Ruling paves way for firm's marijuana case to go to trial

A Little Rock company rejected for a medical-marijuana growers license for a Jacksonville site won a partial victory in court this week over its claims that state regulators wrongly awarded the license to a Fort Smith grower.

Pulaski County Circuit Judge Herb Wright on Monday sided with 2600 Holdings LLC, which operates as Southern Roots Cultivation, when he refused a dismissal motion by the defendants, the Arkansas Department of Finance and Administration, the Arkansas Alcoholic Beverage Control Administration and the Arkansas Medical Marijuana Commission.

Wright's one-page order paves the way for the case to go to trial, pending an appeal by the state agencies, which are represented by the attorney general's office.

The ruling is a distinct turnaround from Wright's findings in June, when he denied Southern Roots' motion to block authorities from giving the cultivation license to River Valley Production LLC of Fort Smith, which operates as River Valley Relief Cultivation.

Southern Roots asserts that River Valley should never have been licensed because of a "constitutionally deficient" application. Southern Roots wants the judge to either force authorities to give it the River Valley license or require regulators to address its complaints about how River Valley received the license.

In June, Wright stated that he had "serious doubts about the likelihood of success on the merits" even if everything the Southern Roots claimed about regulators' action was true.

State lawyers contended that the litigation should be dismissed on sovereign immunity grounds. That immunity, derived from the Arkansas Constitution, protects regulators because what Southern Roots is trying to do is use the courts to control the operations and administrative decisions of state agencies, the attorneys say.

The suit also should be dismissed because Southern Roots failed to include the license-holder River Valley as a defendant, the response by Senior Assistant Attorney General Jennifer Merritt states.

Merritt further argues that the regulators' actions are not reviewable by the courts under a 2018 state Supreme Court decision involving marijuana-licensing procedures.