Arkansas judge blocks state from licensing medical marijuana growers

LITTLE ROCK, Ark. — An Arkansas judge on Wednesday temporarily blocked the state from awarding its first licenses for companies to grow medical marijuana in response to complaints about the state’s process for reviewing applications for the facilities.

Pulaski County Circuit Judge Wendell Griffen issued a temporary restraining order preventing the state from issuing permits to five companies that had qualified to grow marijuana. Hours after the order was issued, the state Medical Marijuana Commission postponed the hearing it had scheduled Wednesday to formally award the licenses.

Arkansas voters approved a constitutional amendment in 2016 legalizing medical marijuana for patients with certain conditions. The commission is expected later this year to license up to 32 dispensaries to sell the drug.

Griffen issued the order in response to a lawsuit by Naturalis Health LLC, which was denied a permit. The judge scheduled a hearing Friday morning to consider the firm’s request for a preliminary injunction against the state.

“The court hereby finds that the verified complaint asserts facts showing a substantial likelihood of success on the merits regarding violations of the Administrative Procedures Act, due process and equal protection and that Naturalis Health LLC will suffer irreparable harm absent entry of a temporary restraining order,” Griffen wrote in his two-page ruling.

An attorney for Naturalis said he was pleased with the order and was confident in the firm’s case challenging the application process. Attorney General Leslie Rutledge’s office said it will respond to the company’s lawsuit “in due course.”

The lawsuit claims that the state’s process for awarding the cultivation licenses has been flawed, saying the applications for the winning companies showed wide-ranging discrepancies and outright violations of the rules. Other unsuccessful applicants have sent letters to the commission in recent days with similar complaints.

The commission last month announced the top five scoring applicants from the 95 applications it had received. All five companies by last Friday had paid the $100,000 licensing fee and posted the $500,000 performance bond needed to receive the licenses. The applications were scored by each of the five commissioners on several factors, including business experience, qualifications and finances.

The lawsuit contends that the state “caused a complete distrust in the newly implemented medical marijuana industry, approved by Arkansas voters, to serve the medicinal needs of qualifying Arkansans

“Arkansas is the first state in the South to legalize medical marijuana. The state has an obligation not only to plaintiff, but to its citizens, to get this right,” the lawsuit states.

Arkansas has approved 4,410 applications for patients to use medical marijuana, and will issue registry cards about a month before the drug is expected to be available legally.