Dragan Vicentic, Licensee, D/B/A Green Springs Medical, LLC v. Arkansas Alcoholic Beverage Control Board

2026 Ark. App. 170

• Court: Court of Appeals of Arkansas
• Decided: March 11, 2026
• Status: Published

Opinion

Cite as 2026 Ark. App. 170 ARKANSAS COURT OF APPEALS DIVISION 1 No. CV-25-140

Opinion Delivered March 11, 2026 DRAGAN VICENTIC, LICENSEE, D/B/A GREEN SPRINGS MEDICAL, APPEAL FROM THE GARLAND LLC COUNTY CIRCUIT COURT APPELLANT [NO. 26CV-24-702]

V. HONORABLE, KARA A. PETRO, JUDGE

ARKANSAS ALCOHOLIC BEVERAGE AFFIRMED CONTROL BOARD APPELLEE

CASEY R. TUCKER, Judge

Dragan Vicentic, licensee, d/b/a Green Springs Medical LLC (GSM), appeals the

Garland County Circuit Court’s order affirming the Arkansas Alcoholic Beverage Control

Board’s (the Board’s) decision revoking GSM’s dispensary license. For its points on appeal,

GSM asserts that the revocation of its license was not supported by substantial evidence and

that the Board’s revocation was based on unlawful procedure. We affirm.

I. Whether the Revocation Is Supported by Sufficient Evidence

GSM is under the misguided impression that the Board was required to find that

GSM was endangering cannabis patients in order to revoke its license. Pursuant to the rules

for the medical marijuana industry in Arkansas, GSM is incorrect. The Board cited and applied the pertinent rules to the overwhelming evidence, thereby supporting its decision in

this case.

Pursuant to the Arkansas Medical Marijuana Amendment of 2016, the Medical

Marijuana Commission is charged with licensing and regulating the licensing of dispensaries

and cultivation facilities. Ark. Const. amend. 98, § 8 (a)(1)–(2). The Alcoholic Beverage

Control Division (the ABC) is responsible for administering and enforcing the provisions of

amendment 98 as they apply to dispensaries and cultivation facilities. Id. § 8(3). The ABC

is charged with adopting rules necessary to carry out the purposes of amendment 98 and to

perform its duties. Id. § 8(b)(1). Rules adopted under section 8 are rules as defined in the

Arkansas Administrative Procedure Act (APA). Id. § 8(b)(2). The ABC has the duty to adopt

rules governing, in pertinent part:

(1) Oversight requirements for dispensaries and cultivation facilities;

(2) Recordkeeping requirements for dispensaries and cultivation facilities;

....

(5) The manufacture, processing, packaging, labeling, and dispensing of usable marijuana to qualifying patients and designated caregivers, including without limitation:

(6) Procedures for suspending or terminating the licenses of dispensaries and cultivation facilities that violate the provisions of this amendment or the rules adopted under this amendment, procedures for appealing penalties, and a schedule of penalties;

(7) Procedures for inspections and investigations of dispensaries and cultivation facilities;

2 (8) Advertising restrictions for dispensaries and cultivation facilities, including without limitation the advertising, marketing, packaging, and promotion of dispensaries and cultivation facilities with the purpose to avoid making the product of a dispensary or a cultivation facility appealing to children, including without limitation:

(A) Artwork;

(F) Other forms of marketing related to medical marijuana;

(9) Procedures for the disposal or other use of marijuana not dispensed to a qualifying patient; and

(10) Any other matters necessary to the division’s fair, impartial, stringent, and comprehensive administration of its duties under this amendment.

Ark. Const. amend. 98, § 8(3). GSM was a medical marijuana dispensary in Hot Springs,

Arkansas, prior to the revocation of its license. As such, GSM was subject to the ABC’s

oversight. Id. § 8.

Pursuant to its rules and regulations, the ABC conducts inspections on dispensaries

at a minimum of one every six months. Rules Governing the Oversight of Marijuana

Cultivation Processors, Facilities, and Dispensaries, 006.02.7 Ark. Admin. Code R. 4.3

(Westlaw current through July 15, 2025) (20 CAR § 810-203(a) (2026));1 see also Ark. Const.

amend. 98, § 10(a) (dispensaries are highly regulated by the State and are subject to

reasonable inspection by the ABC). Drawing on testimony and evidence presented at the

1 Code of Arkansas Rules, https://codeofarrules.arkansas.gov/ (Title 20, Chapter (X XI) (archived at https://perma.cc/28TJ-729H).

3 hearing before the Board, when investigators with the ABC prepare to conduct an inspection

of a licensed location, they pull the state inventory report for that particular dispensary.2

They then select thirty items for review from the inventory. When the inspectors arrive at

the dispensary, they give a copy of the list of thirty items to the employees. They pull the

items to check against the inventory report, and the inspectors prepare a report of their

findings.

During such an inspection of GSM on March 29, 2023, the ABC inspection agents

discovered multiple discrepancies between the inventory report and the actual inventory as

well as other violations of ABC rules for dispensaries. The report included 30.47 grams of

a missing marijuana-flower lot, 20.28 extra grams of another flower lot, and yet another

flower lot was missing 33.16 grams. GSM could not locate approximately thirty-five

prepacked marijuana items. This is just an example of the multiple discrepancies. The ABC

inspector also concluded during the March 2023 inspection that GSM did not conduct the

required biannual inventory of all useable marijuana within its facility as required by Rule

12.1 (CAR § 810-1002). The inspector found GSM’s processing area to be littered with

debris and contaminates and gave GSM a warning for this unsanitary condition of a medical-

processing area.

2 The State maintains an electronic inventory tracking system, ARstems, which tracks marijuana through the medical marijuana system in Arkansas. Dispensaries’ software must integrate with ARstems.

4 The ABC conducted its second biannual inspection in August 2023 and again found

that GSM was in violation of many rules. Again, there were significant discrepancies between

the ABC’s inventory report and GSM’s actual inventory. GSM also had failed to heed the

warning about its processing area. ABC produced photos of the processing area showing

clutter and debris in what was required to be a sanitary medical-processing area as mandated

by Rule 10.6 (CAR § 810-905). In the lobby of the dispensary, a burlap sack depicting an

individual smoking marijuana was hanging on the wall, and in the customer service area the

wall décor included a framed, hand-drawn picture of an alien smoking marijuana. These

displays constituted a violation of the rules in that they depicted consumption of marijuana.

See Rule 19.1(b)(4) (20 CAR 810-1701(b)(4)).

According to testimony adduced at the hearing, the ABC agent gave GSM a list of its

products whose quality-assurance-testing dates had expired. Agent Haley Allen, who is a

senior auditor, testified that, in accordance with the Arkansas Department of Health rules,

products not sold within one year of testing must be retested before they can be sold. Agent

Allen gave GSM a list of the products that were expired. The list of expired products had at

least two pages that stated, “Per the Arkansas Department of Health Rules for Usable

Marijuana. Test results expire after one year. Items on this list exceed the one year test date

and should not be sold.” Below this statement was a signature line, which Vicentic had

signed and dated. Yet an undercover agent bought a product with an expired testing date in

October 2023. Another agent bought a product with no testing data on its label. In fact,

Agent Allen identified 1,882 sales of products with expired test dates.

5 The Board concluded that GSM violated Rule 23.5(d) (CAR § 810-2105(4)) by failing

to record and report required information for all transactions for the dispensing of usable

marijuana, and (f) (CAR § 810-2105(6)) by failing to properly utilize the inventory tracking

system. These violations constitute bases upon which the Board may revoke a dispensary

license. See Rule 23.5 (CAR § 810-2105). The Board also found that GSM failed to conduct

a biannual comprehensive inventory in violation of Rule 12.1 (CAR § 810-1002). The

unsanitary condition of the processing area constituted a violation of Rule 10.6 (CAR § 810-

905), which provides general sanitation requirements for dispensaries. The Board found a

violation of Rule 15.1(b)(iii) (CAR § 810-1301(b)), which requires that medical marijuana

containers be labeled in accordance with the standards established by the Arkansas

Department of Health, a violation which, pursuant to Rule 23.5(h) (CAR § 810-2105 (8))

constitutes a basis upon which a dispensary license may be revoked. The Board found that

GSM sold over 1,800 cannabis products with expired quality-assurance test dates in spite of

being directed by ABC agents not to do so, which constitutes a violation of Rule 23.2(l) (

CAR § 810-2102(12)) (failure to comply with a rule promulgated by the Arkansas

Department of Health regarding medical marijuana), which is a basis for the revocation of a

dispensary license.

An appeal from the Board’s decision is governed by the APA. Ark. Code Ann. § 3-4-

213 (Repl. 2017); Ark. Bev. Retailers Ass’n, Inc. v. Moore, 369 Ark. 498, 256 S.W.3d 488

(2007). This court’s review of a decision under the APA is directed toward the decision of

the agency, not the circuit court, because the agency is better equipped by its “specialization,

6 experience, and more flexible procedures to determine and analyze legal issues affecting [it].”

Baldwin v. Ark. Dep’t of Transp., 2025 Ark. App. 114, at 5, 708 S.W.3d 793, 800. Our review

is limited to ascertaining whether substantial evidence supports the agency’s decision and

whether the agency’s decision runs afoul of the APA. Id. The pertinent question before us

is “whether there is relevant evidence that a reasonable mind might accept as adequate to

support the agency’s conclusion. The issue is not whether the appellate court would have

made a different decision but whether reasonable minds could conclude as the agency did.”

Id. at 6; 708 S.W.3d at 800. We will uphold an administrative decision if it is supported by

substantial evidence and is not arbitrary, capricious, or characterized by an abuse of

discretion. Id. This court in Baldwin further explained:

The requirement that the agency’s decision not be arbitrary or capricious is less demanding than the substantial-evidence requirement. Collie v. Ark. State Med. Bd., 370 Ark. 180, 187, 258 S.W.3d 367, 372 (2007). To be invalid as arbitrary or capricious, an agency’s decision must lack a rational basis or rely on a finding of fact based on an erroneous view of the law. Id. Where the agency’s decision is supported by substantial evidence, it automatically follows that it cannot be classified as unreasonable or arbitrary. Id. This court will not overturn an administrative agency’s interpretation of its own regulation unless it is clearly wrong. Nash [v. Ark. Elevator Safety Bd., 370 Ark. 345, 351, 259 S.W.3d 421, 425 (2007)].

2025 Ark. App. 114, at 7, 708 S.W.3d at 800–01.

The ABC may revoke a dispensary on the basis of many grounds: failure to maintain

required records, failure to comply with advertising and marketing restrictions, failure to

properly package and secure medical marijuana, failure to utilize the Inventory Control

Tracking System for reporting and inventory control, failure to properly label and package

7 marijuana and marijuana products, and failure to record and report required information

for all transactions for the dispensing of marijuana, to name a few. See Rules 23.2 & 23.5

(CAR § 810-2102 & § 810-2105). Indeed, pursuant to Rule 23.2 (CAR § 810-21.2), the

ABC may revoke a dispensary license for failure to comply with any rule promulgated by the

Arkansas Medical Marijuana Commission, any rule promulgated by the Department of

Health, or any state law related to medical marijuana.

Having considered the evidence presented at the hearing, we find that reasonable

minds could conclude as the Board did that GSM committed multiple violations that

constitute grounds for revocation. Thus, the agency’s decision is not arbitrary and capricious

but rather is supported by substantial evidence.

II. Whether the Revocation Was Based on Lawful Procedure

GSM asserts that it was punished for requesting a hearing rather than accepting an

offer of settlement; the rules do not provide for an increase in punishment over what was in

the offer, and GSM was not given notice that its punishment could be increased, especially

in any form other than a fine. We disagree.

The procedure for levying monetary penalties and for suspending or revoking licenses

is found in section 24 of the Rules (CAR § 810, subpart 22) . In this case, the ABC issued

an offer of settlement to GSM on January 29, 2024. The offer set forth the violations the

ABC Enforcement Division had found with the applicable rule numbers and offered to settle

the matter for a total fine of $28,100, all of which is in keeping with Rule 24.1 (CAR § 810-

2201). The offer of settlement informed GSM that it had the right to a hearing before the

8 director. The offer also warned: “If a hearing is held, the Director may dismiss the charge,

or reduce, increase, or adopt the offer made by the Agency.” (Emphasis added.) GSM chose

to request a hearing. On March 7, the ABC sent GSM a notice of hearing; an amended

notice of hearing followed on April 3. The notices set forth the charges, which included

newly discovered violations that were in addition to those included in the offer of settlement,

and explained: “The hearing will be held in the [location] and will be for the purpose of

determining whether your license should be continued, suspended, fined, or revoked.” (Emphasis

added.) The notice was in keeping with Rule 24.3 (CAR § 810-2203), which requires a

statement of the time, place and nature of the hearing, the legal authority and jurisdiction

under which the hearing is to be held, a statement of the matter of fact and law at issue, and

a statement advising the recipient that the license may be suspended or revoked.

The hearing, at which GSM owner Dragan Vicentic appeared pro se, was held on

April 18, 2024. Following the hearing, the director revoked GSM’s license. In the order,

the director set forth the charges, stated findings of fact, and made conclusions of law before

setting forth the decision to revoke, as is mandated by Rule 24.5 (CAR § 810-2205). GSM

appealed this decision to the Board pursuant to Rule 24.6 (CAR § 810-2206). The Board

held its hearing on the matter on June 12, 2024. Following the hearing, the Board ordered

the revocation of GSM’s license. The order set forth the procedural history and the

violations, made findings of fact and conclusions of law, and concluded that fines or

suspension were inadequate to remedy GSM’s ongoing violations, all in keeping with Rule

24.8 (CAR § 810-2208).

9 In sum, there is no evidence that GSM was punished for not accepting the proposed

fine of $28,100; the rules do provide for an increase in punishment above that proposed in

the offer of settlement, and the ABC did provide notice that the punishment could be

increased up to and including license revocation. Section 24 the Rules (CAR § 810, subpart

22) sets forth the procedure for levying monetary penalties and for suspending and revoking

licenses. The procedure to which the Board adhered in this case followed those rules,

including that the notice of the hearing contained a statement that the license may be

suspended or revoked. In its brief, GSM admittedly relies on cases that involve agencies

failing to follow their own rules. Since the present case does not involve the ABC violating

its rules and procedures, we are not persuaded by these cases.

We affirm.

KLAPPENBACH, C.J., and HIXSON, J., agree.

Hurst Law Group, by: Q. Byrum Hurst and Justin B. Hurst; and Brian G. Brooks, Attorney

at Law, PLLC, by: Brian G. Brooks, for appellant.

Tim Griffin, Att’y Gen., by: Doralee Chandler, Deputy Att’y Gen., and Sarah DeBusk-

Griffith, Ass’t Att’y Gen., for appellee.