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Former Arkansas Lawmakers And Legal Firms File Dueling Medical Marijuana Business License Lawsuits

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Former Arkansas Lawmakers And Legal Firms File Dueling Medical Marijuana Business License Lawsuits


The original litigation accused lawyers of manufacturing phantom local ownership groups to obtain four of the state’s first 32 medical cannabis dispensary licenses.

By Hunter Field, Arkansas Advocate

A prominent law firm in Arkansas’s medical marijuana industry hit back last week at a former partner and other dispensary owners who accused the firm of fraud and malpractice as the state’s cannabis industry blossomed.

The Little Rock firm of Steel, Wright, Gray was sued last month in Pope and St. Francis counties over fraud and legal malpractice claims regarding the creation of ownership groups in the lucrative cannabis dispensary business.

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Steel, Wright, Gray has responded to both lawsuits filed by dispensary groups, and late last week filed a defamation suit of its own against Marshall Wright, a former law partner and state legislator, and Scott Pace, a lobbyist and the former CEO of the Arkansas Pharmacists Association.

Pace and Wright are members of the Enlightened Dispensary groups that filed the explosive lawsuits against Nate Steel, also a former lawmaker, and Alex Gray.

That litigation accused Wright and Gray of manufacturing phantom local ownership groups to obtain four of the state’s first 32 medical cannabis dispensary licenses in 2019.

The local “owners” of two of those dispensaries—Enlightened Dispensary locations in Heber Springs and Morrilton—say they had little control over the businesses, which are instead controlled by out-of-state management companies. Further, they say they received little to no income from Enlightened while taking on hundreds of thousands of dollars in tax liability.

Steel, Wright, Gray denied the allegations and said the suits should be dismissed for a number of procedural reasons.

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The firm also claimed that Wright prepared dispensary license application materials for the dispensary group he was a part of as well as the group that included Pace. Both Pace and Wright negotiated with outside management companies and knew those companies would manage their dispensaries, the defamation suit alleges.

Gray and Steel didn’t advise Wright and Pace on how to use their licenses or operate their dispensaries, the suit continues.

At some point, Pace and Wright became “adverse” to the management company running their dispensaries and hired Gray and Steel to find a buyer. Eventually, they hired a different attorney, the suit says.

“Defendants then engaged in a systematic and targeted campaign to defame Gray and Steel, tarnish Gray’s and Steel’s reputations in the Arkansas business and legal communities, and interfere with SWG’s business and law practice with the intent to harm Plaintiffs,” the defamation suit reads.

The suit also claims that Pace disparaged and made false statements about Steel and Gray to the Pharmacists Association, which ended its business relationship with Steel, Wright, Gray. The firm had been retained as the association’s outside general counsel since 2019, according to court documents.

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Scott Poynter, an attorney for Pace and Wright as well as several of their dispensary partners, said his clients wanted to battle in court, not the media.

“That said, our clients are confident in the allegations they have made, which they attempted to resolve for well over a year,” Poynter said in an email.

“As to the defamation case, those claims grow out of the very same problems and procedurally should have been filed as counterclaims in the St. Francis and Pope County cases. When we prove our clients’ malpractice claims in Court, this truth will be a complete defense to the recently filed defamation claims.”

Steel, Wright, Gray also moved to disqualify Poynter, who was “of-counsel” at its firm until 2019, from representing Wright, Pace and the other plaintiffs in fraud and malpractice suits. The defamation suit referred to Poynter as “a disgruntled former member of SWG.”

The court filings were the latest in the ugly fight that pushed a number of controversial cannabis industry issues to the forefront.

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Chief among them: What is ownership?

The Arkansas Legislative Council’s Medical Marijuana Oversight Subcommittee explored the question in a Monday afternoon hearing, but there were no concrete answers to issues that have arisen between ownership and management companies.

Several legislators expressed frustration that the owners listed on paper for medical cannabis companies were not the ones controlling the companies due to the structure of management agreements.

Under state law, marijuana businesses must be owned at least 60 percent by Arkansas residents.

“Therein lies the rub,” state Sen. Linda Chesterfield, D-Little Rock, said. “I may on paper own 60 percent, but if I don’t control the vote in that company, I don’t control the company.”

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This story was first published by Arkansas Advocate.

After Smelling Legal Marijuana In New York, Colombian President Denounces ‘Enormous Hypocrisy’ Of U.S.-Led Drug War

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Arkansas

Knowing the Florida Gators Opponent: Arkansas Razorbacks

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Knowing the Florida Gators Opponent: Arkansas Razorbacks


Gainesville, Fla. – The Florida Gators men’s basketball team’s next destination is Fayetteville, Ark., as they’ll take on the Arkansas Razorbacks (11-4, 0-2) on Saturday for their third SEC matchup of the season. 

Florida is currently sitting at 14-1 on the season and 1-1 in conference play. They opened their SEC slate with a nail-biting loss to the Kentucky Wildcats, losing 106-100 in Lexington. 

However, the Gators were able to avenge this loss with one of the most dominant wins in men’s basketball history on Tuesday over No. 1 Tennessee. They trounced the Volunteers 73-43 in the O’Dome, marking the Gators’ first regular-season win over an AP No. 1-ranked team in program history and the biggest win over a No. 1-ranked team in the NCAA since 1968. 

But enough about what Florida has done this season, let’s shift the focus to their opponents, the Razorbacks, and see who they are. 

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Arkansas’ season started out nice with a win over Lipscomb. However, it wouldn’t be the same for them in their second game of the season against then-ranked No. 8 Baylor, as they found themselves on the losing end of a tightly contested battle. 

Then, following a good stretch for the team in red, they were tasked with the current No. 13 in the AP Poll, Illinois, and things wouldn’t go so well for new Razorbacks head coach John Calipari. His team was outclassed in this game 90-77, which ended their winning streak at four. 

Arkansas did make amends with their fans a few games later, though. While participating in the Jimmy V Classic, they matched up with then-ranked No. 14 Michigan, who they narrowed past 89-87. 

This win over the Wolverines helped maintain a three-game win streak that would eventually turn into a six-game streak. However, since SEC play started for the Razorbacks, they are 0-2 with losses to Tennessee and Ole Miss, who are currently ranked in the Top 25 AP Poll. 

These pair of losses put Arkansas at just a 1-4 record against teams on their schedule to have been ranked or that are currently ranked.

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While it was a complete roster overhaul for Calipari and the Razorbacks this offseason that was fueled by the transfer portal, their biggest grab has been from the high school ranks. 

They added highly ranked players like Johnell Davis, Adou Thiero and Jonas Aidoo all from the portal, but it’s former five-star guard Boogie Fland who’s been arguably the best player for the Razorbacks this season. 

Fland is averaging 15.5 points, 5.9 assists and 3.6 rebounds per game through 15 games this season. He is also connecting on 35.7 percent of his threes, which shows he’s more than just an inside scorer. Additionally, his 5.9 assists rank 24th among his competitors. 

But in these first two SEC games, Fland is just 10-for-35 from the field and 3-for-17 from deep. 

If the Gators can’t keep him in check like he’s been over these last two, then it might be a long afternoon for the visitors on Saturday. 

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Despite bringing in tons of talent that should’ve resulted in a great offense, Arkansas has been anything but that. 

They currently rank inside the bottom five teams in the SEC in scoring offense, averaging 79.4 points per game. They do have two players scoring at least 15.0 points per game, but that’s pretty much it. Outside of Thiero (16.9) and Fland, they only have one other player in double figures (DJ Wagner, 10.5). 

Moreover, if this becomes a free-throw-dominated affair, the Gators shouldn’t be too worried about the Razorbacks’ performance at the line. They are shooting 71.1 percent from the charity stripe, which is good for 12th in the league. 

And, lastly, they have little to no presence on the glass. They are the worst team in the SEC in offensive rebounding, and they are 13th out of 16 teams in overall rebounding. These are two areas where the Gators dominate, and if things play out like they have been this season, then the visitors should outmuscle their counterparts. 

This game will be televised on Saturday at 4 pm on ESPN. 

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Viewer pictures: The Natural State transforms into a winter wonderland

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Viewer pictures: The Natural State transforms into a winter wonderland


LITTLE ROCK, Ark. – A winter storm rolled into Arkansas Thursday and brought with it snow to the majority of western and central Arkansas.

Many from around the Natural State sent in pictures of their area covered in snow.

Though Arkansas is already full of natural beauty, there’s something about the state covered in snow that makes it even more of a winter wonderland.

Several kids from around the state got out and took advantage of the day off of school by throwing snowballs, digging up the snow, sledding and of course making snow angels.

Many who got out in the snow had enough accumulated to make snow men.

Share your snow day pictures at KARK.com/winter-pics.

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Arkansas Blue Cross & Blue Shield Lays Off About 75 Workers, Reports $100M Loss

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Arkansas Blue Cross & Blue Shield Lays Off About 75 Workers, Reports 0M Loss


Arkansas Blue Cross & Blue Shield sent layoff notices to 2% of its workforce — about 75 employees — on Thursday after reporting a loss of more than $100 million in the first three quarters of 2024, the state’s dominant health insurance carrier confirmed.

The Little Rock nonprofit had 3,375 employees as of April 2024, and its $3.14 billion in 2023 revenue put it at the top of Arkansas Business‘ most recent list of the state’s largest private companies. 

But revenue in the first three quarters of 2024 was down by almost 7%, and the company (officially USAble Mutual) reported to the Arkansas Insurance Department a net loss of $100.5 million for those nine months. That compares with net income of $94.7 million for the same period in 2023, although the year finished with net income of just $13.2 million.

“The reduction in workforce was due to changing conditions in the market and increasing financial pressures primarily due to health care costs jumping to the highest levels in more than a decade,” Max Greenwood, an ABCBS spokeswoman, said in response to email questions Thursday afternoon. 

ABCBS also has seen “large increases” in the use of all medical services, especially prescription drugs.

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“These situations have caused necessary shifts in business strategy across the health care and health care insurance industries,” she said.

In addition, the insurance company lost tens of thousands of members as result of the state’s disenrollment of tens people on Medicaid in 2023. 

As part of the Obama-era Medicaid expansion, the state pays private insurers to provide health insurance policies to qualifying Arkansans under the Arkansas Health & Opportunity for Me program, or ARHOME. This program had been known as the “private option” and Arkansas Works.

In January 2023, ABCBS had about 207,000 ARHome members. By December 2024, it was  down to 108,729, Greenwood said. 

“We’ve also seen a drastic increase in the claims amounts among our ARHome population,” she said. “Remember, since we were the first company who offered ARHome policies statewide when the program began, our block of members in that program is older and most likely unhealthier than what other carriers may be experiencing.”

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ABCBS’ premium revenue fell during the first three quarters of 2024. It reported $2.2 billion premiums collected net of reinsurance through Sept. 30, a 4.8% drop from the same period in 2023.

The insurance company’s total members also fell from 630,444 on Dec. 31, 2023, to 598,492 on Sept. 30. The biggest drop came from its comprehensive individual plan. In that group, the total members fell nearly 17% to 132,596 members. 

ABCBS also laid off 85 employees in January 2024. Those positions have not been refilled, Greenwood said.

She said it was too early to tell what the financial numbers will look like for the fourth quarter, which ended Dec. 31. No additional layoffs are planned at this time.

“Every executive vice president was asked to make reductions in their areas,” she said. 

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Greenwood said the insurance company has made several other budget-tightening moves for 2025. “We’ve reduced our budget by more than 7% including cuts to consulting and outside vendor costs, contract labor, software and equipment and facility costs,” she said. “We’ve also had to implement substantial premium increases on our small and large groups.”

Greenwood said the company has a strong balance sheet and has no concerns about its liquidity.   

Founded in 1948, Arkansas Blue Cross & Blue Shield offers health and dental insurance policies for individuals and families. 

 

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