Tuesday, November 15, 2016

TOP STORY >> Marijuana is seen as cash crop

Leader staff writer

State officials say about 40 for-profit medical marijuana dispensaries will open around Arkansas after voters last week approved Issue 6, which will allow doctors to prescribe marijuana to patients to treat 18 different conditions.

Issue 6 passed by 53.2 percent and when it goes into effect next year, physicians can prescribe medical marijuana to their patients for 18 different conditions.

A state commission is expected to issue licenses to as many as eight growing facilities, possibly including farming areas of Lonoke County.

But getting the amendment passed may have been the easy part, as various state agencies are working hard to meet its strict yet short timelines.

In tax revenues alone it may be worth the effort. Pot, which is still illegal, is the biggest cash crop in some Arkansas counties.

Medical marijuana was legalized in California in 1996, and from March 2015 until March 2016, medical marijuana dispensaries in California sold more than $844 million worth of products.

Last week’s election also legalized the recreational use of marijuana in California, Nevada, Massachusetts, Maine and Alaska. It was previously fully legalized in Washington, Oregon and Colorado, and medical marijuana is now legal in 20 states including Arkansas.

The booming industry, dubbed the “Green Rush,” created thousands of jobs and millions of dollars in taxes for states.

In Arkansas, the state will collect 6.5 percent on every dollar that industry generates.

California’s marijuana tax rate is about 7.5 percent. California predicts marijuana sales to be about $6.6 billion by 2020.

According to a Cannabis Investor Study prepared by Arcview Market Research, “Legal cannabis sales in the United States jumped 17 percent, to $5.4 billion, in 2015.”

That includes adult recreational and medical usages, but by 2020, sales are predicted to hit $21.8 billion.

Rep. David Hillman (D- Almyra), who is a farmer, said limiting the number of growers restricts competition.

“I’m philosophically op-posed to an amendment that favors one group over another,” Hillman said.


Lonoke County Extension Agent Keith Perkins said no one has contacted his office about a license to grow cannabis.

However, he said the area of the state can support a wide variety of crops because of the longer growing season and good soil. It might be the perfect place for marijuana production.

In the future, if a grower calls about a particular insecticide, pest or fertilizer, he said he would have to research the information.

State Rep. Mark McElroy (D-Tillar) is on the Agriculture Committee and is a farmer in Desha County, where marijuana is estimated to be the number one cash crop — even though it’s illegal.

McElroy said he expects a lot of discussion during the next legislative session, especially as a member of the Agriculture Committee.

“I will want to study how it’s being done in other states, and the problems they’ve experienced. Security will be a big concern to me. We have to keep the legal product off the black market,” he said.

Hillman said he believes it will take two months of Arkansas legislators’ time.

“Everyone is going to have a different opinion, but I believe we will enact the most restrictive laws that we can under the amendment people voted for,” he said.

Kelly Carney, owner of North Pulaski Farms, is a certified organic farmer and marijuana isn’t allowed under the organic umbrella because it’s an illegal drug.

Still, Carney said, who worked in security systems before turning to farming said, “Security is going to be a big deal,” and he would like that discussed at the state level.

Hillman agrees and wants to see a grower on the Medical Marijuana Commission.

“Growers need to have input into the process,” he said.

Additionally, McElroy said, “Farming’s all about the profit. If it’s legal to grow medical marijuana, you can’t blame a farmer for giving it a first or second look.”

Hillman said if the country ever legalizes marijuana for recreational use, there are farmers that would be more than happy to grow it for the market.”

It could change Arkansas’ farming landscape, he said.

But for now, Carney said Arkansas growers “are certainly going to be interested in growing marijuana but no one knows enough at this point to even put together a business plan.”

Plus, Carney added, “How will the state determine who can grow the crop, by lottery, limited sourcing? It’s going to be a challenge.”


According to The Huffing-ton Post, marijuana is the “fastest-growing industry” in the U.S., and now more than half the states have some form of legal cannabis.

At one time, Arkansas Gov. Asa Hutchinson was head of the U.S. Drug Enforcement Administration, now, the state’s position on medical marijuana puts him at odds with the federal government.

Marijuana is still considered a Schedule I drug and those in possession are subject to arrest.

Nonetheless, Hutchinson must fall in line with the new state amendment and is in the process of establishing a Medical Marijuana Commission by Dec. 8. He has allocated $3 million from the state’s rainy day fund to cover the startup costs needed by the Arkansas Department of Health and the Arkansas Department of Finance and Administration, both charged with critical roles.

While the governor’s office is working hard to meet the deadlines, spokesman J.R. Davis said, “First and foremost, this is going to take time…We need to get the right people, the right processes and the right procedures in place.”

Basically, the state is building a mini FDA from the ground up, he said.

“We have more questions than answers at this point,” but “the reality of the situation is that we will do everything we can to meet the time requirement. That may or may not be possible,” Davis said.

In 2009, new federal guidelines were enacted.

U.S. Attorney General Eric Holder said, “It will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers” in compliance with state laws.

According to Marisha Dicarlo, director of the Health Department’s office of communications, “We knew it (the passage of Issue 6) was a possibility,” but until it failed or passed, there was nothing to be done.


Now, the department is looking at what has worked in other states, as well as establishing rules for the issuance of registry identification cards, tracking of dispensed marijuana and other operations.

Its responsibilities extend to areas such as “regulating labeling and testing standards, establishing reasonable fees, considering public petitions to add additional medical conditions to the list of qualifying conditions, and submitting annual reports to the Legislature,” Dicarlo said.

They will have to hire a program director at some point.

“It will take time (perhaps months) to set up the infrastructure,” she said.

The Health Department received about $2.5 million from Hutchinson’s office to cover its costs, with the remainder going to the Arkansas Department of Finance and Administration (DFA).


The DFA’s share of the money is about $500,000 and was allotted to help establish the rules and regulations for the production and sale of cannabis, said Jake Bleed, the department’s director of communication.

“As soon as it passed we moved quickly to but there’s a lot of work to be done, and a lot questions that need to be answered so we’re working with other states (who legalized medical marijuana),” Bleed said.

The department also hopes to determine the impact it will have on the state.

The DFA will be issuing additional guidance in the coming weeks and months regarding the Medical Marijuana Amendment, and the ABC (Alcohol Beverage Control board), under the direction of the DFA, will issue dispensaries licenses.

The department will also hand out licenses to a few growers in the future.

However, the DFA website cautions that “rules on the cultivation, sale and use of medical marijuana are being developed…Use of marijuana under circumstances outside the limits of the amendment is still illegal in Arkansas.”

Bleed said, “This is a big step for the state and it’s something we need to get right.”