The state Medical Marijuana Commission erred when it allowed a Newport cultivator to change ownership and move the facility to Pine Bluff, according to a lawsuit filed Monday by Little Rock attorney David Couch.
In the lawsuit, Newport Mayor David Stewart and three other plaintiffs argue that the commission did not provide proper notice that a change of ownership and location would be considered at its meeting. The lawsuit also argues that the new owners, Good Day Farm, LLC, were not a registered entity with the state at the time the license was awarded. The suit was filed in Jackson County Circuit Court.
The plaintiffs, which include the Northeast Arkansas Charitable Foundation, also argue that the foundation is owed $2 million as part of the sale. An arrangement with the previous owner, Natural State Wellness Enterprises, LLC, required the owner to provide 10% of the business’ profits to the foundation, which would disburse the funds to nonprofit organizations in Jackson County. Couch said by phone on Tuesday that he believes the foundation is owed 10% of the sale as well as 10% of Good Day Farm’s profits in perpetuity because the agreement with the foundation should be attached to the license.
The plaintiffs argue that the commission has the authority to change its decision to award the license and allow the transfer. The attorney for the commission has stated in a commission meeting that is not possible, according to spokesman Scott Hardin.
“This was just not right and, when it’s not right, the law usually finds a remedy for you,” Couch said. “I’m pretty certain that the city is going to prevail, whatever that looks like.”
Hardin said that the commission does not address active litigation and that “several of the claims made have not been investigated by ABC or the MMC.”
The commission does not have a rule requiring notification to communities regarding ownership changes, Hardin said.
“It was just a situation where they weren’t aware until after the fact,” Hardin said.
The plaintiffs in the suit are Stewart, individually and as mayor of and on behalf of the citizens of Newport; Jon Chadwell, individually and as director of and on behalf of the Newport Economic Development Commission; the Northeast Arkansas Charitable Foundation; and the Newport-Jackson County Industrial Development Bond Board.
The defendants are the commission; the state Alcoholic Beverage Control Division; Good Day Farm, LLC; Regina Thurman; Natural State Wellness Enterprises, LLC; Henry “Hank” Wilkins V; and Harvest Health and Recreation Inc.
Little Rock attorney Alex Gray, an owner of Good Day Farm, said, “I have not yet had the opportunity to review the complaint and am not in a position to comment on it at this time, but I believe in the integrity of the manner in which Good Day Farm obtained both the license and the approval of the relocation of the cultivation facility to Pine Bluff and will vigorously defend it. We are excited to be officially operational in Pine Bluff and look forward to being a strong corporate citizen of the state of Arkansas.”