After some debate, the Arkansas Medical Marijuana Commission voted June 30 to expand the number of licensed cultivators and dispensaries in the state, according to a Talk Business & Politics report.

In a 3-2 vote, regulators released the two remaining cultivation licenses, the news outlet reported, expanding the number of cultivators in the state from six to eight, although only three growers are operational at this time.

The two new cultivators, River Valley Relief and New Day Cultivation, will be located in Sebastian and Garland Counties, respectively, according to Talk Business & Politics.

In a 4-1 vote, the Arkansas Medical Marijuana Commission also approved the release of four additional dispensary licenses, the news outlet reported.

Regulators approved Natural Root Wellness in Fayetteville, Green Gross Cannabis in Highland, MissCo Cannabis Dispensary in Osceola and Native Green Wellness in Little Rock.

There are three dispensary licenses still available, Talk Business & Politics reported, but the applications don’t expire until January 2021.

In the latest in a series of cannabis licensing delays due to the COVID-19 pandemic, Illinois has delayed issuing craft grow, infuser and transporter licenses, according to the Chicago Tribune.

The Department of Agriculture planned to issue 40 craft grow licenses, 40 infuser licenses and an undetermined number of transporter licenses July 1, the news outlet reported, but Gov. J.B. Pritzker instead issued an executive order to delay the permits, without specifying when they would be issued.

The new grow licenses will be the first opportunity for those not already operating in the state’s medical cannabis market—as well as many social equity applicants—to participate in the adult-use industry, and the transporter and infuser licenses create new categories of businesses that have not yet existed in Illinois’ cannabis market, the Chicago Tribune reported.

Photo courtesy of the U.S. Department of Justice

A Department of Justice whistleblower has testified that U.S. Attorney General William Barr was motivated by his personal dislike of the cannabis industry when he launched multiple Antitrust Division merger investigations into nearly a dozen cannabis deals last year.

John Elias, a career employee at the DOJ, testified June 24 before the U.S. House Committee on the Judiciary, alleging that 10 Antitrust Division probes involving cannabis companies—which accounted for 29% of the Antitrust Division’s total merger investigations in 2019—were not bona fide antitrust investigations, as they did not meet the standard internal requirements for proceeding with a Second Request subpoena, which the DOJ must file to formally object to a merger.

Instead, Elias alleged that Barr ordered the investigations because of his personal animosity toward the cannabis industry.

For Matt Karnes, founder of cannabis-focused advisory firm GreenWave Advisors, cannabis’s federally illegal status, coupled with the fact that the industry is still in its infancy, should have prohibited the DOJ from launching these antitrust investigations in the first place.

“It’s very nascent, so it’s like beating up a toddler,” he said. “It doesn’t make any sense in any way, shape or form. If it’s illegal, don’t look at this from an antitrust perspective when they still say banking is not permitted, … [and] even if it was legal, it would be too early to scrutinize anything because it’s not even nationwide yet.”

Still, as any cannabis business navigating IRS Code 280E will attest, companies operating in state-legal cannabis programs are still subject to other applicable federal laws, such as those surrounding securities, employment, taxes and antitrust statutes, according to Eric Berlin, co-chair of Dentons' Cannabis Practice.

Although Berlin said it’s perfectly normal for the DOJ to issue Second Request subpoenas when legally justified, no matter the industry, he still found the probes into the cannabis mergers surprising.

“The DOJ’s actions never made sense from a legal perspective, and the claim that the DOJ needed information about a new industry, which is what they were saying, seemed like an abuse of power at the time,” he said. “It wasn’t even a plausible excuse to me at the time, knowing the industry. It was clear that there was no risk of monopoly or harm to competition, as the industry was and remains fragmented and competitive. In fact, in Mr. Elias’s testimony, we confirmed those facts. Even the DOJ was looking at it as fragmented and competitive, and these investigations were solely motivated by Attorney General Barr’s personal view.”

Berlin represented a party involved in a cannabis merger that was flagged for DOJ review, and at the time, he did not understand why the DOJ issued a Second Request subpoena to his client.

“I look back and it just confirmed my worst fears at the time,” he said. “The fact that it comes from basically just the personal animus of the highest legal officer in the nation is disturbing.”

Complying with Second Requests is very onerous, Berlin added, and any party going through this process can spend hundreds of thousands of dollars, if not upwards of a million dollars, to deal with the investigation and associated legal fees.

“The takeaway is that there’s no question that these companies that were under scrutiny that had these deals reviewed had to spend money … and use resources unnecessarily,” Karnes said. “Also, I think to some extent, investors may have suffered because … some of these companies assumed that these deals were going to go through, included them in the revenues in their guidance, and then when the deals were prolonged, … they weren’t able to meet their numbers, so the stock prices in some cases suffered and I’m sure some investors lost money.”

Many of the cannabis mergers under investigation did not get closed, Berlin said, due to these additional costs and time delays, and now, not only are the companies involved left with little to no recourse, but the DOJ’s actions have dramatically slowed the M&A activity in the industry.

RELATED: Federal HSR Reviews Slow Down Big Cannabis Acquisition Deals

“The actions by the DOJ scared other parties from entering mergers and acquisitions,” Berlin said. “The stunning thing is Attorney General Barr, if these allegations are true, basically got what he wanted, which is a chilling effect on the industry. There is no great recourse other than I would hope these allegations now prevent the DOJ from bringing other spurious antitrust claims or allegations against other parties in the industry. … If it turns out that there are no repercussions for this sort of activity, then maybe that chill will remain.”

“It just underscores a lack of coordination at the federal level,” Karnes added. “It was just a complete waste of time and it appears to be a ploy to disrupt the growth of the industry. … And I don’t think there will be any more types of scrutiny. The whistle’s been blown.”

From a larger perspective, however, these accusations could have repercussions that expand beyond the cannabis industry.

“Using one’s office for personal gain or to implement one’s personal view at the expense of sound government policy and the rule of law is the definition of government corruption,” Berlin said.

The fact that Barr targeted a particular industry is not only corrupt, he added, but it also raises questions about perjury.

“The attorney general testified under oath in his confirmation hearing before the U.S. Senate that he would not … upset federal expectations … as a result of the Cole Memorandum,” Berlin said. “There were people relying on the federal government not entering this area, and he was saying, … ‘I’m not going to go after companies that are relying on the Cole Memorandum,’ and he did just that.”

For Karnes, however, if the allegations are true, it could signal a more positive message for the cannabis industry, one that underscores its resilience and, perhaps, its inevitability.

“If [Barr] was so opposed to pot like [former Attorney General Jeff] Sessions was, and Sessions came out with that statement when he first took office, then why didn’t this guy do it?” Karnes said. “I think it’s because he knows he can’t stop it legally. He can’t just come in and shut everything down, so what does he do? He tries to crumble it in another way, in an indirect way, to weaken it. To me, this is a net positive for the industry because it really signals that it is going to become legal. If it wasn’t, he would shut it down."