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Arkansas's medical marijuana growers come to light 

Four counties, five companies, lots of jobs in the cannabis business.

click to enlarge A NEW CROP FOR COTTON PLANT: The dying Delta town hopes Bold Team, LLC's cannabis cultivation will restore life to the community.
  • A NEW CROP FOR COTTON PLANT: The dying Delta town hopes Bold Team, LLC's cannabis cultivation will restore life to the community.

Fifteen months after Arkansas voters passed an amendment to legalize medical marijuana in Arkansas, the first permits to begin its cultivation have been issued, to five companies. The five competed with 95 applicants to get the OK from the state Medical Marijuana Commission, which announced last Tuesday which companies had the top scores.

The identities of the owners had been withheld from the five commissioners, who reviewed and scored the applications individually. Alcohol Beverage Control administrators then calculated the scores and provided the results to the commission. The commissioners were given a scoring rubric that allowed a maximum of 10 points for owner qualifications; 50 points for ability to run a facility within applicable laws; 20 points for operating plans; 10 points for financial stability; 2.5 points for affiliation with persons with medical, osteopathic or pharmacy degrees; 5 points for economic impact and diversity; and 2.5 points for community benefit.

The applications were heavily redacted, so that while the names of the owners are public, their business plans, including what strains of cannabis they will grow and equipment they'll use, and financial backing are still unknown.

The companies had seven days within receipt of a letter notifying them of the state's intent to award them a license to pay a licensing fee of $100,000 and a $500,000 performance bond. Scott Hardin, a spokesman for the state Department of Finance and Administration, said three of the companies — Natural State Medicinals Cultivation, Bold Team LLC and Delta Medical Cannabis Co. — had paid the licensing fees and bonds by Tuesday afternoon.

While state law would allow eight cultivation sites, the commission — made up of Dr. Ronda Henry-Tillman, James Miller, Dr. J. Carlos Roman, Dr. Stephen J. Carroll and Travis Story — decided to limit the licenses to five. The company holding the sixth spot was River Valley Relief Cultivation of Fort Smith. Asked if the company might consider litigation, Storm Nolan, an owner in the company, said, "That's something we would discuss." While a recent controversial state Supreme Court ruling has said the state can't be sued, Nolan said he believed "they haven't thrown a wrench" into challenges based on administrative process.

Here's a profile of the new cannabis cultivation permit holders. Extra points were awarded for women and minority ownership and location in areas of low employment.

Bold Team, LLC, Cotton Plant, Woodruff County

"It is tantamount to a history-making event for this town," Cotton Plant Mayor Willard C. Ryland said of the medical marijuana cultivation facility coming to his tiny Woodruff County town. "I wake up and have to kind of pinch myself as well. Is this real?" he said.

Cotton Plant has not fared well in recent years. The population dropped from 960 in 2000 to 649 in 2010. The only school closed in 2014. There's been no full-time police force since 2016. The only retail in town is a convenience store, and the town's water and sewage systems have problems. Twenty-six percent of residents live at or below the federal poverty level.

Ryland, a Cotton Plant native who is retired from 35 years with the U.S. Department of Agriculture, lives on a farm that's been in his family for a century. "When I was a kid — and that's been a few years ago — I can remember anywhere from eight to 10 grocery stores along Main Street, and then there were some side streets that had some small convenience stores. I can remember four to five gas stations in this town. Banks. We had two banks. That was one — Planter's Bank," he said, pointing out of his Main Street office to barren white tile on a street corner, no walls surrounding it.

Ryland hopes his town's fortunes will change as Bold Team LLC, the second-highest scorer in the competition for permits (444 out of 500), develops a patch of swampy land described as "a part of the unplanted Cotton Plant Industrial Park." Adjacent to the plot are an estimated 250,000 tires, stacked inside and outside of an abandoned building. There was supposed to be a factory to heat and decompose them, but the state Department of Environmental Quality denied the permit. The business kept taking tires anyway.

"And you know what that means. Collecting tires, $10, $15 dollars a tire. That became the business," Ryland said. The company used Cotton Plant like an unregulated dumpsite. Cotton Plant and the ADEQ are working now to clean it up.

"That has happened over and over and over again. People in this community have been given these promises of opportunities and possible hope. But hope has never been generated until now," Ryland said.

click to enlarge COTTON PLANT MAYOR RYLAND: Calls development of cultivation facility a "turning point."
  • COTTON PLANT MAYOR RYLAND: Calls development of cultivation facility a "turning point."

Bold Team LLC has tried to prove to Cotton Plant that it's different. The company has promised 1 percent of gross sales to the town. It's already bought the city a $5,000 freezer for a local food pantry.

The Times was unable to reach any owners by press time. Bold Team CEO Danny W. Brown, who owns 24 percent of the company, also owns Willy D's Piano Bar in Little Rock, a commercial real estate company and a title company and serves as president of Altitude Trampoline Parks, according to his LinkedIn account; COO Mark Drennan (24.5 percent) owns a construction company in Beebe; medical director Kyndall Lercher (25.5 percent) is a registered nurse at the University of Arkansas for Medical Sciences; and human resources director Misty Drennan (25.5 percent) is a real estate agent.

MJ Freeway Business Solutions, a cannabis consulting firm specializing in software in Colorado, was brought on board to "support facility build-out and business development." Alex Stanish, who has been managing "a 300-light marijuana cultivation facility in Colorado," according to Bold Team's application, will be the director of cultivation. Aki Smith, the director of processing, has "held various positions involving processing of medical marijuana" and is a recent graduate of Penn State.

Director of Security will be Barry Flannery, a longtime Little Rock Police Department detective. In his application, he describes his career: "Sixteen years of the DS's detective career have been spent working as a Narcotics Detective and a Narcotics Interdiction Detective, where he has worked with local, state, and federal law enforcement agencies to seize over $7,000,000 of illicit currency, 6,000 lbs. of marijuana, and several hundred pounds of various other unlawful substances."

The team also includes Cayne Orman (of Orman and Drennan Roofing), who will be director of inventory and quality control. He's likely the Cotton Plant connection. His ancestors lived in the town — a grandfather is buried in the cemetery, Ryland said. Robert Lercher of Beebe will be director of customer relations.

The new medical marijuana facility offers several spots for potential help for Cotton Plant. It will allow the town to hire additional police officers to have a full force. And looking at Bold Team's projections, there should be some added jobs.

"The Company has allocated 25 full-time employees upon launch of the facility, including 2 [executive], 12 skilled, and 11 unskilled positions," according to the application. The company says it "plans to hire locally, creating well-paying jobs for local people and directly improving the lives of many City residents."

Even if locals don't get jobs at the facility, Ryland said he expects it to spark other jobs. He's been trying to recruit stores like Dollar General and restaurants.

"This is a turning point for Cotton Plant," he said.

click to enlarge TIRES STACKED TALL: Next to the future home of Bold Team in Cotton Plant. - BRIAN CHILSON
  • Brian Chilson
  • TIRES STACKED TALL: Next to the future home of Bold Team in Cotton Plant.

Natural State Medicinals, Jefferson County

Natural State Medicinals, which had the highest score among the five companies (486 out of 500), is one of two cultivation companies that will operate in Pine Bluff. "It was not an accident," Jefferson County Economic Development Director Caleb McMahon said, that the county landed Natural State Medicinals and the other cultivator, Natural State Wellness: "It was a lot of hard work."

"In November 2016, I went to my board and to my mayor, and I asked them if we could aggressively go after this. Pine Bluff gets a black eye in the media. [Officials have] been very progressive toward this. .... They were really forward thinking."

McMahon said he could not yet comment on the incentives offered the companies, but they did not include tax breaks.

McMahon said that running water and electricity to NSM's plant, located in the county about halfway between Redfield and White Hall, "is going to be a very big issue," but not a problem.

The plant will be located on 12.42 acres at the intersection on Interstate 530 and Gravel Pit Road, exit 27 off the interstate. Dr. Joseph Courtwright, a pharmacist and former CEO of pharmaceutical company USA Drug, and 12 other investors, including Stephen LaFrance Jr., the son of the founder of USA Drug, and four doctors, own Natural State Medicinals, incorporated as NSMC-OPCO LLC.

Courtwright has 15.72 percent ownership. Other owners are Susan D. Williams (15.02 percent), Wendy Perdue LaFrance (10.07 percent), neurologist Dr. Kelli D. Schlesinger (10.07 percent), gastroenterologist (and husband of Susan Williams) Dr. Alonzo Williams (8.45 percent), Kathryne Deane Peck (7.51 percent); Donna Mae Mooney (7.51 percent), Stephen LaFrance (5.66 percent), neurologist (and husband of Kelly Schlesinger), Dr. Scott Schlesinger (5.66 percent), businessman and Arkansas Cannabis Industry board member Robert DeBin (4.4 percent), veterinarian Dr. Clifton Bolen Peck IV (4.23 percent), urologist (and husband of Donna Mooney) Dr. Keith Mooney (4.23 percent) and Fox 16 news anchor Donna Terrell (1.41 percent).

Courtwright noted his 28 years in retail pharmacy and his position as CEO and president of USA Drug as evidence of expertise in the handling of regulated substances. USA Drug, which was headquartered in Pine Bluff and was the largest privately held pharmacy chain in the U.S., was sold to Walgreens in 2012.

"When we sold our corporate headquarters in Pine Bluff, seeing the loss of jobs was excruciating," the application states. "It will be very rewarding to bring them back."

Key staffers with ties to Arkansas include Terrence Fitch, CEO of Super Farm LLC of Denver and a previous resident of Arkansas, who will be general manager; Lance Huey, the former sheriff of Grant County and director of security for the Arkansas Lottery Commission, director of security; and former U.S. attorney Bud Cummins, a third-party compliance officer. Frank Groves, owner of Benson Creek Produce and a plant geneticist, will serve on the company's advisory board.

The company will also employ at least 28 people in addition to an unknown number of extraction employees and security officers, according to the application.

A summary in the application says the plant will be built "from the ground up" and owners will seek a LEED environmental certification for it.

NSM will use a procedure called "schwazzing" to process plants — a manual defoliation process "similar to pinching back your tomato plants," the application says. The process increases "key medical compounds" and will mean more jobs "for local Arkansans."

The application also says that because of "higher rates of epilepsy" in Jefferson County, "NSM has chosen to allocate resources to ensure that several of the strains produced and manufactured products will specifically be for epileptic patients" in the county.

NSM will use a portion of its profits to "enable efforts of the Little Rock Police Foundation and Yoga Warriors Fighting Colon Cancer." The latter is a nonprofit founded by Terrell, whose daughter died of colon cancer. Terrell announced her affiliation with NSM on the air after the permit was awarded.

click to enlarge OSAGE CREEK PROPERTY: In Berryville.
  • OSAGE CREEK PROPERTY: In Berryville.

Osage Creek Cultivation LLC, Carroll County

Osage Creek had the fourth highest score (432.5 out of 500). Its facility, owned by Mary and Jay Trulove, will be on family land southwest of Berryville and east of Osage Creek. Mary Trulove, CEO, holds 60 percent ownership, Jay Trulove, COO, 40 percent.

"The good Lord has given us this plant we call marijuana for a reason — a purpose. We must open our minds and hearts to use this gift in a safe and responsible way," the Truloves' application says.

The Truloves own a cattle and crop farm on 750 acres and Jay Trulove has worked as a pilot with Southwest Airlines for 47 years. They describe the cultivation facility as a family business that will employ Naomi Trulove-Wilson, IT supervisor and compliance manager; excavation company owner Matt Trulove, director of operations; U.S. Martial Arts Hall of Fame member Robert Trulove, security supervisor; and Jessica Trulove, extraction technician. They have brought on as advisers Harrison pharmacist Patricia Blaylock; Dr. Hunter Young, a professor of medicine and epidemiology at Johns Hopkins and a graduate of the University of Arkansas for Medical Sciences, as an advisory board member; and Harrison chiropractors Dr. Shaun Kahn and Dr. Anna Kahn. Their cultivation manager, Jeremy Harwood, has worked in the marijuana industry in Colorado and Nevada; and their extractor, Sean Azzariti, is a veteran of the Iraq War who made news as the first person to legally purchase marijuana in Colorado, for his post-traumatic stress disorder.

The Truloves say they will fashion their output to meet market demands — which, based on the 1 to 2 percent patient base in other states would be between 20,000 and 40,000 in Arkansas — and no more.

Osage Creek will make donations to the Carroll County Historical Society and the Freedom Seekers Ministry, a faith-based substance abuse treatment program.

The company offered letters of reference from the Rev. Larry Montgomery, pastor emeritus of Towering Oaks Church; the Rev. David Killingsworth of the Forerunner House of Prayer; former police officer Brad Handley; Carroll County Sheriff Randy Mayfield; and Berryville Mayor Tim McKinney.

Osage Creek owners issued a statement saying they were excited to have been chosen, would start production "as quickly as prudently possible," but would not provide interviews or comments.

McKinney, however, said the Truloves expect to employ 20-25 people with an annual payroll of over $1 million, and that the facility would provide a "five-figure tax figure for our schools."

The mayor described the Truloves as "good, quality people" who would start production "as soon as humanly possible." The city must run a water line to the plant, but McKinney said that would involve a distance of only 1,500 feet and could be accomplished in 30 days or so. No sewer line will be provided.

McKinney said he wanted to assure Carroll County residents that "everything is going to be all right." McKinney said he wanted to remain "low key" about the business, having spent 52 days "in a gated community" himself for possession of marijuana and driving while intoxicated. That was in 2009. He's been re-elected twice since and is in his 28th year as mayor.

Natural State Wellness Enterprises, Pine Bluff, Jefferson County

Not to be confused with the previously mentioned Natural State Medicinals, which will also be located in Jefferson County, Natural State Wellness is owned by 27 shareholders. That list includes some well-known Arkansas names, including former Arkansas Attorney General Dustin McDaniel; his father, Bobby McDaniel; Henry Wilkins V, the son of Jefferson County Judge Henry "Hank" Wilkins IV; and former state legislator and former White County Republican lawmaker Marvin Parks. According to documents filed with their applications, the majority shareholder in Natural State Wellness is William Young, who owns 34 percent of the company. Three doctors, Dr. Thomas Stank, Dr. Ladd Scriber and Dr. Bruce Sanderson, are partners in the venture and "will serve in an advisory role," according to the application, which also says Natural State Wellness will have 51 percent minority ownership and 99.1 percent ownership by Arkansas residents. Natural State Wellness submitted nearly identical applications for facilities in Jefferson and Jackson counties, with both scoring 438 points out of a potential 500. Because the state's medical cannabis law says that the same parties may not have financial interest in two cultivation facilities, Natural State Wellness was forced to choose. Jefferson County's economic development director said Monday that the company would locate in Pine Bluff.

According to satellite photos included in its application, Natural State Wellness's facility will be built on 10 acres near U.S. Highway 63, just across the highway from The Pines Mall. "The proposed facility will provide more than 60 new jobs, a nearly $1,000,000 annual labor investment, and nearly $10,000,000 in capital expenditures to local businesses," the Natural State Wellness application says, "which will help us not only serve medical cannabis patients, but also those less fortunate who reside in the community."

To help construct, establish and staff the cultivation center, Harvest, a Tempe, Ariz., cannabis growing and dispensing company established in 2012 by Harvest CEO Steve White, will make up the "operating team." Harvest now holds 39 cannabis-related licenses in five states, according to documents included in the Natural State Wellness applications.

click to enlarge DUSTIN MCDANIEL: A well-known name behind Natural State Wellness Enterprises.
  • DUSTIN MCDANIEL: A well-known name behind Natural State Wellness Enterprises.

Natural State Wellness partner Bart Calhoun, a Jonesboro-based lawyer who owns a 3 percent stake in the business, according to application documents, said that while he can't recall the exact details of how he and his co-owners settled on Harvest, he believes it was Dustin McDaniel who suggested them to the group. Attempts to reach McDaniel were unsuccessful at press time. "We did research on them," Calhoun said, "and they've been really successful in not only attaining licenses in other states but doing really well producing, cultivating and dispensing marijuana. ... We had a few different people that we were working to partner up with, and they were by far the most impressive."

Calhoun said the facility will be a new, ground-up construction. "We've got plans and everything laid out," he said, "so once we get past the license fees and bonding stage — which will not be an issue at all for us — we'll start looking at implementing those blueprints and starting construction." Calhoun said that construction time depends on a lot of factors, including the weather, "but six- to nine-month timeframe is probably what we're looking at."

Reached by phone before Natural State Wellness settled on the Jefferson County location, Calhoun said both counties had shown great interest in the facility. The Natural State Wellness application for Jefferson County included letters of support from a long list of local civic and business leaders, including Simmons First National Bank chairman and CEO George A. Makris Jr., the pastors of several prominent Pine Bluff churches, Pine Bluff City Council members and Jefferson County Sheriff Gerald Robinson.

click to enlarge FUTURE GROW SITE: Delta Medical hopes to close on this land in Newport.
  • FUTURE GROW SITE: Delta Medical hopes to close on this land in Newport.

Delta Medical Cannabis Co. Inc., Newport, Jackson County

Though Newport in Jackson County had a shot at landing two of the state's five initial medical cannabis cultivation facilities, with Monday's decision by Natural State Wellness Enterprises to go with its application for a facility in Jefferson County, the city will only be getting one: Delta Medical Cannabis Co. Inc. Delta scored fifth out of the cultivation applications submitted (Natural State Wellness' two applications had equal scores), with a final score of 432.5 out of a possible 500.

Partners in Delta Medical Cannabis include Doug Falls, who owns and operates Trinity Lighting Co., a $30 million Jonesboro-based maker of lamps; car dealer and apartment complex owner Ray Osment; Jonesboro lawyer Donald L. Parker II; Dr. John D. McKee; lawyer Lynn Parker; and registered nurse Amy Fulkerson. Falls will serve as CEO, Osment as COO and Parker as president and chief legal counsel.

According to an economic impact analysis compiled by the Newport Economic Development Commission, which was included as supplemental material in the Delta Medical Cannabis Co. application, the project will directly create 30 jobs in Newport, with an average wage of $19.91 per hour — around $41,400 per year. The average wage in Jackson County is $32,182 per year. The direct local financial impact of the facility will be around $1.2 million per year in increased payroll alone, with a $65,383 bump to local tax rolls. Indirect local impact, according to the analysis, will be 47 jobs created within 24 months of the facility's completion, with an average pay of $17.92 per hour. The report estimates that in total, the facility could create over 200 jobs at the facility and in ancillary companies like delivery services and security firms, with a local financial impact of $5.8 million in salaries and $205,000 in tax revenue.

Jon Chadwell, director of the Newport Economic Development Commission, said the city is excited about Delta Medical Cannabis as "a new corporate citizen" in Newport. That said, Chadwell stressed that because the Newport Economic Development Commission is publicly funded, they offered no financial incentives to any of the 10 firms that filed applications for cannabis cultivation operations in the Newport area, including Delta Medical Cannabis.

"We know there are people in the community who might be morally opposed to the process," Chadwell said. "So we didn't feel it was fair to take money that they were spending at the stores to support economic development of something that they were strongly morally opposed to." Chadwell said there was also the issue of marijuana still being illegal at the federal level.

"From a community perspective, it's basically jobs, payroll and then the charitable contribution they give back to the community," Chadwell said. "We realize there are a lot of ancillary businesses that will come to our area because of this. There's going to be transportation needs, security needs, things like that that will grow out of these industries. They may be new businesses or it may be some of our local businesses will be able to grow to meet those needs. We saw that as an impact and a benefit."

Delta Medical Cannabis President Parker said that the company will construct an all-new, "state of the art" facility at 7301 Victory Blvd., near the ASU-Newport campus. The company has the option to buy 11 acres there, Parker said, but will likely only need 4-5 acres, where it will build a secured structure of between 22,000 and 30,000 square feet, "designed for expansion if needed."

"We hope to close on the property in the next 30 to 45 days," Parker said. "I would optimistically say we'll be breaking ground shortly thereafter. We hope to be fully operational by the end of this year. Sometime in the fourth quarter and hopefully by the end of the year, we'll have product available to sell to dispensaries, assuming that the dispensary licenses are issued and there's somebody to sell it to." Parker said that his "crystal ball" on that information was a little cloudy, however, noting that members of the Medical Marijuana Commission said last week that it would require "several months" to score the dispensary locations. Parker said that waiting for dispensaries to be built won't slow his firm down much in the short term, but it might have some impact on their pace long term.

click to enlarge DELTA MEDICAL PRESIDENT DON PARKER: "We are proceeding with all 
deliberate haste."
  • DELTA MEDICAL PRESIDENT DON PARKER: "We are proceeding with all deliberate haste."

"We are proceeding with all deliberate haste right now," he said. "We're going to operate under the assumption now that as soon as we can get our building built and approved" there will be places to sell the Delta Medicinal Cannabis crop.

Like every other cultivator approved by the Medical Marijuana Commission, Delta Medical Cannabis will grow indoors under carefully controlled lighting, nutrient and watering conditions. Parker said Delta will be bringing in three consultants with deep experience in cannabis cultivation in other states where medical marijuana is legal. He was coy when asked one of the biggest questions currently hovering over the Arkansas cannabis industry: How his firm will import cannabis seeds or immature plants to the state to get cultivation started, when it is against federal law to move any amount of marijuana through a state where cannabis is still illegal — as it is in every state that borders Arkansas.

"That's proprietary information," Parker said with a laugh. "It's like that crystal ball. I also have a magic wand."

Delta Medical will donate 10 percent of its annual profits to charitable causes, with 70 percent of those funds dedicated to launching and maintaining the Northeast Arkansas Learning Initiative, that will, according to the company's application, "provide opportunities for low-income children to attend quality early-childhood education programs" by providing scholarships to "quality preschool" programs for 3- to 5-year-olds, providing mentors to parents who participate in the program, and making grants in participating preschools. The program is modeled on a similar program in Minnesota, and will operate only in Jackson County for the first five years. After that initial period, the program will expand to other counties in Northeast Arkansas. Delta Medical has also pledged to work with all rehab facilities within a 75-mile radius of Newport, and to provide training, speakers, presentations, literature and financial support to groups that work to fight addiction in the area.


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