The Alabama Medical Cannabis Commission (AMCC) is facing a lawsuit from a group of applicants who were denied licenses to operate medical cannabis businesses in the state. The plaintiffs claim that the AMCC violated the law and its own rules in awarding the licenses, and seek to overturn the results and restart the process.
AMCC Awards Licenses After Rescinding Previous Decisions
The AMCC was established by the Alabama Compassion Act, which legalized medical cannabis in the state in 2021. The AMCC is responsible for implementing the act by licensing and regulating medical cannabis businesses, as well as registering qualified patients and caregivers.
The AMCC initially awarded licenses to 12 cultivators, 4 processors, 5 integrated facilities, and 60 dispensaries in September 2022, but rescinded its decisions after receiving complaints and lawsuits from unsuccessful applicants. The AMCC then adopted emergency rules in October 2022, which changed the scoring criteria and the number of licenses available.
The AMCC reopened the application process and received 270 applications from 170 entities. The AMCC met on December 1, 2022, and December 12, 2022, to rank the applicants and vote on the license awards. The AMCC awarded licenses to 5 cultivators, 2 processors, 4 integrated facilities, and 27 dispensaries. The AMCC also denied licenses to 15 secure transporters and 9 testing laboratories, citing insufficient demand or quality.
Plaintiffs Allege Bias and Irregularities in the Licensing Process
The lawsuit, filed on December 28, 2022, in the Montgomery County Circuit Court, challenges the AMCC’s licensing process and results. The plaintiffs are 11 entities that applied for various types of licenses, but were either denied or ranked lower than expected. The plaintiffs include:
- Alabama Medical Cannabis, LLC, which applied for an integrated facility license and was ranked 6th out of 6 applicants.
- Alabama Medical Cannabis Cultivation, LLC, which applied for a cultivator license and was ranked 6th out of 6 applicants.
- Alabama Medical Cannabis Processing, LLC, which applied for a processor license and was ranked 3rd out of 3 applicants.
- Alabama Medical Cannabis Dispensary, LLC, which applied for 5 dispensary licenses and was ranked 28th, 29th, 30th, 31st, and 32nd out of 32 applicants.
- Alabama Medical Cannabis Transport, LLC, which applied for a secure transporter license and was denied.
- Alabama Medical Cannabis Testing, LLC, which applied for a testing laboratory license and was denied.
- Alabama Medical Cannabis Solutions, LLC, which applied for a cultivator, a processor, and 5 dispensary licenses, and was ranked 7th, 4th, and 33rd to 37th, respectively.
- Alabama Medical Cannabis Group, LLC, which applied for a cultivator, a processor, and 5 dispensary licenses, and was ranked 8th, 5th, and 38th to 42nd, respectively.
- Alabama Medical Cannabis Partners, LLC, which applied for a cultivator, a processor, and 5 dispensary licenses, and was ranked 9th, 6th, and 43rd to 47th, respectively.
- Alabama Medical Cannabis Holdings, LLC, which applied for a cultivator, a processor, and 5 dispensary licenses, and was ranked 10th, 7th, and 48th to 52nd, respectively.
- Alabama Medical Cannabis Enterprises, LLC, which applied for a cultivator, a processor, and 5 dispensary licenses, and was ranked 11th, 8th, and 53rd to 57th, respectively.
The plaintiffs allege that the AMCC violated the Alabama Compassion Act and its own rules in several ways, such as:
- Failing to provide adequate notice and opportunity for public comment on the emergency rules.
- Changing the scoring criteria and the number of licenses without justification or explanation.
- Awarding licenses to applicants who did not meet the minimum requirements or who had conflicts of interest with the AMCC or its staff.
- Failing to disclose the identities and qualifications of the reviewers and scorers who evaluated the applications.
- Failing to provide the applicants with their scores, rankings, or reasons for denial.
- Failing to conduct a fair, transparent, and impartial licensing process.
The plaintiffs seek a declaratory judgment that the AMCC’s licensing process and results are unlawful and invalid, and an injunction that prevents the AMCC from issuing the licenses or taking any further action until the process is redone in accordance with the law and the rules. The plaintiffs also seek damages for the costs and losses they incurred in applying for the licenses.
AMCC Defends Its Licensing Process and Results
The AMCC has not yet filed a response to the lawsuit, but has defended its licensing process and results in previous statements. The AMCC has stated that it followed the law and the rules in awarding the licenses, and that it conducted a thorough and rigorous review of the applications. The AMCC has also stated that it considered the public interest and the needs of the patients in determining the number and location of the licenses.
The AMCC has also stated that it provided the applicants with their scores and rankings, and that it offered them an opportunity to request an investigative hearing to challenge the results. The AMCC has stated that it received 19 requests for hearings, and that it will schedule and conduct the hearings as soon as possible.
The AMCC has also stated that it is confident that its licensing process and results will withstand any legal challenge, and that it is committed to implementing the Alabama Compassion Act and providing safe and effective medical cannabis to the patients of Alabama.
