A circuit judge in Little Rock ruled Thursday evening that state regulators erred when they awarded a cultivation license to a Fort Smith business in 2020 and said the state should “take all steps necessary to remedy these violations.”
Judge Herbert Wright ruled Thursday that the state Medical Marijuana Commission violated the state Constitution and its own rules when it awarded a cultivation license to River Valley Relief Cultivation and owner Storm Nolan in 2020.
Wright stopped short of stripping Nolan’s license or granting a license to another applicant. Wright said the court does not have such authority but does have the duty point out when the state has exceeded the authority granted to it by the voters in the state Constitution.
Nolan, who was denied an opportunity to intervene in the case this week, declined an opportunity to comment today via text message.
Scott Hardin, spokesman for the state agencies that were defendants in the case, did not respond to a request for comment. The defendants were the state Department of Finance and Administration, the Alcoholic Beverage Control division and the state Medical Marijuana Commission.
Plaintiffs 2600 Holdings, doing business as Southern Roots, argued in the case that the license was issued to River Valley Cultivation in error because River Valley Cultivation’s application proposed using a site that was less than 3,000 feet from the Sebastian County Juvenile Detention Facility and because the applicant’s business entity had been dissolved.
According to the state constitutional amendment voters passed in 2016, cultivation facilities cannot be located within 3,000 feet of a school. The juvenile detention facility fits the commission’s definition of a school and Wright said the defendant’s argument that it doesn’t fit the Department of Education’s definition of a school was irrelevant.
Wright rejected the state’s argument that the location was acceptable because the commission allows applicants to change blueprints and that the cultivation facility’s front door could have been situated 3,000 feet from the juvenile detention facility.
Wright also ruled that Nolan should not have been awarded a license because the business entity under which he applied had been dissolved. Nolan applied for a license as River Valley Production but dissolved that entity when he did not receive one of the first five licenses the commission issued. Nolan created a new entity, River Valley Relief Cultivation, and was awarded an application under that corporation.
Wright said in his ruling that he did not understand the accommodations made for Nolan.
“That being said, the Court remains curious as to why so many accommodations were made for Mr. Nolan, despite concerns and protests being repeatedly raised from the beginning of the application process,” Wright wrote. “The rules were never changed. The process was not altered. But the license was granted. It is difficult to come to any other conclusion than [the commission] was committed to placing Mr. Nolan in charge of a cultivation facility, notwithstanding any and all defects in the RVRC application.”
Later in the ruling, Wright continued to lay out his dissatisfaction with the commission.
“An effort was clearly made by [the commission] to give Nolan thread to stitch up the holes in the RVRC application,” he wrote. “Whether that was fair or unfair to any of the applicants, it was at a minimum an unconstitutional and ultra vires act.”
Ultra vires is a latin term meaning that something lies beyond someone’s legal authority.