The Arkansas marijuana landscape will change significantly for cannabis businesses and consumers if Arkansas voters approve an amendment to legalize recreational marijuana on Nov. 8. 

Exactly what that landscape would look like is a different question. 

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We know there will be more consumers, but how many are we talking about? 

We know there will be more dispensaries and cultivation facilities, but we don’t know where they would be located or the rules that might dictate the locations.

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We know some regulations related to products, such as the 10mg cap on edibles, would be eliminated. Should we expect to find some new products on the shelves? 

We talked to the folks running a cultivation facility, a dispensary, a processing facility and a cannabis business association to find out how things might change in Arkansas’s brave new cannabis world. 

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Market Size 

The first and most obvious change is that dispensaries would be allowed to sell to adults 21 and older beginning March 8, 2023. 

Estimates of the size of the new marijuana market in Arkansas vary from two to four times the size of the state’s medical marijuana market, according to industry insiders. The state has more than 91,000 medical marijuana cardholders as of mid-October, according to Medical Marijuana Commission spokesman Scott Hardin, which means the state could see an increase of between 180,000 to 360,000 patients. 

Robbin Rahman, executive director of Harvest dispensary in Conway, cautioned against putting too much stock in estimates of the size of the recreational market because the initial projections for the state’s medical market greatly underestimated its size. 

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“I think the first thing you have to do when you start talking about how this market is going to change is you have to remain just a little bit humble about our ability to predict this thing,” he said. 

A study performed by the Arkansas Economic Development Institute and commissioned by Responsible Growth Arkansas, the sponsor of the amendment, estimated that cannabis sales would grow from $264.9 million in 2021 to $399.4 million in 2023. That’s a 50% increase in sales in the first year of recreational sales. 

The study projected cannabis sales would grow to $695.8 million in 2027, about 2.6 times the 2021 sales by the fifth year of the recreational program. 

Dispensaries 

There will also be more businesses that can grow cannabis and more places that can sell it. The Arkansas Adult Use Cannabis Amendment would increase the maximum number of dispensaries from 40 to 120 and the maximum number of cultivators from eight to 20. The medical marijuana amendment that voters passed in 2016 set the previous limits.

The amendment would allow the owners of existing medical marijuana dispensaries to receive a recreational dispensary license as well. Those licenses would have to be issued by March 7, 2023, according to the amendment. 

The Alcoholic Beverage Control Division would issue an additional 40 licenses by a lottery on or before July 5, 2023. 

So where will all those dispensaries go? We don’t know. One thing we know for sure is they won’t be located within five miles of an existing dispensary, because that’s written in the amendment. That rules out most of Little Rock, since the capital city has three medical marijuana dispensaries and a five-mile radius around them covers most of the city. 

Complicating matters is that the dispensaries also can’t be located within 1,500 feet of a school, church or daycare, according to the amendment. That rule, which already exists under the medical marijuana amendment, made it difficult to find appropriate locations for medical marijuana dispensaries.

Before the state Medical Marijuana Commission began issuing dispensary licenses, the commission divided the state into eight zones and allowed a maximum of five dispensaries in each zone. 

Will the state continue to use the zone system? Will the first batch of new dispensaries have to be located in the same zone as their owners’ medical dispensary? 

Bill Paschall, who leads the Arkansas Cannabis Industry Association, said the rulemaking process at the ABC will be important in determining the answers to these questions and more. Paschall estimated his organization already spends 60% of its time working with regulators to craft and tweak rules and help his members learn how they can “stay within the ditches” of the current rules. 

“It’s going to be extremely important,” Pashcall said of the rulemaking process. 

Regardless of the location of the new dispensaries, Rahman said his Conway medical dispensary will need to change to accomodate all of the new customers. Those improvements might not require building expansion but would likely necessitate some construction to reconfigure the budroom and the vault, he said. 

“We have a space crunch right now as it is,” Rahman said “We absolutely will have to figure out how to repurpose our space to accommodate not just our existing medical customers, but what I expect to be a large number of new customers interested in the adult-use market.”

The state will also add 12 small cultivation facilities that will be allowed to grow up to 250 mature plants at a time each (along with hundreds more plants at different stages of immaturity) in addition to the eight existing cultivation facilities that will be allowed to grow an unlimited number of plants. 

The amendment states that the ABC shall issue the 12 Tier Two licenses on or before Nov. 8, 2023, one year after Election Day.

Products 

The amendment would make two big changes that could impact the products on dispensary shelves. 

First, the amendment removes the restriction that prohibits dispensaries from selling an item that “requires the combustion of marijuana,” which would clear the way for pre-rolled joints. Pre-rolls, as they are commonly called, are a common item found in many marijuana markets. 

Storm Nolan, the head of Fort Smith-based cultivator River Valley Relief, said pre-rolls account for 10-15% of the entire marijuana market in other states and should have a significant impact here as well. 

“That’s going to be a huge, huge difference,” he said. “There’s a large market for pre-roll.”

Nolan said older people, such as those with arthritis, will find pre-rolls much easier than preparing flower for smoking. 

Casey Flippo, CEO of Little Rock processor Dark Horse Medicinals, agreed that allowing pre-rolls will be a big change. 

“I’m really excited about the prospect of pre-rolls and different things from a smokable application,” he said. “Naturally, I don’t condone smoking, but in the event that that’s what you’re into, I think that allowing us to make things a little bit easier and more accessible for the consumer is just gonna enhance the overall effect of the market.”

Flippo, who works with many of the state’s cultivators and dispensaries, also said the amendment will improve product availability and product diversity.

The amendment would also eliminate the 10mg cap on edibles, a point that nearly derailed the amendment after a state board seized the elimination of the cap as justification for rejecting the amendment’s ballot title. 

The Supreme Court didn’t agree with the Board of Election Commission’s argument and approved the ballot title, paving the way for some higher THC levels in edible products. The state Alcoholic Beverage Control Division, which will continue to regulate the state marijuana industry, will determine the rules that govern THC limits in edibles. 

Nolan also said customers will likely see products with higher potencies for patients who have built up a tolerance, as well as more beverages, mix-ins and “more discrete ways of consumption.” 

Even if the state approves recreational marijuana, Nolan said his business would still be focused on medicinal relief. There are many people in Arkansas who want to use marijuana for medicinal reasons who are unable to “jump through the hoops” of getting a patient card, he said. Legalization would lower the barrier for entry and allow those customers to use marijuana to treat their ailments. 

Nolan would also be interested in getting one of the 40 dispensary licenses that will be made available through a lottery. 

“We do plan on applying,” he said.