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Medical marijuana sales tax collected surpasses $50 million since legalization in 2016

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Medical Marijuana
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Monday marks five years since 53% of Arkansas voters said ‘yes’ to legalizing medical marijuana.

Scott Hardin, a spokesperson for the Arkansas Medical Marijuana Commission, said it was a slow rollout, with the first dispensary not opening until May of 2019 in Hot Springs. The state had a couple more dispensaries open that month, but has grown tremendously over the past several years.

The program is tightly monitored and controlled, limiting the number of dispensaries allowed in the state to 40, and growers to eight.

“The state is divided into eight different zones and each zone of the state gets five dispensaries,” Hardin said.

So far, there are 37 dispensaries operating and serving patients across Arkansas, and one currently working toward opening for business. The medical marijuana commission expects to issue the two-remaining dispensary licenses after the first of next year.

Since the first dispensary opened, Hardin said Arkansans have spent roughly $430 million dollars to purchase just under 64,000 pounds of medical marijuana.

“Here we are, into the program a couple of years and Arkansans, I think by the end of this year, will be pushing right around $500 million spent on medical marijuana,” Hardin said. “For a small state in a really strictly, tightly controlled program I think 500 million really exceeds our expectations, to say the least.”

Overall, Arkansas has collected $52.3 million in state taxes—the majority being collected since the start of 2021. Since Jan. 1, 2021, the state has collected $28.1 million in taxes due to medical marijuana, and in October alone, $2.75 million.

Arkansas has about 79,000 patients with active cards to purchase medical marijuana. The card allows them to buy 2.5 oz. of medical marijuana every 14 days, a significant amount, according to Hardin.

Two state-level taxes apply to medical marijuana purchases. Hardin said this includes the regular state sales tax of 6.5% along with a 4.0% privilege tax, totaling 10.5% when purchasing medical marijuana.

“A part of that is a tax that goes specifically to the University of Arkansas for Medical Sciences, specifically for a National Cancer Institute,” Hardin said. “So, millions and millions of dollars going straight to that program.”

Northwest Arkansas, specifically Fayetteville, leads the state in medical marijuana sales. However, Hardin said with three dispensaries in Little Rock and a total of seven within a 30-minute radius, central Arkansas isn’t far behind.

“Arkansans have quite a bit of choice, and hopefully that makes it competitive among those seven locations,” he said. “Those seven dispensaries that are within about a 30-minute radius of Little Rock have sold, since May of 2019, about 14,000 pounds.”

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Hardin said there have been a few violations issued to dispensaries across the state, but nothing extremely serious. So far, no licenses have been revoked due to violations.

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