thursday’s hearing that he did not want the court case to drag out for a long time. “My concern is to move this along,” Anderson said. Republished with the permission of The Associated Press.
Marijuana licenses expected to be awarded on Thursday
The Alabama Medical Cannabis Commission (AMCC) will meet on Thursday. On the proposed agenda for Thursday’s meeting will be awarding medical cannabis licenses. The AMCC previously awarded licenses to a number of entities in June. Days later, the Commission suspended those license awards after errors were found in the scoring of some of the applications. On Monday, Montgomery Judge James Anderson ruled that the AMCC could proceed with discussions on license applicants at their August 10 meeting, provided that the Commission abides by the Alabama Open Meetings Act. The temporary restraining order that Judge Anderson previously issued staying the licensing process will expire once the Commission announces the award of licenses on August 10. Some applicants who were denied licenses sued the Commission, and that lawsuit is proceeding. Those plaintiffs will be closely monitoring what the AMCC does on Thursday, as that directly impacts how they proceed with their litigation. The AMCC is expected to award licenses for cultivators, processors, laboratories, transporters, dispensaries, and integrated facilities. The integrator license was the license that was most in demand by applicants. Applicants were not allowed to apply in multiple categories. Chey Garrigan is the founder and CEO of the Alabama Cannabis Industry Association (ACIA). “We are confident that the Commission has resolved the scoring issues, and we look forward to working with all of the licensees as we build the medical cannabis industry into a new vibrant sector of the Alabama economy,” Garrigan said. The Commission will also have to select a new chair. Rex Vaughn, whose expertise is in agriculture, is the vice chair and is expected to be appointed as the new chairman. Former Chairman Dr. Steven Stokes resigned after receiving criticism for serving as both the Chair of the AMCC and serving on the board of the University of South Alabama. The University of South Alabama (USA) was tasked with evaluating and scoring the applications. According to some reports, USA may have made some errors in tabulating those scores leading to the suspension of the license awards. Stokes is a Dothan-based oncologist who has treated cancer patients both in Alabama, where cannabis is not a legal option, and Florida, which has had medical cannabis for years. Stokes played a key role in the 2019 Alabama Medical Cannabis Study Commission that drafted the bill that eventually became Alabama’s medical cannabis law that passed in 2021. That legislation created the AMCC and tasked it with writing the rules for creating legal, medical cannabis in Alabama and regulating the fledging Alabama medical cannabis industry. Since marijuana is presently illegal in Alabama, all of the infrastructure for the cannabis industry has to be built, the first crop grown from seed, that crop processed into an AMCC-approved form, and that product transported to the new dispensaries before any medical cannabis is sold to any patients. Possession of cannabis in its raw plant form, including seeds and plants, will remain illegal in Alabama unless you are licensed by the AMCC. No smokable products will be legally sold in the state. There will likely be more litigation even after the Commission makes its license awards on Thursday. The first legal Alabama-grown and processed medical cannabis will likely not be available until early 2024 – at the earliest. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
