How Arkansas Will Implement Medical Marijuana: Erika Gee Offers Commentary for Arkansas Business

How Arkansas Will Implement Medical Marijuana: Erika Gee Offers Commentary for Arkansas Business

This online series, written by Wright Lindsey Jennings' Erika Ross Gee and published by Arkansas Business, explores the regulatory, administrative and legislative steps the state government must take as it moves towards implementation. 

Surprising some observers — and contrary to the clearly expressed wishes of Gov. Asa Hutchinson, the state surgeon general, and other prominent leaders — the Arkansas Medical Marijuana Amendment of 2016 passed last week with 53.09 percent to 46.91 percent of the votes cast.

In the days following the election, employers, potential patients, dispensaries and cultivation facilities are wondering when the new law will go into effect and, perhaps more importantly, how it will be implemented. 

My colleague Stuart Jackson put together an excellent summary of what employers can expect from the new law. This commentary will take a look at another side of the amendment and examine the regulatory, administrative and legislative steps the state government must take as it moves towards implementation. 

Writing the Rules

First, let's review the text of the amendment. It went into effect immediately upon passage, on Nov. 9, but because the amendment's provisions all depend upon status as a "qualifying patient," a regulatory structure must first to be created to oversee the use of medical marijuana. Given the complicated structure in the amendment and the many detailed decisions to be made by state regulators, we can expect that the first qualifying patient registry card will not be issued for many months. 

Three different state agencies have their own areas of authority under the structure created by the amendment and each have been given 120 days, or until March 9, to promulgate new rules to implement that authority.

The Department of Health is tasked with regulating qualifying patients, qualifying medical conditions and designated caregivers, and it will be the entity that issues registry identification cards to patients and caregivers. The Department of Health must also establish labeling and testing standards for the medical marijuana and consider petitions to add medical conditions to the "qualifying" list. Although there's not yet much information available, the department has established a location on its website to communicate with the public about the ongoing process. 

The Medical Marijuana Commission will license dispensaries and cultivation facilities. It too must promulgate rules for the application process and the content of the applications by March 9, and it must begin taking applications for these facilities by June 1. This will be a particular challenge for the commission, because it does not yet exist — the members must first be appointed by the president pro tempore of the senate, the speaker of the house and the governor. 

The commission also has no staff to assist in the rule-making process, although the amendment authorizes it to use the staff of the Alcoholic Beverage Control Division for help. The activities of this commission will be a significant focus of the medical marijuana business interests that will be trying to obtain licenses to operate in the state.  

Finally, the Alcoholic Beverage Control Division of the Department of Finance & Administration will be responsible to "administer and enforce" the amendment concerning dispensaries and cultivation facilities. That will include, at a minimum, establishing rules for oversight, record-keeping, security, personnel, the manufacturing and packaging process, advertising restrictions and procedures for disposal of marijuana. 

The ABC Division will also be responsible for inspections and investigations of dispensaries and cultivation facilities and for enforcement of the rules and laws against those who fail to adhere to the requirements. Like the Department of Health, the Department of Finance & Administration has established a website for information as they proceed. 

The Legislature's 2 Cents 

As the governor acknowledged in his news conference the morning after the election, this timeline will be a huge challenge for the agencies to meet. Under the state's current rule-making process, which I discussed in an earlier commentary, each agency must draft the new rules, get approval from the governor’s office, publish the rule for public comment, consider those comments and then begin the process of legislative review, probably by either the Joint Budget Committee or a committee of the full General Assembly during the upcoming regular session.

In addition, because the General Assembly will be in session beginning in January, we can expect a significant level of legislative interest in passing new laws to implement, change or even perhaps reverse aspects of the amendment. The amendment itself authorizes the Legislature to make amendments to most of the provisions with a two-thirds vote, so long as the amendments are "consistent with its policy and purpose." The Legislature may not amend the sections authorizing use and possession of medical marijuana by a qualifying patient or designated caregiver or the number of dispensaries and cultivation facilities authorized. 

In short, although patients planning to pursue qualification under this amendment are no doubt hoping for a quicker process, it is likely to take at least six months and flurry of regulatory activity by many levels and sectors of the state government before the first registration card is issued. 

At least at this early stage, the ultimate regulatory structure and rules that will be in place after the regulatory and legislative process are somewhat unpredictable. However, we can expect many interest groups, both inside and outside the state, to actively seek modifications and additions to the amendment as the state moves towards implementation.