Alabama’s woes in launching a medical marijuana market continue as a processor filed a lawsuit after being passed over in the Alabama Medical Cannabis Commission’s third attempt to issue business licenses.
“The AMCC’s actions of repeatedly changing rules, criteria, and parameters for applicants, their submissions, and the awarding of processor licenses was and is unconstitutional and cannot be permitted,” Enchanted Green LLC, a minority applicant that had won a license in the last two failed licensing rounds, said in its Dec. 4 complaint.
On the Friday before the filing, the AMCC awarded 20 licenses to cultivators, processors, dispensaries, secure transport and a testing lab after two previous attempts to award licenses were scratched. The first round in June, which was scored by the University of South Alabama, was suspended after calculation errors were discovered. On Aug. 10, the commission approved another group of licenses, but then was sued by Verano Holdings, a vertically integrated MSO that was denied a license it had previously been awarded.
Again, the commission suspended the licenses. Also, the commission chair, Dr. Steven Stokes, resigned because it was alleged in yet another lawsuit that he couldn’t serve on the commission because he was also a trustee for the University of South Alabama.
Processor alleges a fishy selection
In October, the commission issued emergency rules to consider a third round. The rules allowed applicants to complete documentation that they previously had technical troubles uploading and give a presentation to the commission.
The rules stated, “The Commission remains the primary decisionmaker with regard to licensing and each Commissioner retains full discretion to act independently of the previously generated third-party scoring and evaluations in applying the statutory and regulatory criteria.”
According to Enchanted Green’s complaint, the commission entered into a settlement agreement in other litigation on Nov. 27 whereby the previous scores would be disregarded in the latest round.
On Nov. 28, Enchanted Green made a business presentation to the commission.
On Nov. 29, the Circuit Court of Montgomery County, Alabama, issued an order permanently enjoining the AMCC from considering the previous scores, Enchanted Green’s complaint said.
Two days later, the commission awarded licenses. The commissioners used the requirements outlined in the Darren Wesley Hall Compassion Act and the AMCC rules, AMCC spokeswoman Brittany Peters said in an email.
Under the university’s scoring system, Enchanted Green ranked third and was one of only two minority applicant processors. The other, 1819 Labs LLC, was the top scorer, according to a list published by the commission a day after round two. After being awarded a license in the first and second rounds, Enchanted Green paid its $40,000 license fee to the commission.
In this round, each of the commissioners ranked the 11 applicants 1 through 11, which were then averaged. (Commissioner Dr. Angela Martin was not present for applicant presentations and did not provide rankings for any categories, Peters said.)
As a result, 1819 Labs dropped to number three, and Enchanted Green and Jasper Development Group tied for fourth. Organic Harvest Lab LLC had the highest score.
According to the published rules, any tie would be decided by a random draw “to determine the order in which individual Applicants are subsequently considered.”
The chair, now Rex Vaughn, would then call for a motion to approve or deny an application based on this order.
During the Dec. 1 commission hearing, “A staff member of the AMCC in the hearing room where the award announcements were made, pulled a bowl out from under the dais and handed the bowl to one of the AMCC commissioners, and the commissioner to whom the bowl was handed peered/looked into the bowl and then pulled out a piece of paper which supposedly had the name of the other processor group that tied for fourth place on it. The commissioner did not appear to unfold the piece of paper after drawing it from the bowl,” according to the complaint.
Enchanted Green claims there was no evidence that both applicants’ names were actually in the bowl. After the commissioners voted to award a license to the group supposedly drawn from the bowl, a commissioner asked if the commission would be voting on Enchanted Green to see which group would receive more votes from the commissioners, and a discussion ensued.
“Then the staff member and the chair from the AMCC suggested the tiebreaking process was over after all the aforementioned confusion and lack of understanding and lack of clarity had been expressed and exhibited by the Commission’s members/commissioners, abruptly ending the process,” the complaint said.
Enchanted Green is alleging the commission’s actions violated due process, the Alabama Open Meetings Act and their constitutional rights. It is seeking a preliminary injunction, with a court hearing scheduled for Dec. 13. Chief U.S. District Court Judge Emily Marks already denied a temporary restraining order. An attorney for Enchanted Green did not return messages seeking comment.
Peters declined to comment on the lawsuit.
Enchanted Green is owned by Perry M. Mandera and a Mr. Oden who has lived in Alabama since 1993, according to its mostly redacted license application. The application says the joint venture “brings together a long-established entrepreneur who founded one of the Midwest’s first medical cannabis businesses in 2015 and a biopharmaceutical executive with deep roots in Alabama.”
According to the CRB Monitor database, Perry Michael Mandera is a partner with Verano Holdings in Custom Strains LLC, which owns Zen Leaf and The Herbal Care Center dispensaries in Chicago.
The AMCC is still reviewing applications for integrated facility licenses and plans to award those licenses on Dec. 12.
Updated Dec. 11, 2023, to include additional information on Enchanted Green.
