On Oct. 1, the opening of River Valley Relief Cultivation on Old Greenwood Road will give the River Valley its first medical marijuana growing facility. 

Scott Hardin, director of communications for the Arkansas Department of Finance and Administration, said Amendment 8, which was passed by voters in 2016 to legalize medical marijuana, limits the number of growers in the state to eight. The state has reached its limit of eight growers.

Fort Smith was approved to grow cannabis in 2020 along with Grady and Hot Springs. They join Pine Bluff, Cotton Plant, Newport, Berryville and White Hall, which were approved in 2018.  

Dispensaries in the state

Amendment 8 limits the number of dispensaries in the state to 40. The state has given 38 licenses to allow dispensaries to sell medical marijuana. The state is divided into eight zones and each zone can have up to five dispensaries.

Kristy Floyd, director of operations for River Valley Relief Cultivation, said the increase in supply alone won’t solve the affordability problem. She explained one of the challenges to affordability is insurance companies won’t cover medical marijuana because it is illegal at the federal level. 

According to Weedmaps, the average cost of a gram of weed is $15 in Arkansas. In Missouri, it costs about $10-$20 a gram. Missouri was the only state bordering Arkansas where a price index was available for cannabis. The average price in Colorado is $12 and $10 in Washington. Colorado and Washington were two of the earliest states to legalize both medicinal and recreational marijuana. 

Taxation of cannabis 

In Arkansas, 79,019 residents have medical marijuana cards and the River Valley has a total of 8,514 medical marijuana cards.

Medical marijuana cards by county in the River Valley:

• Logan County – 418
• Sebastian County – 2,848
• Crawford County – 1,620
• Franklin County – 344
• Johnson County – 644
• Pope County – 1,357
• Conway County – 908
• Yell County – 375

In addition to the 6.5% sales tax, Arkansans pay a privilege tax of 4%, which was created by the Legislature, on cannabis purchases.

The privilege tax is paid by patients when they buy from a dispensary and for dispensaries buying from growers. However, dispensaries are exempt from paying the 6.5% state sales tax when buying cannabis from growers. 

Since 2019, the state has collected $47 million — with $23 million of that coming in the past nine months — in sales tax from the 60,000 pounds of product sold. Each month, the state raises about $3 million in tax revenue from cannabis sales.

Revenue from the privilege tax goes to the National Cancer Institute at the University of Arkansas for Medical Sciences in Little Rock and the Medical Marijuana Commission. 

Hardin said data on how much sales tax is generated by region is unavailable. The Tax Procedure Act keeps the amount of sales tax generated by companies confidential, which makes regional data unavailable. The state can only provide overall sales tax revenue collected by the state from cannabis.  

Fort Cannabis Co. has sold 2,554.48 pounds of cannabis since it opened on Dec. 18, 2019. In August, the dispensary sold 116.32 pounds. Zone 4, which represents the River Valley, nearly 4,300 pounds of medical marijuana have been sold.

According to Statista, the United State will generate about $23 billion in taxes from legal cannabis sales by 2025.  

Arkansas is one of 36 states that have legalized medical marijuana.

River Valley Cultivation 

River Valley Relief Cultivation, which opens on Oct. 1, will use 25,000-square-feet of indoor growing space for cannabis. Each of the seven cultivation rooms will have 2,000 plants. 

An economic study done by the Arkansas Cannabis Industry Association found River Valley Relief Cultivation, which will be located on Old Greenwood Road, could bring in $80 million to the local economy over the next four years and 80-100 jobs.

On its website, the company said it will also help educate patients on opioids and research the impact medical marijuana has on stopping the opioid epidemic. 

Floyd said 90% of the water the facility will use to grow the plants will be created from turning humidity in the facility into water, which is a system hospitals use. Floyd said this limits the amount of water from the city the facility uses.