Jim Smith takes leadership job with cannabis company

In August of 2020, late on a Friday afternoon, Rogers attorney Jim Smith got a phone call from Alex Gray, an attorney in Little Rock.

Gray wanted to hire Smith, considered one of Arkansas’ leading and most highly experienced business lawyers, to acquire one of Arkansas’ eight cannabis cultivation licenses. Gray was an investor with an operation that wanted the license — Good Day Farm Arkansas LLC.

Arkansas voters approved the legalization of medical marijuana in November 2016, with 53% of the vote. State lawmakers and regulators were slow to develop and implement the rules for issuing cultivation and dispensary licenses, and a series of legal actions hampered the process.

But, after a painfully slow rollout, the industry was active. And Good Day Farm had designs on being a player, seeking to acquire the license from an existing operator that wanted to exit the market.

“[Gray] said he needed the deal closed in two weeks,” Smith recalled. “It’s been a sprint since I took that phone call.”

Smith’s sprint has led to a job he could not envision for himself a few years ago — a leadership role of a medical marijuana business. As Good Day Farm built out its business infrastructure, Smith handled the legal work as part of his practice in Rogers, Smith Hurst PLC.

He went in-house with Good Day Farm in June 2021 as general counsel and director of mergers and acquisitions. Earlier this year, Good Day Farm hired him as president of business.

Smith is responsible for the company’s corporate office in Little Rock, including finance, legal, human resources, mergers and acquisitions, compliance and regulatory functions. Essentially, everything other than cultivation and facilities. Good Day Farm has a separate COO in charge of cultivation operations. Another president is the head of cultivation.

The growing company also hired a chief marketing officer in the fall of 2021. The four of them report to a newly hired chief executive. Smith said the company would announce that hire later this spring.

Smith also said Will Mullen, a Smith Hurst partner, will become Good Day Farm’s deputy general counsel.

“Many of us have said many times throughout this process that if you’d told us two or three years ago that we’d be involved in the cannabis world that would be the last thing we would say,” Smith said. “But the group that’s been assembled is an outstanding management team, and it’s an outstanding group of successful investors that support us.”

BUSINESS TRANSITION
Smith’s move to Good Day Farm comes in a transitional year for his professional career.

On March 8, Little Rock-based business law practice Rose Law Firm announced a deal to acquire Smith Hurst, a regional business law and private wealth law firm with seven attorneys in Rogers. The merger pushes the firm’s bench to 37 attorneys — 19 members, nine associates and nine of counsel.

Founded in 1820 before Arkansas statehood (1836), Rose Law Firm is the oldest business in the state and the oldest law firm west of the Mississippi River.

Rebecca Hurst, the firm’s managing partner, will become a Rose Law Firm member and manage Northwest Arkansas locations in Fayetteville and Rogers. She will also join the firm’s six-person executive committee.

Smith’s role with the firm will be advisory. The merger is effective April 1.

“I’m not abandoning the clients I have,” he said. “I will be involved [with Rose] in an of counsel role for select clients and projects.”

Smith and Hurst started their law firm in the summer of 2011. The two of them had previously worked at Friday, Eldredge & Clark in Fayetteville. A Russellville native, Smith was one of two attorneys dispatched from central Arkansas to open the Little Rock-based law firm’s Fayetteville office in 2000. He later hired Hurst, who is from Clarksville, in 2006 after she earned her master’s in taxation from New York University School of Law.

Smith said he was proud of the firm’s achievements the past decade, and there are no sad feelings about removing the firm’s shingle from the business community.

“We think the Rose name is exceptional,” he said. “It’s an old firm with some youthful and energetic partners who will work well with us. We did many transactions with [Rose] through the years.”

Those who know Smith say his reputation as one of Arkansas’ top business lawyers is well-earned. His extensive practice spans the full range of business advisory and transactional law.

But he’s always understood that it’s not enough to be intelligent and possess an understanding of the law.

“Many people can check those boxes,” said Marshall Ney, a partner with Friday, Eldridge & Clark in Rogers. “Instead, success goes to those who additionally take an interest in their clients and clients’ businesses and remain responsive to them day and night. Those qualities come naturally to Jim. He has genuine curiosity and interest in his clients and has always immersed himself in their lives and businesses.

Ney has known Smith since they moved to Northwest Arkansas two decades ago. He said they’ve been competitors, adversaries, co-counsel and now attorney/client.

“Through it all, we’ve been friends and enjoy social time together,” Ney said. “Jim has not simply been a lawyer. He’s an invaluable business partner.”

Others say Smith is well-regarded because his reputation is built on tangible results. Smith has advised multiple companies in deals worth hundreds of millions of dollars. A memorable deal occurred in April 2013 when Smith acted as legal counsel for Fayetteville company Acumen Brands Inc. in its $83 million Series C investment round led by General Atlantic. It was the largest private equity investment within the state of Arkansas.

“He has a brilliant mind with great business instincts and exercises formidable judgment in understanding the complexities, nuances and interests in deal-making [such as] legal, emotional, historical, relational, reputational,” said David Echegoyen. He was Acumen’s president and CMO at the time. “His creativity and persuasive skills are also admirable. He’s also able to be assertive and respectful simultaneously, all while showing unflappable confidence and knowledge of the law.”

Among non-lawyers, there may be no one who knows Smith better personally or professionally than Echegoyen, who said Smith remains a sounding board, source of advice and confidant.

Echegoyen joined Jet.com in 2017— one year after Walmart acquired the business for $3.3 billion — and eventually was the company’s chief customer officer. He wound up at Walmart in 2019 as a top marketing executive and later headed Walmart’s first membership program as general manager for Walmart+, leading the team responsible for the program’s development, growth and economics.

“Jim quickly became someone I could trust implicitly, knowing he would consistently provide me with an honest point of view,” said Echegoyen, who’s now the operating partner at Cove Hill Partners, a private equity firm in New York City. He still lives in Northwest Arkansas. “But he didn’t force me to agree with him to forge a fruitful relationship. Although being the great lawyer he is, Jim was clearly persuasive.

“I admire Jim’s talent and dedication, and I’m grateful for his guidance in many situations thought my life and career.”

BOOMING BUSINESS
Smith, 53, has never smoked marijuana — recreationally or otherwise.

“I was not drawn to [Good Day Farm] as an enthusiast or aficionado,” he said. “I was drawn to it from a business perspective. It’s a booming business. It’s rapidly growing and very competitive.”

According to a report earlier this year from online cannabis marketplace Leafly Holdings Inc. (NASDAQ: LFLY), the marijuana industry in the U.S. continued to grow in 2021, with almost half a million people now employed full-time in the cannabis sector as more state markets come online and mature.

Last year’s national cannabis sales figure ($25 billion) is just about 25% of the industry’s potential, the report said. It also projects that cannabis revenue is expected to almost double by 2025, and even then, it would be “less than half of the total potential market.”

Good Day Farm operates a 100,000-square-foot cultivation facility in Pine Bluff that employs 300 people. There are similar facilities in Columbia, Mo., and Ruston, La. A cultivation facility in Oxford, Mo. is in development.

Smith points out that since cannabis remains illegal from a federal point of view, there are nuances to growing the business in multiple states. Instead of one Good Day Farm entity, separate limited liability companies with common investors own numerous Good Day Farm ventures. The requirements for ownership vary from state to state.

According to the Arkansas Medical Marijuana Commission, which administers and regulates the issuance of licenses to operate medical marijuana dispensaries and cultivation facilities, there are nearly 150 investors/owners from multiple states backing Good Day Farm.

“Our goal is to be the most significant cannabis operator in the southeast part of the country,” Smith said. “We don’t have one mothership that owns everything in these various states. By law, you can’t do that. We have separate companies in each state to comply with the rules and regulations of those states. Eventually, maybe the laws will change to allow us to consolidate. But we can’t do that today by law. We have different investor groups and ownership in each state we are involved in.”