Marijuana commission seeks rule allowing use of consultant to score applicants | Arkansas Blog

Thursday, July 12, 2018

Marijuana commission seeks rule allowing use of consultant to score applicants

Posted By on Thu, Jul 12, 2018 at 6:04 PM

click to enlarge Dr. Carlos Roman (left) and James Miller, two of the five commissioners. - ARKANSAS MMC / FACEBOOK
  • ARKANSAS MMC / FACEBOOK
  • Dr. Carlos Roman (left) and James Miller, two of the five commissioners.

The Arkansas Medical Marijuana Commission moved forward Thursday with an emergency rule change that would allow it the option of retaining an outside consultant to assist in scoring applications for dispensaries and other types of applications in the future.

The emergency rule first must be approved by a legislative committee before taking effect. If approved, the rule wouldn't require the five-member marijuana commission to use a consultant for scoring, a staff attorney for the Department of Finance and Administration told the panel. However, it would clear the way for the commission to find and hire a consultant if it chooses to do so.

Update, 8:30 p.m.:

At the panel's last meeting, on July 2nd, Commissioner Stephen Carroll suggested the idea of contracting out the scoring process for dispensaries, warning that the public "has lost or is losing trust in this commission." Though Carroll didn't say so explicitly, that's largely because of the cloud hanging over the scoring for marijuana cultivation facilities. The commissioners each scored those applications individually. In February, the commission announced five winners for potentially lucrative grow licenses; some losing applicants sued, alleging irregularities in the scoring process and conflicts of interests among certain commissioners. A trial court threw out the commission's choices in March, only to have the state Supreme Court reverse the decision on technical grounds last month.

That cleared the way for the cultivation permits to be awarded earlier this week, at long last. But more lawsuits over the permits would seem almost inevitable.

In the meantime, Arkansas patients remain unable to access medical cannabis, over a year and a half after voters approved an amendment to legalize its sale and use in November 2016.

Using an independent consultant could reduce the commission's legal exposure when it turns to its next question: the difficult task of picking 32 winners from among hundreds of dispensary applicants. But not every member of the panel supported the idea of outsourcing the process. At Thursday's meeting, Commissioner Carlos Roman defended the scoring method the commission used with the cultivation permits.

"One of the strengths of what we did here is that there were five of us grading it," Roman said. The fact that each of the five commissioners comprised 20 percent of the overall score created a "natural mathematical check," he argued.

Roman's numbers, in particular, have been called into question by applicants who pointed out he gave an unusually high score to one of the winners, Natural State Medicinals Cultivation. According to a lawsuit filed by a losing applicant, Roman, who is a doctor, has "an extremely close personal and professional relationship" with a physician who is part owner in that company. He has forcefully rejected those accusations and today made dismissive reference to the "fantastical lawsuits" filed over the cultivation scoring.

"It didn’t matter if it was your grandmother’s application, it washed out with the math," Roman said Thursday. "Now, maybe your grandmother came in 50th instead of 40th, [but] it became irrelevant to who actually got the license. … None of us here determined who got a license. It was a group thing, and that somehow needs to be replicated [with the dispensaries.]" (It should be noted that while the difference between 50th place and 40th place may be irrelevant in terms of securing a cultivation license, the difference between 15th place and 5th place is clearly not.)

Roman also expressed concern that an independent consultant could have a bias toward favoring applicants whose business plans were more inclined toward commercial sale than medical use.

The commission heard Thursday from Mary Kathryn Williams, an attorney with the Office of State Procurement, about how the panel could go about seeking a contract with a consultant, should it go that route. Williams said the commission could use a procurement process called "cooperative contracting" to expedite its search. Cooperative contracting would allow the commission to "piggyback" off an existing contract between a "pre-qualified" consultant doing work for another public procurement unit elsewhere — such as in a different state — rather than using the longer, more laborious Request for Proposals (RFP) process. The lowest qualified bidder would win the contract.

One rationale for using a consultant — aside from attempting to insulate the commission somewhat from accusations of bias — is time, considering the sheer volume of dispensary applications and the fact that two commissioners' terms expire at the end of the year. However, Commissioner Travis Story said the procurement process would still take months, even if everything moved as expeditiously as possible. "I don’t know that we’re saving any time here," he said. (The lawsuit challenging the cultivation scoring also alleges that Story has the appearance of a conflict of interest regarding one of the five winning applicants.)

Danielle Hoefer, an attorney for the Finance and Administration Department, then told the commission that an emergency rule change authorizing the use of a consultant to grade applications wouldn't force the commission to do so. " It doesn’t bind the commission to move forward with this. … So there’s no harm in moving forward with this route," she said.

On Thursday, the commission also voted to keep cultivation applications "active" for a 24 month period; should one of the five winning applicants lose its license for any reason, the commission could turn to the remaining list of applicants. (Because the amendment authorizes the commission to award up to eight growing licenses, it could also use the pool of applicants to award three more, theoretically.) The commissioners turned down a proposal by Story to immediately begin reviewing dispensary applications in one part of the state, Zone 1.

The commission set its next meeting for July 25th at 4 p.m.

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