Public opinion polls have shown that a majority of voters in Arkansas are likely to vote in favor of Issue 4 that would legalize adult recreational use of cannabis. But opponents are arguing that the amendment would create massive profits for a few at the expense of affordable marijuana for patients and recreational users.
“It is all about money,” Melissa Fults, executive director of Drug Policy Education Group and Arkansans for Cannabis Reform, said. “This amendment was written by the owners of existing medical marijuana cultivation facilities. The petition campaign was funded by those same owners. If Walmart was going to write an amendment governing grocery stores, they would make sure Walmart was the only game in town. The cultivator owners got this written, they financed it, and are the only people who are going to benefit from it.”
Under the current medical marijuana program in Arkansas, there are only eight cultivation facilities in the state.
“They can’t even keep up the demand for the current 90,000 patients, so how will they meet the demand for the extra 300,000 customers expected?” Fults asked. “I’m all for recreational marijuana. I’m all for legalization, period. But this is not what we need. This will make it worse, especially for patients. I don’t want to see patients not be able to get the strains they need and then gouged on pricing the way they are now. This recreational marijuana amendment won’t be reform. It will be a brick wall.”
She also has concern that the total of 120 dispensaries allowed by Issue 4 is deceptive because the original 40 medical marijuana dispensaries get a license, and those dispensaries also automatically get 40 Recreational Use Licenses leaving only 40 other recreational licenses to be selected by lottery.
She also fears that those who get a license by lottery could end up selling to one of the large cultivator and dispensary owners.
“Using a management corporation, one entity now owns 18 dispensaries,” Fults said. “With medical dispensaries, some people never even broke ground. They just sold the dispensary license for a couple million and walked away. The way it is set up now, seven to eight people could own the entire industry here. I have a problem with that. What makes prices go down is competition. They don’t want any competition so they can put out as crappy a product as they want and charge as much as they want.”
Fults points out that while the eight existing cultivator facilities are allowed to grow an unlimited number of plants, Issue 4’s additional 12-tier two facilities will only be allowed to only grow 250 plants at a time—a size too small to have economies of scale.
“The smallest medical marijuana cultivator grows 20,000 plants,” Fults said. “Another 3,000 plants from small growers are going to make a difference? It is all bait and switch. It is all mirrors. And they are really good at it.”
She also said while employees of dispensaries making an average of $15 an hour need a background check, under the proposed amendment, shareholders owning five percent of a company aren’t required to have a background check. The amendment also removes a requirement that cultivation facilities and dispensaries be 70 percent owned by Arkansas residents.
“These people who stand to make millions will not have to have a background check,” Fults said. “Why would they have a problem with background checks?”
Two other major flaws she sees is that there is no provision for expungement of crimes for people previously convicted of cannabis violations, and there is no provision for people to grow their own cannabis.
Fults said Issue 4 could make the black market flourish.
“When Arkansas cultivators and dispensaries can put out as bad quality and high prices as they want, what do you do? You will buy it on the black market and not know what you are getting,” she said.
Another opponent is an unlikely ally of Fults. In 2016, attorney David Couch took legal actions that removed a medical marijuana initiative written by a group Fults headed, Arkansans for Compassionate Care. Couch wrote the competing medical marijuana amendment that did successfully pass.
Couch said he is in favor of legalizing marijuana for personal use, but that he wrote the 2016 medical marijuana initiative in such a manner that it could be easily amended to provide an adult-use recreational system that would be fair, equitable and competitive for everyone.
“My biggest concern is that this amendment would establish a system that is anti-competitive,” Couch said. “It is not good for the patients, it is not good for the medical system, it is not good for the personal-use consumers, and it is really not good for that state. The whole thing was written in a very deceptive manner so that voters think they are getting recreational personal use marijuana and they are getting that – if that is all you are concerned about – if you don’t care about costs and you don’t care who makes millions and millions off your choice. The cultivators and dispensaries set this up to enhance their own profits.”
Couch, like Fults, doubts most people realize there will be no new major cultivators despite an anticipated four-fold increase in demand. He also expects the black market would benefit.
“You aren’t going to be able to tell if you stop someone on the street if they got marijuana from a licensed cultivator or the black market,” Couch said. “There should have been at least 25 or more new cultivators. There should have been far more new dispensaries. And it was horrible for them not to provide either complete relief to people who have past marijuana offenses or set up a system with a path to expungement. People are going to be saddled with those offenses.”
Couch sees another danger being that Issue 4 can’t be changed by a vote of the legislature. That means that the only way to make any changes, if Issue 4 passes, would be to pass another constitutional amendment. And currently the legislature has proposed Issue 2 that would require a 60 percent vote to approve amendments. He also said that the existing marijuana industry will become increasingly wealthy and able to spend huge amounts to prevent any changes to their monopolies.
He sees dispensaries at state lines where cannabis is legal turning into what you see now with county line liquor stores. Alcohol sales are brisk just outside of counties that don’t allow liquor sales.
“Arkansas is a non-competitive market versus Oklahoma,” Couch said. “The difference in prices is unreal. When you get into the weeds of this thing, you see how bad it is. It does away with the Arkansas Marijuana Commission, essentially, and gives it to ABC. Issue 4 sets tax rates and changes the way the tax money versus the way allocated now.”