A potential earthquake for the Arkansas marijuana industry

The suit, filed by Good Day Farm Arkansas LLC and Capital City Medicinals LLC, could void the restrictions the legislature placed on such things as advertising by cultivators and dispensaries, telehealth for prospective consumers and the sale of prerolled joints, which the legislature prohibited in 2017.   

“If the Good Day lawsuit is upheld, it will radically change the rules that the medical marijuana industry currently operates under,” said Bill Paschall, who runs the Arkansas Cannabis Industry Association. “So, it’ll be a bit of an earthquake in the industry.”

If Good Day Farm is victorious, Amendment 98 will revert back to its original form, meaning the legislature’s changes to it will be null and void, as if they never happened, according to Joshua Silverstein, a law professor at the University of Arkansas at Little Rock William H. Bowen School of Law.

Rules made by the Alcohol Beverage Control Administration to regulate the industry could be voided as well if any of those rules were based on changes the legislature made to the original amendment, Silverstein said.

The case could take a few months at the trial court level where it is in the hands of Circuit Judge Mackie Pierce. Given how much is at stake, Silverstein said he expects the losing side to appeal, which would take several more months. 

Good Day Farm Arkansas LLC, which is a major force in the Arkansas medical marijuana industry, owns a cultivation facility in Pine Bluff. Capital City Medicinals is the legal name of the dispensary better known as Berner’s by Good Day Farm in Little Rock. Good Day Farm also manages dispensaries in Van Buren and Texarkana. 

Defendants in the case are the state Alcoholic Beverage Control Administration and the state of Arkansas. 

Amending Amendments

Good Day Farm argues in the suit that the state constitution prohibits the legislature from amending the constitution on its own without a vote of the people. 

“Amendments to the Arkansas Constitution require a vote of the people because the people have reserved that power to themselves and not delegated it to the General Assembly,” the lawsuit states.

Amendment 7 to the state constitution, which covers initiatives and referendums, states that measures can only be amended by a two-thirds vote of the General Assembly. Elsewhere in the amendment, a “measure” is defined as a “bill, law, resolution, ordinance, charter, constitutional amendment, or legislative proposal of any character.” 

So, that means the state legislature can change amendments by a two-thirds vote, right? 

A state Supreme Court ruling from 1951 says no. 

In that case, Chief Justice Griffin Smith said it is “inconceivable” that the people intended for the state legislature to have that power. With such authority, the legislature could change the meaning of any constitutional provision and, if that was the people’s intention, the people would have expressed such a desire in more emphatic terms, Smith wrote. 

So that means the legislature can’t amend an amendment? Not so fast. 

Generally, a Supreme Court ruling means an issue has been resolved but, as Silverstein points out, the court can change its precedents as the state Supreme Court did on the issue of sovereign immunity. In this case, the precedent is from 1951 — that’s 71 years ago — and a lot of water has passed under the bridge in that time. The court could decide to make a change. 

“There’s a case out there [from 1951], but there’s been a lot of activity since, so the Supreme Court may revisit the issue and may simply say that the older case is governing or maybe that older case isn’t as clear as it appears,” Silverstein said. 

In other words, the constitution is unclear and the ruling from 1951 might not have settled the issue. 

David Couch, the Little Rock lawyer who wrote the successful 2016 amendment, said he believed the legislature could change certain aspects of the amendment when he wrote it. Couch said he believed the legislature could change anything about the amendment except the fact that marijuana would be legalized, the number of dispensaries and cultivators, and they couldn’t change their power to amend the amendment. 

Couch said he has other concerns about the amendment. 

“I have always been concerned about the Supreme Court reversing that 1950s decision,” Couch said. 

Couch said some justices take a more literal approach to interpreting law and they could “very easily” rule that Amendment 7 gives the legislature the power to amend a constitutional amendment.  

The constitution is unclear on the issue and the Supreme Court ruling that governs the issue could be tossed aside. So anything could happen, although Silverstein said “probably the better reading” of the state constitution is that the state legislature doesn’t have the authority to change the constitution on its own. 

Regardless, expect appeals until the matter is settled, Silverstein said. 

Section 23

There’s another issue at hand in this lawsuit — Section 23 of Amendment 98. 

When voters approved Amendment 98 in 2016 to legalize medical marijuana, it appeared they gave the legislature some authority to make changes to the amendment. In Section 23, the amendment says “the General Assembly, in the same manner as required for amendment of laws initiated by the people, may amend the sections of this amendment so long as the amendments are germane to this section and consistent with its policy and purposes.”

The lawyers for Good Day Farm say that means the legislature can only amend the constitution through the way it typically does, by referring an amendment to the voters. Furthermore, Good Day Farm argues that “germane to this section” means the legislature can only amend Section 23. 

If the legislature can only amend Section 23, then the rest of the amendment can’t be touched. That would mean any purported changes the legislature made to the rest of the amendment would not stand. 

The state argues in its filing that Amendment 98 gave the legislature the authority to make changes. 

“Section 23 of Amendment 98 specifically provides for amendment by the General Assembly — it is even entitled ‘Amendment by General Assembly’,” the filing states. “Moreover, Section 26 of Amendment 98 confirms this provision by using the language, ‘an act of the General Assembly’.” 

Changes 

If Good Day Farm gets a favorable ruling and all of the legislature’s changes are considered null and void, that would open the door to legalizing some things that have been off limits in the state medical marijuana marketplace. 

The legislature made 27 changes to Amendment 98, including limitations on telemedicine for people seeking medical marijuana cards, limitations on advertising and packaging and a prohibition on supplying “paraphernalia that requires the combustion of marijuana to be properly utilized.”  

That measure, known as Act 1024 of 2017, specifically lists “pipes, water pipers, bongs, chillums, rolling papers and roach clips.” 

If that measure is voided, then those items — including prerolled joints — could find their way to Arkansas dispensary shelves, although they would still need to be cleared by regulations at the ABC. 

And that’s how Couch always figured those items would be regulated anyway. 

“I never anticipated that our General Assembly would get into such minutiae over the involvement of whether or not you have prerolls,” Couch said. “I just always assumed that was a regulatory function.”