Cannabis ap­pli­cant put meet-up on tape

Se­cret video shows topic was failed li­cense

Arkansas Democrat-Gazette - - FRONT PAGE - HUNTER FIELD

An ap­pli­cant for one of Ar­kan­sas’ first med­i­cal-mar­i­juana grow­ing li­censes se­cretly video­taped a meet­ing ear­lier this year with a mem­ber of the panel given the task of is­su­ing the lu­cra­tive per­mits.

The record­ing, ob­tained this week by the Ar­kan­sas Demo­crat-Gazette, re­veals more about an at­tempted-bribery al­le­ga­tion that has loomed over the roll­out of the state’s med­i­cal-mar­i­juana pro­gram since the al­le­ga­tion be­came pub­lic in June.

Dr. Car­los Ro­man, the Ar­kan­sas Med­i­cal Mar­i­juana Com­mis­sion mem­ber, and Ken Shollmier, owner of Nat­u­ral State Agro­nomics, ac­cused each other of wrong­do­ing in in­ter­views on Fri­day, but they both agreed that the March meet­ing be­tween them was set up for one main goal: to cap­ture Ro­man on tape ask­ing for a bribe.

Shollmier and Ro­man, how­ever, both said that no money ever changed hands.

Nat­u­ral State Agro­nomics, which didn’t score well enough to re­ceive one of the five cul­ti­va­tion li­censes, was rated poorly by four com­mis­sion mem­bers, but it was the sec­ond-high­est of Ro­man’s scores, rais­ing eye­brows when the grades were re­vealed in Fe­bru­ary.

The bulk of the video­taped meet­ing was a con­ver­sa­tion be­tween Ro­man and Shollmier about why Ro­man thought the other com­mis­sion­ers graded Nat­u­ral State Agro­nomics’ ap­pli­ca­tion poorly.

“I ap­pre­ci­ate ev­ery­thing,” Shollmier told Ro­man in the video. “If I owe you some­thing, let me know.”

“No sir, not at all,” Ro­man said. “A kind word in your fa­vor (sic) if you hear my name men­tioned. You see [Sen­ate Pres­i­dent Pro Tem­pore Jonathan] Dis­mang or some­thing, say, ‘Yeah, reap­point Dr. Ro­man to that com­mis­sion.’ You see the gover­nor, just say, ‘I think Dr. Ro­man is a swell guy. He ought to stay on that com­mis­sion.’ But that’s all. That’s all.”

Reached about the video on Fri­day, Ro­man said he was un­aware he was be­ing recorded dur­ing the meet­ing, and he had felt pres­sured into meet­ing Shollmier twice — once be­fore scor­ing ap­pli­ca­tions and once af­ter. The meet­ing af­ter the scor­ing process was the one recorded.

Dr. Ralph Teed, a New­port den­tist, helped ar­range the meet­ings. Teed, who could not be reached for com­ment Fri­day, was at the March meet­ing, Ro­man and Shollmier con­firmed.

Ro­man said he con­tacted the FBI af­ter Shollmier and his as­so­ciates tried to use se­cretly recorded footage to ex­tort him. Ro­man said he vol­un­tar­ily turned over his bank, tax and phone records to the FBI.

“I should’ve gone to the FBI ear­lier,” Ro­man said. “I’ve never ex­pe­ri­enced any­thing like this.”

An FBI spokesman de­clined to com­ment. No in­for­ma­tion about the in­ves­ti­ga­tion has been re­leased since it was dis­closed in a June let­ter from Ar­kan­sas At­tor­ney Gen­eral Les­lie Rut­ledge to the Ar­kan­sas Supreme Court, which at the time was con­sid­er­ing a le­gal chal­lenge to the com­mis­sion’s scor­ing process.

Rut­ledge wrote in the let­ter, which she tried to keep se­cret, that Ro­man had re­ported be­ing of­fered a bribe by Nat­u­ral State Agro­nomics to au­thor­i­ties.

Shollmier on Fri­day de­nied ever of­fer­ing Ro­man a bribe. He ini­tially told a re­porter who asked about the video­taped meet­ing that he didn’t “un­der­stand what you’re talk­ing about,” but then he briefly dis­cussed the video af­ter the re­porter de­scribed it.

He said Ro­man re­quested the meet­ing. Shollmier said he hid the cam­era to try to cap­ture Ro­man on video ask­ing for a bribe.

“He had al­ready told peo­ple I had tried to bribe him, which is a lie,” Shollmier said, adding that Ro­man had asked him for a loan. (Ro­man de­nied ever ask­ing for a loan.)

The video raises ad­di­tional ques­tions about the process the Ar­kan­sas Med­i­cal Mar­i­juana Com­mis­sion used to eval­u­ate the cul­ti­va­tion li­cense ap­pli­ca­tions. The cul­ti­va­tion li­censes were awarded in July and the next step will be to award dis­pen­sary li­censes. Of­fi­cials es­ti­mate med­i­cal mar­i­juana will be avail­able to Arkansans in 2019. Vot­ers ap­proved med­i­cal mar­i­juana in a con­sti­tu­tional amend­ment in the 2016 elec­tion.

The process has been marred by scor­ing ir­reg­u­lar­i­ties, al­leged con­flicts of in­ter­est, pla­gia­rism, court chal­lenges and claims that reg­u­la­tors failed to ver­ify that per­mit-hold­ers have com­plied with key re­quire­ments.

The video shows, for ex­am­ple, that com­mis­sion­ers could iden­tify who owned the com­pa­nies be­hind cer­tain ap­pli­ca­tions dur­ing the grad­ing process, de­spite ef­forts to redact in­for­ma­tion from the doc­u­ments. Al­co­holic Bev­er­age Con­trol Di­vi­sion staff mem­bers stripped the ap­pli­ca­tions of own­ers’ in­for­ma­tion to try to pre­vent any bias in the grad­ing process.

How­ever, as seen in the meet­ing on the video­tape, Ro­man im­plied to Shollmier sev­eral times that he knew Nat­u­ral State Agro­nomics’ ap­pli­ca­tion was his dur­ing scor­ing, say­ing he went the “ex­tra mile” while grad­ing the pro­posal. Still at sev­eral points, Ro­man stressed that he didn’t do Shollmier any fa­vors.

On Fri­day, Ro­man said that much of what he said in the video is false, and that he was sim­ply try­ing to ap­pease Shollmier be­cause he was scared.

“They tried to en­trap me with that video, so they could lever­age this over me to get me to do other things.” Ro­man said Fri­day.

Ro­man said that he knew Nat­u­ral State Agro­nomics’ ap­pli­ca­tion was Shollmier’s when he was grad­ing it, and he gave the com­pany a high score be­cause he was “un­der duress.” But the com­mis­sioner also said he was im­pressed by the com­pany’s pro­posal to part­ner with an Is­raeli med­i­cal re­search group.

Ro­man, in the video, also gives Shollmier a copy of Nat­u­ral State Medic­i­nals Cul­ti­va­tion’s ap­pli­ca­tion. The com­pany was the high­est-ranked one to ap­ply for a grow­ing per­mit. Ro­man told Shollmier that he brought the top ap­pli­ca­tion, so Shollmier could use it as a tem­plate for his own ap­pli­ca­tion if ad­di­tional grow­ing per­mits be­came avail­able.

“Yeah, I’ll let you have it,” Ro­man said. “You bet­ter not tell where you got it.”

In the video, Ro­man ap­pears to point to di­a­grams and ren­der­ings that were redacted in the por­tions of the ap­pli­ca­tions re­leased to the pub­lic. Those redac­tions were made be­cause the sec­tions were con­sid­ered pro­pri­etary in­for­ma­tion ex­empt from dis­clo­sure un­der the Ar­kan­sas Free­dom of In­for­ma­tion Act. The sec­tions would not have been redacted in the ap­pli­ca­tions pro­vided to the com­mis­sion­ers for grad­ing.

Ro­man said Fri­day that the ap­pli­ca­tion he gave Shollmier was the same ver­sion re­leased to the pub­lic.

If an unredacted ver­sion was shared, Scott Hardin, a spokesman for the Ar­kan­sas De­part­ment of Fi­nance and Ad­min­is­tra­tion, which pro­vides ad­min­is­tra­tive sup­port to the com­mis­sion, said it wouldn’t vi­o­late any com­mis­sion rule, but it would be “very con­cern­ing,” be­cause the agency went to great lengths to pro­tect sen­si­tive in­for­ma­tion in each ap­pli­ca­tion.

Hardin also said there’s no rule that would for­bid a med­i­cal-mar­i­juana com­mis­sioner from meet­ing with an ap­pli­cant.

Ro­man said Shollmier wasn’t the only ap­pli­cant he met with, say­ing there were about five other groups he couldn’t name.

“I just wanted to learn more about med­i­cal mar­i­juana and the in­dus­try,” Ro­man said. “We’re all new to this.”

Three of the other com­mis­sion mem­bers were crit­i­cized in the video. Shollmier said “the black lady,” the com­mis­sion chair­man, Dr. Ronda Henry-Till­man, was the one caus­ing prob­lems in the scor­ing process.

Shollmier also said that sev­eral of the five win­ning com­pa­nies only in­cluded black own­ers in their ap­pli­ca­tions to earn bonus points. Ap­pli­cants could earn ad­di­tional points on their ap­pli­ca­tions for sev­eral fac­tors, in­clud­ing mi­nor­ity own­er­ship, lo­cat­ing in an eco­nom­i­cally de­pressed county and com­mu­nity ser­vice.

“The blacks won’t be in there be­fore it’s over with,” Shollmier said. “They won’t be. They’ll be bought out. That’s just the way it works.”

Shollmier also im­plied that sev­eral of the com­mis­sion mem­bers took money in ex­change for boost­ing scores.

Be­sides Ro­man, Stephen Car­roll was the only com­mis­sion mem­ber to re­spond to com­ment re­quests on Fri­day.

“Through­out the en­tire process, no one ever of­fered me, nor did I so­licit any­thing in ex­change for pref­er­en­tial treat­ment in the scor­ing of med­i­cal mar­i­juana cul­ti­va­tion cen­ter ap­pli­ca­tions,” Car­roll said. “In fact, I sug­gested that the cul­ti­va­tion cen­ter ap­pli­ca­tions be graded by an in­de­pen­dent third party. Af­ter the scan­dal that en­sued fol­low­ing the ini­tial award­ing of cul­ti­va­tion li­censes, I rec­om­mended [to the com­mis­sion] that we again con­sider hir­ing in­de­pen­dent graders for the dis­pen­sary ap­pli­ca­tions to en­sure the in­tegrity of the process. That mo­tion passed 3-2. Any sug­ges­tion that I was not com­pletely trans­par­ent and ob­jec­tive in the process is lu­di­crous.”

The com­mis­sion is next sched­uled to meet on Tues­day to dis­cuss the dis­pen­sary ap­pli­ca­tion with Pub­lic Con­sult­ing Group, the com­pany se­lected to grade the about 200 ap­pli­ca­tions for 32 dis­pen­sary li­censes. The com­mis­sion elected to hire a con­sul­tant to grade dis­pen­saries af­ter the con­tro­ver­sies that fol­lowed the grow­ing-li­cense process.

Shollmier is a Lit­tle Rock busi­ness­man and real es­tate de­vel­oper. He’s also a mem­ber of the Ar­kan­sas Eco­nomic De­vel­op­ment Coun­cil — the 16-mem­ber body ap­pointed by the gover­nor. He’s also a fre­quent donor to the Uni­ver­sity of Ar­kan­sas, Fayetteville, which has named a lec­ture hall and plaza af­ter Shollmier and his wife, Linda.

At the end of the March video­taped meet­ing, Shollmier said he’d praise Ro­man to Gov. Asa Hutchin­son.

Hutchin­son said in a Fri­day state­ment that hasn’t oc­curred.

“I have not re­viewed the video, but Mr. Shollmier has never ap­proached me to dis­cuss a Med­i­cal Mar­i­juana Com­mis­sioner,” Hutchin­son said through a spokesman. “Dr. Ro­man is not my ap­pointee, and I have not spo­ken to him about any med­i­cal mar­i­juana is­sues. The Med­i­cal Mar­i­juana Com­mis­sion is an in­de­pen­dent body. Upon hear­ing sub­stan­tive al­le­ga­tions con­cern­ing Dr. Ro­man, I co­or­di­nated with the At­tor­ney Gen­eral and no­ti­fied law en­force­ment. This is re­flected in the At­tor­ney Gen­eral’s let­ter of June 5, 2018 to the Ar­kan­sas Supreme Court.”

At the start of the video, Shollmier and one of his as­so­ciates can be seen po­si­tion­ing the cam­era in a hid­den spot near a fake plant. As the as­so­ciate packs up to leave, he makes plans to re­trieve the cam­era later.

“Just in case he’s not with us, we’ve got some­thing (in­audi­ble) if he wants to if he was to say some­thing not true you’ll be able to hold his feet to the fire,” the man said.

Shollmier

Ro­man

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