How to Open a Dispensary in Arkansas

How to Open a Dispensary in Arkansas in 2024

Individuals and businesses can open cannabis dispensaries in Arkansas, but they must obtain the relevant licenses from the Arkansas Medical Marijuana Committee (AMCC). To obtain an Arkansas dispensary license, a prospective dispensary owner must have comprehensive business plans showing their cannabis industry knowledge. They are also required to submit applications, plans, and other necessary documents to the AMCC. The AMCC regularly calls for new applications for dispensary licenses in Arkansas.

Why Open a Dispensary in Arkansas?

Several reports indicate that Arkansas-licensed dispensaries generated up to $141 million in cannabis sales between January and June 2023. According to the Arkansas Department of Finance and Administration, cannabis retail sales may pass last year's record of $276 million. Also, the number of medical marijuana patients jumped from 43,160 in 2020 to 85,192 in 2022.

Since the first dispensary opened in 2019, the state has received up to $105 million in tax revenues. According to a report published by the Arkansas Economic Development Institute in 2022, a fully legal (medical and recreational) cannabis industry in Arkansas can generate up to $984 million by 2027. This means the state’s marijuana industry has the potential for more growth, making Arkansas perfect for entrepreneurs looking to establish cannabis dispensaries.

Types of Dispensary Licenses in Arkansas

Arkansas has two types of dispensary licenses. These are:

• Non-cultivating dispensary license: This permits retailers to purchase marijuana from state-approved cannabis growers/processors and dispense it to eligible patients
• Cultivating dispensary license: Holders of this license cultivate their own supplies of medical marijuana and sell them directly to patients

How to Get an Arkansas Dispensary License

Below are the major steps required to get an Arkansas dispensary license:

• Meet the following basic qualifications:
• 21 years or older
• Arkansas residents or residents for at least 7 consecutive years before applying
• Have no excluded felony convictions listed under the Arkansas Medical Marijuana Amendment of 2016
• Have no outstanding tax delinquencies
• Submit necessary documents to the AMMC: Make in-person submission at:

Arkansas Medical Marijuana Commission c/o Arkansas Alcoholic Beverage Control 1515 W. 7th Street, Suite 503 Little Rock, AR 72201

• Pay the $7,500 application fee: Payment via cash or certified/cashier's check made out to the State of Arkansas. Unsuccessful applicants may get a 50% refund of the application fee
• Review process: The state agency will verify and hear each application before issuing an order to accept or reject an application
• Pay the dispensary license fee: Successful applicants must pay non-cultivating or cultivating dispensary license fees within seven days after approval.

The Arkansas Medical Marijuana Commission (AMMC), the agency responsible for issuing dispensary licenses, often announces the application window and dates for hearing applications. At the moment, the application window is closed, and new applicants must wait for the next open application window. According to Arkansas medical cannabis law, the AMMC can issue no more than 40 dispensary licenses. The state currently has 33 licensed cannabis dispensaries.

Information and Documents Required for a Dispensary License in Arkansas

Applicants must submit the following information and supporting documents within 90 days of the application window notification:

• Proof of applicants’ or business representatives’ personal information such as legal names, residences, social security numbers, dates of birth, mailing addresses, and phone numbers. This may include any of the following documents:
• Certified copy of a birth certificate or marriage certificate
• Valid U.S. passport
• Valid permanent resident card
• Copies of valid driver’s license or government-issued photo identification card
• Proof of residency in Arkansas for the past seven years before the application. This may include any of these documents:
• Arkansas tax returns for the past seven years; this should show the last four digits of the applicant's social security numbers
• Proof of voter registration for the last seven years
• Ownership, lease, or rental documents for primary residence in the last seven years
• Utility bills for the last seven years
• Vehicle registration for the seven years
• Fingerprints and consent to background checks. Note that individual applicants and all members of business entities are subject to background checks
• Business representatives must submit the following:
• Documentation of business ownership structure
• Proof of residency in Arkansas for board members with up to 60% interest in the business
• Documents showing that the intended dispensary location complies with the zoning requirements in the Arkansas Medical Marijuana Amendment of 2016
• Sworn statements that dispensaries comply with local zoning ordinances
• Business plans for cultivating or non-cultivating dispensary licenses
• Optional supporting documents showing:
• Proof of affiliation with state-licensed physicians or pharmacists
• Proof showing the positive impact of the dispensary on the local economy

What Plans Do You Need to Open a Dispensary in Arkansas?

Interested parties must submit comprehensive business plans along with other required documents to the Arkansas Medical Marijuana Committee when applying for a dispensary license. To enhance the chances of getting approved, a well-prepared dispensary business plan in Arkansas should contain the following details:

• Business goals, organizational structure, key board members, and stakeholders who are licensed physicians
• Market analysis
• Concise budget showing opening and operational costs
• Legal funding sources
• Dispensary operations showing the following:
• Management of cannabis inventory, including tracking, storage, and compliance with the seed-to-sale tracking system in Arkansas
• A detailed floor plan that shows the layout of the dispensary, including customer areas, product displays, and security features
• Compliance with local zoning regulations and record-keeping requirements
• Marketing strategies that adhere to signage, packaging, and labeling regulations on cannabis products
• Community engagement strategies and future contributions to the local community
• Security plans to protect the dispensary against theft, diversion, and from unauthorized access. This should include surveillance, alarm systems, and access control measures

Are There Municipal Requirements for Opening a Cannabis Dispensary in Arkansas?

Local municipalities cannot prohibit Arkansas-licensed cannabis dispensaries from operating within their borders. However, they can adopt zonal ordinances to ensure that dispensaries do not open close to sensitive places such as schools and churches.

How Long Does It Take to Get an Arkansas Dispensary License?

The Arkansas Medical Marijuana Committee typically reviews and approves applications for dispensary licenses within 150 days after announcing the open application window. As of October 2023, the committee is not accepting new applications.

Where Can You Locate a Cannabis Dispensary in Arkansas?

Cannabis dispensaries in Arkansas can open in any of the eight approved medical marijuana dispensary zones. Non-cultivating dispensaries must maintain a minimum distance of 1,500 feet from schools, churches, and daycares. On the other hand, cultivating dispensaries must be away from these institutions by at least 3,000 feet. Local municipalities may create additional zoning regulations to ensure compliance with the state’s medical marijuana law.

Can Licensees Have More Than One Dispensary Location in Arkansas?

No. Dispensary licensees can establish only one cannabis retail store in Arkansas.

How Much Does It Cost to Open a Marijuana Dispensary in Arkansas?

Opening a marijuana dispensary in Arkansas can cost between $250,000 and $2,000,000, depending on the proposed dispensary operation (cultivating or non-cultivating) and location. A business owner should consider the following costs when opening a cannabis dispensary in Arkansas:

• Licensing fees:
• Cultivating dispensary license fee - $25,000, while annual renewal fee is $32,000
• Non-cultivating dispensary license fee - $2,500, while annual renewal fee is $10,000
• Performance bond requirements: A cultivating dispensary licensee must post a $100,000 performance bond within seven days after approval and maintain it until the first license renewal
• Lease cultivating area or retail space: In Arkansas, leasing a retail space can cost anywhere from $3,000 to $10,000 or more per month. On the other hand, a cultivating dispensary may spend between $2,500 - $5,000 annually to lease an acre for cannabis cultivation
• Inventory costs: Budget for $15,000 or more for initial inventory. This can vary depending on the product selection and size of the dispensary. Generally, a pound of marijuana flower costs between $1,500 and $1,800 in Arkansas
• Security costs: Procuring and maintaining security systems, surveillance cameras, and personnel can range from $10,000 to $50,000 or more annually
• Staffing costs: In Arkansas, budtenders earn $18-20/hr, while store managers earn $25-$30/hr. Depending on the size of the team and their roles, total staff salaries can amount to over $150,000 annually
• Operational costs: These include utility expenses for electricity, water, and gas, which can vary based on location and facility size. Customizing the dispensary space to meet regulatory requirements and hiring legal/professional services may also cost more than $15,000 altogether

Do You Need an Insurance Policy for a Cannabis Dispensary in Arkansas?

Arkansas does not mandate insurance coverage for marijuana dispensaries. However, having cannabis business insurance is highly beneficial as it safeguards against potential liabilities and risks associated with the marijuana industry. The following insurance policies are recommended for Arkansas cannabis dispensaries:

• General Liability Insurance - This protects dispensaries against third-party bodily injury and property damage claims
• Product Liability Insurance - This covers claims related to product defects or injuries caused by the consumption of cannabis products
• Property Insurance - This protects against damage to a dispensary due to fire, theft, or vandalism
• Workers' Compensation Insurance - This provides coverage for budtenders and other employees injured while on the job
• Crop Insurance - Cultivating dispensaries need this policy to protect against losses related to damage or theft of cannabis crops
• Business Interruption Insurance - This covers lost income in the event of a temporary business closure

Cannabis dispensary insurance premiums can range from $5,000 to $20,000 or more annually, depending on the following factors:

• Dispensary size
• Types of Coverage
• Location-specific risks
• Policy limit
• Deductibles and endorsements

How to Get a Grant to Open a Dispensary in Arkansas

Business owners and individuals can use the following steps to secure funds to open cannabis dispensaries in Arkansas:

• Self-Funding - Investing personal savings or assets provides complete control over the cannabis business
• Family and Friends - This involves seeking financial support from family and friends who believe in the business idea
• Loans - Business owners with good business plans can explore traditional loans or credit lines from credit unions or private lenders
• Equity Funding - This involves attracting investors (angel investors or venture capitalists) who exchange capital for a stake in the business
• Cannabis-Specific Lenders - Specialized financial institutions that understand the unique challenges of the cannabis industry may offer loans or investment opportunities
• Crowdfunding - Using crowdfunding platforms is also a good way to raise funds from a broader audience
• Joint Ventures and Partnerships - Collaborating with established cannabis businesses or industry experts can provide both financial support and valuable guidance
• Alternative Financing - Explore alternative financing options like revenue-based financing or equipment leasing tailored to the cannabis industry

Does Arkansas Have a Social Equity Program for Cannabis Dispensaries?

Arkansas does not have a social equity program for marijuana dispensaries.

Does Arkansas Tax Marijuana Dispensaries?

Yes. The Arkansas Department of Finance and Administration (DFA) collects a 4% excise tax on cannabis products sold by cannabis retail stores and other cannabis businesses. Patients also pay a 6.5% sales tax on every cannabis product purchased at licensed dispensaries.