COMMISSIONER TRAVIS STORY MMC

Updated, 8:30 p.m.: A divided state Medical Marijuana Commission voted 3-2 on Wednesday afternoon to contract with an outside consultant to score applications for dispensaries, the retail businesses that will eventually provide access to cannabis for certain Arkansas patients.

It also affirmed the disqualification of a cultivation facility applicant, Carpenter Farms Medical Group, which would have been the top runner-up behind the five winning growers (that is, the #6 spot) but was removed from the process in February due to a discrepancy in the ownership interest information stated in the application. The panel was divided on that vote as well, 3-2.

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The commission first began discussing the possibility of hiring a third party to score the 203 dispensary applications earlier in July, after months of litigation over the panel’s scoring of cultivation hopefuls. The five commissioners themselves graded the cultivation applications, but allegations of conflicts of interest and other irregularities have dogged the process.

The voter-approved medical marijuana amendment — passed in 2016 — tasks the commission with issuing licenses for both cultivators and dispensaries but leaves it up to the commission to determine how it does so. Last week, a legislative committee approved an emergency rule change that would allow the commission to move forward with an outside consultant if it chose.

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On Wednesday, commissioners Stephen Carroll, James Miller and Ronda Henry-Tillman (the chair) voted in favor of using the independent consultant to score the dispensaries. Commissioners Carlos Roman and Travis Story voted against it.

It’s hard to avoid pointing out that Roman and Story are the two commissioners who have been accused of conflicts of interest regarding two of the five winning cultivation applicants. Roman gave an unusually high score to Natural State Medicinals, a company whose owners include a friend and colleague of Roman, a physician. He has forcefully denied any implication of wrongdoing. Story, an attorney, has done legal work in the past for the owners of Osage Creek Cultivation. Although the names of owners were redacted from the applications scored by the commissioners, they included other identifying information, such as addresses. Both Osage Creek and Natural State received high scores from the other commissioners as well.

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When the commission last met, Roman expressed doubt about the merits of hiring an outside consultant. On Wednesday, Story spoke at length against doing so, arguing that using a third party amounted to passing the buck. “I for one am not a fan of shuffling off my duties, that I signed up for, to somebody else,” he said. He said hiring a consultant could waste taxpayer money, and that in doing so the commission would be “acting like Congress.” He also questioned whether the vetting process would really be expedited if a consultant was used.

“In the end, the issues that could come up previously could come up in this same scenario,” Story said. He made a motion for the commissioners to score the dispensary applications individually; it failed, 2-3, with Roman joining Story.

The other three commissioners then voted for a motion to use an independent company for the grading, with Story and Roman voting no.

(That isn’t to imply necessarily that either Roman or Story had improper intent in wanting to score the dispensary applications themselves. They could have other reasons: The allegations of conflicts of interest regarding the earlier round of grading may have motivated the two commissioners to defend the process by which the cultivation applications were scored.)

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It remains to be seen what company will be chosen to perform the dispensary scoring. Rather than issuing an RFP, the commission will use “cooperative contracting,” allowing it to expedite the procurement process. David Withrow, an attorney with the Office of State Procurement, and Alcohol Beverage Control Director Mary Robin Casteel told the commission that an invitation for bid will be issued within a few days; the lowest bid will be automatically awarded the contract. The commission will seek a company with experience in the health care field and will require that it use the same scoring rubric previously used by the commissioners. It will also require that the winning company use five individuals to score the dispensary applications individually, presumably to ensure a sense of parity with the process for cultivation applications.

If all goes well, the dispensary licenses could be awarded in November, a spokesman for the Department of Finance and Administration wrote in an email Wednesday.

The commission also voted to affirm a determination made by Alcohol Beverage Control staff in February that the sixth-highest scoring applicant among the cultivation hopefuls should be disqualified. (ABC serves as staff for the commission.) The ABC’s disqualification occurred around the same time the commissioners were finishing scoring the applications. The applicant, Carpenter Farms Medical Group, would have fallen just short of winning a license based on the commissioners’ cumulative scores — a coveted position, since it would then become eligible for a license in the event one of the top five winners were to lose their license.

Apparently, ABC staff discovered the Carpenter Farms application contained a discrepancy in the ownership interest stated for the venture. In a memo distributed today, ABC explained:

The ABC review revealed discrepancies in the disclosure of the ownership interest in the application, the memo states. In one section, the application lists ownership interest as being divided among several individuals; in others, it says those individuals have equity in Carpenter Farms through LLCs.

The commission’s rules, and the medical marijuana amendment itself, require disclosure of ownership interest and contain certain requirements about in-state ownership. However, the ABC memo did not say that Carpenter Farms actually ran afoul of the ownership rules. It simply said there was a discrepancy in the application that made the submission fail to meet the minimum requirements. Although the error was not discovered by the agency until February, an ABC attorney told the commission Wednesday that it would not have been “curable” even if it had been discovered immediately after the application was submitted, on September 15.

“While Carpenter Farms Medical Group is in the unique position of being the only applicant scored and later disqualified, none of the disqualified applicants have been permitted to submit subsequent information or explanations beyond the September 18, 2017 deadline,” the memo said.

An ABC attorney told the commission Wednesday it had no power to waive the rules for minimum qualification, which would seem to mean the body had little choice but to accept the disqualification. However, Commissioner Henry-Tillman said she felt it was unfair to disqualify the application after it had already been scored and made a motion to reject the recommendation of ABC staff. Roman joined her, but the other three voted no and the motion failed.