Appeals court ruling deals blow to Cannabis Commission

While upholding some actions taken by the Alabama Medical Cannabis Commission, the Alabama Court of Civil Appeals on Friday seemingly dealt a blow to the commission’s defense in other legal action challenging its licensing process. 

Friday’s opinion came in response to a lawsuit filed by several companies that were first awarded licenses in the initial round of licensing by the AMCC but who later had those licenses rescinded. A Montgomery County Circuit Court dismissed that lawsuit, ruling that the AMCC did have the authority to rescind the licenses. 

However, in affirming that lower court’s decision, the appeals court also noted two important facts: 1. That the AMCC’s appeals process for handling disputes filed by unsuccessful applicants is inadequate because even if the appeal is successful, it is likely that there would be no license to award; and 2. That the Montgomery Circuit Court is the proper venue to determine those disputes. 

Those rulings will be of particular importance to the group of unsuccessful applicants that have filed legal actions against the AMCC, alleging that the agency failed to follow state law when establishing the licensing process. Among many complaints in that legal action, the companies allege that the AMCC’s licensing process fails to establish a necessary appeals process that would give aggrieved applicants a meaningful opportunity to challenge the awards.  

The AMCC, however, has argued that it does have “a public-investigative hearing process” that allows for applicants to challenge licensing decisions. After that hearing, if the applicants are still unhappy with the results, they are then free to file a complaint with the court – a process they contend is compliant with Alabama law. 

But the Appeals Court said that only applies if the hearing process provides an actual remedy. 

“That (AMCC appeals) procedure only allows an unsuccessful applicant to prove its suitability for a license; nothing in the language … suggests that, in a public-investigative hearing, the AMCC could reconsider or correct its … decision,” the opinion reads. “In this case, (the defendants) could be irreparably harmed by a delay in judicial review. Presently, the five integrated-facility licenses have been awarded, but not issued; however, by the time the circuit court obtains jurisdiction to review a final decision, it is possible that no integrated facility licenses will be available. 

“The remedy of judicial review following a final decision would be inadequate if there is some suggestion that the administrative ruling, if incorrect, could not be remedied so as to cause irreparable harm.”

In other words, even if the plaintiffs are successful in the appeals hearing challenging the decisions made by the AMCC, there would be no way to correct the actions because the licenses would already be awarded and the companies awarded those licenses already doing business. 

That is essentially the same argument being made by several companies that have filed lawsuits against the AMCC. Those lawsuits also contend that the AMCC should have followed the guidelines of the Alabama Administrative Procedures Act when establishing its licensing process. 

“I’m very encouraged by the Court’s ruling,” Will Somerville, attorney for Alabama Always, one of the companies suing the AMCC, said in a statement. “The Court made clear that the Commission’s process doesn’t protect the applicants’ rights under the Alabama Administrative Procedure Act, and it affirmed (the Montgomery Circuit Court) for stepping in and protecting those rights. 

“The Court also implicitly acknowledged that the process has been marred by numerous violations of the Open Meetings Act and the Administrative Procedure Act. I am hopeful that this is a step towards implementation of a fair process that follows the law, because that is the only way to get the medicine to the people who need it.”