Complaints re the cultivator choices: conflicts of interest, little minority inclusion, etc.

Complaints re the cultivator choices: conflicts of interest, little minority inclusion, etc.



Retired Arkansas Court of Appeals Judge Olly Neal of Marianna has filed a complaint with the Arkansas Ethics Commission over Medical Marijuana Commissioner Travis Story’s scoring of a cultivation permit application for Osage Creek Cultivation, a Carroll County company owned by Jay and Mary Truelove, who have been Story’s legal clients.

Osage Creek was one of five companies whose scoring made them eligible for permits to grow medicinal marijuana.

Story has not commented on the allegations or on his grading of the applications, but state Rep. Bob Ballinger (R-Berryville), Story’s law partner, confirmed in an Arkansas Democrat-Gazette interview that he and Story had worked for the Truloves, were aware of their plans to seek a marijuana permit and had told them they could not handle that business because of Story’s position.

Cultivation applications were redacted before they were provided to commissioners. But while the name Trulove did not appear on Osage Creek’s successful application, it did reveal where the cultivation center would be located (in Carroll County) and information about several businesses owned by the Truloves, including a dirt works, a graphics company and Sports Corner, where a campaign event was held for Ballinger’s Senate race. It also noted the applicant was a pilot. How many pilots with dirt works, a graphics concern and the Sports Corner as a business filed applications for Carroll County?

Neal was identified in a September article in the Arkansas Democrat-Gazette as one of the owners of competing cultivator Delta Cannibanoid, which finished ninth in the scoring.

His multi-page complaint said commissioners were covered by state laws on conflict of interest and that Story had a direct or indirect interest in the application of Osage Creek.

The Ethics Commission doesn’t confirm filings of such complaints. A complaint begins a review process that generally takes weeks to complete.

Meanwhile, another member of the Delta Cannabinoids group, Mildred Griggs of Marianna, has filed a protest over the state Medical Marijuana Commission’s choices for marijuana cultivation permits, which were expected to be ratified at a meeting Wednesday. Griggs sent a letter of protest to Mary Robin Casteel, director of the Alcoholic Beverage Control Division, where marijuana permitting is reviewed.

Among the points raised:

  • Some applicants were incorporated as LLCs, not corporations, as the letter contends is required by statute.
  • The commission failed to adopt rules to ensure fair and impartial proceedings. Sufficient steps weren’t taken to be sure commissioners didn’t know those involved in the applications they graded.
  • Standards were enforced arbitrarily and capriciously. A number of people, for example, failed to include signed (and thus validated) passports. Osage Creek Cultivation, the letter said, failed to provide proof of sufficient assets. Some criminal background checks were missing. Different scores were given for essentially the same answers.
  • The commission didn’t adequately consider racial diversity. Bonus points for diversity were given for the inclusion of women in ownership, though few had major roles in governance or operation. The letter notes there are no black-majority groups and only five African Americans among 53 owners with a cumulative 9 percent of ownership of the five winners.

 

The Department of Finance and Administration has responded to a request from Rep. Scott Baltz (R-Pocahontas) for confirmation that the state Medical Marijuana Commission made sure no applicants for cultivation permits were delinquent on state taxes.

Baltz said he’d heard rumors that there might be some shortcomings in income, sales, personal or corporate franchise taxes.

Director Larry Walther’s detailed response said he couldn’t supply specific information on account of the confidentiality of tax records.

But Walther went on to note that delinquencies only apply to individual applicants, not corporations.

Similarly, a tax deficiency on the part of a corporate entity such as an LLC might not be a personal deficiency, except in circumstances outlined in law.

The letter notes that corporate franchise taxes are obligations of corporations, not individuals, and that personal property taxes are not state taxes.

When reviewing applications, the department reviewed individual applicants and owners of legal entities, the letter said. Finally, Walther concluded the department had received a request from a commission member to ensure there’d been compliance with the tax deficiency standard and was preparing an evaluation for Wednesday meeting.

Natural State Wellness, which had two permit approvals but, by law, could choose to pursue only one, will build a facility in Jackson County, rather than Jefferson County as it had originally announced. The other four permits anticipate facilities in Carroll, Woodruff, Jackson and Jefferson Counties.