If approved, Arkansas’ recreational marijuana law would be tightest in U.S.

by Hunter Field, Arkansas Advocate

Arkansas would have the strictest recreational marijuana law in the U.S. if voters approve a constitutional amendment legalizing the drug next month.

Nineteen other states have legalized cannabis for adult use, but Arkansas would be only the fourth to still outlaw growing the plants at home, an Advocate analysis of marijuana laws across the U.S. found. 

The Natural State would be the eighth to enact a hard limit on the number of cultivation and dispensary licenses. 

National policy experts said a combination of the license cap, prohibition on residential cultivation and one-ounce possession limit would make the amendment the most tightly-regulated in the U.S. to date.

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What would the Arkansas Adult Use Cannabis Amendment do?

• Allow those 21 or older to possess up to one ounce of cannabis for personal use, beginning March 8.
• Issue eight “Tier 1” cultivation licenses to the existing medical marijuana cultivators in Arkansas.
• Issue 12 “Tier 2” cultivation licenses, which would be allowed to grow no more than 250 mature plants at a time.
• Issue 120 adult use dispensary licenses. The first 80 licenses would be granted to the current 40 medical marijuana dispensaries.

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“The Arkansas initiative as written is one of the stricter referenda there has been so far on adult-use cannabis,” said John Hudak, a marijuana policy expert and deputy director of the Center for Effective Public Management at the Brookings Institution, a nonpartisan think tank in Washington D.C. “It certainly could create some potential challenges down the road in its strictness.”

Are the tight regulations good or bad? That depends on who you ask. 

This dynamic puts the amendment in an interesting position. Most conservative and religious groups oppose any legalization measure on its face, but prominent marijuana activists also oppose the Arkansas Adult-Use Cannabis Amendment due to its strict construction.

Still, public polling favors the amendment, which is sponsored by the medical marijuana industry-backed group, Responsible Growth Arkansas.

Erika Gee, an attorney representing Responsible Growth, said ballot initiatives are limited because they must be adequately described in the ballot title. 

The State Board of Election Commissioners initially kicked the amendment off the ballot due to an insufficient ballot title, but the Arkansas Supreme Court last month approved the title and ordered the measure on the Nov. 8 ballot. It will be Issue 4.

Gee said she hadn’t reviewed marijuana laws in every state where adult use is legal, but she agreed that Responsible Growth’s amendment is more restrictive than some. 

“Our medical program is very tightly regulated in comparison to a lot of other states,” she said.  “And this amendment builds the adult use program off the medical program.

“From a legal perspective, when you’re writing a ballot initiative, you have to be able to sum up what you’re doing in a ballot title. What that really means is if you’re changing existing law you can’t make it too complicated or you won’t effectively be able to do that.”

Comparisons

The U.S. has a hodgepodge of cannabis laws. Some states outlaw it altogether; others, like Arkansas, limit the drug to medicinal use. 

The patchwork of laws is largely due to cannabis remaining illegal under federal law. (State programs operate under a convoluted legal scheme that allows federal authorities to look the other way.)

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Colorado, the first state to legalize and implement recreational marijuana, doesn’t limit the number of dispensary licenses in the state and allows residents to grow their own cannabis at home. Yet some cities restrict the number of dispensaries allowed within their boundaries.

In Colorado, there are 665 dispensaries, according to the Colorado Department of Revenue.

In Arizona, where adult-use cannabis was legalized in 2020, the number of “marijuana establishment” licenses is tied to the number of pharmacies in the state, with the number of cannabis retailers precluded from exceeding one per every ten pharmacies in the state.

There are 169 marijuana establishments in Arizona, according to the state Department of Health Services.

Brian Vicente, a Denver attorney and a lead drafter of the amendment that legalized cannabis in Colorado, said Arkansas’ 120 dispensary cap didn’t strike him as “insanely low.” 

He said a good way to look at dispensary numbers is to compare it to liquor licenses.

Arkansas has permitted 451 liquor stores, according to the state Alcoholic Beverage Control Division. Liquor licensing is based on population (One permit for every 7,500 residents in each wet county).

Vicente said Arkansas’ adult-use cannabis law would likely be the strictest approved so far. 

He noted that drafters face a challenge. An overly free market can make it difficult for marijuana businesses to operate profitably. However, an overly restrictive market creates a monopoly and drives up prices.

Referendum drafters also face political realities, he said.

“It’s a valid point that Arkansas voters are different than California voters, and in order to pass legalization, it needs to be crafted in a way that voters will support,” Vicente said. “It could be that voters in Arkansas really don’t want homegrow or they’re fine with really limiting overall cultivation facilities because it’s easy for regulators to keep an eye on it.”

Grant Smith Ellis, a policy expert at the nonpartisan, pro-cannabis think tank Parabola Center, said Massachusetts found a good balance. It doesn’t cap the number of licenses, but it does limit the number of licenses in which individuals can own stakes.

Concerns

If Issue 4 passes, Arkansas will have the highest recreational cannabis prices in the U.S. due to the limits on growing licenses and the prohibition on residential cultivation, Smith Ellis said. 

“Arkansas will have the highest prices in the country,” he said. “The only people that will be able to afford it are the wealthy, and those who can’t will be arrested because they won’t be able to buy it legally.

“There is no doubt in my mind.”

Some also have concerns about the amendment directing recreational cultivation and dispensary licenses to the medical cannabis growers and retailers already licensed in the state.

A recreational effort failed in Ohio in 2015 largely due to voters taking issue with the monopoly it would’ve enshrined into law.

Vicente said Issue 4 would be the “largest handout” to current medical marijuana companies of any legalization measure. But he said that medical cannabis companies deserve some type of grandfathering into the recreational market after taking risks and operating responsibly in the medical marketplace. 

“The challenge is if you go too far it does become an oligopoly,” he said.

Gee, the Responsible Growth attorney, said the law could be tweaked in the future at the ballot box. Such future measures could include, for instance, changing the licensing structure or adding residential cultivation. The state Legislature, she said, could also enact expungement measures to clean the records of people convicted of past marijuana offenses. 

For now, she thinks Arkansas voters would be more comfortable with the tighter regulations offered in Issue 4.

“I think, certainly, there are more Arkansans that would be more comfortable with a program that is more tightly controlled and doesn’t allow home grow or a lot of licenses so you have a dispensary on every corner,” she said.

Next month, Vicente said Arkansas voters must weigh the pros and cons.

“It’s a heavy-handed handout to pre-existing medical marijuana business owners,” Vicente said. “There’s a lot of pot dipping, but you’d no longer be arresting people for cannabis. And Arkansas arrests thousands. You’d also have more tax revenue. 

“There’s a lot of positives here.”