On June 7, 2018, the Arkansas Supreme Court heard oral arguments on the granting of a temporary restraining order (TRO) by Pulaski County Circuit Judge Wendell Griffin to stop the Arkansas Medical Marijuana Commission (MMC) from awarding cultivation licenses. Due to this TRO, the MMC has also stopped the selection process for the dispensary applicants.
Attorney Casey Castleberry, who represents cultivation companies who were awarded licenses by the MMC, argued that there was no adjudication at the agency level and therefore, neither the Court nor Judge Griffen had subject matter jurisdiction to hear the case. Additionally, he argued that the recipients of the licenses had a protected property interest in the licenses and that Judge Griffin did not provide any notice or an opportunity to be heard to the recipients of the licenses. Instead, Castleberry argued that Judge Griffen took it upon himself to rule on the merits of the case in violation of the recipients’ due process rights. The Court questioned Castleberry about the current process allowed under the MMC rules, and he responded that since there were no denial letters sent to those who did not receive licenses there was no adjudication to appeal. Castleberry went on to state that he believed his clients have been issued licenses and there is a process for the MMC to consider protests (which were to be heard at a March 16, 2018, meeting). In addition, a party could lodge a complaint with the Alcohol Beverage Control Board, which oversees the MMC, to revoke a currently issued license, and the Board would afford the parties notice and a hearing. At that point, there would be an adjudication and an appeal could be brought to the circuit court in accordance with the MMC rules.
Arkansas Solicitor General Lee Rudofsky agreed with Castleberry that Judge Griffen did not have subject matter jurisdiction because there was no adjudication at the agency level and therefore the Court should reverse Judge Griffen’s ruling. When asked, Rudofsky stated that the Court should be very careful when deciding this matter because he believes that this issue is not properly before the Court under the rules regarding of subject matter jurisdiction. Rudofsky briefly mentioned the issue of impropriety of two of the commissioners and stated that, if you excluded Dr. Roman’s scores, the same entities would have been awarded the licenses.
Attorney Jay Bequette, representing Naturalis Health who was not one of the five selected to receive a license, told the Court that the actions by the MMC were arbitrary and capricious and the process was fundamentally flawed and corrupt. He believed that a decision by the MMC had been made but that no licenses had been issued before the issuance of the TRO. Justices Wood and Womack questioned Bequette about what process was reviewable, how the Court should define adjudication, what rights are afforded to a person with a future interest, and what notice was given to the parties. These Justices on multiple occasions asked Bequette if he wanted them to change the law to reflect his point of view. It seemed from the questioning by Justices Wood and Womack that they were in favor of reversal because, as they alluded to, there is a process in place that would afford parties a hearing and an opportunity to be heard and that only when that takes place can the issue be appealed and the Court step in.
After oral arguments, the Supreme Court released a letter filed by Attorney General Leslie Rutledge revealing that there is an ongoing investigation that a commissioner was offered a bribe by an applicant of a license. The letter further revealed that the applicant was not one of the five selected to receive a license.