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Proposed Rules Shed Light on the Implementation of the Arkansas Marijuana Law

The State of Arkansas is one step closer to implementing the Arkansas Medical Marijuana Amendment (AMMA). The Arkansas Medical Marijuana Commission recently released proposed rules and regulations governing the licensing of cultivation facilities and dispensaries. The Commission must begin accepting applications for licenses by July 1, 2017.

Pursuant to the AMMA, the Commission is required to issue at least four, but no more than eight, cultivation licenses. The Commission must issue at least twenty, but no more than forty, dispensary licenses, with no more than four dispensaries in one county.

The Commission’s proposed rules would establish minimum requirements for individuals or business entities applying for either license. The requirements are related to age, residency, tax compliance, criminal history, and access to capital. No one may own an interest in more than one dispensary license and one cultivation license.

For cultivation licenses, the Commission will evaluate all applications received and use a merit-based system to award licenses to the most qualified applicants. For dispensary licenses, the Commission will use a combined merit-lottery system to award licenses as they become available. Licenses may not be transferred without permission from the Commission. Failure to obtain permission may result in revocation.

The application and licensing fees reflect the Commission’s concern that applicants are adequately prepared to support what will likely be a mostly cash business. For cultivation licenses, an applicant must be prepared to pay up to $115,000 in application and licensing fees and post a $500,000 bond. For dispensary licenses, the combined application and licensing fee is $10,000, with an annual renewal fee of $10,000. For a combined dispensary-cultivation license, the license holder must pay a $25,000 licensing fee, post a $100,000 bond, and will be subject to a $32,500 annual renewal fee.

The Commission also published rules and regulations governing the oversight of cultivation facilities and dispensaries by the Alcoholic Beverage Control Division. These rules reflect the Commission’s concerns about edible marijuana products that may appeal to children. Specifically, these rules ban the production of marijuana products that are shaped like animals, vehicles, persons, or characters, as well as marijuana products that “closely resemble” familiar food and drink items like candy.

The Commission is accepting comments on the proposed rules and regulations until March 31, 2017. A public hearing will be held at the end of the comment period.

Marijuana products must also adhere to labeling standards to be promulgated by the Arkansas Department of Health (ADH). If the ADH finalizes its proposed rules, employer would be able to locate the following information on a label: the net weight of the product, the concentration of the active components of marijuana, and the time it is likely to take for an individual to begin to feel the effects of ingesting or inhaling marijuana (the “activation time”). Employers should also look for the “universal symbol” on the label, which indicates that the marijuana was legally obtained from a licensed dispensary.

What does this mean for Arkansas employers and Arkansas employment law? Medical marijuana is coming to Arkansas soon. It is time to review your Employee Handbook and/or substance abuse policy to ensure compliance with the AMMA.