Week in Review: Arkansas drops ballot measure, two heavyweights enter cannabis & PA issues draft rules

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By Bart Schaneman and Omar Sacirbey

Arkansas’ Supreme Court tosses one of two medical marijuana initiatives, more corporate heavyweights enter the cannabis business, and Pennsylvania issues draft rules for dispensaries that could lead to a robust MMJ market.

Here’s a closer look at some notable developments in the marijuana industry over the past week.

Better odds?

When the Arkansas Supreme Court ruled Thursday to disqualify a medical marijuana proposal from the November ballot, it cleared the way for the one remaining MMJ measure to proceed. The high court may have boosted the odds of its passage.

Issue 6, the surviving initiative, is a proposed constitutional amendment that would allow for-profit dispensaries.

“Our polling showed us polling above 50%, not way above 50%. But there existed some confusion between Issue 6 and 7, and now that that confusion has been hopefully removed somewhat,” said David Couch, an Arkansas attorney and sponsor of Issue 6. “We’ll be able to focus our advertisements more on the benefits of marijuana and not comparing and contrasting.”

The Arkansas high court ruled 5-2 on Thursday that about 12,000 signatures submitted by Arkansans for Compassionate Care were invalid, meaning Issue 7 didn’t have enough signatures and won’t appear on the ballot next month.

In addition to a for-profit MMJ system, the surviving Issue 6 would bar home grows and establish between 20 and 40 dispensaries and four to eight cultivators. It offers a narrower list of qualifying conditions than Issue 7.

According to the Arkansas Times, the rejected Issue 7 will remain on the ballot, and voters will no doubt cast votes for it. But by Supreme Court order, those votes may not be counted.

“I believe it’ll pass,” Couch said of Issue 6. “It’s just getting those people to agree that what you have is the best way to do it.”

More corporations go green

Canada’s largest pharmacy chain and Britain’s leading sugar supplier are the latest mainstream companies to wade into the cannabis market, hastening a trend of big businesses joining the rapidly expanding industry.

Shoppers Drug Mart – which has more than 1,200 locations across Canada – has applied to the federal government to distribute medical marijuana. British Sugar, meanwhile, has contracted with GW Pharmaceuticals, a U.K.-based CBD-medicine developer, to grow cannabis in an 18-hectare (44.5-acre) greenhouse in England.

This follows news that U.S. corporations such as Scotts Miracle-Gro, Microsoft and Arrow Electronics are angling to capture a piece of the marijuana market.

“I think mainstream companies are seeking industry partners that have already gained a foothold and see themselves both as validators and suppliers of ‘conventional’ expertise and capital,” said Scott Hawkins, a consultant with California-based Grun Strategic.

Rather than create such companies on their own, mainstream corporations can save time and resources by teaming with existing cannabis businesses.

“It’s easier,” Hawkins said. “For example, Scotts Miracle-Gro is acquiring companies and also seeking to partner with other companies to extend their product lines.”

Hawkins sees the industry having an opportunity for wider penetration and potentially better governance.

“It will ultimately mean more acceptance at a federal level,” he added. “It serves as external validators for an industry that’s been operating on the margins, especially in the eyes of Washington DC insiders who will shape the regulatory landscape over the next one to five years.”

Pennsylvania potential

The new draft regulations for medical marijuana dispensaries in Pennsylvania, released Tuesday, may not be perfect. But Brett Roper, COO of Denver consultancy Medicine Man Technologies, believes they’re getting better. And he’s betting that Pennsylvania, despite some shortcomings, could become a robust MMJ market.

“The big $64,000 question is: What’s the timeline?” Roper said. After getting public input, Pennsylvania regulators have said they want to wrap up the dispensary regulations before year’s end. Roper’s question: Does that mean applications will become available within days, weeks or months of those regulations being published?

“They didn’t give any real guidance on when to expect an application and they didn’t give any real guidance on how long the application period would be open,” Roper said.

It’s important to know when applications will be available and how long the application period will last “because that’s what’s going to drive a lot of what happens in Pennsylvania,” Roper said.

Despite such uncertainties and restrictions barring flower and edibles from being produced and sold, Roper believes Pennsylvania can be a vibrant market. A big reason is the inclusion of chronic pain on the list of qualifying conditions, which Roper believes will buoy the Pennsylvania MMJ market.

“I think you’re going to find a whole new profile of patient in Pennsylvania,” Roper said. “I think you’re going to see a whole new marketplace evolve on the medical side for people that didn’t ever choose cannabis as an option because they were worried about doing something illegal.”

Bart Schaneman can be reached at barts@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com