Initially it was anticipated that when the market was mature, there would be about 40,000 to 50,000 people with health conditions that would permit them to qualify for a medical marijuana (MMJ) card, allowing them to purchase products at dispensaries. But although not all dispensaries are open yet, the number of active patient cards has grown steadily during the pandemic with the Arkansas Department of Health (ADH) reporting 77,029 active patient cards in early June.
“We anticipate sales will surpass 50,000 pounds within the next week,” Arkansas MMJ Commission spokesperson Scott Hardin said June 8. “Regarding taxes generated, Arkansas recently reached a significant milestone in taxes generated from MMJ. Since the first dispensary opened in May 2019, more than $30 million has been collected between the two state taxes applied to MMJ. This includes the regular state sales tax of 6.5 percent and the 4 percent privilege tax established by the legislature. It is certainly safe to say collections have exceeded our initial expectation.”
Hardin said the growth in patients during the pandemic could be due to a couple of factors. First, AHD allowed patients to visit with a physician via a telehealth visit in order to receive the signature confirming the patient had one of the 18 qualifying conditions required to obtain a card. This was a new option under the pandemic that allowed thousands of patients to obtain a medical marijuana card without ever leaving home. The telehealth option ended at the end of March 2021.
Hardin said another factor was that dispensaries have continued to open throughout 2020 and 2021, making the product more accessible to many, including those patients who did not want a card until a dispensary was located within a reasonable drive.
Since the first dispensary opened in mid-2019, Arkansans have spent $330.4 million to obtain 48,914 pounds of MMJ. There are currently 33 dispensaries in operation throughout Arkansas with five more working toward opening for business:
3J Investments (Lamar), Natural Root Wellness (Fayetteville), Pine Bluff Agriceuticals (Pine Bluff, to open this month), Missco Cannabis (Jonesboro) and Natures Herbs and Wellness (Pine Bluff).
There are eight cultivator licenses, the maximum allowed by the voter referendum that approved the MMJ program. Five of those cultivators are growing and selling to dispensaries while the three licensed in 2020 are working toward opening.
Some patients in Arkansas have complained the MMJ prices are much higher than in surroundings states due to the restrictions on the number of cultivators and dispensaries in Arkansas.. The additional cultivators and dispensaries are expected to help by increasing supplies, but if the number of MMJ patients grow, that could put upward pressure on prices.
It has been astounding how many patients have already flocked to the opportunity of using marijuana as a medicine, said Casey Flippo, CEO of Natvana LLC, a hemp production company, and Dark Horse Medicinals, a third-party medical marijuana processor facility under development in Little Rock. Unlimited licenses are available for third-party processors like Dark Horse Medicinals, but only two are approved currently. Flippo said a large barrier to entry is product availability. “We cannot cultivate so we must source raw materials from a cultivator or dispensary,” he said.
Flippo said while current MMJ market statistics are impressive, he and many others believe that this is just the tip of the iceberg.
“Marijuana programs in conservative states such as Arkansas are met with a number of initial challenges such as patients not being allowed to own a firearm to supply restrictions,” Flippo said. “Product shortages and current regulatory restrictions are preventative for a number of prospective patients. Access and education are other barriers to entry for the Arkansas patient pool.”
But Flippo said the Arkansas MMC, alongside in-state industry professionals, are working diligently to address those barriers. As milestones are met to raise accessibility and supply while lowering the average cost for marijuana as a medicine, he expects to see more patients enter the marketplace.
“Personally, I wouldn’t be surprised to see the patient pool double over the next 18-24 months,” Flippo said.
Since starting the CBD company Natvana in 2019 and founding Dark Horse Medicinals just a few months ago, Flippo said he has been bombarded with testimonials of cannabis products changing people’s lives. There’s a common misconception that while there is no denying the medicinal benefits of MMJ, misuse and abuse are sometimes perceived to be primary factors for some patients.
“While I don’t doubt the validity of these accusations for the few, we and a number of other groups in this space are here to serve the many,” Flippo said. “So many patients in the Arkansas patient pool are not only being treated for their chronic pain or other ailments, but many are using medical cannabis as an alternative to far more harmful pharmaceutical applications.”
He finds it somewhat ironic that marijuana was tied into the War on Drugs by the Nixon administration back in the 70s, today marijuana is being used to fight against the opioid epidemic.
“Bottom line, this medicine saves lives and will continue to do so for years to come,” Flippo said.
Mental health professionals have warned that many more people have developed anxiety and PTSD as a result of the pandemic. Flippo said he thinks anyone, such as himself, that suffers from anxiety and/or PTSD understands that medical cannabis can be a great tool.
“In the year of 2020, nearly every cannabis program in the U.S. saw dramatic spikes in both transactions and acceptance following the lockdown,” Flippo said. “I believe that stress is certainly a contributing factor there and it will always play a part in new patients entering the market.”
Flippo believes wholeheartedly that the marijuana revolution will be one of the largest economic impacts of his generation. As of now, the local MMJ market is generating roughly $1,000,000/day in gross revenue. Even with the limitation of facilities and the current tax burden of 280E (a federal tax that taxes MMJ business at 40-80 percent versus the 21 percent corporate tax), that is generating hundreds of jobs and millions of dollars in taxes.
“As I mentioned previously, those numbers will only continue to increase,” he predicts.
Recently the Mississippi Supreme Court overturned a Mississippi MMJ program that had been supported by 74 percent of the voters. This program, if it had gone through as designed, could have had a negative impact on Arkansas sales.
“With the acceptance of Temp Medical Cards, similar to the cards being accepted in Oklahoma, dispensaries close to the Mississippi border would have been in trouble,” Flippo said. “Secondly, while this program was just disapproved, I think with an overwhelming majority supporting MMJ, I don’t believe that fight is completely over. MMJ will be coming to Mississippi in due time. The hope is that when it does, the Arkansas market is primed to compete.”
According to the ADH, the most prevalent qualifying medical condition among MMJ recipients was intractable pain unresponsive to medicines, treatment, or surgery for greater than six months with 32.5 of cards issues for that condition. The second was post-traumatic stress disorder at 20.6 percent and third was severe arthritis at 13.6 percent. The fourth most common reason was peripheral neuropathy at 7 percent and the fifth was fibromyalgia at 5.7 percent.