Suit’s end puts grower in line for pot permit
Panel to award 6th license, citing high demand for drug
A growing demand for medical marijuana in Arkansas prompted the state’s regulatory commission for the drug to approve an additional cultivation license on Tuesday.
There are five licensed growers in Arkansas, though only three have harvested and sold their marijuana crop.
Carpenter Farms Medical Group, a fully minority-owned company from Grady, is next in line to receive one of the coveted licenses, after the Arkansas Medical Marijuana Commission agreed Tuesday to settle a lawsuit over the group’s disqualification from the initial bidding process.
By a separate, 4-1 vote, the commission agreed to award a sixth license Tuesday. Carpenter Farms will have seven business days to pay a $100,000 licensing fee and post a $500,000 bond to receive its license, according to commission spokesman Scott Hardin.
Under the constitutional amendment approved by voters in 2016 to legalize medical marijuana, as many as eight cultivators can be licensed, and as many as 40 dispensaries to sell the drug.
The Medical Marijuana Commission voted more than three years ago, however, to give out only five licenses to growers and 32 to dispensaries as the state phased into the cannabis business. As the number of qualified patients has grown beyond initial projections, and sales of the drug approach the $100 million mark, calls for the commission to issue new licenses have grown.
Applications for the three remaining cultivation licenses are set to expire July 10, and the commission had scheduled its final meeting before that deadline for Tuesday evening. The meeting was conducted with several commissioners and members of the public participating by videoconference.
“It could be years before we’re in the position to grant licenses again,” Abraham Carpenter, one of the owners of Carpenter Farms, told the commission on Tuesday.
“Think of all the patients that are not being treated, all the jobs that are not being created, all the taxes that are not being collected.”
Carpenter’s comments were bolstered by two lawmakers — Rep. Vivian Flowers, D-Pine Bluff, and Rep. Jay Richardson, D-Fort Smith — who said that high costs were sending Arkansas med
ical-marijuana patients over state lines into Oklahoma, which has issued thousands of licenses to grow the drug.
Officials representing currently licensed cultivators, however, disputed that drug prices were much cheaper in surrounding states. Demand for the drug, they said, can be adequately filled by the three current growers and two new operations that are set to begin harvesting soon in Newport.
Alex Gray, an attorney who represents the Arkansas Medical Marijuana Association, said “there’s no proof and no facts” to support awarding additional cultivation licenses, and that by doing so the commission could put itself in legal jeopardy.
Before the commissioners voted to extend a single additional license, they also agreed to accept a settlement agreement to end a lawsuit filed against them by Carpenter Farms. According to a copy of the agreement, the commission agreed to reinstate Carpenter Farms as the sixth-placing applicant for a cultivation license, where it would have originally scored before its disqualification for errors in its application.
Carpenter Farms alleged in its lawsuit that the errors were merely typographical, and that the commission overlooked similar problems in competing applications.
After the Arkansas Supreme
Court ruled last month to allow the lawsuit to go forward, Attorney General Leslie Rutledge’s office offered to settle the lawsuit by reinstating Carpenter Farms into the applicant pool and having the commission hold a vote on whether to award any additional licenses, according to a copy of the agreement provided by the commission. The agreement did not bind the commission to vote in favor of awarding new licenses.
“After sharing the offer with our client the Medical Marijuana Commission, the Commission decided it was in the best interest of the State to enter into the settlement which is not a reflection of any wrongdoing by the State,” Amanda Priest, a spokeswoman for the attorney general’s office, said in a statement.
A representative for Carpenter Farms could not be immediately reached for comment after the commission’s vote.
Two other grower applicants, River Valley Relief of Fort Smith and New Day Cultivation of Hot Springs, are tied for seventh place in the applicant list and the final two licenses should the commission vote to award those licenses before the deadline, according to the commission.
“I don’t know what to expect from the commission other than to make very thoughtful decisions,” said Bailey Moll, a consultant for New Day Cultivation.
A representative for River Valley Relief could not be reached for comment.
In its final action Tuesday, the commission agreed to meet again before its deadline to award more cultivation licenses. That meeting will take place June 30.