Arkansas

insights

December 22, 2020
Notable Players

A Deeper Look At This State

Regulatory Framework

This deep red southern state has a bit of a green thumb, enjoying one of the most sensible medicinal programs outside of the West Coast. The only restriction in Arkansas is the production of certain edibles, including candies, cookies, brownies, and other treats that may appeal to minors.

The Arkansas Medicinal Marijuana Commission released additional cultivation and dispensary licenses in June 2020. In a 3-2 vote, the commission released the two remaining cultivation licenses. The state has eight cultivators approved for business, but just three are currently operational.

Notable Market Activity

November 2020 | Harvest Health sells Natural State Wellness for $25MM

What's the Play?

Arkansas' limited license structure has the potential to provide the fundamentals MSOs want. With 33 retail and eight cultivation licenses for a market expected to surpass $300MM in 2021, there is plenty of room for operators to achieve scale and profitability. We have recently seen Harvest Health divest from this attractive state to focus on higher ROI projects in their core footprint. Look for smaller MSOs to build density in this market, creating attractive future acquisition targets for the majors.

Investors can find positive ROI projects here that will be prime acquisition targets. This green southern belle will continue to expand patient count and ultimately transition to adult-use, although that may take time as the medicinal regulatory framework is still under debate.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~3MM

Medicinal Legalization

2016

Adult-Use Legalization

N/A

MMJ Patients

~87K

Monthly Revenue

~$18MM

Cultivation Cap

No Limit

Cultivation Licenses

8/8 (Issued/Limit)

Retail Licenses

33/40 (Issued/Limit)

Retail License Cap per Operator

1

Vertical Integration

Allowed

Delivery

Allowed

MMJ Qualifications

Less Restrictive

State Population / # Retail Licenses

MMJ Patients / # Retail Licenses

~3K

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data
Shit We Don't Know

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