Medical Cannabis applicant suing Cannabis Commission for defamation over allegedly incorrect evaluations

Newly-discovered issue could’ve given the incorrect impression some applicants had criminal records
(Erin Davis)
Published: Sep. 12, 2023 at 12:42 PM CDT|Updated: Sep. 12, 2023 at 4:49 PM CDT
Email This Link
Share on Pinterest
Share on LinkedIn

BIRMINGHAM, Ala. (WBRC) - One of the companies applying for a medical cannabis license in Alabama is suing the Alabama Medical Cannabis Commission (AMCC) for defamation, claiming the AMCC’s evaluations of several license applicants inaccurately implied one of the company’s owners or senior directors had a criminal record.

The lawsuit from Medella LLC asks a judge to issue an injunction preventing the Commission from “continuing to make defamatory statements against Plaintiff,” and asks for damages.

This new legal challenge comes in the midst of intense negotiations about how to correct multiple mistakes and move forward with issuing medical cannabis licenses in Alabama.

At issue is the overview of evaluations of the applicants given to Commission members that included a column labeled “Pass/Fail Items noted,” with letters of the alphabet included to indicate different kinds of pass/fail issues. The letter “A,” according to the summary/key given to Commissioners, indicated “Criminal Conviction History (felony or controlled-substance-related misdemeanor /ten years).”

WBRC obtained a copy of the evaluations given to Commissioners that shows seven applicants with the “A” indicating a criminal conviction history for the applicant, including three in the lucrative and highly competitive integrated license category.

This version of evaluations of cannabis license applicants shows 3 integrated license...
This version of evaluations of cannabis license applicants shows 3 integrated license applicants with the "A" indicating criminal convictions in the Pass/Fail Items column.(WBRC-TV)
This is the key given to commissioners, showing what each letter meant.
This is the key given to commissioners, showing what each letter meant.(WBRC-TV)

But multiple license holders given what they now consider a scarlet letter in that column say that designation is inaccurate and that none of their potential owners have felony criminal convictions.

Late Monday, the AMCC updated its website with a new version of the evaluations that scrubs the letter “A” from all but one of the applicants previously given that designation.

The new version of the Integrated license evaluations removes the "A" from all but 1 of the...
The new version of the Integrated license evaluations removes the "A" from all but 1 of the applicants.(WBRC-TV)

The AMCC added a note that says in part “In the “Pass Fail Summary Key”, shown on page seven of the Applicant Summary Report, the “A” reference included entities whose criminal conviction history of applicant’s owner(s), director(s), board member(s), or individual(s) with a controlling interest in the applicant owners’ criminal history could not be fully verified due to non-receipt of timely criminal background checks in the manner designated by the Commission. The reporting form has been revised to delete the “A” reference for the impacted applicants. The prior “A” reference in the summary report for these applicants should not be construed as evidence of an any criminal background on the part of the applicant, or any individual or other entity associated with the applicant. The pass/fail items and the scored items are independent of each other, and the evaluators had no access to the pass/fail items or any indication of how an applicant may perform on any pass/fail item.”

But multiple affected applicants believe they were unfairly dismissed from license consideration because of these inaccurate pass/fail designations, and say the impression that some of their ownership has a criminal record is a bell that can’t be unrung.

AMCC Communications Director Brittany Peters tells WBRC: “The pass/fail notations on the Applicant Summary Report indicate a pass/fail item for which potential issues were identified by Commission members and/or staff during the application review process. The inclusion of any pass/fail notation does not indicate that an applicant “failed” with respect to any noted item. For each notation, Commission members had additional notes and references to application materials and the Commission is responsible for determining the pass/fail status.

There were applicants for whom AMCC did not receive all required criminal background checks (denoted by the “L” designation). Those applicants also received the “A” designation because the criminal background history could not be fully vetted for those individuals whose background checks were not received. The corresponding notes provided to Commission members included information as to which background checks were missing and would have only included information on a disqualifying criminal conviction if such a conviction existed. As noted earlier, the designation(s) on the Applicant Summary Report did not operate as a determination and, therefore, did not ring the bell because the Commission had additional information to consider. After receiving inquiry on the matter, AMCC determined that it was appropriate either to clarify the coupling of the “A” and “L” designations or to uncouple them altogether for applicants who were missing background checks and who otherwise had no disqualifying criminal convictions. The latter was done with the updated Applicant Summary Report and accompanying explanation that was published yesterday.”

This comes as the AMCC faces multiple lawsuits over its handling of the now twice-delayed license issuing process, and is engaged in negotiations with applicants and a judge overseeing the cases to figure out if or how the Commission can move forward in trying for a third time to issue the licenses.

Get news alerts in the Apple App Store and Google Play Store or subscribe to our email newsletter here.