The state of Arkansas has become the latest medical marijuana state to exclude small business opportunities by setting outrageous fees and capital requirements for a tiny few marijuana licenses.
The Medical Marijuana Commission decided on a $100,000 license fee for Arkansas growers of medical marijuana.
The fee is on top of the $15,000 fee decided by the commission just to apply. If an applicant is rejected, half of the application fee will be refunded.
The commissioners also decided on basic financial requirements for applicants hoping to have a cultivation facility. They voted that applicants must show proof of $1 million dollars in assets or a surety bond and must also show proof of $500,000 in cash.
You (or your company) need to be worth at least $1.5 million to even be considered for growing medical cannabis. Then you need to be willing to bet half your $15,000 application fee that they’ll pick you. If they do, you need to pay them $100,000 for the privilege.
The state is only awarding five licenses for growing medical cannabis. There is no limit, however, on how many applications they’ll accept. The more, the better, for every application over the first five is a guaranteed free $7,500 for the state.
As if the naked cash grab couldn’t be more apparent, the commissioners ruled that the five cultivation licenses wouldn’t have to be located one in each of the state’s health districts, as they had decided before. Why, that might better serve the patients who may be located in more rural areas of the state!
Now the five grow sites can be located anywhere and the commission will favor the locations that can be shown to have the greatest economic impact. You know, what’s important in a medical marijuana law.
Arkansas’ law also lacks any provision for patients and their caregivers to cultivate their own cannabis. That further benefits the state in its desire to tax medical cannabis products and the five wealthy license holders from whom patients are forced to shop.
Arkansas is just following the lead of many of the medical marijuana states.
- In Florida, 24 applicants who had to show $5 million in capital escrow paid $60,063 each for a shot at 6 grow licenses that cost $300,000 per year. Florida made over $1 million just from the non-refundable application fees.
- In Hawaii, 66 applicants who had to show $1 million in capital escrow paid $75,000 each for a shot at 16 grow licenses that cost $50,000 per year. Hawaii made $3.75 million just from the non-refundable application fees.
- In Connecticut, 16 applicants who had to show $2 million in capital escrow paid $25,000 each for a shot at 4 grow licenses that cost $75,000 per year. Connecticut made $300,000 just from the non-refundable application fees.
- In Illinois, 159 applicants paid $25,000 each for a shot at 21 grow licenses that cost $200,000 per year. Illinois made $3.45 million just from the non-refundable application fees.
- In Pennsylvania, the state will require a $10,000 application fee, $1.5 million in capital escrow, and $500,000 in cash-on-hand for a shot at 12 grow licenses that will cost $200,000 per year.
Based on my research, 9 medical marijuana states have made over $10 million just from non-refundable medical marijuana grow license application fees.
|Medical Marijuana State (with Grow App data)||Grower Application Fee||Non-Refundable¹||Capital Requirement²||Cash Requirement³||Annual Grow License|
|Florida||$ 60,063||$ 60,063||$ 5,000,000||$ 300,000|
|Illinois||$ 25,000||$ 25,000||$ 200,000|
|New York||$ 10,000||$ 10,000||$ 200,000*|
|Pennsylvania||$ 10,000||$ 10,000||$ 1,500,000||$ 500,000||$ 200,000|
|Maryland||$ 6,000||$ 2,000||$ 125,000**|
|Arkansas||$ 15,000||$ 7,500||$ 1,000,000||$ 500,000||$ 100,000|
|New Mexico||$ 10,000||$ 9,000||$ 90,000***|
|Connecticut||$ 25,000||$ 25,000||$ 2,000,000||$ 75,000|
|Hawaii||$ 75,000||$ 75,000||$ 1,000,000||$ 100,000||$ 50,000|
|Massachusetts||$ 31,500||$ 1,500||$ 50,000|
|Delaware||$ 5,000||$ 5,000||$ 40,000|
|North Dakota||$ 5,000||$ 5,000||$ 25,000|
|Vermont||$ 2,500||$ 2,500||$ 20,000|
|Colorado||$ 15,000||$ 15,000||$ 13,200†|
|Rhode Island||$ 250||$ 250||$ 5,000*|
|Nevada||$ 5,000||$ 5,000||$ 3,000|
|Maine||$ 1,200||$ –||$ 1,200‡|
|Washington||$ 250||$ –||$ 1,000|
¹ Amount of your Application Fee the state keeps even if you don’t get a license.
² Amount you must show in escrow or assets to even be considered for a license.
³ Amount of cash-on-hand you must show in your bank account to even be considered for a license.
* Initial fee, then fee collected every two years.
** Initial fee, then $250,000 every two years.
*** $30,000 minimum + $10,000 for every 50 plants over 150 to a max of 450.
† Type 3 facility, Type 1 and Type 2 with fewer plants cost less.
‡ $240 per patient to a max of 5.