A local group that had hoped to start a medical marijuana cultivation facility in El Dorado will have to change its plans after the state did not award it a license Tuesday.
The state Medical Marijuana Commission announced the top five applications for cultivation facilities, which will grow and provide cannabis for dispensaries to sell under a 2016 voter-approved measure.
El Dorado-based South Arkansas Cannabis Solutions, LLC, was the only group to have applied for a cultivation license in Union County. The group announced its formation in September and entered into a lease-purchase agreement with a limited liability corporation for the former Therma-Flite manufacturing facility on Champagnolle Road.
Mollie Balfe, director of external communications for South Arkansas Cannabis Solutions, did not return messages left for comment Tuesday afternoon.
The five companies awarded cultivation licenses are Natural State Medicinals Cultivation in Jefferson County, Bold Team LLC in Woodruff County, Natural State Wellness Enterprises in Jefferson or Jackson County, Osage Creek Cultivation in Carroll County and Delta Medical Cannabis Company Inc. in Jackson County. The companies have seven days to pay a $100,000 licensing fee and post a $500,000 performance bond in order to receive the licenses.
When the local group announced its intentions in September, attorney Mattison Thomas, who was representing Cannabis Solutions, said the group submitted the only application for a cultivation facility in dispensary Zone 8, which includes 14 counties in southwest Arkansas, including Union, Ouachita and Columbia counties. None of the winning bidders for the first five cultivation licenses are located in Zone 8.
South Arkansas Cannabis Solutions, for which local business owner Bilo Beege is listed as incorporator/organizer in the Arkansas Secretary of State’s LLC listings, has also filed an application for a dispensary license. The commission will license up to 32 dispensaries to sell medical marijuana later this year.
Natural State Wellness Enterprises’ investors include former Attorney General Dustin McDaniel, who said the company hopes to decide in the next 24 to 36 hours in which county to locate. The company had two applications among the top five, but is prohibited from opening more than one facility.
“We appreciate that it is a public trust that has been placed upon our company to produce quality, safe, and legal medicine to Arkansas patients,” said McDaniel, who is also an attorney and lobbyist for the company. “We will make a location decision shortly and will promptly begin construction.”
Delta Medical Cannabis has a property under contract in Newport, about 89 miles northeast of Little Rock, and will likely have its facility up and running by the end of this year or early 2019.
“We’re building a state of the art facility from the ground up,” said Donald Parker, an owner and attorney of the company.
The state received 95 applications for cultivation facilities. The applications were scored by each of the five commissioners on several factors, including business experience, qualifications and finances. The commission will meet March 14 to formally award licenses to companies that complied with the requirements.
According to the Arkansas Medical Marijuana Commission cultivation facility score breakdown, the five companies that were awarded licenses all had scores above 432. South Arkansas Cannabis Solutions had a total score of 360.
The state has approved more than 4,100 applications for patients to use medical marijuana, and will issue registry cards about a month before the drug is expected to be available legally.
The licenses were announced the same day dozens of medical marijuana supporters appeared at the state Capitol to urge lawmakers to make changes to the medical marijuana program next year. The proposals include adding qualifying medical conditions, ending a 4 percent tax on medical marijuana sales and allowing students approved to use medical marijuana to have access to non-smokeable forms of cannabis on school grounds.
“We wanted everyone to really understand what the real story is. It’s not about five businessmen that are going to make a lot of money,” Corey Hunt with the Arkansas Cannabis Industry Association, said. “It’s about these patients here who fought years and years and years.”
The Associated Press contributed to this report.