“More than likely than not there will be lawsuits, just looking from other states, just looking at how it has gone from elsewhere.”
By Ralph Chapoco, Alabama Reflector
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The players for the nascent medical cannabis industry have been chosen amid suspicion about the process and criticism from those left out.
The Alabama Medical Cannabis Commission Monday awarded 16 licenses for production and distribution of medical cannabis, out of more than 90 firms that applied for licenses.
“To the recipients, let me say that we look forward to working with you in a partnership manner in which all you know what lies ahead,” said John McMillan, the Commission’s director.
The Alabama Legislature approved a medical cannabis program for the state in 2021, but the bill authorizing the program did not allow licenses to be issued until September 1, 2022. The AMCC began accepting applications late last year
When the product is available, patients certified by participating physicians for medical cannabis use for 15 conditions, including cancer, chronic pain, depression and Parkinson’s disease will have to apply for a card to obtain medical cannabis from licensed dispensers.
The law forbids smoking medical cannabis or consuming it in food. It will be available as tablets, capsules, gelatins, oils, gels, creams, suppositories, transdermal patches or inhalable oils or liquids. Cannabis gummies will only be allowed to be peach-flavored.
The commission can award up to 12 licenses to cultivate cannabis, four licenses for those who want to process it and four licenses to dispense the product.
Commissioners may also provide up to five licenses for integrated facilities, which cultivate, process and distribute medical cannabis. The Commission stated that each integrated facility will operate five dispensaries that will be responsible for growing cannabis and selling the product in dispensaries.
Thirty-eight entities applied for integrated facilities licenses. Another 12 applicants vied for the 12 cultivator licenses. Another 12 applied for four available processor licenses, while 18 have applied for the four dispensary licenses.
An unknown number of transport and testing licenses are also available. The commission has received 11 applications for the transport license and three applications for testing licenses.
The commission awarded integrated facility licenses to:
Flowerwood Medical Cannabis, LLC, based in Loxley in Baldwin County;
Southeast Cannabis Company, LLC, based in Theodore in Mobile County;
Sustainable Alabama, LLC, based in Salem in Lee County;
TheraTrue Alabama, LLC, with a Montgomery mailing address but whose organizers are based in Georgia, and
Verano Alabama, LLC, with a Montgomery mailing address but whose company is based in Chicago.
The commission awarded dispensary licenses—facilities that distribute medical cannabis to patients—to:
CCS of Alabama, LLC, whose address on business records is listed at the Birmingham law firm of Maynard, Cooper and Gale;
RJK Holdings AL, LLC, listed on business records as located in an office building near the State House in Montgomery;
Statewide Property Holdings AL, LLC, listed in the same office building as RJK Holdings and
Yellowhammer Medical Dispensaries, LLC, located in Birmingham.
Companies receiving a license to cultivate cannabis are:
Blackberry Farms, LLC, located in Dothan;
Gulf Shore Remedies, LLC, located in Fairhope in Baldwin County;
Pure by Sirmon Farms, LLC, located in Daphne in Baldwin County; and
Twisted Herb Cultivation, LLC, located in Greenville.
The organizations granted licenses to process cannabis into medical cannabis are:
1819 Labs, LLC, located in Dothan;
Enchanted Green, LLC, located in Dothan;
Jasper Development Group Inc., located in Jasper in Walker County and
Organic Harvest Lab, LLC, located in Bessemer.
The commission awarded transport licenses to Alabama Secure Transport, LLC in Montgomery; International Communications, LLC in Birmingham and Tyler Van Lines, LLC in Troy.
Certus Laboratories in Grand Bay in Mobile was the only firm who was selected for a testing license.
Many of the winning companies’ applications are partly or fully redacted on the commission’s website.
Alabama, like Georgia, limited the number of licenses that will be available for its medical cannabis industry, and that could lead to litigation.
Many were left disappointed after the commission made its announcement in what became a highly competitive process for securing one of the coveted rights to be part of the industry.
“I felt like the Commission did the best that they could with the tools that were handed to them,” said Antoine Mordican, the CEO of Native Black Cultivation, one of the companies who was denied a cultivating license. “We have to figure out what comes out later about the reason why we were not selected or why they made the selection that they did.”
Mordican said he plans to apply again should future licenses become available.
“I am sure it was a hard decision for the Commission to make,” said Liberty Duke, one of the board members of Hornet Medicinals, LLC, a company that was denied an integrated license. “I am just anxious to see the grading metrics.”
Some of the firms who were awarded integrated licenses were multi-state entities or had years of experience in the industry. TheraTrue has a presence in Georgia and Virginia. Another was Verano, with dispensaries in the Chicago and throughout the Northeast.
“We’ve always had a long-term focus on strengthening our position in the South, and with the addition of Alabama to our footprint, we have an excellent opportunity to increase our presence in an important medical market as cannabis acceptance and state-level programs continue to spread across the growing Southeast region,” said George Archos, the founder and CEO of Verano, in a statement.
The medical cannabis law required applicants to be majority-owned by persons or entities that have resided in Alabama for 15 years. But it did not forbid out-of-state firms from taking minority stakes in those companies.
Justin Aday, general counsel for the Commission, provided highlights of the process for selecting those who would receive the license, going over choosing who would evaluate the applicants and attempts to make the process as fair as possible.
“There were portions of it that were blinded,” Aday said about the evaluation process. Some portions of the process could not be completely blinded, meaning that the board has some information related to the company they were evaluating because of the context. But other than that, Aday said, “the evaluators performed the evaluation objectively.”
But much of the decision criteria and the ranking was left largely shrouded in mystery, with few willing to discuss how every factor was weighed to come to a final decision.
“They did the best they could to try and be as objective as possible,” said former state Rep. Mike Ball, R-Madison, who campaigned to expand medical cannabis access for years. “One of the things that I focused on was trying to make the makeup of the board as diverse as possible.”
The question now becomes whether those who were denied a license will accept the commission’s decision or file suit.
“More than likely than not there will be lawsuits, just looking from other states, just looking at how it has gone from elsewhere,” said Zach Huey, an attorney who represented Fleur De Vie Wellness Inc., a company that was not awarded a dispensary license.
Even without the legal challenges, it will take time for the industry to develop to begin selling medical marijuana to those eligible, perhaps toward the end of the year at the earliest.