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KNWA: ‘They are doing this for one reason: greed.’ River Valley marijuana cultivator responds to lawsuit filed on behalf of competitors

Read the full post at KNWA.

FORT SMITH, Ark. (KNWA/KFTA) — A Fort Smith-based medical marijuana cultivator responded to claims made in a lawsuit filed on behalf of his competitors, stating, “They want to limit competition and maintain artificially high medical cannabis pricing.”

Storm Nolan is the owner of River Valley Relief, one of three cultivators granted licenses by the Medical Marijuana Commission during the pandemic. The five existing cultivators filed a lawsuit against River Valley Relief, accusing it of being located too close to a school, as defined by a 2017 memo, and operating under a dissolved LLC. The lawsuit seeks to revoke the company’s license.

“They are doing this for one reason: greed,” Nolan said. “They want to limit competition and maintain artificially high medical cannabis pricing which is currently unaffordable to many Arkansas patients.”

Scott Hardin, a spokesperson for the Arkansas Dept. of Finance, said the LLC issue could prove to be the most difficult hurdle for River Valley Relief. Nolan pointed to the company’s status with the Secretary of State’s office and said the issue is overblown.

“The license was issued to me as the applicant and our company, River Valley Production, LLC,” Nolan said. “Our DBA is River Valley Relief Cultivation, and our status with the SoS is in ‘Good Standing.’”

The lawsuit noted that River Valley Relief Cultivation is located close to the Sebastian County Juvenile Detention Center, and a 2017 Medical Marijuana Commission memo stated that juvenile centers are considered schools because local school districts teach curriculum in the facilities. Nolan sent an email from the Arkansas Dept. of Education that said the department, “does not consider the Sebastian County JDC to be a ‘school’ or a ‘school district’ for purposes of Title 6 of the Arkansas Code.”

Nolan said the company submitted a transfer request to move to another location, which would eliminate this problem if approved.

“We are asking the MMC to let us relocate within Fort Smith, so this is a moot point in addition to the allegation in the lawsuit having no merit,” Nolan said.

Nolan said he expected the lawsuit to be filed after seeing similar occurrences in other states.

“We were not surprised by the lawsuit, as this tactic has been used in other states with limited licenses, because the incumbents want to limit competition,” Nolan said. “We are proceeding ahead, working to complete our facility and bring medical cannabis to Arkansas patients as quickly as can be done.”

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Arkansas Business: Medical Marijuana Litigation Grows Like Weeds

Read the full story at Arkansas Business.

Here’s an excerpt:

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KNWA: New medical marijuana cultivators granted licenses amid pandemic, controversy surrounds approval

Read the full story at KNWA.

FORT SMITH, Ark. (KNWA/KFTA) — Three medical marijuana cultivators were granted licenses as state sales have risen dramatically during the pandemic, said a Dept. of Finance spokesperson. The additions have drawn controversy, including a lawsuit filed against a cultivator in the River Valley.

“These licenses are worth 10s of millions of dollars, if not more, so they’re obviously very important to companies,” said Scott Hardin, Dept. of Finance spokesperson. “The challenges aren’t a surprise. I think it’ll be interesting to see where all of this goes.”

Representatives of the five current cultivators filed a lawsuit against a Fort Smith cultivator, accusing it of being a dissolved LLC and also being too close to a school, as defined by a Medical Marijuana Commission memo. River Valley Relief Cultivation LLC was dissolved, according to the Secretary of State’s website.

The facility is located near a juvenile detention center, which the lawsuit claims is a violation of the commission’s stated rules. 

“Juvenile detention facilities cooperate with local school districts to provide school instruction that the individuals incarcerated would ordinally [sic] receive if not incarcerated,” a 2017 Medical Marijuana Commission memo stated. “Because schooling is provided in the facility by the local school district and recognized by the Arkansas Department of Education as a non-traditional school, real property operated as a juvenile detention facility will qualify as a school.”

The lawsuit seeks to have the cultivator’s license revoked.

“Osage Creek Cultivation, LLC, Delta Medical Cannabis Company, LLC, Bold Team, LLC, Natural State Medicinals Cultivation, LLC and Natural State Wellness Enterprises, LLC hereby respectfully request that the ABC immediately proceed with the revocation of the license issued to River Valley Production I on July 17, 2020,” the lawsuit stated.

Hardin said the LLC issue may prove to be a serious problem for the cultivator.

“Can the owner transfer ownership to the new name of the company?” Hardin said. “That could be an issue, but that’s something that’s under investigation, and we’ll have to see.”

The too-near-to-school issue could be remedied soon, Hardin said, referencing the owner’s initiative to move the site.

“The owner of that company has issued a transfer of location request the commission will hear next week,” Hardin said. “The company would stay in Fort Smith, but if its awarded, it wouldn’t be close to the school, the juvenile facility.”

If the commission doesn’t approve the request, an investigation into whether the detention center counts as a school would ensue, Hardin said, which could lead to a halt in operations.

“It would be really surprising if that happens,” Hardin said, citing the fact that the majority of transfer requests are approved.

These new cultivators were approved amid a spike in medical marijuana sales throughout the state, Hardin said. Four additional dispensaries were also approved.

“We now have eight cultivators in the state, and that’s the maximum,” Hardin said. “We won’t see any more unless there’s a statewide ballot initiative, and I don’t see that happening.”

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Arkansas Dem-Gaz: Arkansas pot producers sue to cancel new licenses

Addition of 3 competitors against rules, filing claims

Read the full story at the Arkansas Democrat-Gazette.

Arkansas’ medical-marijuana growers are teaming up in a lawsuit to try to invalidate licenses recently issued to companies in Fort Smith, Grady and Hot Springs, claiming that regulators exceeded their authority by licensing more growers than needed, thereby reducing the value of their operations.

The 33-page lawsuit, filed Wednesday in Carroll County Circuit Court, calls on Circuit Judge Scott Jackson to cancel the licenses issued to Carpenter Farms Medical Group of Grady, New Day Cultivation of Hot Springs and River Valley Relief Cultivation of Fort Smith before the three can start growing cannabis.

Those three companies, the second set to be licensed since Arkansas legalized medical marijuana in 2016, were granted their licenses over the past month but only because the defendants — the Arkansas Medical Marijuana Commission and the Alcoholic Beverage Control Division of the state Department of Finance and Administration — broke the rules governing marijuana farming licenses, according to the lawsuit, which names the companies as co-defendants with the regulating agencies.

“The [Medical Marijuana Commission] has greatly diluted the plaintiffs’ market share in the medical marijuana industry and disrupted sales of plaintiffs’ medical marijuana to their dispensary customers,” the lawsuit states. “The illegal actions of the [commission] will result in a loss of plaintiffs’ long-term dispensary customs and a reduction in sales of medical marijuana, both of which will have an adverse economic impact on plaintiffs, for which there is no legal means of redress.”

The plaintiffs, represented by attorney Casey Castleberry of the Murphy, Thompson, Arnold, Skinner & Castleberry firm of Batesville and lawyers Eric Gribble and Annie Depper of Little Rock’s Fuqua Campbell firm, are the first growers to be licensed in July 2018.

They are Bold Team of Cotton Plant; Delta Medical Cannabis Co. of Newport; Natural State Medicinals Cultivation of White Hall; Natural State Wellness Enterprises of Newport; and Osage Creek Cultivation of Berryville.

The plaintiffs say they have “indisputable” evidence that regulators failed to follow the rules when granting the new licenses and can present “concrete” proof about how bringing in new growers will damage their businesses.

According to the lawsuit, state rules only allow new cultivators if the five original growers are not producing enough cannabis to supply dispensaries, which serve the 66,594 medical-marijuana card holders who spend an average of $520,000 per day on the drug.

The voter-approved constitutional amendment legalizing medical marijuana allows only eight growers and 40 dispensaries. The commission recently awarded additional dispensary permits, raising the number of sellers to 37.

Scott Hardin, a spokesman for the Department of Finance and Administration, said Friday that Arkansans have spent $109 million on more than 17,445 pounds of medical marijuana since the first dispensary opened in May 2019.

Sales have increased during the coronavirus pandemic as more people have stayed home. Over the past two weeks, Arkansans have spent an average of $583,000 a day on medical marijuana, Hardin said.

Authorities don’t have any reason to believe that marijuana is in short supply, according to the suit.

Data from regulators show that the three farms now growing marijuana — Bold Team, Natural State Medicinals and Osage Creek — are currently supplying more than the dispensaries can sell. Delta Medical and Natural State Wellness are expected to harvest and sell their first crops next month, which will put more of the drug in the supply chain, the suit states.

The lawsuit also points to a survey of dispensaries — 22 of which also grow some of their own product — that showed no supply problems with the current growers, while commissioners have noted that Arkansas appears to have between one and three months surplus on hand.

But at meetings on June 16 and June 30, commissioners approved issuing the remaining cultivation licenses without ever considering the cannabis supply, according to the lawsuit.

Commissioners have had some legislative encouragement to increase the number of licensed producers. Reps. Vivian Flowers, D-Pine Bluff, and Jay Richardson, D-Fort Smith, endorsed adding more growers at a commission hearing last month, although a vote by a Senate committee failed to pass a proposal to ask the commission to award the remaining licenses.

The reasons that commissioners have given for licensing the three new producers are not legal justifications to expand the pool of growers from five to the maximum of eight, the suit states. Those reasons included resolving a lawsuit by Carpenter Farms, an attempt to lower the costs to patients, and increase patient access, the suit states.

Further, by conducting those votes the way they did, without any warning to the public or the established growers about what they were going to do, commissioners violated the plaintiffs’ constitutional due-process rights, given how much money the growers have invested in their operations based on representations by regulators, the suit states.

According to the lawsuit, the five growers say each was practically guaranteed 20% of the medical-marijuana market as the state only could add growers if they failed to produce an adequate supply.

With that understanding of the regulations, the growers say in the suit that they’ve invested significant expense — “millions of dollars” — in their operations, mostly from their personal assets because the nature of the marijuana industry limits opportunities for loans.

But in two weeks — the 14 days between commission meetings — state regulators “drastically reduced the market share of each of the plaintiffs by licensing three additional cultivation facilities. This reduced the market share of plaintiffs from 20 percent to 12.5 percent, a 37.5 percent reduction of their original market share,” the suit states.

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Arkansas Times: Lawsuit challenges additional marijuana cultivation permits

Read the full story at Arkansas Times.

The five existing medical marijuana cultivators in Arkansas have sued to stop the award of permits to three more cultivators.

The lawsuit claims the three new permits awarded last month violated rules that said additional permits should be issued only on a determination that existing cultivation permits aren’t sufficient to supply dispensaries. It also says that, after waiting more than 24 months to award new permits, rules required a new application process rather than choosing from original applicants.

The Medical Marijuana Commission was allowed to award up to eight cultivation permits. It awarded five initially. Then it added three more, in part under pressure from Carpenter Farms, which had sued to challenge how initial applicants were scored. The commission approved a permit under a settlement of that lawsuit. But two weeks later, the Commission also approved two more permits. The plaintiffs contend proper notice wasn’t given of this business.

The suit in circuit court is by Osage Creek Cultivation, Delta Medical Cannabis, Bold Team, Natural State Medicinals Cultivation and Natural State Wellness Enterprises.

Defendants are the state Finance and Administration Department, the Alcoholic Beverage Control Division, the Medical Marijuana Commission, and the three new cultivation permit holders — Carpenter Farms Medical Group, River Valley Relief Cultivation and New Day Cultivation.

Here are the lawsuit and exhibits.

Lawyers are Casey Castleberry, Eric Gribble and Annie Depper.

The state will claim sovereign immunity. The lawsuit claims that failure to follows rules is an illegal action (ultra vires is the legal term) that is an exception to the rule that the state may not be sued in its courts.

The lawsuit asks for an injunction against the issuance of the permits or if they have been issued that they be voided.

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Talk Business & Politics: Cultivation Center Creates More Jobs in the River Valley

Read the full story at KUAF.

Michael Tilley, with our partner Talk Business and Politics, discusses how River Valley Relief, Covia and Gerber are creating new jobs amid the pandemic. He also previews a special meeting of the Fort Smith Board of Directors who will discuss a face mask ordinance Saturday morning.

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KNWA: Final marijuana cultivation licenses issued

Read the full story at KNWA.

FORT SMITH, Ark. (KNWA/KFTA) — A Fort Smith business gets one of the last remaining licenses to grow marijuana.

The Arkansas Medical Marijuana Commission voted to issue the final two cultivation licenses.

One went to River Valley relief.

The other went to a group in Hot Springs.

There are now eight licensed growers in the state.

That is the maximum allowed.

Storm Nolan with River Valley Relief said they hope to start with about 40 employees and could grow to over 100.

“We’re going to be able to pull from Fort Smith workers in a very convenient location to where the many people we employ will actually, this will benefit Fort Smith greatly,” Nolan said.

The commission also licensed four new dispensaries including one in Fayetteville.

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Talk Business & Politics: Fort Smith marijuana cultivation center owner plans to provide low-cost products, create up to 150 jobs

Read the full story at Talk Business & Politics.

With the additional cultivation and dispensary license issued by the Arkansas Medical Marijuana Commission June 30, Storm Nolan’s four-year quest to open a cultivation center in Fort Smith is about to happen.

Nolan first applied for cultivation center license four years ago but was not one of the five cultivators chosen.

“At the time, the commission said they would come back after a time to see if the market grew and if there need to be more suppliers and distilleries,” Nolan said.

Early in the process the state estimated there would be about 30,000 medical marijuana patients in the state and the number of distilleries and suppliers originally approved would serve the market. As of July 3, there are 65,000 approved medical marijuana patients in Arkansas, Nolan said.

“It is time to get more (cultivators),” Nolan said.

The state now has eight cultivators approved for business, and three are operational. The two new licenses approved by the commission June 30 are Nolan’s River Valley Relief, which will be located in south Fort Smith, and New Day Cultivation in Garland County. The commission also released four additional dispensary licenses to the following counties: Washington, Fulton, Mississippi, and Pulaski. Natural Root Wellness will be located in Fayetteville; Green Cross Cannabis in Highland; MissCo Cannabis Dispensary in Osceola; and Native Green Wellness in Little Rock.

Nolan said River Valley Relief will employ about 40-50 when it first opens, which he hopes will be within six months. Eventually, he wants to expand the operation to 150 employees. The company estimates the operation will have an $80 million impact on the regional economy.

The center will grow and process medical marijuana and medical marijuana flowers, Nolan said. On the cultivation side, the center will have a grow room that is lit 24-hours a day to get seeds growing as quickly as possible. From there, plants go to the flower room, which will be lit for 12 hours and dark for 12 hours a day. This will allow the plants to continue to grow and flowers to bud. Once flowers are harvested, they will dry before being packaged for sale or moving to the production area of the center. Drying usually takes a couple of weeks, Nolan said.

Storm Nolan (photo from Arkansas Public Media)

In the processing area, product can be made that can go into vape pens, tinctures, edibles (gummies, brownies, cookies, etc.), topical creams, sodas, drink additives and Binaca style oral spray, he said.

“Indoor cultivation centers, which is what this will be, allow for a very high flower, which is needed for these products,” Nolan said.

It will also allow Nolan to be able to produce medical marijuana in as cost-effective way as possible, which in turn will allow him to keep the cost of this product as low as possible. This is important because of Nolan’s compassionate care plan that would allow River Valley Relief to offer some product “hopefully” free to dispensaries, which would then offer it free to those who need it the most and also to offer some product at a greatly discounted price, which again would be offered to low-income patients at a discounted price, he said.

“It’s important to be able to do this, so medical cannabis can be a usable alternative to pharmaceuticals,” Nolan said. “The cost to treat cancer or HIV or PTSD (with medical marijuana) can get very expensive because it is not covered by any insurance. (Patients) not only have the cost of the product, they have to see a doctor (for the certification) and apply through the health department. The costs add up. We want to provide a way that those who need it can get it.”

Nolan’s family understands the importance of access to medical marijuana first hand. His mother, a “super smart, talented, kind-hearted, God-fearing, woman,” became addicted to opioids following a dental procedure and eventually died in a rehabilitation facility in Bentonville, he said. His mom graduated high school two years early, went to college and then law school, and became only the second female attorney in her firm.

After a dental procedure left her with intense jaw pain, she tried “every homeopathic remedy she could just to be able to sleep at night,” Nolan said. Eventually, she got a prescription for an opioid to help with the pain.

“Once you start using opioids, you have to use more and more to get relief,” Nolan said. “She spiraled out of control.”

Had she been able to use medical marijuana, Nolan believes her outcome would have been different.

“The CDC has a cannabis publication that shows after 7 years (of legalized medical marijuana) fairly significant decreases in opioid prescription rates in the states (with legalized medical marijuana),” Nolan said. “That is a very encouraging sign. We really hope the same will happen here, especially in Arkansas that has such a high rate of opioid abuse.”

Nolan’s focus on cultivating medical marijuana is on the medical aspect. He understands some in the state have brought up the idea of legalized recreational use, as in Colorado, Washington, Oregon and elsewhere in the United States, but he believes a big part of that push is because of availability and cost. He said the decision to open more cultivators and dispensaries will help that.

“Typically, when there is more supply (of any product), the cost goes down. Hopefully, we can see that happen,” Nolan said.

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5News: Medical marijuana commission approves new licenses for cultivators, dispensaries

Read the full story at 5News.

The two remaining cultivation licenses for medical marijuana in Arkansas were released Tuesday, June 30.

ARKANSAS, USA — The Arkansas Medical Marijuana Commission released additional cultivation and dispensary licenses on Tuesday (June 30). 

In a 3-2 vote, the commission released the two remaining cultivation licenses. The state now has eight cultivators approved for business, but just three are operational. It wasn’t until earlier this month that the sixth applicant received a license following a long legal battle. 

Among the two cultivation licenses approved Tuesday, River Valley Relief will be located in Sebastian County and New Day Cultivation will be located in Garland County. 

After a long and hard fight Storm Nolan with River Valley Relief Cultivation received one of the new licenses and his company will soon be in Fort Smith.

“Because of our family’s story and my mom’s addiction to opioids, an addiction which eventually took her life, we understood just how much Arkansas needs this,” Nolan said.

Nolan first applied for the cultivation center when medical marijuana was first approved. He says he was not chosen but was put in line in case one of the top five choices didn’t work out.

Nolan’s company sent two protest letters to the Arkansas Medical Marijuana Commission after an application for a permit was denied. He and other unsuccessful applicants claim the five companies approved for permits lied about their credentials and stole information from competitors.

Now, after four years of trying, Nolan says they’re ready to get growing.

“In everything we do, we’re going to keep patients in mind and that’s why we plan on having one of the most extensive, compassionate care plans that will provide free and low-cost cannabis to people who can least afford it,” Nolan said.

City Administrator Carl Geffken says this is a huge accomplishment for Fort Smith.

“It is definitely a win-win, it’s helping the people of the City of Fort Smith and the River Valley and the state of Arkansas and it’s also helping the city put people to work and they’re going to be put to work to do and help those that need it most,” Geffken said.

Nolan says they have already started working on their layout plans and hope to open in the next four to six months.

The cultivation center could employ up to 100 people from the River Valley.

To read more of this story, visit our content partner Talk Business & Politics

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40/29 News: Medical marijuana cultivation facility set to open in Fort Smith

See the full story at 40/29 News.

FORT SMITH, Ark. —

The owners of River Valley Relief Cultivation hope to be operational in about 4 – 6 months and eventually plan to employ approximately 100 workers.

“With increased competition, that should help lower prices for patients,” said Storm Nolan.

Nolan and his brother plan to open the cultivation facility inside a 25,000 square foot warehouse located on the south side of Fort Smith.

Nolan was an outspoken supporter of medical marijuana before it was approved by voters in 2016, “My mom, who was a bright corporate attorney, just a very loving lady, she ended up getting addicted to opiates after a dental procedure that went wrong. Eventually she ended up with an addiction that took her life,” Nolan said. “If she had access to legal medical cannabis we think that she would probably still be with us today.”

On Tuesday the Medical Marijuana Commission approved issuing 2 of the last 8 licenses in the state for cultivation facilities. Currently, the closest cultivation facility to the River Valley is located in Berryville, outside of Northwest Arkansas.

Nolan told 40/29 he hopes more supply, with increased demand and competition as well as additional dispensaries will contribute to lower prices for medical marijuana patients, “It all has to be transported in very secure means and so every mile you have to drive to a dispensary adds costs. We’ll be able to eliminate a lot of that transportation cost and serve dispensaries from all over the state, but more importantly, from Fort Smith to Little Rock to Fayetteville and Bentonville.”