Chicago-based Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) on Monday followed through with its threat to sue Alabama marijuana regulators, after a state commission voided a medical cannabis business license that had been granted to the multistate operator in June.
Verano filed suit against the Alabama Medical Cannabis Commission in Montgomery County Circuit Court, arguing that the agency broke its own rules and didn’t have the authority to rescind the “integrated facility” license it initially gave to Verano.
The move to redo the licensing on Aug. 10 “both exceeds and conflicts with the authority provided to it by the Alabama Legislature,” Verano argued in its suit.
“Regardless of the commission’s intent when it decided to issue the stay and subsequently ‘re-award’ the licenses, its decision to ‘void’ previously awarded licenses without following the Legislature’s – and its own – clearly established rules and regulations, exceeds and violates the statutory authority it has been granted, violates its own rule, and is clearly erroneous,” the Verano lawsuit asserts. “As such, Verano Alabama’s awarded license remains valid.”
“The best way to get the state’s program rollout back on track is to follow the law and reset this process back where it rightly began in June when the Commission made a final vote to award licenses,” the company said in an email to Green Market Report. “There is no legal or regulatory basis for the Alabama Medical Cannabis Commission to habitually seek to void, re-do, or cast aside validly awarded licenses to obtain the preferred outcome of selected bidders or individuals.”
A spokesperson for the AMCC declined to comment, citing the pending nature of the litigation.
The commission chose to redo the initial licensing round of its own accord after irregularities were identified and at least one lawsuit was filed. For the most part, license recipients remained unchanged, but Verano and Alabama Secure Transport both lost permits they had originally been given, and two other companies were proposed for licenses but denied.
Verano asserted in its lawsuit that the license is both already paid for – since the company forked over $50,000 on June 12 for the permit fee – and also remains the top scoring applicant for the five coveted integrated facility licenses.
The AMCC asserted during its Aug. 10 meeting that the redo was due to “inconsistencies” in MMJ license application scoring, but a revised scoring report given to commissioners during that meeting actually increased Verano’s score.
That fact makes it clear that the revised scoring reason cited by the AMCC was a “Trojan Horse to improperly throw out the scoring altogether, unilaterally void a valid license … and re-award the license to another company without legal justification,” Verano’s lawsuit asserts.
Two other companies that applied for medical marijuana licenses filed their own lawsuit against the AMCC, alleging the commission violated state open records laws by voting on permitting while in executive session. The plaintiffs, Always Alabama and Hornet Medicinals, contend makes the recent licenses illegal, according to the Alabama Political Reporter.
In response to the latest lawsuit, the AMCC plans to redo its licensing process once more on Aug. 31, according to the Reporter, in order to nullify the lawsuit from Always Alabama and Hornet Medicinals.
Further license processing is already on hold due to a temporary restraining order issued by the judge overseeing that lawsuit. A hearing is scheduled for Aug. 28 in Montgomery County Circuit Court.
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