Arkansas’ fledgling medical marijuana industry is poised for a major expansion into recreational cannabis after financing a multimillion-dollar campaign that recently turned in nearly 200,000 signatures to clear the first hurdle toward a November vote on a constitutional amendment to allow recreational marijuana.
The secretary of state’s office has until Aug. 8 to certify whether lists presented July 8 by Responsible Growth Arkansas, which spent $2.5 million on signature-gathering, contain enough valid voter names to put the amendment before voters. That threshold is about 90,000 names, a level Responsible Growth’s leaders — with 192,828 signees — expect to surpass easily.
The secretary of state's office approved the signatures Friday, moving the measure one step closer to the ballot.
But the proposal will still face potential challenges, including a test of whether its ballot title is lawful. There is also a lawsuit pending that paints the entire medical marijuana system as a racketeer-influenced criminal organization under federal law and accuses cultivators and a testing company of defrauding patients by overstating the potency of marijuana products.
The proposed amendment would grant recreational marijuana licenses to the state’s eight existing licensed medical cannabis cultivation sites and 40 dispensaries, and would create licenses to be granted by lottery to expand the recreational use network by 12 cultivators and 40 new dispensaries.
“We’re confident, and a lot of work was put into this,” said former state lawmaker Eddie Armstrong, Responsible Growth’s director. “We collected the most signatures in state history despite COVID, despite having competing proposals and facing new state rules on signature-gathering. We were able to overcome all of that, so yes, we’re confident.”
Two other ballot efforts for recreational use collected signatures early this year but pulled back to focus on getting on the 2024 ballot, clearing the way for Armstrong’s proposal, which has a 35-word popular name and an 877-word ballot title.
Armstrong said he believes most voters will favor recreational legalization if the Responsible Growth proposal reaches the ballot. “We take the education of the voters seriously,” Armstrong told Arkansas Business. “It’s critically important, because we’re confident, but this is no slam dunk.”
Amendment 98, which legalized medicinal marijuana, passed with 53% of the vote in 2016. Medicinal sales began in May 2019, and about 85,000 qualified patients with medicinal marijuana cards spent $265 million in Arkansas dispensaries in 2021, generating $32.2 million in state sales tax revenue in fiscal 2022.
“On average, patients in Arkansas are spending $22.37 million a month to purchase 3,920 pounds of medical marijuana,” state spokesman Scott Hardin said.
A recreational market would be at least twice as large, industry leaders project, and through June the medicinal industry had put $3.26 million into making it a reality. In June alone, Responsible Growth received $1.3 million from cultivators and dispensaries.
The biggest contributors, donating $700,000 each in total, are cultivators Bold Team LLC of Cotton Plant, Good Day Farms Arkansas LLC of Rogers and Osage Creek Cultivation of Berryville.
Stephen R. Lancaster of Wright Lindsey & Jennings in Little Rock, attorney for Responsible Growth, said last week that the group spent $2.5 million on signature-gathering, mainly with Advanced Micro Targeting Inc. of Dallas and Verified Arkansas LLC of Little Rock.
AMT received payments of $300,000 each in January and April, a $405,400 payment in May and $822,450 in June. Verified Arkansas received $181,840 in May and $323,780 in June.
“Everybody’s been paid, and we’re now looking forward to moving on to the next phase,” Lancaster told Arkansas Business.
That includes getting confirmation from the state that the signatures are sufficient, and clearing a review of the ballot title by the state Board of Election Commissioners. “Assuming we get a thumbs-up on both of those, then we’re on the ballot, and we’ll go forward with the campaign.”
Neither he nor Armstrong would estimate what marketing and voter outreach efforts might cost. “I do believe it’ll be a well-funded effort,” Lancaster said. At the end of June, according to state records, Responsible Growth Arkansas had a cash balance of $226,263.
The industry effort has brought criticism from some recreational marijuana proponents like Melissa Fults of Arkansas NORML and Little Rock lawyer David Couch, author of the medicinal cannabis amendment. Couch calls it a “blatant money grab” because the medicinal industry players are guaranteed spots on the ground floor of the recreational market.
Lancaster said he knows of no organized and well-funded opposition to the proposed amendment, but both U.S. Sen. Tom Cotton and Jerry Cox of the Arkansas Family Council have spoken out against recreational legalization.