State Overview: Arkansas

In mid-2020, the Arkansas medical marijuana program’s slow rollout continues.

Although voters approved the constitutional amendment establishing the program in November 2016, the first dispensary did not open until May 2019, and only 26 dispensaries and three cultivators are open for business as of this writing.

In late June, the Arkansas Medical Marijuana Commission awarded three additional cultivation licenses and four additional dispensary licenses, bringing the total number of authorized licenses to eight cultivators and 37 dispensaries.

Arkansas requires 60% of the equity ownership in licensed cultivators and dispensaries to be held by Arkansas residents, and no individual may own an interest in more than one cultivator or dispensary. State regulations allow an individual to vertically integrate and own both a cultivation facility and a dispensary.

The patient count in Arkansas also got off to a slow start.

When sales began in May 2019, there were only 12,000 people who had obtained a patient registration over the course of nearly two years. Just over a year later, there are now 60,268 patients. That is an increase of five times the total number of patients and is particularly notable given the state’s relatively limited number of qualifying conditions in comparison to other states.

Arkansas retail prices remain on the high end in comparison to other states with a medical market, with an average price of $15 per gram.

Sales have been strong, however, with a total of $109 million in sales since the program’s launch in May 2019. Sales have significantly increased since the outbreak of the COVID-19 pandemic, with an average of just over $500,000 per day spent on medical marijuana in the first two weeks of July.

For entrepreneurs interested in the Arkansas market, processor licenses are the most likely opportunity in the near term.

Processor licenses were authorized in the 2017 legislative session and would allow companies to process cannabis into extracts or use the extract to create other products.

The state, however, has not yet finalized the rules or begun accepting applications for these licenses, or for the specialized transportation and distributor licenses that were also authorized in 2017. There are no residency requirements or limits on the number of licenses to be issued for these categories, unlike the existing cultivation and dispensary licenses.

Erika Gee | Wright Lindsey Jennings

Erika Gee is a member of the firm’s Government Relations Practice and a former Chief of Staff and Chief Deputy in the Arkansas Attorney General’s Office. Since returning to Wright Lindsey Jennings in 2015, she has put her years of experience as general counsel for state agencies and licensing boards to work assisting clients in resolving their regulatory and administrative disputes with state government. She also represents clients in government relations matters, including advocacy and policy development with state agency officials, the Attorney General’s Office and the Executive and Legislative branches of government.

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