Alabama Medical Cannabis Licensing Derailed by Court

One step forward, two steps back, remains the ongoing theme for Alabama’s medical cannabis regulators, who have been attempting to issue business licenses since June 2023.

In the latest legal saga, Montgomery County Circuit Court Judge James Anderson ruled April 21 that the Alabama Medical Cannabis Commission (AMCC) erred in utilizing an emergency rule in December 2023, when it re-awarded licenses in a second do-over.

The ruling comes as the AMCC has yet to officially issue five vertically integrated facility licenses and four dispensary licenses to the awardees due to ongoing litigation. The integrated facility licenses—the state’s most competitive category—would authorize companies to cultivate, process, transport and open up to five dispensaries each. The dispensary licensees could open up to three stores each.

Plaintiffs Jemmstone Alabama LLC, Bragg Canna of Alabama LLC, and Insa Alabama LLC—three unsuccessful applicants for the integrated facility licenses—filed a motion for partial summary judgment and permanent injunction in the circuit court, naming AMCC and Trulieve AL Inc. as defendants. Trulieve AL was awarded an integrated facility license in the AMCC’s December 2023 do-over despite not having a top-five score in that licensing process.

In Monday’s ruling, Anderson acknowledged that the AMCC implemented the emergency rule without undergoing a traditional rulemaking process of notice and comment and used that emergency rule as its legal process to award integrated facility licenses to five entities during its Dec. 12, 2023, meeting.

However, the judge ruled the emergency rule to be void—therefore invalidating the AMCC’s licensing awards from December 2023—for lack of any “emergency” as required by the Alabama Administrative Procedures Act (AAPA).

“The grounds relied upon by the commission … do not rise to the statutory standard of ‘an immediate danger to public health, safety or welfare,’” Anderson wrote. “An agency’s being embroiled in ongoing litigation is simply not a legal emergency, and no authority suggests so. Likewise, the unavailability of medical cannabis is not an emergency because it is not a recent development. Medical cannabis has never been available in Alabama, so its availability or lack thereof is not emergent.”

The judge also ruled that patient demand for medical cannabis does not suggest an emergency.

The court ruling comes nearly four years after Gov. Kay Ivey signed legislation in May 2021 to legalize medical cannabis in the Yellowhammer State. Ivey signed that legislation three days after the state’s Supreme Court ruled that a November 2020 voter-approved initiative to legalize medical cannabis was unconstitutional.

The 2021 legislation established the 14-member AMCC that’s tasked with issuing business licenses, from which nine companies can open 37 dispensaries to serve qualifying patients.

While the AMCC initially awarded licenses in June 2023, the commission abandoned that awards process four days later due to “potential inconsistencies” in a third-party, blind scoring process. Essentially, individual sections were scored correctly on applications, but the AMCC determined there were math errors when calculating cumulative scores for some applicants.

Verano, a Chicago-based multistate operator that won one of the five coveted integrated facility licenses in that initial awards process, turned around a sued the AMCC for rescinding the results. Even after the scores were retabulated, Verano remained the highest-scoring applicant; however, when AMCC regulators re-awarded the licenses in the first do-over in August 2023, Verano was left out.

At the time, James Leventis, Verano’s executive vice president of Legal, Regulatory and Government Affairs, told Cannabis Business Times that the AMCC risked entering an endless circle of lawsuits should it move forward on re-awarding licenses rather than creating a pathway for applicants wrongly left out of the initial licensing awards to challenge their denials.

Although Verano’s lawsuit was dismissed, Leventis was not wrong in his prediction.

Other lawsuits unfolded, and the AMCC decided to establish its now-voided emergency rule for the second licensing do-over in December 2023. As part of the emergency rule, license applicants were provided the opportunity to present their business plans to the 12 commissioners ahead of the awards process.

During that third licensing attempt, AMCC members took it upon themselves to rank 33 qualifying applicants for the state’s integrated facility licenses during their meeting, only to omit two applicants that they themselves had scored higher than those awarded. In other words, the AMCC members didn’t stick to their own scoring structure.

In particular, Jemmstone Alabama—one of the three plaintiffs in this week’s ruling—was provided a top-five score from the AMCC, but then the commissioners voted to award the license to a lower-scoring company instead.

Warren Cobb, general counsel for Sustainable Alabama LLC, one of the five awardees from the December 2023 do-over, told 1819 News this week that the company plans to appeal Anderson’s April 21 order.

“Judge Anderson’s opinion purports to invalidate a rule his court essentially created through the mediation process in October of 2023,” Cobb said. “The emergency rule was created to allow the plaintiffs to have the presentations they sought and now decry as illegal. We relied upon this rule, as did every other party, without objection. It was only after the plaintiffs lost did they attempt to attack this rule.”

However, according to Anderson, the AMCC suspended and did not apply parts of the emergency rule during the Dec. 12, 2023, licensing awards meeting.

“The fact that the commission departed from the ER in the middle of the meeting itself suggests there was no emergency,” the judge wrote this week. “Second, the commission’s most recent action fatally undercuts its claim of emergency. On April 10, 2025, the commission met and passed proposed rules, for notice and comment in the normal course, governing the investigative hearings … for denied applications (such as the plaintiffs).”

Furthermore, Anderson ruled that the AMCC’s decision not to treat the post-award (and post-denial) investigative hearings as emergent contradicts its position that the October 2023 situation was emergent.

“The truth is that neither was emergent,” he wrote.