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Times Record: Medical marijuana sales tax receipts surpass $30 million, overall sales will soon hit $300 million

Read the full story at the Times Record.

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.

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Times Record: Commercial building permits in Fort Smith break record in 2020

Read the full story at the Times Record.

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.

The citywide building permit value was driven by projects including the Fort Smith Public Schools millage projects and the new Veterans Affairs Clinic in the city.

“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.

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Arkansas Times: Arkansas medical marijuana legal wranglings

Read the full story at Arkansas Times.

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.”

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Times Record: River Valley business sues Marijuana Commission for dispensary license

Read the full story at the Times Record.

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.

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Talk Business: Commissioners approve one of three remaining dispensary licenses, legal challenge possible

Read the full story at Talk Business & Politics.

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.

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Talk Business: Fort Smith cultivator owner says three remaining medical marijuana dispensary licenses should be approved

Read the full story at Talk Business & Politics.

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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Times Record: Fort Smith cultivator rigs up to decrease prices, create jobs

Read the full story at the Times Record.

In July, the Medical Marijuana Commission released the remaining cultivator licenses for the state of Arkansas and Storm Nolan, along with his brother Kane Whitt, were among the recipients of one of those licenses.

River Valley Relief Cultivation is hoping to set up shop in an existing warehouse south of the airport.

They are submitting their plans to the city for approval by the end of the week. This would take them to the next step to begin operations as soon as possible.

A warehouse will be used to better control the environment. Nolan used the example of another cultivator who started with greenhouses but is making the move to warehouses for this very reason.

Once River Valley Relief Cultivation opens, there will be 50 to 60 jobs available. But the company owners are hoping to grow at the same rate as their competitors and need more than 100 workers in the near future. These jobs include cultivators and trimmers. River Valley Relief Cultivation expects to be unique and have hand-trimmed plants.

By not using machines, they will be able to maintain “tricombs” on the bud of the plant, which increases the potency of the marijuana that is lost when machines knock them off while trimming.

Nolan believes this new cultivation facility will “bring a lot of capacity to the area,” meaning that the supply and demand will drive the price down. Historically, Oklahoma prices have been lower than Arkansas prices, driving people to cross state lines to get medical marijuana despite violating federal law.

River Valley Relief Cultivation intends to take part in a compassionate care program that would help patients who can’t afford their treatment get it at a discounted price or completely cover it.

In Arkansas, there are 59,132 active medical marijuana cards. The Department of Finance and Administration previously reported that there were 90,000, but approximately 30,000 of those were temporary passes that have expired or applications that were not fulfilled.

Nolan also noted that there are three dispensary licenses remaining to be distributed in Arkansas and they are one of the applicants. Their application expires on Jan. 10, 2021, so it is up to the Medical Marijuana Commission to release those licenses before the applications expire.

If they receive the license, they would be able to house the cultivator. The dispensary would have been approximately a quarter mile apart, which would drastically reduce any delivery costs. River Valley Relief Cultivation hopes to distribute across the state, but they are happy to grow and potentially sell in their hometown.

Nolan stated that their goal has always been to help people. He hopes that people recognize medical marijuana is a legitimate tool to help people who need it, rather than those who just want to get high.

Both Nolan and Whitt were born and raised in Fort Smith and are “very happy to bring jobs to (their) hometown.” Nolan recalled the support they received from several businesses when medical marijuana passed in 2016 and is excited to see what is in store.

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Marijuana Business Daily: Harvest Health sells Arkansas medical marijuana operation (Natural State Wellness) for $25 million

Read the full story at Marijuana Business Daily.

Multistate marijuana operator Harvest Health & Recreation said it has completed the sale of its Arkansas medical marijuana operations for $25 million, a move to allow the company to focus on markets such as Arizona.

Arizona-based Harvest Health said it netted $12.9 million in cash from the sale of Natural State Wellness, a vertical operation. The assets included a dispensary in Little Rock that opened in February 2020.“We are pleased to have completed this divestiture as part of our strategic plan to streamline our business and focus on core markets,” Harvest Chief Executive Officer Steve White said in a news release.

“The additional cash on our balance sheet adds flexibility at a time when we are pursuing growth opportunities such as recreational sales in Arizona.”

Harvest is the leading medical cannabis operator in Arizona, with 15 dispensaries. The company recently acquired three more medical cannabis licenses in the state.

Arizona voters earlier this month legalized a recreational marijuana market that gives priority status to existing MMJ operators. Adult-use sales could begin by April 2021.

Harvest also has marijuana operations in California, Florida, Maryland, North Dakota and Pennsylvania.

The company reiterated financial guidance that total revenues will exceed $225 million for 2020.

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Arkansas Business: Room to Grow: State Adds New Cannabis Growers

Read the full story at Arkansas Business.

Ever since Arkansas legalized a medical marijuana industry four years ago, Storm Nolan of Fort Smith has waited in line, not always patiently, for a chance to get in.

Now, spurred by his late mother’s opioid addiction, he’s on the verge of getting his wish in the form of a multimillion-dollar cannabis cultivation center south of the Fort Smith airport.

Nolan, a partner in family-owned CSK Hotels of Fort Smith, is sole owner of River Valley Relief Cultivation LLC, one of three companies that recently gained state licenses to join the five original grow operations.

Nolan’s mother, Toni Whitt, an accomplished lawyer who graduated from the University of Arkansas at 19, died in 2013 at age 57 after struggling with opioids. “That was one of our primary motivations, because we’ve heard countless stories about patients who are either getting completely off of opiates or scaling down their opiate by managing their pain with cannabis instead,” Nolan told Arkansas Business.

“That’s also a reason it’s so sad that Arkansas’ pricing remains so high. People would rather manage their pain with cannabis, but they can’t afford it.”

Total sales at the state’s 29 operational dispensary sales recently topped $600,000 a day, and with twice as many Arkansans obtaining medical cards than expected — 80,314 as of Sept. 11 — the state Medical Marijuana Commission decided recently to issue three new grow licenses. Joining Nolan in the market will be Carpenter Farms Medical Group LLC of Grady, led by Abraham Carpenter Jr., and New Day Cultivation of Hot Springs, owned by Carla McCord with junior partners Nick Landers, Sherman Tate and Charles Singleton.

$300,000 a Day Wholesale

“About half of that $600,000 is divvied up between the current five cultivators,” Nolan said by telephone, noting that wholesale prices are generally about half of what Arkansas patients pay retail, prices that remain among the nation’s highest at nearly $400 an ounce.

“A pound of cannabis flower goes for between $2,800 and $3,200 wholesale, and the state’s latest numbers have the average retail price at $6,300 per pound, so that’s right in line with the 50% rule of thumb,” Nolan said.

Arkansans legalized medical cannabis in a November 2016 vote, and Nolan’s bids for both a cultivation and dispensary license fell just short in the application period that followed, finishing a close runner-up for the five initial growing slots and 32 dispensary opportunities.

Now Nolan, Carpenter and McCord are poised to build their grow operations and start bringing products to market in eight months or so, hoping to ease prices through competition.

That is, if they aren’t sidelined by a lawsuit from the original five growers: Bold Team LLC of Cotton Plant, Osage Creek Cultivation LLC of Berryville, Delta Medical Cannabis Co. of Newport, Natural State Wellness Enterprises LLC of Newport, and Natural State Medicinals Cultivation LLC of White Hall.

The gist of the lawsuit, which names state agencies and the three new cultivation licensees as defendants, is that the state didn’t follow its own guidelines in granting the additional licenses, particularly by failing to establish that new growers were needed to supply the burgeoning Arkansas market. The complaint was filed in Carroll County Circuit Court on July 15, shortly after the Arkansas Medical Marijuana Commission ruled that it would grant the new cultivation licenses. The plaintiffs are represented by Kenneth P. “Casey” Castleberry of the Murphy Thompson Arnold Skinner & Castleberry firm of Batesville.

‘Major Supply Issue’

“There’s a major supply issue in the state,” Nolan said. “We’ve seen a lot of social media messages from dispensaries telling people that they’re out of stock; they can’t get cannabis flower from the cultivators. Instead of placing orders, they basically get an allotment based on previous volume. So even if they want 20 pounds of flower, they may only get 4 pounds delivered in a given week.”

To back up his point, Nolan provided copies of Facebook messages from the Purspirit Cannabis Co. and the Releaf Center, dispensaries in Fayetteville and Bentonville, respectively, revealing that they had sold out of cannabis buds on Sept. 7 and 8. “It is a statewide problem,” Nolan said, “and right now, the cultivators just can’t can’t keep up.”

Castleberry, the lawyer representing the five original cultivators, said the commission couldn’t have determined whether the supply was sufficient to the dispensary market because only three of the five licensed growers were delivering product at the time the commission granted the new licenses. Four are now supplying product, and the fifth is preparing its first delivery this week, state spokesman Scott Hardin said.

Castleberry said that regardless of the disputed need for more cultivators, the state was obligated to follow its licensing rules strictly. “First of all, they didn’t conduct the analysis required [to establish a need for more cultivators]. And even if they had, there was really no way to know whether the five cultivators would have been able to supply the dispensaries because two of the cultivators were not actually supplying [dispensaries],” Castleberry said.

The new cultivators, answering the complaint, argue that circuit courts lack jurisdiction to review adjudications by state agencies. However, Castleberry said, “there’s a longstanding general rule that circuit courts have the authority to enjoin administrative agencies from committing unlawful acts, and we’re claiming that by acting in violation of its own rules, the Medical Marijuana Commission … was doing so.”

The five plaintiffs were content to let Castleberry speak for them, and New Day Cultivation, citing the pending litigation, declined to comment. Abraham Carpenter Jr. of Carpenter Farms did not respond to interview requests.

Both Nolan and Hardin said lawsuits over cannabis licences, which can be worth tens of millions of dollars or more, were inevitable. “The litigation started back as the process was launched, and it has not stopped,” said Hardin, who works for the Arkansas Department of Finance & Administration.

“There have been multiple lawsuits throughout, really. Over the last couple of years, I don’t know if we’ve had a day without any ongoing litigation.”

Planning Underway

One aspect of Castleberry’s filing is specific to Nolan’s cultivation license. “Storm Nolan dissolved the River Valley entity back in 2019, so that entity ceased to exist and did not exist at the time the commission issued that license,” Castleberry said. “In my estimation, that’s going to be an issue the court will look at pretty seriously.”

“That’s a nonissue to us,” Nolan said in response. “Our entity is and was in good standing as of the day they issued the license.”

Hardin, the state spokesman, said all three of the newly licensed cultivators, as well as four new dispensary licensees, are all working toward opening as soon as possible. “It’s going to take probably another one or two months for the dispensaries and longer for the cultivators. But they’re all making progress.”

Nolan plans to start growing marijuana soon in 25,000 SF of a 100,000-SF warehouse his family already owned about half a mile from CSK Hotels’ headquarters at 4320 Industrial Drive. He has engaged a Tulsa design team with vast experience in marijuana manufacturing, Mitch McClain of Davies Architects and engineer Allen Merk of Green Acorn for mechanical and electrical engineering, as well as plumbing.

“The people of Arkansas voted to adopt up to eight [cultivation] licenses, and everybody I’ve spoken with counted on those licenses coming out eventually,” Nolan said. “It seems disingenuous for them to say we don’t need those sources, considering our current patient count, at 80,000, is well above where we thought we’d be. The market size has been a pleasant surprise to everybody.”

As of Sept. 9, Arkansas had total sales of 22,530 pounds of medical marijuana worth $143 million. The first sales were in May 2019, and they shot up as more dispensaries opened. The state tracks sales at individual dispensaries, Hardin said, but it does not rank sales by individual cultivators.

Nolan hopes to get preliminary plans to the city of Fort Smith within a few weeks. After local construction approval, he expects three to four months of building, then inspections by state Alcoholic Beverage Control Division, which enforces medical marijuana regulations.

“ABC approval will allow us to put our seeds in the ground, and the cannabis plant takes, you know, from four to five months to go from seeds to salable product,” Nolan said. “So, something like seven to eight months from now.”

If only the courts will cooperate.

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40/29 News: Fort Smith Medical Marijuana cultivation site moving

Read the full story at 40/29 News.

FORT SMITH, Ark. —

The Arkansas Medical Marijuana commission gave River Valley Relief Cultivation approval on Tuesday to move their operations 5.6 miles across town. 

“We think it’s a better location,” explained Storm Nolan, the owner of River Valley Relief Cultivation. “It’s going to allow us to get up and going quickly because it’s a nice, well-built existing warehouse that is ready for us to start putting up walls and equipment.”Advertisement

However not everyone supported the change. Quenton May, an attorney based in Little Rock, spoke out at the commission meeting because ABC is investigating a claim filed against River Valley Productions LLC. Members of the Medical Marijuana Commission were told not to let that impact their decision.

“Ruling on a change of location for this applicant at this point is improper,” said May. “It’s premature, the application submitted by river valley production was not compliant when it was submitted.”

May said the original location of the cultivation site on South E Street was within 3000 feet of a school. Storm Nolan countered, saying it was a juvenile detention center and he had letters from the state board of education, Fort Smith Public Schools and Sebastian County Sheriff’s Office all stating the property was not a school. 

“None of this is surprising,” said Scott Hardin, a spokesperson for the Medical Marijuana Commission. “You have cultivation licenses that are valued at tens of millions of dollars if not more. To say it’s a competitive process is an extreme understatement.” 

With the commission’s approval, Nolan hopes to have the new cultivation site approved to grow medical marijuana by the start of 2021. “Everyday that we’re not under construction is a stressful day, and so that’s our number one goal is to get up and running so we can serve our Arkansas patients.”