Alex Gray went all in on medical marijuana. A Little Rock lawyer, Gray rose to prominence by crafting the constitutional amendment to expand casino gambling in Arkansas that voters approved in 2018, but has largely turned his attention to the medical marijuana market, another industry that the conservative Natural State is slowly embracing and which stands to generate a lot of money for participating businesses. He’s now co-owner of both a medical marijuana cultivation facility and a dispensary in Arkansas, and of cultivation facilities in Louisiana and Missouri. He and other investors are primed to open a grow operation in Mississippi and continue to expand throughout the Southeast as the ever-evolving market continues to open up.
All of the operations Gray co-owns carry the name Good Day Farm, but because Arkansas and other states have certain in-state ownership requirements, the ventures aren’t owned by an umbrella Good Day Farm corporation, but rather a string of limited liability companies in various states with common investors.
In November 2020, Gray’s Good Day Farm Arkansas LLC purchased one of Arkansas’s eight cultivation licenses from Natural State Wellness Enterprises of Newport. Good Day Farm received approval for a construction permit in December and the go-ahead to open its 100,000-square-foot facility in Pine Bluff only 3 1/2 months later, in April. It employs more than 150 people. “We hope it will be an economic engine driver for the area,” Gray said.
Meanwhile, in November 2020, another company co-owned by Gray purchased a Little Rock dispensary license from Natural State Wellness Dispensary, owned by some of the same people as the Natural State cultivation facility, including former Arkansas Attorney General Dustin McDaniel. Harvest, an Arizona-based multistate cannabis company, was an operating partner in both Natural State Wellness ventures. In a press release, it reported that $25 million was the combined sale price of the cultivation and dispensary businesses.
The dispensary, formerly known as Harvest House of Cannabis, was rebranded Good Day Farm Little Rock. It’s located at 900 Rodney Parham Road, but has received approval from the state Medical Marijuana Commission to move to 11600 Chenal Parkway, behind The Purple Cow restaurant and across the street from Barnes & Noble bookstore. Gray anticipates that will happen by the end of the year or early next year. The dispensary is owned by Gray, his wife, Ann; and Nate and Lauren Steel.
Nate Steel, the former state legislator who is a partner with Gray in the still-active Steel Wright Gray Little Rock law firm, is also an investor in other Good Day ventures and does government relations and compliance work on their behalf. Other investors: Reid Dove, CEO of his family’s Dothan, Alabama-based AAA Cooper Transportation, which recently sold for $1.35 billion, has a stake in all of the Good Day cultivation operations and projects in Arkansas, Louisiana, Missouri and Mississippi. Eric Thornton, a lawyer and developer in Dickinson, Tennessee, is invested in the Arkansas, Missouri and Mississippi operations. (He also owns a large hemp farm in Dickinson County, Tennessee, also called Good Day Farm, but that’s otherwise unaffiliated with the marijuana operations.) Stephen LaFrance Jr., formerly of USA Drug and previously a co-owner of Good Day Arkansas’s cultivator rival Natural State Medicinals, has stakes in Good Day Farm Arkansas, Missouri and Louisiana. His wife, Wendy LaFrance, owns nearly 11% of Good Day Farm Arkansas, which represents the largest share in the company.
Gray’s description of what he does on a day-to-day basis sounds fairly dry: He largely works with regulatory officials and investigates potential markets, he said. “We have a focus on the Southeast because that’s where the overwhelming majority of our investors live and have successful businesses,” he said, adding that there could be exceptions to that regional focus. A clue to what some of those future markets may be: In November 2020, Gray incorporated Good Day Farm LLCs in Alabama, Colorado, Florida, Kentucky, North Carolina, South Carolina, Tennessee and Texas.
“We look to participate in states that are highly regulated,” Gray said, citing high testing of cannabis as one indication of that. “At the end of the day, we’re in the compliance business. It just happens to be medical marjiuana. We want to be in markets where that is an important factor.”
Gray said when he travels to other states and visits with legislators and state regulators, they tell him Arkansas is a model medical cannabis program. There’s a wide variety of laws in medical marijuana states.
Louisiana’s program, launched in 2019, began as perhaps the most restrictive in the country. Initially, the state allowed only cannabis tincture to be sold and severely limited the number of qualifying conditions, which only about 60 licensed doctors could prescribe. But beginning in January, any licensed doctor can recommend marijuana to any patient the doctor believes needs it, and patients will be able to buy smokable products. The business side remains highly controlled. The state has only authorized two growers, which are overseen by the agricultural divisions of Southern University and Louisiana State University, and nine dispensaries. Good Day Farm Louisiana works with LSU and recently raised $55 million and bought a 225,000-square-foot facility in Ruston to produce medical cannabis, according to The Advocate, a Baton Rouge-based news outlet.
In Missouri, where voters approved a constitutional amendment to allow medical marijuana, there are 60 cultivation licenses and nearly 200 dispensaries. Good Day Farm Missouri built a 100,000-square-foot facility in Columbia, Missouri; it was waiting on approval from the state to begin growing in mid-September.
Last year, voters overwhelmingly approved a ballot measure that would have created a medical marijuana program in Mississippi, but in a bizarre outcome, the state Supreme Court declared the citizen initiative was unconstitutional. State justices ruled that the state constitution required that signatures be submitted from the state’s five congressional districts, despite the fact that the state lost one of its U.S. House of Representatives positions after the 2000 census. State legislators have been trying to hash out a deal to create a program in a special session. Gray and partners own property near Oxford, which they hope to develop as a cultivation center if the law is passed.
One state Gray and Co. plan to avoid? Oklahoma. “It’s the Wild West,” Gray said. “People are growing it in their bathtubs.”