Cannabis applicant denied over a nearby church gets no fee refund, Supreme Court rules

Mississippi’s 2022 medical cannabis law bars a dispensary within 1,000 feet of a school, church or child care center, the opinion explains. A waiver is possible only beyond 500 feet. On July 30, 2022, Green Cross of MS LLC applied to open one at 311 Heritage Drive in Oxford.

A survey found a child care center within 1,000 feet but not within 500. So Green Cross got the waiver, or permission, the law allows. The surveyor also certified that no church-owned property was in the zone, the court wrote.

But the state’s Alcoholic Beverage Control division, part of the Department of Revenue, found a church nearby. Wellspring Church had begun holding services on July 15, 2022, in a strip mall 99 feet from the proposed dispensary. It did not own the property, the court noted.

On Aug. 5, 2022, the division denied the license. It refunded the $25,000 yearly license fee but kept the $15,000 application fee, the opinion says.

Green Cross appealed to Panola County Circuit Court. The judge upheld the denial but ordered the $15,000 returned, the opinion says.

Keeping the fee ‘in this unique set of facts’ was ‘arbitrary,’ or without good reason, the judge found. Both sides then appealed to the Supreme Court.

On the fee, the court reversed, meaning it threw out the order to return the $15,000. On the license, it affirmed, meaning it upheld the denial. Justice Branning wrote for five justices.

The law calls the application fee nonrefundable, the court wrote. Its only exception lets the state refund the fee when the sole reason for denial is another dispensary within 1,500 feet. No exception covers a church, and it is ‘certainly not within the constitutional powers of this Court to create one,’ Branning wrote.

The majority also said a church does not have to own its building to count. It is enough that the church existed there before the application, and no one disputed that Wellspring did, the court wrote.

Four justices dissented, meaning they disagreed with the result. Chief Justice Randolph wrote that Green Cross ‘was never offered constitutional due process,’ which Randolph described as notice and a chance to be heard. Randolph would have sent the case back for a full appeal before the agency.

Justice Sullivan, joined by Presiding Justice King and Justice Ishee, said the denial rested on ‘uncorroborated hearsay within hearsay,’ meaning secondhand reports. The agency’s record was three emails from an agent and an affidavit, a sworn statement, Sullivan wrote. Sullivan would have overturned the denial and kept the refund.

The court called this ‘a case of first impression,’ meaning it had never ruled on these questions before. Its answer is that the $15,000 application fee stays with the state when a license is denied over a nearby church.

Under the ruling, a church does not need to own its space to block a dispensary. Wellspring had paid a fee to use its space, the trial judge found. The majority quoted that finding and agreed.

The ruling deals with fees paid by people and companies applying for dispensary licenses. On the court’s reading, an applicant denied for any reason other than a nearby dispensary cannot get the $15,000 application fee back.

A 2023 law, House Bill 1158, created an appeal inside the agency for denied applicants, the majority wrote. Green Cross applied and went to court before that law took effect.

The Wire’s read: applicants carry the risk that a church opens nearby shortly before they apply, even if a careful survey finds nothing.

The ruling does not send the case back to a lower court. Either side may ask the court to reconsider, a step called a motion for rehearing. None had been filed when the opinion was released, its cover page shows.