State Supreme Court reverses Griffen on marijuana growers, allowing commission's licensing awards to stand | Arkansas Blog

Thursday, June 21, 2018

State Supreme Court reverses Griffen on marijuana growers, allowing commission's licensing awards to stand

Posted By on Thu, Jun 21, 2018 at 10:57 AM

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The Arkansas Supreme Court on Thursday morning reversed Circuit Judge Wendell Griffen's March ruling that declared the state's awarding of five marijuana cultivation permits null and void, saying the circuit court had no subject-matter jurisdiction in the case.

That means the Arkansas Medical Marijuana Commission is back to where it was in early March, when it first announced five winning applicants. Scott Hardin, a spokesperson for the Department of Finance and Administration (which serves as staff to the commission) said DFA was appreciative of the court's order and was reviewing it to determine next steps.

Update, 3:30 p.m.: The commission must wait two weeks before acting on the court's ruling. In an email, Hardin wrote:
We appreciate the Arkansas Supreme Court’s decision to overturn the injunction from the Circuit Court that blocked the implementation Arkansas’ medical marijuana program. Today’s Supreme Court ruling will be declared final in just over two weeks. At that point, the Medical Marijuana Commission, with the ability to continue any action that was underway or scheduled prior to the injunction, will announce the next steps in this process.

In February, the commission completed its scoring of a long list of cultivation license applicants. Several of the losing applicants filed suit, alleging that the commission's process was fatally flawed and that at least two commissioners had undisclosed conflicts of interest. Undeterred, the commission was set to award licenses to the five winners on March 14, but Griffen issued a temporary restraining order before that meeting could take place. On March 21, Griffen issued a preliminary injunction and declared the commission's scoring "null and void." The judge found that the state had acted arbitrarily in some aspects of the scoring process and agreed with the plaintiffs that financial connections between two of the top-five applicants and commissioners Carlos Roman and Travis Story were "enough to create a reasonable suspicion of unfairness, even if it does not establish actual bias."

The state appealed Griffen's order and the Supreme Court heard oral arguments on June 7.

Associate Justice Rhonda Wood authored the Supreme Court's opinion on Thursday. Chief Justice Dan Kemp wrote a brief concurring opinion that agreed with the majority that Griffen's court lacked subject-matter jurisdiction but also seemed to suggest the commission should consider reevaluating its system for awarding licenses. Kemp wrote:
The MMC has a constitutional duty to adopt rules necessary for its “fair, impartial,stringent, and comprehensive administration” of the Arkansas Medical Marijuana Amendment. See Ark. Const. amend. 98, § 8(d)(3). I urge the MMC to review its rules and procedures and to cure any deficiencies. 
The majority opinion cited the separation of powers in its conclusion that Griffen erred, stating that the judicial branch should not take it upon itself to review "the day-to-day actions of the executive branch." The opinion acknowledged the state Administrative Procedures Act contains a mechanism to subject executive agency decisions to judicial review. However, the justices said that should only occur after an agency has conducted an adjudication. Wood wrote:
Appellees cannot identify anything that occurred at the agency level that was an adjudication as defined by statute. Neither can we. The legislature identified quasi-judicial decisions involving “adjudications” as appropriate for judicial review. The MMC’s [medical marijuana commission's] decision simply was not quasi-judicial. Therefore, we find that the circuit court did not have subject matter jurisdiction over the action disputing MMC’s decision to grant the five identified licenses under section 212 of the APA.
The justices noted that the medical marijuana commission's own Rule 19 explicitly allows for applicants to appeal to the circuit court if they are denied an application by the commission. However, the Supreme Court said it was premature to make that argument since denial letters had yet to be written:
Finally, we decline to address appellees’ arguments under MMC Rule 19. The rule states that “if the commission denies an application for a cultivation license, the commission’s decision may be appealed to the circuit court of the county in which the cultivation facility is situated or the Pulaski County Circuit Court. Appeals shall be governed by the terms of the Arkansas Administrative Procedure Act, § 25-15-201, et seq.” However, the arguments concerning the denial of the license were not ripe for the circuit court to hear. Because the appellees have not been issued denial letters subsequent to an adjudication, the issue was not ripe; therefore, we reverse. We do not address whether Rule 19 conveyed subject-matter jurisdiction to the circuit court.

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