FORT SMITH, Ark. (KNWA/KFTA) — According to Arkansas state law, there can only be eight medical marijuana cultivation centers in the state at a time, and the latest one is coming to the River Valley.
River Valley Relief Cultivation in Fort Smith is scheduled to have its first harvest by the end of this year.
The facility got its license in July 2020 and started growing operations in July 2021.
For the management team at the cultivation center, made up mostly of Arkansas Natives, there is a common sense of enthusiasm ahead of the center’s opening.
“I’m super excited. This is the first female operated cultivation facility in the state, so that’s pretty exciting,” said Director of Operations Kristy Floyd. “We’re building a really great team. We’ve sort of already become a family in the short amount of time that we’ve been all together. So, that’s pretty amazing.”
“Super excited to have the opportunity to work in my home state,” said Director of Processing Ryan Kenaga. “I believe that the high quality products are needed in the state and we’re looking forward to providing them.”
The center is state-of-the-art and uses a special dehumidification system that reclaims moisture from the building and uses it for growing the plants.
Floyd says this technology makes the facility’s water usage largely self-sustaining.
FORT SMITH — A new medical marijuana cultivation facility is on the way to producing its first harvest.
Kristy Floyd, director of operations for River Valley Relief Cultivation, said the facility anticipates the harvest by the end of the year. The end product is intended to be high-quality cannabis at an affordable price sold at medical marijuana dispensaries throughout the state.
William Walton, cultivation director for River Valley Relief, said the facility plans to harvest 2,000 marijuana plants at a time with 35 harvests per year.
Storm Nolan, who owns the facility with his brother, Kane Whitt, said the business believes in the medical benefits of cannabis. It received the go-ahead from the state to begin operations July 28.
“In Arkansas especially, with opiate addiction, this is a way patients can truly manage their pain if they want to get off opiates,” Nolan said. “We hear stories every week from patients who are more effectively managing their medical conditions with cannabis than traditional pharmaceuticals, and when you hear those stories, it’s really moving and it makes this whole thing meaningful.”
The United States had 67,367 reported drug overdose deaths in 2018, 46,802 of which involved opioids, according to the National Institute on Drug Abuse website. Opioids were involved in 208 of the 444 reported overdose deaths in Arkansas that year.
In addition to intractable pain, cancer, glaucoma, Crohn’s disease, severe arthritis, post-traumatic stress disorder, Alzheimer’s disease and HIV/AIDS are among the 18 conditions that can qualify patients for a medical marijuana certification.
Scott Hardin, spokesman for the Arkansas Medical Marijuana Commission, said about 80,000 patients in the state are approved to purchase medical marijuana. Arkansans have spent more than $400 million to purchase about 60,000 pounds of product since the first dispensary opened in Hot Springs in May 2019. The sales generated about $47 million for the state from the state sales tax of 6.5% and a 4% “privilege tax.”
River Valley Relief Cultivation is one of six licensed cultivation facilities growing product, Hardin said. Amendment 98 to the Arkansas Constitution, which was passed by voters in 2016 and established the state’s medical marijuana program, limits the total number of medical marijuana cultivators in the state to eight.
The other cultivators in production are Bold Team in Cotton Plant, Osage Creek Cultivation in Berryville, Natural State Medicinals Cultivation in White Hall, Good Day Farm in Pine Bluff and Delta Medical Cannabis Company in Newport, according to Hardin.
They received their licenses from the Medical Marijuana Commission in 2018.
New Day Cultivation in Hot Springs and Carpenter Farms in Grady, which received their licenses in 2020 with River Valley Relief, are still working toward growing product.
Walton said the River Valley Relief facility at 5601 Old Greenwood Road is 25,000 square feet with rooms dedicated to each step of the cultivation process. It has seven “flower rooms” where marijuana plants are grown. River Valley Relief Cultivation plans a processing lab where concentrated and edible products will be made after it receives the necessary equipment.
Nolan said the more efficient River Valley Relief Cultivation is in growing high-quality medical marijuana, the lower the costs it will incur. Quality in this context is two components, according to Walton. This includes a marijuana flower’s potency in its medicinal compounds, meaning cannabinoids, terpenes and flavonoids, and how free it is from pathogens and any residual chemicals or biochemicals applied during the cultivation process.
Floyd said the facility hopes to provide access to no-cost and low-cost medical marijuana for patients who demonstrate need.
Floyd said River Valley Relief Cultivation employs 20 people.
On Oct. 1, the opening of River Valley Relief Cultivation on Old Greenwood Road will give the River Valley its first medical marijuana growing facility.
Scott Hardin, director of communications for the Arkansas Department of Finance and Administration, said Amendment 8, which was passed by voters in 2016 to legalize medical marijuana, limits the number of growers in the state to eight. The state has reached its limit of eight growers.
Fort Smith was approved to grow cannabis in 2020 along with Grady and Hot Springs. They join Pine Bluff, Cotton Plant, Newport, Berryville and White Hall, which were approved in 2018.
River Valley Cultivation
River Valley Relief Cultivation, which opens on Oct. 1, will use 25,000-square-feet of indoor growing space for cannabis. Each of the seven cultivation rooms will have 2,000 plants.
An economic study done by the Arkansas Cannabis Industry Association found River Valley Relief Cultivation, which will be located on Old Greenwood Road, could bring in $80 million to the local economy over the next four years and 80-100 jobs.
On its website, the company said it will also help educate patients on opioids and research the impact medical marijuana has on stopping the opioid epidemic.
Floyd said 90% of the water the facility will use to grow the plants will be created from turning humidity in the facility into water, which is a system hospitals use. Floyd said this limits the amount of water from the city the facility uses.
The facility will include a C1D1 shelter, which is a room used to handle flammable liquids and gases, to perform the extraction process on the plants.
The state has a new legal marijuana grower, and he’s hoping to supply the medical cannabis market with enough product to bring down prices.
River Valley Relief Cultivation of Fort Smith, owned by hotel chain entrepreneur Storm Nolan, has passed its final inspection and “recently received formal approval to launch operations,” state spokesman Scott Hardin told Whispers. The “grow is now underway,” he said.
Nolan confirmed that he’s been fully cleared by the state to run his 25,000-SF operation in warehouse space River Valley owns near the Fort Smith airport. “Our whole goal is to bring more affordable and high-quality cannabis to Arkansas,” said Nolan, a partner in CSK Hotels of Fort Smith.
“You probably have heard that patients still consider Arkansas products to be way too expensive. So we’re eager. Our train is coming down the tracks and we’re here to help.”
The Arkansas Department of Finance & Administration also offered an update on this year’s industry expansion from 32 to 38 dispensaries and from five to eight cultivation centers. Amendment 98, which allowed medical marijuana after a 2016 vote, allows eight cultivation licenses and 40 dispensary licenses.
Collections from Arkansas state taxes on medical marijuana purchases recently surpassed $30 million.
According to the latest report from the Arkansas Department of Finance and Administration, the 6.5% state sales tax and 4% privilege tax established by the legislature have netted about $31,663,022 as of March 31, 2021.
Medical marijuana sales began in June 2019. While the 6.5% tax does not apply when a cultivator sells to a dispensary, the 4% does apply to those sales. Department of Finance and Administration spokesman Scott Hardin said the sales tax numbers have “exceeded expectations.” Overall sales will soon surpass $300 million, he added.
River Valley Relief is in the process of constructing a medical marijuana cultivation facility in Fort Smith with expectations to start growing plants in July. Product from River Valley Relief would then be available in the fall.
“We will produce a substantial amount, which will increase supply,” River Valley Relief owner Storm Nolan said. “We hope to make cannabis more affordable for Arkansas patents.”
While River Valley Relief has a few core people already involved, Nolan intends to start hiring more workers for the cultivation facility closer to the time of completing the facility. With their closest competitor having about 120 employees, Nolan expects to eventually match that in employment numbers.
While 2020 didn’t set the record for total building permit value in Fort Smith, it did set one for commercial permits.
Fort Smith saw roughly $234.2 million of building permit value in the city during the year, which was second to 2008. The city did set the record for commercial building permit value at $157.6 million.
“We feel like it was a pretty good year with the projects and the permits and the costs that we’ve got going, so we just feel like it was a good year,” said Jimmie Deer, Fort Smith building services director.
The city’s 426 commercial building permits were spearheaded by projects from Fort Smith Public Schools’ 2018 millage increase and the beginning construction of the new Veterans Affairs clinic on Phoenix Avenue.
Deer said Northside High School projects alone amounted to $31 million and the VA clinic represented $16 million. Fort Smith Public Schools is expected to spend around $125 million by the time they are done with all of their improvements, which include the PEAK Innovation Center, two basketball arenas and facilities improvements.
What’s in store for 2021
It’s only one week into 2021, but Deer said several prominent building permits have been filed.
Hytrol, which on Monday announced they would open a production facility in Fort Smith this year, has filed a $400,000 demolition permit for the old Whirlpool distribution center at 6500 Jenny Lind Road. Deer expects the company will likely spend more money on improvements to the facility.
A building permit for River Valley Relief has also been filed for a location on Old Greenwood Road.
The Natural State’s medical marijuana industry is high on intrigue.
The state Medical Marijuana Commission decided in its Dec. 8 meeting to award the latest dispensary license to 3J Investments, owned by Jeffery Catlett Fitch and Jeremy Ruiz, who plan to open a dispensary in Lamar (Johnson County). There was some controversy at the meeting over whether 3J was next in line to receive the lucrative license.
When the applications were scored and ranked in 2017, River Valley Sales LLC, the owner of River Valley Relief Dispensary, was ranked seventh in Zone 4 and 3J Investments was ranked eighth. Two applicants ranked ahead of them chose to pursue applications in other zones and pulled their applications from Zone 4.
The commission, which has divided the state into eight zones, allows a maximum of five dispensaries in each zone. Zone 4 consists of eight counties between Conway County and the Oklahoma border.
Before the Dec. 8 commission meeting, 3J Investments’ attorney Michael Goswami submitted a letter stating that River Valley was not eligible to receive a license because the company was dissolved and not registered with the secretary of state’s office. The letter cited language in Amendment 98 of the state constitution that states “A dispensary and a cultivation facility shall be an entity incorporated in the State of Arkansas.”
Commissioners were unsure whether to consider River Valley or 3J Investments as the next applicant in line to receive the license.
“You’re probably going to get sued no matter what you do,” Sara Faris of the state attorney general’s office advised the commission.
Stephen Smith, a representative for River Valley, attended the meeting via Zoom and attempted to speak, but commission chairwoman Dr. Ronda Henry-Tillman did not recognize him. Before the meeting, River Valley submitted a letter arguing its case for the license based on access and need in the area but did not address the issues of dissolution or eligibility. The commission voted 4-1 to consider awarding a license in Zone 4 and then voted 5-0 to award it to 3J, making it the state’s 38th dispensary to be licensed.
Storm Nolan, who submitted the application for River Valley, said after the meeting that he believes his application was wrongly passed over and hopes to settle the disagreement with the commission “amicably” rather than through a lawsuit.
Nolan said he dissolved River Valley Sales because he was following guidance from the secretary of state’s office on inactive businesses. The commission accepted applications for dispensaries in 2017 and has held them in reserve until a Jan. 9 expiration date.
Nolan also said the commission was violating its own rules by recognizing the corporation rather than the individual (Nolan) as the applicant.
The commission’s rules and regulations define the “applicant” as “the natural person in whose name a license would be issued and any entity: (a) the natural person represents; or (b) on whose behalf the application is being submitted.”
“We followed the commission’s guidelines,” Nolan said. “We followed the secretary of state’s guidelines. For this to happen on a very minor technicality and counter to their rules and regulations, it’s a sad deal.”
Fort Smith, the state’s second largest city, is home to one dispensary, Fort Cannabis. Nolan’s letter to the commission pointed out that Sebastian County has the most medical marijuana patients of any county, yet has only one dispensary.
Nolan said he has held onto the retail space in Fort Smith that he intended to use for the dispensary.
“We were ready, willing and able and we still hope that we can bring this home to Fort Smith,” he said.
After an initially slow rollout, there are now 31 dispensaries operating in Arkansas. The other seven are said to be working toward opening. Voters approved the medical marijuana amendment in 2016, but the state did not open its first dispensary until May 10, 2019, when Doctor’s Orders (now known as Suite 443) opened in Hot Springs. Fourteen dispensaries open that year and 17 opened in 2020.
As of Dec. 17, the state’s dispensaries had sold 30,648 pounds of medical marijuana for $200.7 million since the first dispensary opened in 2019. Last year, the state’s dispensaries sold 4,200 pounds of medical marijuana for $28 million.
The commission passed on the opportunity to award the final two licenses, in Zones 6 and 8, during its December meeting. Unless the commission holds an emergency meeting before the Jan. 9 expiration date, it will have to open a new application process.
The next dispensary in line for a license in Zone 6 is Green Remedies Group and the next in line in Zone 8 is T&C Management.
Will the commission solicit new applications next year?
“I think it really depends on where we see the industry,” Scott Hardin, spokesman for the commission, said.
The commission licensed three additional cultivators earlier this year, giving the state the maximum eight cultivators to provide products to the dispensaries. Hardin believes the introduction of more product from additional cultivation facilities will help shape the industry in 2021.
“That will be the point at which everyone can look at this industry and understand exactly where it stands from a patient and product perspective,” Hardin said. “You’re still going to have this issue of lack of adequate product from dispensaries, but until these other three cultivators come on, it’s hard to tell where we stand.”
A Fort Smith business that is in the process of building a medical cannabis cultivation facility has entered a lawsuit with the Arkansas Medical Marijuana Commission for a dispensary license in Fort Smith.
While River Valley Relief LLC moves forward with constructing a cultivation facility in a 100,000-square-foot warehouse near the Fort Smith Regional Airport, the owners’ separate entity, River Valley Sales LLC, has entered a lawsuit to secure a Zone 4 dispensary after the one they vied for was given to 3J Investments for a dispensary in the Johnson County city of Lamar.
Storm Nolan and Kane Whitt of River Valley Sales LLC have submitted an appeal in Pulaski County Circuit Court that seeks affirmative status of the River Valley Sales LLC following the Dec. 8 Medical Marijuana Commission meeting in which the LLC was deemed “dissolved.”
Pulaski County Circuit Judge Herbert Wright Jr. denied a temporary restraining request from River Valley Sales LLC that would put a hold on the dispensary license issued to 3J Investments for a dispensary in Lamar.
“We asked the license to not be issued until the matter is resolved,” Nolan said. “There is an ongoing lawsuit. We’re asking the judge to see they (Medical Marijuana Commission) follow their own rules and regulations … If they followed the rules we would’ve received it. We were ranked the next highest scoring applicant.”
In the appeal, Nolan’s attorneys point out that the commission “did not offer the opportunity to pay the licensing fee and post the performance bond in according with Section V.10 to the next highest scoring applicant (Storm) from the applications held in reserve for the zone where the commission has determined a need for the license.”
A manager for 3J Investments told commissioners River Valley Sales LLC had been dissolved and that made their application for the license ineligible for consideration. Following a 4-1 decision by the Medical Marijuana Commission to issue a dispensary license to River Valley Sales LLC, the commission then voted 5-0 to give the dispensary license to 3J Investments.
A presentation that preceded the first Dec. 8 commission vote was to determine if there was a need for a second dispensary in Fort Smith. The one issued to 3J was the fifth and final dispensary license in Zone 4, which includes an area from Conway County to Sebastian County.
River Valley Sales LLC was the fifth-highest scoring applicant. 3J Investments was the sixth-highest scoring applicant. River Valley Sales LLC attorneys – Smith, Cohen & Horan, PLC – note in the appeal the commission chairwoman stated in the Dec. 8 meeting her concern for a second vote to award the license to 3J Investments was not in the purview of the commission because they had not seen this issue arise previously. Deputy Attorney General Sara Farris, however, advised it was within the commission’s discretion to deem an application ineligible.
As president of 3J, Michael Goswami of 3J Management LLC provided documentation in a letter prior to the meeting on the dissolution of the River Valley Sales LLC, according to Department of Finance and Administration spokesman Scott Hardin. 3J has since paid the bond and $15,000 fee for the dispensary license.
Goswami’s Dec. 4 letter to the commission noted a 2019 application was entered for Articles of Dissolution for Limited Liability Company signed by Storm Nolan. The reason given on the application was it “never started business.”
“River Valley Sales, LLC, d/b/a River Valley Relief Dispensary was voluntarily and formally dissolved with the Arkansas Secretary of State’s office by Mr. Bennett (‘Storm’) Nolan II on March 20, 2019,” Goswami wrote. “As a result, pursuant to Amendment 98 and Arkansas law, it is not authorized to receive a dispensary license from the MMC after March 20, 2019.”
Nolan explains the lawsuit argues River Valley Sales LLC “is not dissolved.”
“We are saying that the Arkansas Secretary of State improperly deemed our entity as ‘dissolved’ – per Arkansas state statute,” Nolan wrote.
River Valley Relief Cultivation
While the appeal goes forward, River Valley Relief expects to receive a building permit soon to following a standard process with Fort Smith Building Safety.
Phase 1 is to transform 25,000 square feet of a 100,000 square foot warehouse into a cultivation facility.
“We have all expertise in place,” Nolan said.
Price Point
There is currently one dispensary in Fort Smith called Fort Cannabis at 3904 Ayers Road. There are about 8,200 medical marijuana patient card holders in Zone 4 with about 5,000 of those card holders in Sebastian, Crawford and Franklin counties.
The Arkansas Medical Marijuana Commission (AMMC) on Tuesday (Dec. 8) approved just one of three remaining dispensary licenses, but a legal challenge may be filed by Fort Smith-based River Valley Relief which lost its bid for a dispensary license because of a technicality.
Tuesday’s vote also means the state will have authorized 38 of the 40 dispensary licenses approved by voters in 2016.
AMMC members on Tuesday were to vote on three remaining dispensary licenses which were in Zones 4, 6 and 8. To date, there are 31 active dispensaries in Arkansas, with six dispensaries being approved but not yet open. The medical marijuana constitutional amendment approved by Arkansas voters in 2016 allows for 40 dispensaries and 8 cultivation (growing) licenses. All eight cultivation licenses have been approved, with five active growers and three in the process of opening.
The commission on Tuesday approved the Zone 4 license and in a last minute twist, awarded the license to 3J Investments which is 60% owned by Jeffery Fitch and 40% by Jeremy Ruiz. The dispensary will be located in the Johnson County town of Lamar. River Valley Relief (RVR), owned by Fort Smith businessman Storm Nolan, was the highest scoring dispensary for the Zone 4 license, but Rose Law Firm attorney Michael Goswami told the commission the RVR application was invalid because the entity had not renewed its business license with the Arkansas Secretary of State’s office.
“Thus, Amendment 98 requires that the MMC only issue a medical marijuana dispensary license to an entity incorporated with the State of Arkansas. A limited liability company that has been voluntarily and formally dissolved pursuant to Arkansas law does not meet this requirement. Further, pursuant to Arkansas law, there is no mechanism for a dissolved limited liability company to revoke its dissolution and restore itself into existence,” Goswami noted in a Dec. 4 letter to the commission.
Nolan, who received in June a medical marijuana cultivator license, said he was surprised by Tuesday’s vote, and said a decision will be made Wednesday about legally challenging the commission’s vote. Nolan told Talk Business & Politics that he was told by AMMC attorneys that applications were tied to the applicant and not a business entity.
“We’re going to make that the decision tomorrow,” Nolan said when pressed on if he would pursue legal action. “We’ll see.”
Nolan was also critical of the commission not approving licenses for the other zones. The scoring and approval process for the remaining licenses expires Jan. 9. The AMMC paid just under $100,000 to craft the process and all that would be lost if the licenses are not approved prior to the deadline.
“They spent $100,000 to score these, and now they are talking about a whole new application process for these two licenses,” Nolan said.
Arkansas has 31 active dispensaries for 60,013 active licenses, or a dispensary for 1,935 licensed medical marijuana patients. By way of comparison, Oklahoma has 1,924 dispensaries serving 360,741 active licenses, or a dispensary for 187 licensed medical marijuana patients. Total sales since the first dispensary opened in May 2019 were $187 million – and 28,674 pounds of medical marijuana – as of Nov. 25. The AMMC expects sales will reach 30,000 pounds by late December.
Storm Nolan believes approval of three remaining medical marijuana dispensary licenses should be granted by state regulators to provide greater access to licensed patients and to avoid another costly and time-consuming process to score dispensary applications.
Nolan, owner of Fort Smith-based River Valley Relief, which received in June a medical marijuana cultivator license, is behind one of three dispensary applications the Arkansas Medical Marijuana Commission (AMMC) is set to consider during a Dec. 8 meeting. On that agenda are licenses for a dispensary in Fort Smith, Hot Springs and Texarkana.
To date, there are 31 active dispensaries in Arkansas, with six dispensaries being approved but not yet open. The medical marijuana constitutional amendment approved by Arkansas voters in 2016 allows for 40 dispensaries and 8 cultivation (growing) licenses. All eight cultivation licenses have been approved, with five active growers and three – including Nolan’s operation – in the process of opening.
Nolan said approving the three licenses will improve patient access to medical marijuana. Arkansas has 31 active dispensaries for 60,013 active licenses, or a dispensary for 1,935 licensed medical marijuana patients. By way of comparison, Oklahoma has 1,924 dispensaries serving 360,741 active licenses, or a dispensary for 187 licensed medical marijuana patients.
Fort Cannabis, owned by Jeff Scholtes and Sheri Neely, opened in Fort Smith on Dec. 18, and has sold 1,207.75 pounds of medical marijuana as of a Nov. 25 AMMC report.
“You have dozens of pharmacies but only one dispensary for medical marijuana” in the Fort Smith metro, Nolan said, adding that his dispensary will deliver to areas within the approved zone. Communities in Crawford, Franklin and Logan counties do not have a local dispensary and could benefit from a delivery service, Nolan said.
Also, a scoring and approval process for the remaining licenses expires Jan. 9. The AMMC paid just under $100,000 to craft the process and all that would be list if the licenses are not approved prior to the deadline.
“I cannot see a good reason for them (AMMC) hanging on to the three (licenses). Why keep three and then go through the expensive $100,000 process again? And you have three ready, willing and able to do our part,” Nolan told Talk Business & Politics.
Scott Hardin, a spokesman for the Arkansas Department of Finance and Administration, the parent agency of the Arkansas Medical Marijuana Commission, agreed that the process would have to begin again. Hardin said questions AMMC members face in approving new dispensary licenses are a low supply from existing cultivators, sales data, and the number of active patients. And as to the number of dispensaries per active patients, Hardin said, Arkansas’ law approved by voters allows only 40 dispensaries, while the Oklahoma law did not restrict the number of dispensaries or growers.
Nolan agrees there is a supply issue, but said existing cultivators are expanding, and newly licensed cultivators could be open by mid-2021. Nolan hopes to have River Valley Relief open by the early part of the second quarter of 2021. Also, it can take up to six months before the three newly licensed dispensaries would open to customers.
“We will eventually be able to put (more) supply to the supply issues. They (AMMC) need to be aiming for what will happen six months or a year from now,” Nolan said.
Total sales since the first dispensary opened in May 2019 were $187 million – and 28,674 pounds of medical marijuana – as of Nov. 25. The AMMC expects sales will reach 30,000 pounds by late December.
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