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Understanding the Proposed Selection Process for Arkansas Medical Marijuana Dispensary Licenses

Medical Marijuana Update

February 28, 2017

This is the first of two articles reviewing the proposed process for Arkansas medical marijuana dispensary and cultivator licenses.

This article looks at dispensary license selection. Part 2 will look at cultivator license selection.

On February 24, 2017, the Arkansas Medical Marijuana Commission (the “Commission”) issued final draft rules and regulations (the “Rules”) for the licensing of medical marijuana cultivators and dispensaries. The Rules detail the Commission’s selection process for the limited number of dispensary licenses available. In general, dispensary licenses will be selected using a combined lottery and hearing process.

  • Applications will be accepted for 90 days once the application period for a particular geographic zone opens.
  • On receipt, applications will be processed to verify completeness and compliance with the application requirements.
  • Verified applications will get a hearing before the Commission. The hearing will be set between 150 and 180 days from the opening of the application period.
  • The Commission chairperson will conduct a lottery at least 15 days before the hearing. At the lottery, each applicant will draw a “position number.” The position number establishes the order in which applications will be heard. Position numbers are non-transferable.
  • At the hearing, the Commission will hear applications for the specified geographic area in the order determined by the lottery. Applications will be heard, “until the designated number of licenses have been issued for the area.”
  • Following each hearing, the Commission will issue an order approving or denying the license. The order will review the evidence offered and include findings of fact and conclusions of law supporting the decision.
  • The Commission’s order approving or denying a license is appealable to the circuit court of the county where the dispensary would be situated, or to the Pulaski County Circuit Court. Appeals will be governed by the Arkansas Administrative Procedure Act (Ark. Code Ann. § 25-15-201 et seq.).

The Rules are silent on some important issues. For example, the scope of the license application hearing is unclear. Will the hearing be limited to the “procedural” issue of whether the application and supporting documentation meet the requirements of the Rules, or will the hearing be “substantive” with the Commission effectively making worthiness determinations about each applicant? Will evidence outside the application be considered at the hearing and, if so, will the Commission hear testimony from expert witnesses? Will opponents to a particular application have an opportunity to be heard?

Another open issue is whether an applicant can submit multiple applications. While the Rules are clear that no individual can have an interest in more than one dispensary and one cultivation facility, it is foreseeable that some applicants will want to apply for a license in more than one geographic zone, or to locate a dispensary in every county within a zone.

The Commission will hold a public hearing on the draft Rules and Regulations on Friday, March 31, 2017, from 2:00 pm to 6:00 pm.

The members of the Mitchell Williams Medical Marijuana Practice Group are Harry Hamlin, Morril Harriman, Jr., Martha Hill, Melissa Bandy, Benjamin Brenner, Courtney Crouch, Meg Johnston, Alan Lewis, Bethany Marshall, Nicole Lovell, Scott Schallhorn, and Mary Catherine Way.

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