A Fort Smith business that is in the process of building a medical cannabis cultivation facility has entered a lawsuit with the Arkansas Medical Marijuana Commission for a dispensary license in Fort Smith.
While River Valley Relief LLC moves forward with constructing a cultivation facility in a 100,000-square-foot warehouse near the Fort Smith Regional Airport, the owners’ separate entity, River Valley Sales LLC, has entered a lawsuit to secure a Zone 4 dispensary after the one they vied for was given to 3J Investments for a dispensary in the Johnson County city of Lamar.
Storm Nolan and Kane Whitt of River Valley Sales LLC have submitted an appeal in Pulaski County Circuit Court that seeks affirmative status of the River Valley Sales LLC following the Dec. 8 Medical Marijuana Commission meeting in which the LLC was deemed “dissolved.”
Pulaski County Circuit Judge Herbert Wright Jr. denied a temporary restraining request from River Valley Sales LLC that would put a hold on the dispensary license issued to 3J Investments for a dispensary in Lamar.
“We asked the license to not be issued until the matter is resolved,” Nolan said. “There is an ongoing lawsuit. We’re asking the judge to see they (Medical Marijuana Commission) follow their own rules and regulations … If they followed the rules we would’ve received it. We were ranked the next highest scoring applicant.”
In the appeal, Nolan’s attorneys point out that the commission “did not offer the opportunity to pay the licensing fee and post the performance bond in according with Section V.10 to the next highest scoring applicant (Storm) from the applications held in reserve for the zone where the commission has determined a need for the license.”
A manager for 3J Investments told commissioners River Valley Sales LLC had been dissolved and that made their application for the license ineligible for consideration. Following a 4-1 decision by the Medical Marijuana Commission to issue a dispensary license to River Valley Sales LLC, the commission then voted 5-0 to give the dispensary license to 3J Investments.
A presentation that preceded the first Dec. 8 commission vote was to determine if there was a need for a second dispensary in Fort Smith. The one issued to 3J was the fifth and final dispensary license in Zone 4, which includes an area from Conway County to Sebastian County.
River Valley Sales LLC was the fifth-highest scoring applicant. 3J Investments was the sixth-highest scoring applicant. River Valley Sales LLC attorneys – Smith, Cohen & Horan, PLC – note in the appeal the commission chairwoman stated in the Dec. 8 meeting her concern for a second vote to award the license to 3J Investments was not in the purview of the commission because they had not seen this issue arise previously. Deputy Attorney General Sara Farris, however, advised it was within the commission’s discretion to deem an application ineligible.
As president of 3J, Michael Goswami of 3J Management LLC provided documentation in a letter prior to the meeting on the dissolution of the River Valley Sales LLC, according to Department of Finance and Administration spokesman Scott Hardin. 3J has since paid the bond and $15,000 fee for the dispensary license.
Goswami’s Dec. 4 letter to the commission noted a 2019 application was entered for Articles of Dissolution for Limited Liability Company signed by Storm Nolan. The reason given on the application was it “never started business.”
“River Valley Sales, LLC, d/b/a River Valley Relief Dispensary was voluntarily and formally dissolved with the Arkansas Secretary of State’s office by Mr. Bennett (‘Storm’) Nolan II on March 20, 2019,” Goswami wrote. “As a result, pursuant to Amendment 98 and Arkansas law, it is not authorized to receive a dispensary license from the MMC after March 20, 2019.”
Nolan explains the lawsuit argues River Valley Sales LLC “is not dissolved.”
“We are saying that the Arkansas Secretary of State improperly deemed our entity as ‘dissolved’ – per Arkansas state statute,” Nolan wrote.
River Valley Relief Cultivation
While the appeal goes forward, River Valley Relief expects to receive a building permit soon to following a standard process with Fort Smith Building Safety.
Phase 1 is to transform 25,000 square feet of a 100,000 square foot warehouse into a cultivation facility.
“We have all expertise in place,” Nolan said.
There is currently one dispensary in Fort Smith called Fort Cannabis at 3904 Ayers Road. There are about 8,200 medical marijuana patient card holders in Zone 4 with about 5,000 of those card holders in Sebastian, Crawford and Franklin counties.