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Arkansas regulators to explore ways to issue last 2 medical marijuana permits

by Rachel Herzog | August 1, 2021 at 9:12 a.m.
FILE - In this Aug. 15, 2019 file photo, marijuana grows at an indoor cannabis farm in Gardena, Calif.

After deciding last month that it will issue the remaining two dispensary licenses allowed under the state constitution, the Arkansas Medical Marijuana Commission this week will look at how those license recipients could be selected.

In 2016, Arkansas voters approved Amendment 98, the constitutional change legalizing cannabis for medical use. The state's first dispensaries opened in May 2019, after delays resulting from regulatory snags and court challenges.

The amendment allows the commission to issue up to 40 dispensary licenses. The commission initially issued 32 dispensary licenses spread evenly across eight geographic zones in January 2019 and has granted six more since then.

The commission in December voted unanimously to issue the 38th license, then in February declined to issue the remaining two on the basis that the applications had expired before the meeting.

Since then, three commissioners have been replaced by two new members and one reappointment, chairman James Miller.

At their meeting July 21, commissioners noted that there were fewer dispensaries in the southwestern portion of the state relative to the number of patients in the region.

After their discussion, the commissioners voted to issue the two remaining licenses, which will go to businesses in Zone 6 and Zone 8. Zone 6 covers Scott, Polk, Montgomery, Garland, Perry, Saline, Hot Spring and Grant counties; Zone 8 covers Howard, Sevier, Little River, Hempstead, Miller, Nevada, Lafayette, Columbia, Union, Ouachita, Calhoun, Clark and Dallas counties.

Miller, who lives in Bryant, said he would be in favor of issuing the remaining licenses because there are fewer dispensaries in that area than in other parts of the state.

As of July 18, there were 36 operational dispensaries in Arkansas, according to an industry update provided by state Department of Finance and Administration spokesman Scott Hardin. All the dispensary licenses have been awarded based on a merit scoring system.

Of those businesses, three are in Zone 6 and four are in Zone 8. Two of the dispensaries in Zone 6 are in Hot Springs and the other is in Alexander, which is near the Pulaski County line. In Zone 8, the dispensaries are in Arkadelphia, Texarkana and El Dorado.

Zone 3, which covers northeast Arkansas, also has four dispensaries, as does Zone 4, which is directly north of Zone 6. Zone 7, which covers southeast Arkansas, has five, as does Northwest Arkansas' Zone 1.

Zone 5, which includes four Central Arkansas counties, has six. Five of those are in Pulaski County.

The state has three options for determining what the newest dispensaries will be, which are:

• Choosing from the previously submitted dispensary applications.

• Opening a new application period and scoring those applications.

• Opening a new application period but using a blind draw.

Hardin said choosing from the previously submitted applications would require a rule change because those applications have formally expired under the existing rules.

Using a blind draw system also would require a rule change because the existing rules allow only for merit scoring.

"Overall, the fastest way to issue the licenses would be opening up a new application period and scoring those applications as rule changes will not be required," Hardin said last week in an email.

David Couch, the Little Rock attorney who wrote Amendment 98, said he modeled it on New Mexico's medical cannabis program, because the states have comparable populations and economies.

He added that a medical-marijuana amendment on the ballot in 2012 failed after opponents complained that there would be too many dispensaries.

"I wanted to have a good number but not too many ... where it might not pass," he said.

He said Monday that he thinks the state needs more dispensaries to better serve the population. The products are significantly cheaper in Oklahoma, where there is no limit on licensed medical-marijuana businesses, he said.

"I think more competition would drive down prices," he said.

Melissa Fults, spokeswoman for the Arkansas chapter of the National Organization for the Reform of Marijuana Laws, described the commission's decision as "better late than never."

"They should have done this a long time ago, and it's ridiculous that they've waited this long and drug their feet," she said Friday.

Fults pointed to how close together some dispensaries are in Little Rock, while patients in some places, including rural areas, have "no access."

She added that the turnover on the commission made her optimistic, with members including Miller, who she said are advocates for medical marijuana.

Couch and Fults said they thought the commission should have awarded licenses with a lottery system in the first place, rather than the merit-based scoring system.

"It just takes away all the temptation to meddle. It's a more fair process," Couch said. "If we'd put the thing in the hat and drew them out, then we'd have been ... better off."

If a blind-draw system is used, there should be minimum qualifications, including a set location and a deadline on how long it will take the dispensary to open, Couch said.

He said that method could "eliminate any allegations of impropriety."

Miller said at the past meeting that he wanted to see all of the options "on the table" at Thursday's meeting.

Print Headline: Panel to explore ways to issue 2 pot permits

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