The Arkansas Medical Marijuana Commission has been barred from issuing any more dispensary licenses after an unsuccessful firm launched a lawsuit.

A Pine Bluff-based firm called Medicanna claims it was unfairly overlooked when a license was handed to a rival bidder called Nature’s Herbs and Wellness of Arkansas. It request for a temporary restraining order on new licenses in a lawsuit filed with Pulaski County circuit court, and Judge Wendell Griffen decided to grant the request.

The ban runs until at least March 3, when there will be a preliminary injunction hearing.

Arkansans voted to legalize medical cannabis in 2016 and the Medical Marijuana Commission was created. It was required to hand out between 20 and 40 dispensary licenses.

In the end it decided to divide the state into eight geographic zones and issue four dispensary licenses per zone, resulting in a total of 32. However, 14 of the successful licensees are yet to open their stores.

At least 26,000 people in Arkansas need access to medical cannabis, and they have pressured the commission to clamp down on those that are yet to open their doors. Last month, it voted to issue an additional license in Zone 7.

Three firms – Medicanna, Wild Wings of the Delta, and Nature’s Herbs and Wellness – bid for the license, and the commission decided to hand it to the latter. Medicanna and Wild Wings of the Delta received higher scores in the process, but they were disqualified for requesting 50% refunds of their initial $15,000 application fees.

Medicanna objected the decision in its lawsuit. It argued that disqualifying applicants after they have requested a refund is not mentioned in the commission’s rules.

All unsuccessful applicants are entitled to a refund of half the application fee, but Medicanna said this should not prevent it from gaining a license in Zone 7. Judge Griffen ruled that Medicana would suffer “irreparable harm absent entry of a temporary restraining order”. The case will continue next week.

The first dispensary opened in May 2019, and sales have now gone past the $43 million mark, despite the dearth of dispensaries. The Arkansas Beverage Control Board has warned it may rewrite state marijuana laws so it can revoke the licenses of dispensaries and cultivators that have not opened by mid-2020.

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