Arkansas Dispensary Licensing Issues Cause Uncertainty For Underserved Cannabis Patients

Parts of Arkansas' medical cannabis market remain underserved, leaving patients to drive miles and hours to find medicine.

As license renewals approach in June, 13 of the state's 33 licensed dispensaries remain unopened.

Per the state's approved cannabis regulations, it can issue up to 40 dispensary licenses across eight designated zones. After initially issuing 32, officials granted an additional license to Zone 7 in March 2020 after approved retailers were slow to open.

With a market generating over $50 million in sales from over 44,000 patients in its first year, opportunities for continued growth appear likely if all dispensaries were to open.

The Reasons For Slow Dispensary Openings In Arkansas 

One theory as to why 12 of the original 32 licensed dispensaries have yet to open is that they never intended to, but rather aimed to sell the permit to another operator. 

Arkansas Medical Marijuana Commission officials validated such a notion when the commission rejected the sale of two licenses on similar grounds.

In a unanimous vote, the five-person panel cited a lack of effort by the license holders as its primary concern.

"To sell [a license] before renewal, it raises a fundamental fairness issue," Commissioner Travis Story said, called the matter frustrating.

Story did not respond to a request for comment from Benzinga. 

Erik Danielson, a lawyer and licensed dispensary owner operating in Arkansas and Oklahoma, said he understood the ruling.

"[The commission] did not want to give someone the opportunity to make a windfall without doing what they said they were going to do on the application."

Ryan Agnew, an attorney in Rogers, Arkansas, told Benzinga that local regulations — and possibly funding — are to blame. Some retailers are working with out-of-state groups to secure financing to ease the pain point, he said. 

Melissa Fults, program director for the non-profit organization, Arkansans for Compassionate Care, places the blame on the state commission itself and said that it ignores its own rules and regulations.

"They have drug their heels at every opportunity," she said. 

The state's two-year-plus wait on issuing dispensary licenses, as well as its allowing certain dispensaries to move to reportedly more lucrative areas are reasons for concern, Fults said. 

With June renewals ahead, the fate of unopened dispensaries remains a question in the sector, said attorney Danielson. 

"It's going to be interesting to see how the commission handles renewal for any store that hasn't gotten online." 

What's Next For Arkansas? 

Concerns over medical market access may be quelled with the granting of a 33rd dispensary in Zone 7.

The COVID-19 pandemic could stall another possible market development in Arkansas: adult use legislation. 

Agnew said recreational laws would help curtail the local regulations he took issue with. 

Now, with live signature efforts prohibited due to social distancing, the attorney said the timing couldn't be much worse.

"[The effort] had, just a couple of months ago, secured additional financing to pay signature categories, which is really what it takes to get to the finish line for the deadline in early July."

Related Links:

A Snapshot Of America's Medical Marijuana Markets: Arkansas

Harvest Health Opens Little Rock, Arkansas Medical Marijuana Dispensary