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Judge allows cannabis licensing to move forward

This is the third round of license awards by the AMCC, but the first time the issuance was not stayed by the court.

The logo of the Alabama Medical Cannabis Commission. STOCK

On Thursday, Montgomery Circuit Judge James Anderson denied the plaintiffs’ motions for a temporary restraining order (TRO) on the Alabama Medical Cannabis Commission (AMCC). The decision followed a two-and-a-half-hour court hearing where attorneys for multiple plaintiffs presented their cases. The court’s decision means that the AMCC will likely issue license awards in categories such as cultivator, processor, state testing laboratory, and secure transporter as early as Friday.

The most sought-after license is the integrator. This license permits the holder to grow, process, transport, and dispense medical marijuana. These five license awards will not be issued until January 9, as they were scheduled two weeks after the earlier license awards.

This is the third time the AMCC has made license awards, but the first time the issuance of licenses was not stayed by the court.

A number of attorneys representing plaintiffs in the marijuana trial asked Judge Anderson for the TRO to prevent the AMCC from proceeding with the licenses.

“I have received several requests for temporary restraining orders,” Judge Anderson stated in court.

Plaintiff’s Attorney Patrick Dungan requested a TRO from the Judge, saying, “Stay pending the administrative hearings process.”

Dungan represents Southeast Cannabis Company (an applicant for an integrator license), Yellowhammer (an applicant for a dispensary license), and Pure by Sirmon Farms (seeking a cultivator license).

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Several failed applicants have asked the Commission for investigative hearings on why their applications were denied, as is their right under the rules established by the AMCC.

Attorney Mike Jackson represents the AMCC.

“The commission’s lawyers have not made a recommendation on issuing the licenses,” Jackson mentioned in court ahead of Thursday’s virtual meeting of the commissioners. “It is their decision. They will be issued tomorrow (Friday) if the commission does not take any additional action.”

“If there are no licenses to award, what is the purpose of an investigative hearing?” Dungan questioned.

Dungan argued that Blackberry Farms and Pure by Sirmon Farms, both awarded licenses by the Commission in the August awards, had their awards later rescinded by the commission to settle plaintiffs’ lawsuits. The applicants were given the opportunity to make presentations before the commission as part of the redo on the awards.

“It was reiterated over and over again that these presentations were not required,” Dungan said.

Both Blackberry Farms and Pure by Sirmon Farms elected not to make presentations and subsequently failed to win awards a second time. Dungan argued that they were caught unaware by the settlement between the earlier plaintiffs and the commission.

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“I read the order into the agreement into the court record, and it was open to the public,” Judge Anderson replied.

Dungan claimed his clients were harmed by the court agreement to not consider the independent scoring by evaluators hired by the University of South Alabama.

“Instead of being the highest-ranked applicant, they were simply left off,” Dungan said of Thurmond Farms.

“You lost – you were one of eleven applicants (for the cultivator license) and you lost,” Judge Anderson responded.

Wilkerson noted that other applicants who chose not to make cultivator presentations were awarded licenses.

“I am going to deny your TRO,” Judge Anderson told Dungan regarding the issuance of the cultivator licenses.

“Yellowhammer Dispensary – they were a two-time award winner (in the June and August awards),” Dungan said. “Yellowhammer had seven commissioners vote them in the top four in the ranking system.”

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“There was never supposed to be politics involved in this,” Dungan stated. “A minority of commissioners tanked their application.”

Dungan argued that the decision to disregard the independent scoring “is in violation of the commissioner’s own rules. Once they agreed to discard that, they needed to devise a new system to comply with those rules. It is arbitrary.”

“Some people prefer chocolate, and some vanilla,” Judge Anderson replied. “What you are requesting is that they not issue these licenses until these (investigative) hearings are conducted.”

“The status quo should be maintained until this is resolved,” Dungan asserted.

Wilson Green, another plaintiff’s attorney, commented, “If they proceed with issuing integrator licenses, there is no way to reverse them.”

“Their rules from the beginning required impartial, blind scoring,” Green stated. “Back in late summer, after the enjoining of the licenses, we had discussions with the Commission’s counsel that the South Alabama scoring be maintained. The South Alabama scores were how the commission complied with the statute and all of their own regulations.”

“What you are suggesting is that there needs to be scoring?” Judge Anderson asked.

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“When they discard the South Alabama scoring as a matter of process, they must devise another scoring method,” Green replied.

The independent scoring of the University of South Alabama was replaced by a ranking system where each commissioner ranked the applicants from first to last, and the totals were added together and averaged to produce rankings.

Will Summerville, representing Alabama Always, which applied unsuccessfully for an integrator license, remarked, “In the Olympics, they discard outliers (referring to

events decided by judges’ scoring).”

“It might be wise, but I don’t believe it’s mandatory,” Judge Anderson responded. “In the Olympics, you always have that Romanian judge.”

Green labeled the Commission’s rankings as “Spitball rankings.”

“There is no evidence in any of these votes that they applied the statutory criteria,” Summerville said.

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Summerville noted that the Commission never explained why Alabama Always’ application was denied.

“They want us to enter this statutory hearing process without knowing why we were denied a license,” Summerville said. “We have to figure out what we did wrong.”

“This is not a close call. This is not the issue we debated a few months ago,” Green said. “They did not adhere to their own rules. The only argument of record is one made by Trulieve that the emergency rules discarded all of that.”

“These criteria must be followed for them to proceed,” Summerville said. “This was a subjective process, not an objective one.”

Wilkerson stated that no one objected when the emergency rules were being established; but “Now that they are unsuccessful, they are running to court.”

“That is what it was: a ranking system,” Jackson said. “The notion of scoring is not the ultimate determinant.”

“They are adept at making erroneous assumptions,” Jackson added. “This assumption that the Commission did not have a scoring system and did not consider the statutory requirements is a baseless assumption on their part.”

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“They acquiesced to the process,” Jackson said of the unsuccessful applicants. “They have an opportunity during the investigative hearing to present anything they wish.”

“You encouraged us to settle, and we did,” Jackson told Judge Anderson. “The awards are entirely discretionary as long as the applicants are statutorily qualified.”

Verano was awarded an integrator license in June but lost that award in the second round of awards in August. They sued, arguing they were entitled to an award because they had the highest score in the University of South Alabama rankings and that an award once made cannot be rescinded by the commission. Judge Anderson ruled against them. They have appealed the decision to the Alabama Court of Civil Appeals.

Dungan argued that the entire process should be paused until the Verano case is resolved in the appellate process.

“These issues need resolution,” Dungan said. “What will we do if an appellate court rules that was wrong? Are we going to start demolishing buildings?”

Wilkerson said, “What the Commission wants is to get the product to the people in need. The needs of the people outweigh any of these concerns.”

“The college football playoff committee had an explanation for ranking Alabama ahead of Florida State,” Summerville said. “The commission won’t tell us why we didn’t receive a license.”

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“The process is irredeemably flawed,” Summerville stated. “We don’t know why we didn’t get a license. We are shadowboxing.”

“We knew it was an unfair process,” Summerville said. “We knew it wasn’t fair. We sought redress from this court (ahead of the Commission’s rankings and awards) and were told it was premature.”

“They intend to issue licenses on January 9th, and the investigative hearings can’t even start until February,” said plaintiff’s attorney Stephen Braun.

Another attorney commented, “We are now an aggrieved party. We went from number one to not in the top ten. The commission must follow their own rules.”

“The state of Alabama has operated for over 200 years without medical cannabis, but what we can’t function without is due process,” Braun said.

“I am inclined to let the commission meet and hear what they have to say,” Judge Anderson said.

One of the plaintiff’s attorneys requested expedited depositions from the court.

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Jackson called this a “Classic fishing expedition.”

“If you look at the ranking sheets, their scores were all over the place, so if they were colluding, they did a poor job of it,” Jackson said.

Mr. Mills, representing a company that did receive a successful award, said, “It is not a violation for some commissioners to meet. Only if there is a quorum would it be a violation of the open meetings act.”

“Let’s wait and see what the commission does this afternoon,” Judge Anderson said.

Anderson denied all motions for a temporary restraining order.

Late that evening, Judge Anderson did issue a TRO enjoining the dispensary licenses.

The November award winners for medical cannabis cultivator, processor, secure transporter, and testing laboratory were expected to be automatically issued by the AMCC on Friday.

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For further information, contact [email protected].

Brandon Moseley is a former reporter at the Alabama Political Reporter.

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