Panel delays timetable for state’s medical pot industry, five counties lead bidding for cultivation, dispensary sites

Nearly a month after the Arkansas Medical Marijuana Commission received a rush of last-minute applications for pot-growing cultivation facilities and dispensaries, the five-person panel on Monday (Oct. 16) pushed back the timeline for review and approval of more than 320 applications.

The AMMC, chaired by Gov. Asa Hutchinson appointee Dr. Ronda Henry-Tillman, held its first public meeting before a standing-room only crowd of more than 200 people that spilled into the hallways outside the tiny Arkansas Alcoholic Beverage Control (ABC) boardroom across the street from the State Capitol.

According to information provided to Talk Business & Politics by the Department of Finance and Administration (DFA), businesses based in Pulaski, Garland, Jefferson, Washington and Sebastian counties submitted more than one-third of the proposals for cultivation greenhouses and retail sites for medical marijuana to the Commission. But a decision on how many of the 95 cultivation applications and 227 dispensary proposals will be considered to pioneer the state’s medical marijuana industry will not be known for several months, officials said.

On June 30, the Commission began accepting bids for five operators of one of the state’s first marijuana growing facilities, or one of 32 applicants to operate up to 40 retail locations in four quadrants of the state.

“No licenses will be awarded until well after January,” said Joel DiPippa, an attorney with DFA’s Office of Revenue Legal Counsel, later also refusing to specify a potential date for the state’s first cultivation facility or dispensary. “With the background checks from the FBI and all of this, it is pushing [back] the timetable.”

In providing an overview of the ongoing application process, DiPippa and ABC Director Mary Robin Casteel explained to the Commission the huge task state officials face in simply completing precursory FBI background checks on the proposals that “made it in the door” ahead of the state’s Sept. 18 deadline.

Casteel, who was appointed ABC director by Hutchinson in June, said although the application period opened June 30, it became obvious to ABC and DFA staff early on that it would take much longer for the FBI checks to be completed than originally expected. The reason, she said, was because most of the applications were submitted to the Commission in a last-minute rush before the mid-September deadline.

Under the Commission rules, once an “acceptable application” was received by the newly-created oversight panel, then every person listed on the proposal would be given or mailed a fingerprint card that  had to be submitted to the Arkansas State Police.

“So originally, we said Nov. 1 …, so that would give everyone a month to get them in,” Casteel told the Commission board members. “I don’t think that is going to be sufficient to those who met the deadline to get them in. The numbers that the State Police had to process was such that there was a backlog of getting those to the FBI on the front end.”

According to data provided by the ABC and DFA staff, Pulaski County had 35 applications, including six cultivation facility proposals and 26 dispensary applicants. Garland and Washington counties were next on the list with 25 and 24 applications, respectively. Jefferson County was fourth with 21 applications, but also had the highest number of bids for medical marijuana growing conservatories at 13. Sebastian County has 14 applications, and there were 95 cultivation applications and 227 dispensary bids in eight zones across the state.

Following the applications report by DiPippa and Casteel, the Commission unanimously approved several measures to move back nearly all of the deadlines on the application review and scoring process. Those measures ranged from making redactions on applications for the Commission and for state open records requests, to changing the timetable on when the proposals meeting minimum bid standards will be reviewed and scored by the Commission.

DiPippa told the Commission that ABC and DFA staff of 10 persons committed to reviewing the applications, which included some with “thousands of pages of paper,” needed additional time to read and then de-personalize certain identifying information so board members could apply the same objective criteria to each application. A second redaction process was also necessary to remove sensitive and confidential financial and business information that can be accessed by the media and public through state Freedom of information Act requests, he said.

“We have to go through that [process] twice …, so it is entirely likely it will take longer than the timeline to Dec. 1, to go through the number that has made it through the merit score,” DiPippa told the Commission. “Our goal is not to delay at all. Our goal is to ensure that we meet these requirements because of the merit scoring process and the de-personalization, and the necessity for an objective review.”

Casteel and DiPippa also noted some of the rules promulgated by the Commission were “ambiguous” and inconsistent with applications submitted ahead of the Sept. 18 deadline. DiPippa and Casteel asked the panel for clarification on whether certain applicants had met the minimum requirements in providing the proper documents that showed proof of age, met certain citizen and residency requirements, and fulfilled financial, and satisfied the state’s criteria of at least $500,000 in liquid assets.

“I think we need to go with what’s in the rules, not the [application]. I think it is pretty clear. I think it is pretty straight-forward,” Henry-Tillman told the board members.

Afterward, the medical marijuana oversight panel spent nearly 30 minutes peppering DiPippa and Casteel with questions concerning possible legal consequences if some applications were tossed out. In the end, the five-member panel approved motions clarifying that all applications that met the minimum standards would be accepted by the Commission.

In the last 30 minutes of the meeting, the Commission approved three measures that received the most attention from the overflow crowd that included dozens of applicants, lobbyists and trade groups, and several state lawmakers.

The first measure included considerable discussion on whether to announce the applications that are approved and denied for merit scoring on the same day.

“The problem with that is that once you tell someone ‘no,’ that is when people are going to get upset …,” Henry-Tillman said.

The second measure approved by the medical marijuana panel was to refund the application and renewal fees for applications withdrawn or denied before the merit scoring begins. To date, DiPippa said only one application has been voluntarily withdrawn.

In the last item on the agenda, the Commission decided to extend the renewal process and waive the licensing renewal fee if licenses are awarded by the panel in the first six months of 2019. The renewal period was extended so that licenses issued before June 30, 2018 will not expire until a year later, not as originally plan on Jan. 1, 2019.

DiPippa also reminded the Commissions that they must not publicly discuss the medical marijuana application process or speak with the media during the merit scoring phase of the Commission’s review of the proposals.

The Commission’s next meeting is scheduled for Dec. 1.