A CLOSER LOOK: medical marijuana tax collected & how it's distributed

ARKANSAS (KNWA/KFTA) — Since the first dispensary opened in mid-2019, Arkansans have spent $285 million to obtain 42,769 pounds of medical marijuana, according to the Medical Marijuana Commission’s (MMC) April 13, 2021 report.

Arkansas has collected more than $28 million in state taxes from medical marijuana.

The MMC reports that the tax collection has increased every month since its inception.

The state collects a 10.5% tax on each purchase — 6.5% state tax and 4% privilege tax.

June 2019: $102,685
June 2020: $1,942,479
Jan. 2021: $2,623,271

Arkansans pay two state taxes for a total of 10.5% on every purchase. (Chart: KNWA/FOX24).

When a patient makes a medical marijuana purchase, two taxes from the state level apply. This includes the regular state sales tax of 6.5%.

Those who drafted the ballot proposal that was approved by Arkansans in November 2016 — and is now Amendment 98 to the state constitution (Arkansas’ Medical Marijuana Amendment) — included language that said the 6.5% state sales tax rate would apply to each purchase.

“Some patients find this frustrating since state taxes are not paid on regular prescription medication. However, the tax is required as it is clearly stated in the amendment,” said MMC Spokesperson Scott Hardin.

In addition to the 6.5% state sales tax, the state legislature established a 4% privilege tax that also applies to each purchase.

“Due to these two taxes, patients pay 10.5% in state taxes on every purchase,” said Hardin.

The 6.5% state sales tax is directed back into General Revenue. It is distributed across state government, including the agencies that oversee the state’s medical marijuana sector, said Hardin.

The revenue generated via the 4% privilege tax is directed to the University of Arkansas for Medical Sciences (UAMS), specifically for the establishment of a National Cancer Institute.

The reason the 4% privilege tax is a slightly larger amount than the 6.5% tax is that the state sales tax applies only when a patient makes a medical marijuana purchase, the 4% privilege tax applies to patient purchases and also to sales cultivators make to dispensaries.

Since the industry was launched (the first dispensary opened in May 2019), these two taxes have resulted in approximately $28 million in collections for the state.

“The 6.5% does not apply when a cultivator sells to a dispensary,” said Hardin.

There are 74,779 Arkansans with active patient cards, according to the Arkansas Department of Health (ADH).

Across the state, patients spent an average of $880,000 daily on medical marijuana purchases.

There are 32 dispensaries in operation around the state with six working toward opening for business — 38 licenses have been issued. Twelve dispensaries have reached at least 2,000 pounds in sales, according to the MMC.

The four dispensaries in Northwest Arkansas (two in Bentonville, two in Fayetteville) have sold 12,325, which accounts for 29% of total sales. A fifth dispensary will open in Fayetteville later this year.

According to the MMC, the state’s top-selling dispensary is The ReLeaf Center in Bentonville with more than 4,000 pounds sold, followed by Green Springs Medical in Hot Springs with 3,888 pounds sold.

TOTAL MEDICAL MARIJUANA SALES THROUGH APRIL 11, 2021

Suite 443 (Hot Springs): Opened on Friday, May 10, 2019. Sold 2,791 pounds.
Green Springs Medical (Hot Springs): Opened on Sunday, May 12, 2019. Sold 3,888 pounds.
Arkansas Natural Products (Clinton): Opened Thursday, June 20, 2019. Sold 848 pounds.
Greenlight Dispensary (Helena): Opened on Thursday, June 27, 2019. Sold 570 pounds.
Native Green Hensley (Hensley): Opened on Tuesday, July 2, 2019. Sold 2,024 pounds.
Fiddler’s Green (Mountain View): Opened on Thursday, July 11, 2019. Sold 2,067 pounds.
The ReLeaf Center (Bentonville): Opened on Wednesday, August 7, 2019. Sold 4,619 pounds.
The Source (Bentonville): Opened on Thursday, August 15, 2019. Sold 2,583 pounds.
Acanza (Fayetteville): Opened on Saturday, September 14, 2019. Sold 2,889 pounds.
Harvest (Conway): Opened on Friday, October 11, 2019. Sold 2,650 pounds.
Purspirit Cannabis (Fayetteville): Opened on Wednesday, November 20, 2019. Sold 2,234 pounds.
NEA Full Spectrum (Brookland): Opened on Monday, December 9, 2019. Sold 2,207 pounds.
420 Dispensary (Russellville): Opened on Tuesday, December 17, 2019. Sold 830 pounds.
Fort Cannabis (Fort Smith): Opened on Wednesday, December 18, 2019. Sold 1,894 pounds.
Red River Remedy (Texarkana): Opened on Friday, January 10, 2020. Sold 690 pounds.
Bloom Medicinals (Texarkana): Opened on Wednesday, January 15, 2020. Sold 259 pounds.
Plant Family Therapeutics (Mountain Home): Opened on Monday, February 3, 2020. Sold 2,260 pounds.
Capital City Medicinals (Little Rock): Opened on Friday, February 14, 2020. Sold 516 pounds.
Herbology (Little Rock): Opened on Wednesday, February 26, 2020. Sold 544 pounds.
Custom Cannabis (Alexander): Opened on Thursday, March 5, 2020. Sold 780 pounds.
Natural Relief Dispensary (Sherwood): Opened on March 17, 2020. Sold 2,862 pounds.
Body and Mind Dispensary (formerly Comprehensive Care Group): Opened on April 27, 2020. Sold 255 pounds.
Delta Cannabis (West Memphis): Opened on July 1, 2020, the company sold 644 pounds.
Arkansas Patient Services Company (Monticello): Opened on July 4, 2020. Sold 191 pounds.
Enlightened Cannabis for People (Arkadelphia): Opened on July 16, 2020. Sold 139 pounds.
Since Enlightened Cannabis for People: (Heber Springs): Opened on July 17, 2020. Sold 235 pounds.
Enlightened Cannabis for People (Morrilton): Opened on August 3, 2020. Sold 214 pounds.
Enlightened Cannabis for People (Clarksville). Opened on August 7, 2020. Sold 176 pounds.
THF Investors Dispensary (West Memphis): Opened on August 26, 2020. Sold 102 pounds.
High Bank Cannabis (Pine Bluff): Opened on October 9, 2020. Sold 478 pounds.
Zen Leaf (El Dorado): Opened on October 22, 2020. Sold 189 pounds.
Spring River Dispensary (Hardy): Opened on January 7, 2021. Sold 138 pounds.
Combined, this is more than 42,769 pounds and $285 million in total sales, per ADC.