As Arkansans vote on a marijuana legalization modification that will give current medical hashish licencees an awesome head begin within the multimillion-dollar leisure enterprise, sworn depositions present that the unique licensing course of was questionable sufficient to spawn an FBI investigation. 

In discussing the depositions, a constitution member of the Arkansas Medical Marijuana Fee, Dr. J. Carlos Roman, informed Arkansas Enterprise final week that he went to the Federal Bureau of Investigation after a license seeker supplied him a bribe. 

“There was an tried bribery,” Roman stated in an interview, discussing allegations extensively reported in 2018 involving Pure State Agronomics, which didn’t obtain a license. “I did contact the FBI, they usually investigated them. Sadly, there was not an indictment in opposition to them.”

Roman, a Little Rock ache administration doctor, stated he shared paperwork with the FBI to indicate he didn’t settle for the bribe provide. His time period on the fee, which granted all of Arkansas’ medical cultivation and dispensary licenses, led to 2018. 

The depositions additionally reveal a Fayetteville physician’s allegations that an eventual cultivation firm part-owner, Dr. Alonzo Williams, had mentioned technique of gaining affect with commissioners in a gathering of potential cultivation candidates earlier than licenses have been awarded. These allegations appeared within the deposition of Dr. Thomas Benjamin de Miranda, taken on Sept. 20.

James Miller

In the meantime, the fee’s present chair, Bryant lobbyist and former gubernatorial aide James Miller, stated in an Oct. 5 deposition that no less than one fee resolution proved unfair to an organization denied a license, 2600 Holdings of Little Rock.

Additional, he conceded that the corporate that bought the license, River Valley Aid Cultivation LLC of Fort Smith, was by no means scored by anybody on the fee as a result of its utility had been filed below a distinct enterprise identify.

The depositions, obtained by Arkansas Enterprise earlier than they grew to become public final week, got here in a lawsuit by 2600 Holdings in opposition to the Arkansas Division of Finance & Administration, its Alcoholic Beverage Management Division and the Medical Marijuana Fee.

The swimsuit, in Pulaski County Circuit Courtroom, alleges that 2600 Holdings, doing enterprise as Southern Roots Cultivation, was denied a cultivation license it deserved, and the license went as a substitute to River Valley Aid Cultivation, whose utility listed a equally named however defunct firm. The swimsuit asks for River Valley’s license to be revoked and awarded to Southern Roots.

The depositions provide a uncommon look inside an opaque system that inevitably generated controversy, awarding licenses price tens of tens of millions of {dollars} to winners and sending losers away empty-handed. Now, with the leisure modification proposing that each medicinal licensee get an identical adult-use license, these permits are poised to extend exponentially in worth. Voting started Oct. 24 and continues by Nov. 8.

Answering FBI Questions

The depositions and subsequent reporting by Arkansas Enterprise additionally reveal that Roman and the present and former chairs of the fee answered questions from the FBI.

Ronda Henry-Tillman

The fee’s authentic chair, Dr. Ronda Henry-Tillman, stated in an Oct. 13 deposition that she had answered FBI questions on Roman, and about “totally different relationships.” She bristled at questions suggesting misconduct by the fee. “I by no means did [engage in] misconduct with the Medical Marijuana Fee,” Henry-Tillman informed Southern Roots legal professional Abtin Mehdizadegan. “And I’m appalled that you’d even state that over this. I’m appalled.”

De Miranda, one other witness deposed by Southern Roots, stated that his father-in-law thought-about looking for a hashish enterprise license however was scared off by discuss of potential bribery.

De Miranda stated his father-in-law, Kevin Horton, was contemplating submitting an utility when Eddie Armstrong, a good friend and hashish activist, talked about that his personal father-in-law, Dr. Alonzo Williams, was additionally within the new trade.

“The 2 of them bought in contact they usually mentioned for a reasonably brief time period doing it collectively, however in the end selected to not,” de Miranda stated within the deposition, dated Sept. 20. 

Although he stated he didn’t bear in mind the entire particulars of a dialog with Armstrong and Williams that happened at a Little Rock restaurant, de Miranda stated within the deposition that “it clearly stands proud in my thoughts that there was a dialogue of bribing public officers, which is why there was a right away cease to that dialog and the events parted methods.”

Mehdizadegan requested de Miranda if Williams had talked about “back-door offers” that he wished to work with a view to receive a good rating from the fee. “Properly, I don’t know if the time period ‘back-door offers’ particularly was used,” de Miranda replied, however “there was some dialogue of getting talks with commissioners concerning the appliance and someway giving it favorable phrases or one thing of that nature.”

De Miranda stated the FBI reached out to him across the time the primary licenses have been issued in early 2018, and that he’d had a 10- or 15-minute interview with an agent. 

In her deposition, Henry-Tillman stated that each one licensing selections have been made on the deserves of the functions. And she or he stated she couldn’t recall particular questions from the FBI about Armstrong or Williams. 

Armstrong is chairman of the trade group selling the leisure proposal, Accountable Progress Arkansas. Williams is an proprietor of Pure State Medicinals, a cultivator in White Corridor. “The FBI didn’t discuss to me about Eddie Armstrong or, instantly, Alonzo Williams that I recall,” Henry-Tillman, a Little Rock breast most cancers surgeon, stated within the deposition.  “They talked in regards to the totally different functions. However I don’t actually recall. I don’t know of any schemes.”

Henry-Tillman informed Arkansas Enterprise in an interview final week that she’s by no means been investigated by anybody. “I’m a really trustworthy individual,” she stated. Any allegation involving impropriety by Williams was “a complete lie,” she added. 

Williams didn’t reply to messages from Arkansas Enterprise. Armstrong, reached briefly by telephone, promised a later interview however didn’t name a reporter again.

The Licensing of River Valley

In Fee Chairman Miller’s deposition, he concluded awarding the license to River Valley Aid Cultivation in 2020 was not honest to Southern Roots, which had scored almost in addition to the appliance from River Valley’s proprietor. It was additionally freed from the enterprise identify discrepancy that tainted River Valley’s utility.

Miller was a fee member from 2016 to December 2018, and returned as its chairman final 12 months.

Mehdizadegan, the legal professional for Southern Roots, requested Miller if River Valley proprietor Bennett “Storm” Nolan’s license utility had failed to fulfill the state’s minimal {qualifications}. Miller replied, “From what I’ve seen up to now, sure.”

Miller acknowledged that commissioners had by no means scored River Valley Aid Cultivation as a result of the corporate listed on the appliance was River Valley Manufacturing LLC. However, the allow went to Nolan in mid-2020.

ABC officers finally conceded that Nolan had dissolved River Valley Manufacturing’s enterprise license nicely over a 12 months earlier than the license was granted in that identify.

Doralee Chandler, director of Alcoholic Beverage Management, which enforces guidelines on marijuana services, stated in her deposition that Nolan obtained the cultivation license as a “pure individual,” although all licenses identify particular companies.

Courtroom filings level out that Nolan skilled a radically totally different end result along with his utility for a dispensary license; he was refused that license on the identical grounds that didn’t halt the cultivation license. 

Nolan created River Valley Gross sales LLC in 2017 to hunt the dispensary license. However when no license was forthcoming, he filed dissolution papers in 2019 with the Arkansas secretary of state’s workplace concurrently for River Valley Gross sales and River Valley Manufacturing, making them lifeless entities below Arkansas regulation.

However, the fee awarded River Valley Manufacturing a cultivation license in June 2020. By the point commissioners started contemplating Nolan’s separate dispensary utility in late 2020, that they had been informed the corporate listed was defunct, and denied it a license on that foundation. 

Briefly, one in all Nolan’s dissolved entities bought a cultivation license whereas his identically located dispensary firm was rejected. Nolan sued over the dispensary license denial however dropped the case in February 2021.

State officers stated the outcomes differed as a result of the fee had no thought the entity on the cultivation license was defunct, however members had discovered of the dispensary firm’s standing earlier than rejecting its utility.

In her deposition, Chandler stated that the “preliminary issuing of the license is managed by the Medical Marijuana Fee on the time they issued River Valley Aid — they issued the license to Storm Nolan. River Valley Manufacturing LLC … nobody was conscious that it had been dissolved.”

Chandler wrote Nolan in Could 2021, informing him the ABC had discovered “substantial proof” of guidelines violations within the cultivation utility. However as a substitute of revoking the license, the ABC selected to advantageous Nolan $15,000 and place him on a 12 months’s probation. The state additionally required a $500,000 efficiency bond. The probation ended March 16. In his deposition, Miller stated it was his understanding that after granting a license, the fee had no authority to revoke or alter it.

Chandler stated in her deposition that she’d reached the identical conclusion, although the modification requires cultivation and dispensary corporations to be correctly licensed as companies by the Arkansas secretary of state, a requirement River Valley Manufacturing couldn’t meet when it obtained the license.

Requested if it mattered legally whether or not the commissioners have been conscious of River Valley Manufacturing’s dissolution beforehand, Chandler replied, “I feel it issues on how the fee voted. They voted to award it. I don’t know the way they’d have voted in the event that they hadn’t had that very same data of the dissolution of River Valley Aid Manufacturing on the June thirtieth [2020] assembly.”

The relatively unfastened scrutiny of River Valley’s utility contrasts sharply with different aspects of a extremely monitored and controlled medicinal hashish system. Each marijuana plant, for instance, is tracked from seedling to sale.

David Sofa, the Little Rock lawyer who authored the medical marijuana modification, wrote heavy regulation into the proposal as a result of he feared voters wouldn’t favor the measure with out them. If he needed to do it over, he informed Arkansas Enterprise in June, he would distribute licenses by lottery. “A minimum of everybody would have an equal likelihood below a lottery,” he stated. 

Sofa isn’t impartial on the leisure hashish modification. The truth is, he’s one in all a number of distinguished Arkansas hashish supporters campaigning in opposition to it; he has repeatedly referred to as the plan “a cash seize” backed by tens of millions of {dollars} from medical marijuana corporations. He believes any leisure legalization plan ought to open the market to many extra members, and provide some recognition to individuals who have been arrested and jailed for promoting marijuana previously.

Southern Roots, led by Dr. Carl Johnson of Little Rock and represented by Cross Gunter Witherspoon & Galchus, argues that as an energetic enterprise, it ought to have obtained the license as a substitute of River Valley.  

If Pulaski County Circuit Decide Herbert Wright in the end orders Chandler to take River Valley’s license away, Chandler stated in her deposition that she didn’t know whether or not she would attraction. “I imply, I must have a look at it,” she stated.