Delaware judge asked to dismiss lawsuit in fight over license for medical marijuana dispensary


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DOVER, Delaware — A Delaware judge is mulling whether to dismiss a lawsuit against a lobbyist who once worked for U.S. Sen. Tom Carper in a dispute over who should be allowed to operate Delaware's first medical marijuana dispensary.

The judge heard arguments Monday on Mark Lally's motion to dismiss the lawsuit but did not indicate when he would rule.

State officials, meanwhile, are continuing to negotiate a contract with Lally, president of First State Compassion Center, after he submitted the top bid for the medical marijuana operation.

But former Lewes city councilman A. Judson Bennett is suing Lally, claiming he breached an agreement to help Bennett seek a license for Delaware's first "compassionate care center," and began working for a competing group without Bennett's knowledge or consent.

Lally is a former state trooper who once ran the governor's executive protection unit and later served as Carper's Sussex County director. After initially representing Bennett, he began working with Massachusetts-based Sigal Consulting, which specializes in developing medical marijuana operations.

Court documents indicate that Bennett hired Lally in October 2011, agreeing to pay him $25,000 for one year and requiring him not to represent any "actual or potential" competing parties.

Bennett and his business partner, Jeffrey Siskind, entered into a subsequent agreement with Lally in January 2013. That agreement called for Lally to be paid $1,000 a month for at least six months, and for him to receive 10 percent of the net profits of any medical marijuana enterprise. It also required Lally "to refrain from assisting others in a similar enterprise unless and until Siskind and Bennett withdraw from pursuing said licensing ..."

Court records indicate that Lally began working with the Sigal group earlier this year after a failed attempt to establish a joint venture with Bennett.

Lally's attorney, Timothy Holly, argued Monday that there was no contractual relationship between Lally and Bennett as of August 2013, because Bennett was no longer paying him.

Nevertheless, Lally continued to hold himself out after that date as a representative of Delaware Compassionate Care Inc., the entity formed by Bennett as the potential license holder, and to work with Bennett on trying to win the license.

Asked by a dubious Vice Chancellor John Noble to explain, Holly said Lally was offering "pro bono" and "gratis" services on behalf of Bennett with the hope of future work and a bonus for getting the license.

"They had no contract at that point," Holly said, adding that Lally was free to pursue other endeavors. Holly also argued that the contract itself was invalid because the bonus payment structure for winning the bidding violated state law regarding compensation of lobbyists.

Scott Wilcox, an attorney for Bennett, argued that Lally was a "business savvy individual" who violated a noncompete agreement because he found "a better opportunity."

"This is a moneymaking endeavor, and that's why all of the parties are involved in it," Wilcox told the judge.

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