Verano Sues Alabama Medical Marijuana Regulators Over Decision Not To Award License In Second Round

“Its decision to ‘void’ previously awarded licenses without following the Legislature’s—and its own—clearly established rules and regulations, exceeds and violates the statutory authority it has been granted”

By Alander Rocha, Alabama Reflector

A medical cannabis company sued the Alabama Medical Cannabis Commission (AMCC) on Monday, alleging the AMCC cannot revoke licenses and that its exercise of power “both exceeds and conflicts with the authority provided to it by the Alabama Legislature.”

Verano Holdings, a Chicago-based company with an Alabama chapter, received an integrated facility in the first round of awards in June. It did not get a license in a second round earlier this month, after the commission put the awards on hold over questions on how the applications were initially scored.

“Regardless of the commission’s intent when it decided to issue the stay and subsequently ‘re-award’ the licenses, its decision to ‘void’ previously awarded licenses without following the Legislature’s—and its own—clearly established rules and regulations, exceeds and violates the statutory authority it has been granted, violates its own rule, and is clearly erroneous. As such, Verano Alabama’s awarded license remains valid,” the lawsuit said.

It stated that while the commission’s rules and the Administrative Procedure Act establish a method for challenging the AMCC’s decision to deny and award licenses, it does not give the ability for the AMCC to “void” previously awarded licenses on its own motion.

Brittany Peters, spokesperson for the AMCC, did not return a request for comment.

The University of South Alabama (USA) brought in evaluators who reviewed the initial license applications. Verano had the highest scores by USA and was awarded a license on June 12. But the AMCC put a pause on the process following several “inconsistencies” in scoring the applications, the commission re-awarded the licenses on August 10 to every company who got one in June, except Verano.

The awards on August 10 ended a two-month limbo for licenses amid questions about the transparency of scoring applications. Less than a week after announcing the licenses, the commission imposed a stay on awarding licenses, citing “scoring inconsistencies” that would have led to “catastrophic” results if the licenses were issued.

A message was left with Verano’s legal counsel Monday.

Alabama Always, a company that did not win a license in either round, has filed two lawsuits against the commission. In the first, the company alleged that the commission violated a provision over the appointment of former chair Steven Stokes, a USA trustee. Stokes stepped down earlier this month saying he did not want to slow down the process.

A second lawsuit alleges that commission members were instructed to seal their nominations in an envelope during the executive session, and the companies with the most nominations received a public vote in the August 10 meeting, in violation of the state’s Open Meetings Act.

Montgomery County Circuit Judge James Anderson put a hold on Alabama’s medical cannabis program last week over the suit. The stay followed a heated hearing where an attorney for the AMCC suggested the commission would air applicants’ “dirty laundry.” The hearing for Alabama Always’ lawsuit is set for August 28.

Will Somerville, attorney for Alabama Always, said after the hearing last week that the process wouldn’t have been delayed if the commission “were doing things the right way.”

“The delay has been caused by their refusal to follow the law every time. They keep on doing things they shouldn’t do. And they keep on being stuck,” Somerville said.

This story was first published by Alabama Reflector.