Arkansas medical cannabis sales expected to launch in 2018
Arkansas residents with qualifying medical conditions will be able to begin purchasing medical cannabis in early 2018. The 2016 law lists 18 medical conditions eligible for treatment with medical marijuana, and based on those conditions, it’s estimated that more than 540,000 Arkansans will be eligible to purchase medical marijuana, according to Arkansas Center for Health Improvement (ACHI).
With implementation of the medical marijuana program imminent, Arkansas has been quick to outline the process and guidelines for businesses looking to enter the state’s medical cannabis market.
Early projections for medical marijuana sales in Arkansas
Arkansas officials project that approximately 1 percent of the population — or between 30,000 and 50,000 residents — will sign up to participate in the medical marijuana program within the first three to five years. With that in mind, the Arcview group, an investment firm for the cannabis industry, estimates that annual cannabis sales in Arkansas could be between $30 million and $60 million within the first few years of implementation.
Legalized in 2016 with the passage of Issue 6, Arkansas’s medical marijuana program will be open to people with ALS, Alzheimer’s disease, cachexia/wasting syndrome, cancer, a chronic or debilitating disease, Crohn’s disease, fibromyalgia, glaucoma, hepatitis C, HIV/AIDS, intractable pain, multiple sclerosis, peripheral neuropathy, PTSD, seizures, severe arthritis, severe nausea, severe and persistent muscle spasms, Tourette syndrome, ulcerative colitis or any other medical condition or its treatment approved by the state health department. To be eligible to purchase medical marijuana, patients must submit a written certification to the Arkansas Department of Health from an Arkansas-licensed physician stating that they suffer from an applicable disease. The law also allows designated caregivers to enroll in the program to assist the physically disabled and minors.
With home growing of medical marijuana prohibited, the implementation of medical marijuana in Arkansas means that the state must set up a network of private businesses to grow, process, test and see medical cannabis in the state.
Entering Arkansas’s cannabis market
Arkansas began moving quickly to establish its medical marijuana market, forming the Arkansas Medical Marijuana Commission less than a month after voters approved the state’s medical marijuana amendment, and the commission has been quick to establish the guidelines for medical marijuana business operating within the state.
Under guidelines set by Arkansas’s newly formed Medical Marijuana Commission, five cannabis cultivation facility licenses initially will be granted, one in each of the state’s five health regions. The commission’ leadership has been firm that five cultivators is a starting point for the state, and more licenses are expected to be administered once the program is fully operational. Additionally, the commission has decided that it will grant 32 dispensaries evenly spread through eight geographic zones. Under commission regulations, those dispensaries will be allowed to operate between 9 a.m. and 7 p.m. daily, and they will be allowed to deliver medical cannabis to patients the same day it is ordered.
Arkansas began accepting applications from potential cannabis cultivators and dispensaries on June 30, 2017, and the application period will remain open through Sept. 18, 2017. As of Aug. 24, 2017, the Arkansas Medical Marijuana Commission confirmed that it had so far received two medical cannabis dispensary applications.
Arkansas does have strict application guidelines for medical marijuana cultivators and dispensaries. Those who wish to be granted licenses to grow and sell medical marijuana in Arkansas must be able to prove financial solvency and the ability to operate a successful medical cannabis business, and that majority stakeholders in their business are long-time residents of the state.
Based on the bond forms for cultivation facility and dispensary applicants recently released by the Arkansas Medical Marijuana Commission, applicants must adhere to the following guidelines:
- Per the amendment approved by voters, an owner can have interest in one dispensary and one cultivation facility only.
- Applicants must demonstrate that 60 percent of the ownership interest in the medical marijuana facility is held by a resident or residents of the state, and those residents must be able to show that they have resided within the state of Arkansas for at least 7 consecutive years.
- Working capital/ escrow/bond requirements for cultivators dictate that applicants must have $1 million in bonds or assets worth $1 million and the ability to demonstrate $500,000 in cash liquidity.
- Based on legislation passed by the state’s general assembly, the distance between a medical marijuana facility, measured from the primary entrance of the medical marijuana facility to the nearest property boundary of a public or private school, church or daycare center, must be at least 1,500 feet from a public or private school, church or daycare center for dispensaries, and at least 3,000 feet from a public or private school, church, or daycare center for a cultivation facility.
Arkansas’s medical cannabis laws also allow cities, towns, and counties to pass “reasonable” zoning restrictions on dispensaries and cultivation facilities. Localities are only permitted to completely ban the operation of medical marijuana facilities through a popular election pursuant to Arkansas’ initiative process.
Texarkana set the stage for localities across the state by serving as the first municipality to formally pass local regulations for medical marijuana companies operating within its borders. The regulations, approved by Texarkana’s board of directors, established the rights of medical cannabis companies to conduct business within Texarkana’s borders.
Arkansas’s medical marijuana market outlook
Arkansas’s leadership has been quick to establish the guidelines and process to get its medical marijuana program up and running in early 2018. With an initial 32 dispensaries and five cultivation licenses up for grabs, there are ample opportunities for plant-touching companies looking to enter Arkansas’s medical cannabis market. On top of the easy-to-follow business guidelines, the state stands to see strong participation in its medical cannabis program, thanks to the extensive list of qualifying medical cannabis conditions and the inclusion of intractable pain on that list.
Fees and taxes
|Application||Dispensaries – $7,500 Cultivators – $15,000|
|License||Stand-alone dispensaries – $2,500 (new); $10,000 (annual renewal) Dispensaries with cultivation – $25,000 (new); $32,500 (annual renewal)
Cultivators – $100,000
|State tax requirements||4% tax on all medical marijuana transactions|
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