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Alabama Litigation Over Marijuana Licensing Process Continues As Legislative Efforts Fall Short



“What we’re saying is that ours is an administrative appeal, not a lawsuit.”

By Alander Rocha, Alabama Reflector

Medical cannabis, approved by the Alabama Legislature three years ago, remains ensnared in legal disputes over the state’s licensing process.

The litigation is likely to continue after several bills aimed at addressing the impasse died in the legislative session. And the relationship of the various lawsuits against the Alabama Medical Cannabis Commission was the focus of a hearing in Montgomery County Circuit Court on Monday.

Numerous companies hoping for a license joined the initial lawsuit, brought by Alabama Always, against the commission. Because the state, or its agencies, can’t be named a defendant, Will Somerville, attorney for Alabama Always, asked the court to dismiss the initial lawsuit and filed a new, similar one naming the commissioners instead.

Now the question is whether the other lawsuits against the Alabama Medicaid Cannabis Commission consolidated into the initial lawsuit can move forward.

Patrick Dungan, attorney representing three firms that either received or was denied a license in the three rounds of licensing, said that his filing was not a lawsuit.

“The law is clear. A petition for judicial review is not a ‘suit against the state,’” Dungan said in a motion filed last week.

He said that after the court hearing petitioners have to name an agency when making an appeal.

“What we’re saying is that ours is an administrative appeal, not a lawsuit,” he said after the hearing.

AMCC first awarded licenses to produce medical cannabis June 2023, but the commission voided them after they said there were inconsistencies in scoring applications. The commission attempted a second time to award licenses in August, but a lawsuit alleging Open Meetings Act violations derailed the process. The commission attempted a third time in December to award licenses, where further litigation has stalled the process.

Attempts in the Legislature to address the legal problems mostly failed this year. The only bill related to medical cannabis that was sent to Gov. Kay Ivey’s (R) desk was HB 390, sponsored by Danny Crawford (R-Athens), which shifts licensing powers for cultivators from the Department of Agriculture and Industries to the Alabama Medical Cannabis Commission.

SB 276, sponsored by Sen. David Sessions (R-Grand Bay), would have increased the maximum number of dispensary licenses from four to seven; required the Alabama Medical Cannabis Commission (AMCC) to issue 10 licenses for integrated facilities, or businesses that can grow, process and distribute medical cannabis, and increase the maximum number of processor licenses from four to six. As originally filed, it would have issued 15 licenses for integrated facilities.

The bill would also have required the AMCC to confirm any licenses granted by the commission from June to December of last year by June 15.

SB 306, sponsored by Sen. Tim Melson (R-Florence), who also sponsored the 2021 medical cannabis legislation, would have restarted the licensing process and taken away some of the powers of the AMCC. The Alabama Securities Commission would have had to verify and evaluate applications before AMCC could select candidates.

The two bills—aimed at getting the program started—stalled in the Senate and never reached the floor for a vote before the end of session.

This story was first published by Alabama Reflector.

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Photo courtesy of Chris Wallis // Side Pocket Images.

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