Eureka Springs stands to gain a large increase in sales taxes, and patients from three counties will now have a shorter drive to obtain medical marijuana products, from relocation of a dispensary in Fayetteville to Eureka Springs approved by the Arkansas Medical Marijuana Commission (MMC) May 5.
MMC spokesman Scott Hardin said the commission voted unanimously to approve a request to transfer the Osage Creek Dispensary from 3970 Martin Luther King Blvd in Fayetteville to 101 E. Van Buren, which is the site of the Best Western Eureka Inn, located at the intersection of US 62 and S. Main. Dispensaries may transfer locations within their zone if approved by the MMC.
“This will be the first dispensary in Eureka Springs,” Hardin wrote in an email. “Following the transfer, two dispensaries will remain in Fayetteville along with two in Bentonville. A second transfer request was also approved following the Osage Creek vote. Purspirit Cannabis Co. will remain in Fayetteville but will move into Osage Creek’s former location.”
The attorney representing Osage Creek was asked by commission Chair James Miller why the transfer was being requested. The attorney said the move to Eureka Springs would allow patients in Carroll and Madison counties to be better served by a closer, accessible dispensary.
There isn’t a projected opening date for the Eureka Springs dispensary. Hardin said the owner will let them know when the dispensary is ready for final inspection.
Mayor Butch Berry said he is always excited about anything that can improve the local economy and increase sales tax revenues. Local city and county sales taxes apply to medical marijuana purchases. Eureka Springs receives sales taxes of 2 3/8th percent.
“I have no idea at this point how much of an impact that would be, but I’m guessing it would be pretty significant,” Berry said. “That is always welcome news. I know when I first spoke with Matt Truelove asking about various properties that would be available, he said one of the reasons to bring the dispensary to Eureka is that people were coming as far as Mountain Home to Fayetteville to purchase from a dispensary. Evidently there are a lot of few people traveling quite a distance to visit a dispensary.”
Berry said he expects spinoff benefits from the dispensary to restaurant and retail establishments in town. “It will get more people familiar with Eureka Springs,” he said.
Sales tax collections are already up 24 percent in 2022 over the same period of 2021.
Osage Creek is being allowed to open the dispensary in Eureka Springs despite initially coming in two places below Eureka Green dispensary that was proposed by a local group of healthcare providers and other investors. Eureka Green was going to operate more like a regular clinic providing consultations to patients.
“They picked four licenses in each zone a few years ago and we barely missed out coming in fifth,” said Dr. Dan Bell, one of the investors involved with Eureka Green, which has promised to return 10 percent of its profits to non-profit causes in Eureka Springs. “We assumed we were still in the running but did ask for half of the application fee back as was allowed. No one told us that eliminated us. We listened to every meeting and assumed we would still be in the running. A couple years went by, and the MMC decided to assign five dispensaries. In Pine Bluff, the MMC gave the license to the applicant that finished seventh. Number five sued and said that there was nothing in the regulations that said having half the application fees returned removed applicants from being considered.”
Eureka Green, operated by Carroll County Holdings Inc., joined them in the lawsuit, which is now pending before the Arkansas Supreme Court.
“We feel we were unfairly passed over,” Bell said. “No rule said we were eliminated. Osage got that license even though they were number seven. The relocation of Osage to Eureka sort of takes the wind out of our sails. We were saying that there was a maldistribution, that all dispensaries in our region were Fayetteville and Bentonville. Now there is going to be one over here.”
But he said it is good news for the community they are coming here. Bell is hopeful that by having a dispensary and a grow facility could lead to economies of scale that could reduce prices.
Arkansas has limited licenses for marijuana grow facilities and dispensaries which some people have complained has led to higher prices than in neighboring states that took a free market approach. For example, prices are lower than in Oklahoma where there are more than 2,000 marijuana dispensaries.
There have been some who feel that allowing one of the five growers in the state to also own a dispensary is unfair to other applicants. Chris Burkes, attorney for Carroll County Holdings Inc., said in an interview with Jacqueline Froelich on KUAF National Public Radio that Eureka Green played by the rules and, unfortunately, the state agency just kicked them out of the line. He said it defeats the purpose of having zones if one or two entities control most of the growing and dispensaries in a zone. Burkes said the way medical marijuana has played out has not served the people of Arkansas.
“We could do much better,” Burkes said. “We could be much more like Oklahoma and other states in how we dispense medical marijuana.”
There has also been discussion of the attorney for Osage Creek, Sen. Bob Ballinger, also being the law partner at the time of Travis Story, a member of the MMC who rated Osage Creek higher than other commissioners.
Arkansas Democrat-Gazette reporter Hunter Field wrote in an article that Ballinger said that he and Story told the Truloves that the firm couldn’t do any legal work for them on marijuana-related matters. But Ballinger said he saw no problem if the firm continued representing them in unrelated matters.
“He delved further into our report that commissioner Travis Story, a Fayetteville lawyer, had done legal work in the past for Jay Trulove and his family, Berryville owners of the Osage Creek Cultivation medical marijuana cultivation business that finished in the top five in the competition (and got a very high score from Story),” Max Brantley wrote in the Arkansas Times March 9, 2018. “I have a hard time reading this without concluding that Story and Ballinger had talked with the Truloves before the application process. If so, Story knew they were going to attempt to get a permit. Though names and owners of permit seekers were redacted from applications the commissioners reviewed, their locations were not. Did Story not have a clue when he was marking the Osage Creek application for Carroll County that this was his old friend the Truloves?”