Alabama Plans to Award Medical Cannabis Business Licenses by End of 2023 as Verano Lawsuit Dismissed

The delays in rolling out Alabama’s state-legal medical cannabis market could be coming to an end, as the Alabama Medical Cannabis Commission (AMCC) revised its procedures related to pending applications at its meeting Oct. 12. The new procedures “allow for appropriate document submission, applicant presentations, public comment, and the award of licenses to be completed by the end of 2023,” according to an AMCC press release.

The procedural changes AMCC adopted during the meeting retain previous application scoring results, while enabling applicants “to make a presentation to the Commission regarding matters identified in their application and their score results,” according to the release. “Applicants will also be afforded the opportunity to respond to preliminary pass/fail items identified by the Commission and submit exhibits that were not previously filed due to the file size limitation in the application portal. The procedures also narrow the scope of information that may be redacted from applications and provides a second public comment opportunity.”

The rule changes follow a rocky six months for the AMCC. It announced in June that 21 cultivators, processors, dispensaries, transporters, laboratories and integrated facilities would be awarded licenses (and named those businesses), as Cannabis Business Times reported, but then voted June 16 to stay the licensing process entirely while it sought an independent review of all scoring data “because of AMCC’s discovery of potential inconsistencies in the tabulation of scoring data,” AMCC stated in the press release. 

Days later, a rejected applicant, Alabama Always LLC, filed a lawsuit in Montgomery County Circuit Court requesting a temporary restraining order (TRO) on licensing under the state’s medical cannabis program, citing its own concerns over the licensing review process, according to the Alabama Political Reporter. The suit argued that the AMCC “abdicated its duties to various third parties and then relied blindly on the information returned by the third parties,” the Political Reporter reported.

Another company, Hornet Medicinals LLC, also filed a suit and requested a TRO, according to AL.com.

Montgomery County Circuit Court Judge James Anderson granted the TRO June 23 and extended it Aug. 28. The judge had also issued an order June 23 “preserving the opportunity for companies denied a license by the Alabama Medical Cannabis Commission to appeal that decision,” AL.com reported. “Under the AMCC’s original timeline, companies that did not receive a license had until June 26 at 4 p.m. to appeal. Anderson’s order means that deadline is suspended.”

On Aug. 10, “AMCC regulators decided to ‘void’ the original licensing process altogether and deliberate behind closed doors before re-awarding the licenses in a do-over that same day,” CBT reported. AMCC announced that it would award 24 applicantswith medical cannabis business licenses. One suit, filed on behalf of Alabama Always and Hornet Medicinals, claims the AMCC violated the Open Meetings Act by meeting behind closed doors, the Political Reporter first reported.

In addition, in the license-awarding do-over, Verano Alabama, a subsidiary of multistate operator Verano Holdings, was one of two companies previously awarded a license in June but not included among the 24 new recipients, resulting in another lawsuit against AMCC, this time filed on Aug. 21 by Verano. The suit claimed that when the original application scores were re-tabulated, Verano’s score increased by 16 points and the company was still the highest-scoring applicant. Verano argued in the suit that AMCC lacks the authority to revoke licenses, the Alabama Reflector reported.

Verano’s suit was dismissed Oct. 11 by Judge Anderson, who wrote that “the commission’s authority to award licenses inherently includes the power to void and correct those awards. … The court also concludes that the commission’s express authority to stay the licensing process impliedly includes the power to rescind or void its June 12 license awards. If the commission has no power to rescind awarded licenses, then there could be no legitimate reason for the commission to stay licenses in the first place,” according to Alabama Daily News. (CBT reached out to Verano, but Verano did not have a comment at this time.)

The AMCC’s meeting the next day—where the commission announced new procedures to award licenses by the year’s end—followed a request from the Montgomery County Circuit Court for AMCC representatives to participate “in multiple discussions with parties involved in litigation in an effort to allow the Commission to carry out its statutorily-mandated responsibilities without further delay and court intervention,” the commission’s press release stated.

“While these discussions have not resulted in a proposed agreement, they have helped clarify the parties’ positions and identified concerns that need to be addressed for the licensing process to continue,” Mark Wilkerson, attorney for AMCC, commented in the release. “We understand that the proposed changes will not satisfy all parties, but we have considered all available options in order to resume the licensing process in an expeditious manner.”