DFA official: First medical marijuana could go on sale in January 2018
LITTLE ROCK (TALK BUSINESS & POLITICS) -- Medical marijuana will be available to Arkansas patients around January 2018, predicts the Department of Finance and Administration.
The timeline is based in part on the process spelled out by the voter-approved Medical Marijuana Amendment and then altered by the Legislature. It’s also based on the realities of setting up private businesses.
The Department of Finance and Administration (DFA) will submit proposed emergency and regular rules to the Legislature for final approval Friday or Monday, ahead of a May 8 deadline, said Joel DiPippa, an attorney with DFA’s Office of Revenue Legal Counsel.
The Medical Marijuana Commission then will begin accepting license applications for cultivation facilities and dispensaries July 1. DiPippa said in an interview Wednesday that potential licensees will have 45 days to present their paperwork, moving the timeline to mid-August. Cultivation facilities and dispensaries will be scored based on merit, which should last about six weeks.
“Hopefully by the end of September, we will see the first cultivation facility and dispensary licenses being issued, awarded,” he said. “And then that gives three months of time where it make take them to build out and meet the requirements” as well as grow and test the plants.
There is no legal deadline for issuing the licenses. Theoretically, regulators with DFA’s Alcoholic Beverage Control (ABC) Division and the Medical Marijuana Commission could wait indefinitely, but DFA spokesman Jake Bleed doesn’t see that as a problem.
“We have received a huge amount of public interest in this, so my expectation is that we will be moving forward as quickly as we can to process applications and/or licenses,” he said.
DFA expects the market to mature 18 months after the drug is available. It expects $40 million to $45 million in retail sales based on estimates derived from six other states that have legalized marijuana only for medical use.
The amendment allows the licensing of up to eight cultivation facilities and 40 dispensaries, but under rules adopted by the Medical Marijuana Commission, licenses will be granted to five cultivation facilities and 32 dispensaries initially.
David Couch, sponsor of the amendment approved by 53% of Arkansas voters in the 2016 general election, said he expects the dispensaries, which can have up to 50 mature plants and 150 immature ones, to be the first to offer the drug once the licenses are provided. Dispensaries are smaller than cultivation facilities and can be housed in existing locations, which he said is “like the difference between building a 7-11 and a Walmart.”
DiPippa said DFA expects a similar timeline for dispensaries and cultivation facilities. He said additional rules will be created by the Medical Marijuana Commission for licenses for transporters, processors and distributors under legislation passed by the General Assembly.
“I think we’re in a good shape considering the timeframe we’ve been under,” he said.
The Arkansas Department of Health, whose primary responsibility will be administering medical information cards to patients, is finalizing its rules and regulations, said Meg Mirivel, public information officer. Rules will go before the Board of Health April 27 and be enacted by May 1. The information technology structure will be readied to issue registration cards about a month before the department anticipates the product will be available.
“We don’t want to issue cards and then people can’t actually purchase the product and then their cards expire shortly after the product is potentially available,” she said.
Among those hoping to build a cultivation facility is Storm Nolan, a Fort Smith-based real estate developer and manager who with his partners at CSK Hotels owns 600,000 square feet of real estate. They expect to submit their application not long after filings open July 1.
Nolan said he and his partners, who have not previously owned a marijuana-related business, are working with a consultant who has been successful in competitive licensing elsewhere. He believes it will take about six months to begin selling the product. They will begin constructing a 16,000-square-foot shell building in Fort Smith before July 1; if they win the license, they’ll complete it as a marijuana facility, and if not, it will become something else. That facility will enable them to grow the plants under extended lighting hours. If they win the license, they’ll then attach 6,000-square-foot greenhouses that can be completed in six to eight weeks. Those will enable the company to reduce energy costs.
“One of the things we’re concerned about is getting the product in the hands of patients at an affordable price so that the black market is not attractive to where people would prefer to purchase it through illegal means,” he said.
Nolan said the company has two motivations. One is economic, as it sees a potentially profitable venture. The other is personal, as his mother died a few years ago of a heart attack in a rehabilitation facility after a long battle with an opioid addiction. The medications prescribed for her chronic pain during one episode left her in intensive care for three months after her intestines ruptured. He said it was frustrating to see huge amounts of morphine prescribed to her with little concern for its addictive effect.
“We would have killed to have an alternate drug like that, something that had fewer side effects, was relatively non-addictive comparatively,” he said.