Hot Springs Dispensary Leads in Cannabis Sales

The early bird may get the worm, but being the first legal medical marijuana dispensary to open in Arkansas was not enough to keep Suite 443 of Hot Springs ahead of the rush of competitors.

This week, Arkansas Business ranks the state’s first 19 dispensaries by pounds of product sold as of Feb. 29. The last to open, Herbology in Little Rock, came in at No. 19 with just over four pounds sold in its first three days of business.

But Suite 443, which opened on May 10 under a different name (Doctor’s Orders) and with different ownership, sold only 367.8 pounds of cannabis in its first nine months of operation. Its crosstown rival, Green Springs Medical, which opened two days later, had sold more than four times as much by leap day.

Green Springs Medical, which had cumulative sales of 1,554 pounds at the end of February, benefited from its weeks of lead time on other dispensaries. While 32 were licensed by the Arkansas Medical Marijuana Commission in February 2019, only 14 had opened by the end of 2019 and only five more have opened so far this year.

Because the 19 current dispensaries have all been open for different lengths of time, and all less than a year, Arkansas Business has chosen to rank them by cumulative sales reported to state regulators since their opening dates, which are included in the list.

We have also estimated their revenue based on the statewide average for all sales as of Feb. 29 — a bit over $400 per ounce. However, the average price has been trending down slightly as more dispensaries have opened. In June, for instance, the average price was about $416 per ounce; by early March, the average was about $399. The estimates, then, may understate revenue at dispensaries that opened earlier and overstate revenue at those that opened more recently.

The list also includes the number of employees at each dispensary as of last week based on the number of active registry identification cards issued by the Alcoholic Beverage Control Division of the Arkansas Department of Finance & Administration. These may be full- or part-time employees, as “each employee must pass a background check and receive a RIC card from ABC before going to work for a dispensary or cultivator,” DF&A spokesman Scott Hardin said in an email.

The accompanying list of marijuana cultivators is ranked by number of registered employees. While ABC is collecting data on cultivator inventory and individual wholesale transactions, Hardin said, the state’s tracking system was not able to produce total sales figures for the five cultivators, only three of which have begun selling mature crops.

A total of 881 registry IDs were active last week, according to Hardin, including a few to licensed dispensaries that have not yet been approved to open. Natural Relief Dispensary in Sherwood, which was expected to open Saturday, had 16 registry employees, while Natural State Medical Group in Alexander, which is expected to open later this week, had 20.

Not a ‘Raid’

One of those cards belongs to Nicholas Christian Nielsen, 40, of Jonesboro, who was employed by Harvest of Newport, then called Natural State Wellness Enterprises, a cultivation facility that has not yet begun selling to dispensaries.

On Jan. 23, according to reporting by the Jonesboro Sun, Jonesboro police executed a search warrant at Nielsen’s apartment and subsequently charged him with growing marijuana. The Sun reported in February that “armed enforcement agents” from Alcoholic Beverage Control were at the Newport cultivation facility at the same time the JPD was inside Nielsen’s apartment.

Hardin, the DF&A spokesman, said the timing was coincidental.

“ABC conducts daily compliance inspections throughout the state on dispensaries and cultivation facilities along with bars, restaurants and liquor stores. None of these compliance inspections are scheduled as we are simply checking in to confirm the day to day operation remains within our rules and regulations.

“Regarding Newport, our agents were already in the area to conduct an initiation of operations inspection on [the Delta Medical Cannabis Co.] cultivation facility [in Newport]. As we always try to maximize our agents’ time in an area, we used this opportunity to also stop at Natural State Wellness for a compliance inspection. This was nothing outside of our normal operation.”

The Sun’s February report, based on an interview with a former Harvest of Newport employee, suggested that Nielsen had been the source of the Harvest cultivator’s initial supply of marijuana seeds. This underscored what Hardin acknowledged was a void in state regulation.

“While the rules allow a dispensary to accept seedlings from any individual lawfully entitled to possess marijuana seeds, the rules do not consider a cultivation facility obtaining seeds. The rules do require all cultivation take place on-site at the facility,” Hardin said in an email.

Nielsen’s registry ID was still active as of Thursday, Hardin said. “However, any RIC card will be in jeopardy if there are criminal convictions.”

Medical Marijuana Business Ranked by Number of Employees

Approved dispensaries and cultivation facilities by full- and part-time employees holding state-issued registry identification cards as of March 11