Filing says Cannabis Commission mislabeled applicants felons, improperly eliminated them

A new filing in the ongoing litigation against the Alabama Medical Cannabis Commission could prove to be the most problematic legal issue for the embattled Commission and its tortured licensing process. 

On Tuesday evening, Madella Inc., which applied for an integrated facilities license as a minority vendor, filed an amended complaint against AMCC alleging that the Commission erroneously flagged the company for failing the requirement that company leadership pass a felony background check. In doing so, the filing states, the AMCC eliminated Madella from consideration for a license, despite the fact that the company’s owners and directors all passed a background check. 

“Medella submitted a full and complete application to the AMCC for an Integrated Facility License, including all required criminal background investigative reports from the Department of Justice and ALEA in accord with the instructions given by AMCC,” the filing states. “Those reports reflected that no owner, director, board member, or individual with a controlling interest in Plaintiff had a disqualifying criminal history.”

According to three sources with knowledge of the situation, the AMCC publicly labeled at least seven companies as failing the “Criminal Conviction History” requirement of the licensing process. According to those sources, six of the seven had not failed but had been erroneously tagged by the Commission. 

If that information is accurate, it could provide Montgomery Circuit Court Judge James Anderson with no choice but to force the Commission to restart its licensing process and re-score applicants. 

The AMCC already appears to have acknowledged its mistake. Over the weekend, the scores from the original round of grading that were posted on the AMCC website were suddenly scrubbed of six of the original “Criminal Conviction History” designations. 

Additionally, the AMCC posted a semi-apology to its website, which essentially stated that the designation meant only that the companies in question had possibly failed to provide all necessary documents. 

AMCC posted a semi-apology to its website.

“The (‘Criminal Conviction History’) reference included entities whose criminal conviction history of applicant’s owners, directors, board members or individuals with a controlling interest … could not be fully verified due to non-receipt of timely criminal background checks in the manner designated by the Commission,” the statement read. “The reporting form has been revised to delete the (‘Criminal Conviction History’) reference for the impacted applicants. 

“The prior (‘Criminal Conviction History’) reference in the summary report for these applicants should not be construed as evidence of any criminal background on the part of the applicant, or any individual or other entity associated with the applicant.” 

But Madella and other companies impacted dispute that there were issues with the background checks. In its court filing Monday, Madella states it followed guidance provided from the AMCC and worked with the Alabama Law Enforcement Agency to provide the necessary information. Sources at two other impacted companies had similar stories, saying they each contacted AMCC officials to ensure that they were following protocols. 

But perhaps more concerning, according to the two sources, was that AMCC never alerted them to a filing problem, despite alerting companies to many other application issues. 

“We didn’t find out about this until the scores were posted and we learned that we weren’t even considered,” said one source. “Then we couldn’t get anyone from the Commission to talk to us after the initial scores and we’ve since learned that we weren’t considered in the second round of license voting because of the background issues. And now, months later, they finally decide to fix it and admit their mistake? That doesn’t do us much good.”

The Madella filing asks a Montgomery County Circuit Court to determine whether AMCC violated laws and the Alabama Administrative Procedures Act in conducting its scoring process for licenses, and also award Madella damages for slander for essentially publicly labeling its leadership group as felons.