Alabama’s troubled medical cannabis program faces more uncertainty after an appeals court rejected regulators’ attempt to dismiss a lawsuit challenging their licensing process.

The Alabama Court of Civil Appeals ruled against the state’s Medical Cannabis Commission (AMCC) last Friday, allowing Jemmstone Alabama LLC to proceed with claims that regulators mishandled its application for an integrated facility license, according to court documents obtained by the Alabama Political Reporter.

The decision deepens scrutiny of Alabama’s cannabis program, which has attempted three licensing rounds since 2021 without successfully launching operations. The AMCC had argued the case should be dismissed on sovereign immunity grounds and cited procedural issues with how commissioners were named in the complaint.

However, Judge Moore wrote for the appellate court that “technical errors, such as omitting names from a caption, should not defeat a plaintiff’s clearly expressed intent.”

The ruling means the Montgomery Circuit Court will now hear Jemmstone’s core claims about licensing fairness. Legal experts told the outlet that the case could establish precedent for how state agencies handle administrative disputes.

Meanwhile, a court-appointed mediator is trying to untangle disputes over five integrated facility permits that have effectively frozen the broader cannabis infrastructure buildout. Changes to the licensing rules could follow.

“The AMCC can no longer hide behind technicalities,” said a legal analyst familiar with the case, who spoke to the Alabama Political Reporter. “This ruling forces them to confront the core issues of fairness and accountability in their licensing process.”

The commission’s repeated procedural missteps have frustrated industry stakeholders. Regulators have walked back licensing decisions multiple times since December 2023 amid accusations of opacity and mismanagement. The commission’s next steps may determine if the program advances or faces more legal hurdles.

The Daily Hit is a recap of the top financial news stories for Tuesday, October 22, 2024.

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