Arkansas medical marijuana program well behind other states

When Arkansas voters took the step to legalize medical marijuana in the November 2016 election, the Natural State was hailed as an outlier for being the first state in the Southeast U.S. to make such a bold move.

Today, with Louisiana, Missouri, Oklahoma and other surrounding states pushing forward with medical marijuana programs or early stage plans and ballot initiatives to legalize medical cannabis, Arkansas is now an example of a “red state” facing marijuana implementation problems. Some officials in charge of the process are on record as being opposed to the use of marijuana in any capacity.

In early July, a legislative panel approved emergency rules allowing the state Medical Marijuana Commission (AMMC) to hire an independent consulting firm to review and score more than 200 applications to operate marijuana dispensaries, opening the door for Arkansas to possibly have medical cannabis products on the shelf by mid-2019.

Under rules enacted by the Arkansas legislation under the Arkansas Medical Marijuana Amendment, the AMMC can issue five licenses for cultivation facilities and up to 32 permits for dispensaries at 40 locations. On the deadline for applications to be submitted in September 2017, the AMMC received 322 applications for cannabis growing greenhouses and retail medical marijuana pharmacies to set up the state’s fledgling marijuana industry.

After several months of litigation postponed Arkansas’ entry into the legal marijuana business, some industry observers suggest Arkansas lawmakers have intentionally thwarted the will of voters by handicapping legislation approved by the 91st General Assembly in the 2017 regular session.

Handing off the oversight of the industry to a part-time, five-person regulatory body that includes members who have publicly announced opposition to the legal use of marijuana was not a brilliant move, said Paul Armentano, deputy director for the National Organization for the Reform of Marijuana Laws (NORML). He said most medical marijuana initiatives across the U.S. have been implemented quickly and competently in states where lawmakers are on the same page as voters.

“As a rule, these programs tend to be rolled out efficiently in jurisdictions where politicians [honor] the political will of voters to expeditiously have these programs up and running,” Armentano said in an interview with the Northwest Arkansas Business Journal. “By contrast, in jurisdictions, where politicians or lawmakers remain reluctant to enact these programs, not surprisingly we see that the roll out is delayed, and often times very dysfunctional.”

MAPPING RESULTS
According to NORML’s recently updated “medical marijuana” map, Oklahoma is the 31st state to legalize and regulate medical cannabis access. On June 26, Oklahoma voters approved the legalization of marijuana for medical use with 56.8% of voters checking “yes” on the ballot.

Oklahoma Gov. Mary Fallin actively campaigned against State Question (SQ) 788, saying it would open the door to legalization of recreational marijuana use, and claiming medical uses for marijuana stipulated in the plan were too broad. Less than three weeks after voters approved the ballot initiative, Fallin signed into law emergency regulations amending SQ 788 to limit patients’ access to a wide range of cannabis products. Oklahoma Attorney General Mike Hunter has since warned that the state health board overstepped its authority with the amendments, and Gov. Fallin has called for the amended rules to be rescinded.

Gov. Asa Hutchinson also opposed the legalization of medical marijuana in Arkansas and voiced statements regarding the use of cannabis products in the Natural State following the voter-approved ballot initiative nearly two years ago. However, he has said publicly he respects the will of voters.

Arkansas’ difficult path to implement the legislature-enacted medical marijuana program is not rare. There has been robust debate and legal challenges in eight other states where voter referendums legalized marijuana for medical or adult use in the 2016 election.

Of the states that approved medical marijuana programs, Arkansas will be the last one implemented. Florida and Montana already have models that are operational, and North Dakota is on schedule to make medical cannabis available to patients later this year after nearly two years of debate and legal challenges. States that have legalized marijuana for adult use — California, Nevada, Massachusetts, Maine and Arizona — all have programs that are up and running, according to data provided to Talk Business & Politics.

“So yeah, I think Arkansas is having the most difficulty,” said Karen O’Keefe, director of state policies for the Marijuana Policy Project in Washington, D.C.

O’Keefe said states have had three different options for implementing a medical marijuana program. They include a free market approach that allows any applicant to start a greenhouse or pharmacy if they meet all the state requirements to get a license with local or regional limits. The other two options include a qualified lottery system to set up eligible medical marijuana businesses or merit-based scoring like the Arkansas model.

“Of the states that have the most litigation, of course it’s usually the ones with the merit-based [system] because they have the question of ‘Was everybody scored impartially in the same manner?’” O’Keefe said.

‘DELAY AFTER DELAY AFTER DELAY’
Armentano lays the blame with Arkansas leadership.

“We have seen this in jurisdictions where the will of the voter comes in conflict with the will or the desires of lawmakers. In those instances, lawmakers and regulators have the ability to undermine the will of the people essentially with delay after delay after delay …” Armentano said.

He added there is no reason for delays in Arkansas’ medical marijuana program when states like California, Massachusetts, Florida and Montana have developed successful legislative prototypes to expedite states’ ability to “go to market.”

“There is no need for states like Arkansas to reinvent the wheel when the template for how to do this effectively is already there,” he said.

Arkansas Department of Finance and Administration (DFA) spokesman Scott Hardin, who serves as AMMC’s media liaison, said the initial 322 applications for medical marijuana greeneries and retail pharmacies have since been weaned to less than 300 because some applications were tossed for incomplete information, background checks, voluntary cancellation and other reasons.

In July, at the meeting where the AMMC board gave approval for the state to hire a consultant to score and review applications for medical marijuana dispensaries, a subcommittee of the Arkansas Legislative Council also agreed to keep the remaining applications on file for up to two years in case one of the selected cultivators or retail operators have their licenses suspended or revoked.

Hardin said 81 cultivation applications went to final review and scoring before the AMMC awarded the state’s first cannabis-growing licenses to five Arkansas companies in late February.

“Since then, six cultivation applicants have requested to withdraw their applications from consideration over the next 24 months,” he said. “With that, we have 70 cultivation applications that will remain active and in consideration. Regarding dispensaries, 203 of the 227 apps will go to review and scoring.”

State law also holds that the AMMC can add another three cultivation licenses in the future if the need arises, Hardin said. But the five commissioners have been reluctant to do so since the governor and top legislative leaders have not endorsed such an expansion.

“Awarding the additional three cultivation licenses is totally at the discretion of the commission. [They] could choose to open a new application period or go to the existing, active cultivation applications to award another three licenses,” he said.

In August, the regulatory panel announced it had received two varied proposals to review and score the state’s 203 applications to locate up to 32 medical marijuana pharmacies across Arkansas. DFA’s procurement team is now working with the Arkansas Beverage Control Board’s legal staff to finalize an agreement with Boston-based Public Consulting Group under the state’s “lowest bid” requirements.