Legislator calls for delay of marijuana permits until tax issue checked | Arkansas Blog

Saturday, March 10, 2018

Legislator calls for delay of marijuana permits until tax issue checked

Posted By on Sat, Mar 10, 2018 at 5:26 PM

REP. SCOTT BALTZ: Wants delay in marijuana permits.
  • REP. SCOTT BALTZ: Wants delay in marijuana permits.
Questions continue on the process by which the Arkansas Medical Marijuana Commission scored applicants for the five cultivation permits, set to be awarded Wednesday.

The latest is a letter sent by Rep. Scott Baltz of Pocahontas to Larry Walther, director of the state Department of Finance Administration, the agency with responsibility for overseeing the permitting process Baltz says he's heard "rumors" that some of the top applicants for permits are not in compliance with rules that applicants have no outstanding state tax delinquencies. This would include personal and corporate income, sales, employee withholding and franchise taxes. (The Arkansas Times been plowing through an independent compilation of franchise tax filings at the secretary of state offices provided by a permit applicant that  suggests some past deficiencies, though it's not immediately clear if any of the problems are current.)

Baltz wants Walther to provide him, the governor and the Arkansas Medical Marijuana Commission with a report on whether each of the top 10 applicants for a cultivation permit met the tax requirement in all areas of state tax collection.

"It's important to have responsible operators running the cultivation centers and being deliquent on taxes to the state is not consistent with being a responsible operator. It is, therefore, extremely important to make certain that all of the cultivators who have been or will be issued  licenses by the Commission in fact meet all the legal requirements for such a license"
An anonymous source sent me a copy of Baltz's letter and I confirmed it with him. He told me in a phone interview that there were no applicants in his county, but the process was important.

He joins a chorus of people with questions aimed at delaying the award of the permits at the meeting at 5 p.m. Wednesday.

Said Baltz "I think they need to delay it until we get the answers we need. Let's do it correctly. Let's compare apples to apples. Let's not give the state a black eye."

Baltz indicated he'd heard reports about specific shortcomings but declined to discuss them. He said DFA should check and provide accurate information.

Also rolling in today on the marijuana applications:

* PASSPORTS: One correspondent of mine notes that applicants for permits must show they have valid passports. By law, a passport must be signed to be valid.  There appear to be unsigned passports among the applications that have been released. Ticky point, but rules are rules.

click to enlarge PLAYING DEFENSE: Stu Soffer, shown in photo with Donald Trump, finds himself on the defensive after a marijuana cultivation permit decided not to locate in his home county.
  • PLAYING DEFENSE: Stu Soffer, shown in photo with Donald Trump, finds himself on the defensive after a marijuana cultivation permit decided not to locate in his home county.
* JEFFERSON COUNTY INTRIGUE: And then there's Stu Soffer, the White Hall Republican who's long feuded with Democratic Jefferson County Judge Hank Wilkins IV. Hank Wilkins V is an owner of Natural State Wellness, ones of the top five applicants. It announced Friday it would put its facility in Jackson rather than Jefferson County. A prepared statement expressed regret and praised the efforts made to attract the business to Jackson County. But it's since become evident that the toxic political climate in Jefferson County, embodied by Soffer's questions about land purchased by the Economic Development Alliance of Jefferson County for the business and continued questions about the county judge's business relationships, played a role in the change of direction.

Having been identified as the potential cause for the loss of a business with 40 to 50 jobs in Jefferson County, not to mention the $278,000 worth of now useless land purchased with tax money, Soffer is on the defensive. He issued this statement today, which continued to throw suspicion on local politics.

My interest in who owned the land where the second marijuana growing facility will be located was piqued by a story in Wednesday’s Commercial reporting it would be on land near the Mall. I could not find anything in that area on the county assessors web site owned by any Wilkins’ but did find three lots purchased by the Alliance in January.

On Wednesday afternoon, I expressed a concern to a member of the Alliance board because of who was involved with Natural State Wellness Enterprises. On Thursday afternoon, the board provided a satisfactory response and I dropped the matter.

The Arkansas Business News reported, Caleb McMahon, Director, Economic Development for the Alliance said, "One individual" had cost Jefferson County the site, but said he couldn't say more."

McMahon then left a message for election commission chairman Mike Adam saying to call him, “it was an emergency.” When Adam called, McMahon demanded to know who my boss was. He accused me of using my election commission position to obtain information. He told Adam, “He was after Stu Soffer because Dustin McDaniel had just called and said they were moving the business to another county”. He followed up with an email to county committee chairman Peter Smykla. Since I did not communicate my concern about the land with anyone affiliated with Natural State Wellness Enterprises or the media, we can only surmise someone from the Alliance spooked them.

Business professionals like McDaniel don’t make knee jerk decisions to relocate what is presented as a “multi-million dollar venture” in less than 24 hours. So it is either the plan to locate in Jackson County had to be in the works for some time and the Alliance’s announcement was premature, or something I stumbled upon would not stand the light of day. 
Baltz's letter: Page 1.

Baltz's letter: Page 2.

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