Alabama Court Confirms Medical Cannabis Agency’s Ability to Rescind Licenses

The Alabama Court of Civil Appeals on Friday ruled that the Alabama Medical Cannabis Commission (AMCC) had “properly exercised” its power when rescinding medical cannabis business licenses it awarded previously, 1819 News reports.

The lawsuit was filed by three medical cannabis companies who were initially awarded licenses in August 2023, only to have the licenses rescinded under litigation brought by other applicants who had not been selected in the first licensing round. The three companies, Southeast Cannabis Company, Yellowhammer Medical Dispensaries, and TheraTrue Alabama, filed suit against the AMCC after not being selected for licenses during the subsequent licensing round in December 2023. In total, Alabama awarded medical cannabis business licenses on three separate occasions in 2023.

“Alabama law recognizes that an administrative agency has a limited inherent power to rescind a nonfinal administrative order to avoid a procedural legal error. The AMCC properly exercised that limited power when it rescinded the August 10, 2023, license awards. In conclusion, we dismiss the appeals insofar as they relate to any claims arising out of the August 10, 2023, decision to rescind the June 12, 2023, license awards. We conclude that the circuit court had jurisdiction over the claims arising out of the AMCC’s October 26, 2023, decision to rescind the medical-cannabis license awards made on August 10, 2023, and we affirm the summary judgment as to those claims.” — Excerpt from the Alabama Court of Civil Appeals ruling

Attorney Patrick Dungan, who represents Southeast Cannabis Company, said in the report the ruling means “that state agencies are gods… that they can do whatever they want to do, whenever they want to do it, and put things on ice for as long as they want to.”

“As of today, if you don’t like the decision of a state agency, all you have to do is accuse the agency of doing something wrong and the agency can use that allegation, without admitting any wrongdoing, as an excuse to give itself a mulligan, even if other parties are harmed,” Dungan told 1819 News.

In October, a Montgomery Circuit judge appointed a mediator to help resolve the legal dispute over the state’s embattled medical cannabis licensing process.