Medical marijuana officials say state ready to grow pot industry, express banking concerns

by Wesley Brown (wesbrocomm@gmail.com) 835 views 

Although no one has yet to file an application to operate a pot-growing greenhouse or dispensaries when medical marijuana sales are expected to kick-off in early 2018, Rep. Doug House, R-North Little Rock, said Thursday at the Association of Arkansas Counties (AAC) annual state convention that the legislature has fully prepared the fertile ground for the industry to grow and weed out any bad actors.

“I have yet to detect anybody with what I would call a criminal motive. They are honorable people who want to provide a product that the people want for a fair and reasonable price, for a fair and reasonable profit,” said House, who originally campaigned against the constitutional amendment that was approved by voters in the November 2016 election.

House, along with Department of Finance and Administration attorney Joel DiPippa and Mary Robin Casteel, director of the Arkansas and Beverage Control, participated in the hour-long panel discussion before an overflow crowd of more than 100 people at the AAC’s annual meeting at the Little Rock Statehouse Convention Center.

House, who sponsored 15 of the 24 bills passed during the 2017 legislation promulgating rules for the medical marijuana trade in Arkansas, said he has had conversations with several impressive investor groups planning to compete for the cultivation and dispensary licenses that the state will hand out later this year.

In early May, the Legislature approved the proposed emergency and regular rules that were submitted by DFA. On June 30, the commission actually began accepting bids for five operators to up to eight marijuana growing facilities and another 32 dispensary applicants to operate up to 40 retail locations in four quadrants of the state.

Once applications are delivered to the commission by Sept. 18, those accepted will be time-stamped and applicants must then submit a payment voucher for the required fee of $15,000. Applicants will be able to modify a submitted application at any time prior to the final submission deadline, which will be subject to the state Freedom of Information Act. Applicants must also provide proof of assets or a surety bond in the amount of $1 million and proof of at least $500,000 in liquid assets.

DiPippa told the anxious county officials attending the AAC meeting that since the 2017 legislation session ended in May, state policymakers have been busy working on the respective rules for each department involved in different aspects of the industry, including the licensure process for cultivation facilities and dispensaries, oversight of employees working cannabis-related jobs, and requirements for patients who apply to receive a doctor-approved ID card to purchase cannabis for medical reasons.

“What we are hoping to be able to do today is dispel some misinformation that is still out there about what is going on,” DiPippa said.

Rep. House also admitted that before the 2017 session began in early January, House Speaker Jeremy Gillam tasked him with shepherding more than 50 medical marijuana-related bills through the legislative process although he did not support the voter-approved referendum in November.

“I gave money, I campaigned (against it), I talked to churches and groups and I fought this as hard as I knew how to fight it. We lost. Democracy works that way,” said the Republican lawmaker. “All the legislation that we got done was designed to implement this system and deliver it to the people that believe and need the product they want, which is pesticide-free, herbicide-free, heavy metals-free, opium-free, heroin-free (marijuana) that has been cleaned and tested.”

Still, House said he is somewhat concerned farmers and retailers and other marijuana-related businesses that will mostly operate on a cash-only basis may run into problems with the Trump administration because the sale of pot is still illegal at the federal level, which opens FDIC-operated banks up to government seizure.

Under federal law, banks must disclose marijuana-related transactions as suspicious activity. After the November election, Little Rock law firm Friday, Eldredge & Clark sent out an alert to Arkansas bankers that local financial institutions providing financial services to a marijuana business could face charges of aiding and abetting money laundering and racketeering. They also said banks could be at risk when approached by marijuana related businesses.

House said he has talked with some local investors who are aiming to form a banking solution to solve the cash-only problem once the commission hands out licenses to marijuana growers and retailers across the state.

“Imagine an armored truck backing up to your courthouse with about $60,000 in cash money to pay their personal property tax. What are you going to do – because that is what is going to happen unless we get a bank,” House said. “I think we have (someone) who is going to step up. I don’t know yet, I can’t say because that is their business and I am not going to announce it prematurely.”

More than a month ago, William Carpenter, managing director of a company called TR Global Capital, told Talk Business & Politics that he had formed a startup firm in April called Biometric Payment Systems that will provide medical marijuana businesses a way to accept digital, electronic payments, and other banking process methods for the legal cannabis industry.

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