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Pot-facility ownership bill fails in Arkansas Senate

Bid was to limit out-of-staters, set individuals-only licenses by Brian Fanney, Michael R. Wickline | April 4, 2017 at 4:30 a.m.

A bill aimed at limiting out-of-state ownership of medical marijuana facilities failed to clear the Senate on Monday.

Two other marijuana bills were approved by the House.

The Senate's 17-9 vote on House Bill 1371 by Rep. Douglas House, R-North Little Rock, fell seven votes short of the 24 required votes for approval in the 35-member Senate. The legislation requires a two-thirds vote for approval in the House and Senate because it would change the voter-approved Arkansas Medical Marijuana Amendment.

Amendment 98, as it's known, requires 60 percent of the facilities' owners to be Arkansans, but it doesn't specify what share of the businesses' ownership Arkansans must hold. If there were 10 owners of a dispensary, seven could be Arkansans to satisfy the amendment, but the remaining three out-of-state owners could hold a disproportionately large share in the organization.

[BILL TRACKER: See the status of all marijuana-related bills in Arkansas Legislature]

David Couch, the Little Rock-based lawyer who sponsored the marijuana amendment, said he supported the change.

The bill also would require medical marijuana licenses to be held by individuals instead of business entities like limited liability corporations. House had said the bill would affect who held the licenses, but not business ownership.

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Sen. Missy Irvin, R-Mountain Home, who presented HB1371 to the Senate, said there are many lobbyists for out-of-state marijuana growers that are lobbying heavily against the bill.

Sen. John Cooper, R-Jonesboro, urged senators to defeat the bill.

"Basically the issue is whether or not LLCs and corporations can have ownership in this industry in this state," he said. "There is a lot of good attorneys on both sides of this and this is not a settled issue."

The limited liability companies and corporations are "the most transparent way that ownership can be done in the state," Cooper said.

Irvin said that "it's blatantly not true" that LLCs and corporations wouldn't be allowed to have ownership of the facilities.

"This bill is written very well. It follows the intent of people who wrote the Medical Marijuana Amendment," she said.

Also Monday, representatives gave final approval to Senate amendments on two medical marijuana bills.

House Bill 1580 by House would impose a 4 percent tax on medical marijuana each time it changes hands. The tax compounds as it is levied on growers' sales to dispensaries and on dispensaries' sales to customers.

The tax is expected to raise $1.2 million in fiscal 2018 and $2.4 million in fiscal 2019. The tax expires thereafter. The full House concurred with the amendment to sunset the tax in an 83-0 vote. The bill heads to Gov. Asa Hutchinson.

The House also concurred with an amendment to House Bill 1935 by Rep. Mark Lowery, R-Maumelle. The bill would allow a public school to bar a medical marijuana user from attending school or events if the user is impaired by marijuana.

The bill originally would have allowed students who tested positive for marijuana to also be banned, but that section was removed in an amendment. The House voted 83-0 to concur with the amendment. The bill heads to the governor.

A Section on 04/04/2017

Print Headline: Pot-facility ownership bill fails

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