Medical marijuana commission picks 32 winners for dispensary storefronts

The newly reconfigured state Medical Marijuana Board on Wednesday (Jan. 9) approved a recommendation to award licenses for 32 medical marijuana dispensary locations across Arkansas during an unruly meeting where critics of the process are already threatening legal challenges.

In an unanimous 5-0 decision, the MMC board approved the scores of dispensary applications recommended by Boston-based Public Consulting Group (PCG) to locate four pharmacies each across eight equally populated quadrants of the state. That decision is expected to allow dispensary owners to potentially have cannabis products on the shelf in Arkansas by the spring of this year. You can access the list here.

“I sit back and I have probably been the most vocal critic of this process, but at the same time I think they’ve done a good job,” MMC Director Travis Story said of the East Coast consulting firm hired three months ago to review and score 200 dispensary applications. “It is really hard to pick apart what they’ve given us back.”

According to a scoring rubric released after the evening meeting, Little Rock-based Acanza Health Group came back with the two highest scores, posting tallies of 423.11 and 409.61, respectively. The third-highest cumulative total came from Jonesboro-based Valentine Holdings LLC, which posted a score of 403.11.

Both Acanza and Valentine Holdings were the only two applicants to have multiple winning scores in more than one of the eight retail zones. Valentine Holdings has the top scores of 403.11 and 396.72 in Zones 3 and 4, respectively. Zone 3 encompasses a large 15-county region in Northeast Arkansas, while Zone 4 is the eight-county region that stretches from Conway County to the Oklahoma stateline.

Both Acanza and Valentine also have the two highest scores respectively in Zone 1, which includes Benton, Washington, Carroll and Madison counties. Acanza has the top score in the 13-county Mississippi Delta quadrant located near two cultivation facilities that will be in Jefferson County near Pine Bluff.

According to Deputy Attorney General Bruce Bowen, the commission’s legal counsel, Acanza and Valentine executives will now have to decide what zone they would like to pinpoint their storefront cannabis pharmacies because state regulations don’t allow dispensary owners to own more than one retail location.

Bowen told board members once those two companies select their dispensary sites, then other top “next-in-line” applicants in zones where Acanza and Valentine decide not to locate would move up and be awarded a license. Afterward, each license holder must then pay the $15,000 license fee and post a $100,000 performance bond.

Bowen said he and the ABC legal staff hope to send out a formal notification letter of the commission’s decision in two weeks, along with a physical copy of the cultivation license. The ABC staff must also verify the storefront location of each dispensary in all eight zones, he said.

When asked if the commissioners should be wary of PCG’s selection of the 32 dispensaries, Bowen replied: “What you see in front of you are the final scores.”

NO ‘LOUIS VUITTON SHOES AT DILLARD’S’
Despite the fact that all five permits for cannabis cultivation facilities to grow marijuana for medical use have already been handed out, along with Tuesday’s long-awaited decision to award the 32 dispensary licenses, there were some pensive moments before and after the meeting that could foreshadow legal challenges down the road.

For example, some board members seemed unsure if the Boston-based consulting firm’s scoring and review process considered the MMC board’s directive that the evaluations of the 200 applicants include consideration of the dispensary’s ability to produce the right strains of cannabis to treat all 18 of the state Health Department’s qualifying medical conditions.

During an hourlong presentation by PCG executives to explain the scoring and review process for the dispensary applicants, MMC Chair Dr. Ronda Henry-Tillman of Little Rock was adamant that the commission does not christen the medical marijuana industry without having enough product on the shelves to treat all of the qualifying conditions, include diseases that are rare.

For nearly 30 minutes, the Little Rock doctor and other MMC board members repeatedly quizzed the PCG executives appearing before the board. Henry-Tillman specifically wanted to know if the five reviewers scoring the applications “connected the dots” on the importance of supply enough cannabis to treat all the patients with medical marijuana ID cards in Arkansas.

“If I am going to shop for Louis Vuitton shoes, I am not going to go to Dillard’s because they are not going to have them,” said Henry-Tillman. “We are trying to make sure we have the product to treat all the qualifying conditions in every zone.”

Near the end of the meeting before approving PCG’s recommendation, Henry-Tillman said the regulatory board did have leeway to award more cultivation and dispensary licenses if Arkansas finds itself with a lack of medical marijuana product for certain health conditions. “There is still room for capacity to add up to eight for cultivators and up to 40 for dispensaries,” she said.

QUESTIONS FROM THE CROWD
Besides the commission’s concerns about whether cultivators and dispensaries will have the right mix once the first cannabis product is sold in Arkansas, several dispensary applicants attending the meeting immediately questioned PCG’s scoring process after the meeting.

In fact, Storm Nolan, the Fort Smith-based businessman who filed protests and legal challenges in March 2018 to halt the cultivation award process, stood up and interrupted the meeting just before the commission voted to approve PCG’s 32 top scores.

“Before you do this, I encourage you to read the letter I gave to Mr. (Scott) Hardin to show you,” Nolan told the board before he was asked to sit down and not interrupt the meeting again. Hardin is the spokesman for the state Department of Finance & Administration who doubles as the MMC’s media liaison.

Nolan’s River Valley Relief Cultivation in Fort Smith was one of several losing cultivators that protested the award of the state’s first cannabis growing licenses nearly a year ago. Those protests, among many, led Pulaski County Judge Wendell Griffen in March to issue a temporary restraining order preventing the regulatory panel from ratifying Arkansas’ first marijuana-growing licenses awarded to five cultivators.

Those licenses were not ratified by the commission until late July due to legal challenges that went all the way to the Arkansas Supreme Court. In late September, the regulatory panel then agreed to hand over the task to score the tabled dispensary applications to PCG for nearly $100,000 following a bidding process where only two proposals were received.

LEGAL LOOSE ENDS
In other MMC business, the regulatory panel also unanimously approved a request by Delta Medical Cannabis Co. of Jonesboro to move its planned greenhouse near ASU-Newport to another Jackson County site across the street from the Arkansas Department of Corrections’ Grimes Unit prison. The board’s decision came after state Attorney General Leslie Rutledge in late December concluded that a reviewing court would likely uphold the MMC’s interpretation of a public school to exclude ASU-Newport.

Earlier this summer, Sen. Bill Sample, R-Hot Springs, asked for an opinion from the AG’s office on whether Delta Medical’s application should be thrown out because its proposed greenhouse is too close to a school. The Jonesboro cultivator, which also has a dispensary application, is the same group that Nolan’s company alleged filed an application with the commission that had “misleading, incorrect, false or fraudulent information.”

The MMC also scheduled its next meeting on Feb. 13 to consider rules regarding a hearing process to consider such complaints. They also plan to promulgate rules concerning the transport of medical marijuana products across the state.