Regulators in Arkansas on Monday revoked a medical marijuana cultivator’s license to operate after a judge ruled earlier this month that the state erred when it granted the license two years ago. Doralee, director of Alcoholic Beverage Control Administration in Arkansas and chief regulator of the State Medical Marijuana Commission (MMC), removed the license of River Valley Relief (RVR), the medicinal cannabis cultivation company on November 28 after a nearly hour long hearing.

RVR was granted a cultivation license by Arkansas Medical Marijuana Commission in July 2020. This made RVR the eighth authorized grower. 2600 Holdings filed a suit in January 2021 claiming that RVR shouldn’t have been allowed to cultivate medicinal cannabis. The plaintiff requested the court to declare River Valley Relief ineligible and to award the license to 2600, or to provide relief as required by the Arkansas Administrative Procedures Act.

Attorneys for 2600 argued that the MMC had illegally granted the license to Nolan Storm, the owner of RVR, during the state’s second round of cultivator licensing. They maintained that the action violated state law because Storm’s license application was no longer valid and the site for the cultivation operation was too close to Sebastian County Juvenile Detention Center. According to the plaintiff, the state required that medical marijuana facilities not be more than 3,000 feet from schools or churches and daycare centers.

The case was litigated for the state by attorneys for the DFA, which submitted a 36-page brief disputing 2600’s filing. Nolan and his legal representative were prevented from taking part in the case by Pulaski Circuit Court Judge Herb Wright. 

Earlier this month, Wright ruled that 2600 had proven its case and should be granted relief, ordering that RVR’s license be revoked. The judge decided that the MMC’s action had exceeded the agency’s authority, which is referred to as an “ultra vires” act.

“Plaintiff has, therefore, met its burden in showing that the undisputed facts of the case, viewed in a light most favorable to Defendants, prove that the plaintiff is entitled to relief,” Wright noted in his ruling handed down on November 3. “Defendants have acted unreasonably, unlawfully, and capriciously by awarding Nolan a license.”

“An effort was clearly made by the MMC to give Nolan thread to stitch up the holes in the RVRC application,” Wright continued in his decision. “Whether that was fair or unfair to any of the applicants, it was at minimum an unconstitutional and ultra vires act.”

Arkansas Licence Revocation at Monday Hearing

At a Monday hearing of the Arkansas Department of Finance and Administration (DFA), the MMC oversight agency, Nolan and his attorney Matthew Horan argued that Wright’s decision contained important errors. Nolan addressed each point while under oath during the hearing, saying that he was trying to abide by the state Medical Marijuana Commission’s rules and the guidelines of officials including the secretary of state. The lawyer argued, among other things, that the cultivation location, located at 2,400 feet from youth detention centers, was not in violation of MMC regulations.

“There is no evidence anywhere that the detention center is operated by a public school,” Horan said, adding that the Arkansas Department of Education issued a letter saying the juvenile facility was not a school. Chandler, however, stated that this hearing was held to determine if the license should be revoked and declined to revisit matters resolved by the court.

“We’re not here to litigate matters over any other location,” Chandler told Nolan, according to a report from the Arkansas Times. “You need to worry about your permit and your application.”

Scott Hardin, a spokesman for the DFA, said in a statement that the formal license revocation order would likely be issued no later than the end of the week, according to a report from Arkansas news site Talk Business & Politics.

Hardin also noted that Nolan has appealed Chandler’s administrative decision to revoke the license. The license is temporarily suspended until the full board that oversees Arkansas Alcoholic Beverage Control hears it. RVR will continue to be operational at most until December 21st, as the board’s next hearing is set for December 21st.

After Monday’s hearing, Nolan said that the case would be appealed to the Arkansas Supreme Court.

“River Valley Relief Cultivation has appealed the Pulaski Circuit Court decision to the Arkansas Supreme Court,” Nolan said in a statement to Talk Business & Politics. “RVRC has asked that proceedings be stayed until the appeal is heard. We await the decision of the Supreme Court.”