Of the 33 states that have legalized medical marijuana, widely different paths have been taken in regulating the industry that is estimated to have generated $8.3 billion in 2020, a figure expect to grow to $25 billion by 2025, according to the American Medical Marijuana Association. Arkansas is a state whose constitutional amendment passed by voters legalizing medical marijuana has a monopoly model with a restricted number of licenses for cultivation facilities and dispensaries.
Neighboring Oklahoma has taken a free-market approach, not limiting the number of facilities for growing or dispensing medical cannabis products. Not surprisingly, prices are much lower in Oklahoma and patients don’t have to travel as far to purchase cannabis products.
“Many have compared Arkansas’ medical marijuana program to Oklahoma,” said Scott Hardin, spokesperson for the Arkansas Medical Marijuana Commission. “There could not be two programs that differ any more. Arkansas implemented medical marijuana as approved by Arkansas voters. This limited dispensaries to 40 max and growers to eight. In contrast, Oklahoma has thousands of dispensaries across the state. It is one very limited, strictly-monitored program (Arkansas) versus an unlimited program that issues licenses to all eligible (Oklahoma). Had Arkansas passed a medical marijuana program that allowed for thousands of dispensaries, it would be an apples-to-apples comparison.”
Some medical marijuana patients in Arkansas have been quoted as saying that the cost of the products is so high that they have to choose between medicine and food.
“Any patient choosing between medicine and food is certainly concerning,” Hardin said. “However, those who drafted the ballot proposal that is now Amendment 98 to the Arkansas Constitution did not provide the Medical Marijuana Commission or the Alcohol and Beverage Control Commission any oversight or authority regarding price of the product. As a result, price is and will continue to be driven totally by the market. While the state does not have any authority in this area, we do anticipate the price will become more competitive as the three remaining cultivators become operational along with the six dispensaries yet to open for business.”
The amendment was drafted and promoted by attorney David Couch, who also worked to have a competing amendment on the ballot disqualified that would not have limited the number of grow facilities and dispensaries and would have allowed patients to grow their own cannabis as is allowed in some other states.
The amendment passed by voters allowed eight cultivation facilities, and the MMC issued the three remaining cultivation licenses in 2020. Five cultivation facilities are growing and selling to dispensaries while the three licensed in 2020 are working toward launching operations.
“There is a common misconception that the Commission has discretion to issue additional cultivation licenses and unlimited dispensary licenses,” Hardin said. “That is simply not the case. Under Amendment 98, the Commission is authorized to license 40 total dispensaries across the state. The Commission has issued 38 of those 40 licenses. The two remaining dispensary licenses are in Zones 6 and 8. The Commission considered several factors when awarding remaining licenses such as number of patients and sales of existing dispensaries in the zone. With four operational dispensaries in both Zone 6 and Zone 8, I don’t know that an additional dispensary would solve the distance issue. Zone 6 has a dispensary in Hensley, Alexander and two in Hot Springs while Zone 8 has dispensaries serving patients in El Dorado, Arkadelphia and two in Texarkana.”
Hardin said their hope is the remaining six licensed dispensaries opening will reduce the need for a significant drive. Additionally, several dispensaries now offer home delivery, which he said should be helpful.
Arkansas has ended up with far more medical marijuana patients than initially anticipated. The Department of Finance and Administration’s initial projections included about 40,000 to 50,000 patients in the state. Currently, there are more than 70,000 active patients.
“Sales have exceeded expectations,” Hardin said. “Since the first dispensary opened in mid-2019, Arkansans have spent more than $260 million to obtain 40,000 pounds of medical marijuana. State taxes on medical marijuana purchases have resulted in approximately $27 million in collections.”