Press Release: Health Department Says Marijuana Act Would Cost Taxpayers

 October 29th, 2012  Jerry Cox

Monday, October 29, 2012

Health Department Says Marijuana Act Would Cost Taxpayers

On Friday, the Arkansas Department of Health released a Fiscal Impact Statement of the cost to the State of Arkansas if Issue 5, the Arkansas Medical Marijuana Act, passes on November 6th.

The impact statement outlined the cost establishing and maintaining the Medical Marijuana Regulatory Branch of the Arkansas Department of Health. “A supplemental appropriation and funding would be necessary in order for ADH to meet the requirements of the Act,” the statement said.

The Health Department estimates implementation of the act will cost between $3.3 million and $6.4 million the first year. After that the act will cost $2.7 million to $5.8 million annually.

Governor Beebe has said he opposes Issue 5, questioning its cost to taxpayers. Attorney General Dustin McDaniel also opposes the Arkansas Medical Marijuana Act. The Arkansas Pharmacists Association, a coalition of Arkansas physicians, the State Drug Director, the Arkansas Sheriff’s Association, and the State Chamber of Commerce oppose the act as well.

Family Council Action Committee President Jerry Cox responded to the cost projection, saying, “These numbers are very telling. They’re projecting the measure is not even close to revenue neutral. Arkansas is required by law to balance its budget every year. If the state has to spend millions of dollars extra on marijuana users, that’s going to translate into new taxes or cuts to other programs. Even if you think our state budget is bloated, I don’t think anyone wants to see taxes go up or money funneled away from schools or health programs to pay for marijuana.”

Cox said he doubts the program could ever reach a point where it operates without money from taxpayers. “My experience is that a program needs to start out pretty close to revenue-neutral if it’s going to get there. Issue 5 caps some of the fees the State of Arkansas can charge to help offset the administrative costs the measure imposes on the state. Between that and these cost projections, I think if Issue 5 passes, legislators will have to raise taxes to pay for it.”

The act would set up about 30 marijuana dispensaries statewide where marijuana would be grown, processed, and sold. People living more than five miles from a dispensary could grow and smoke their own marijuana.

The impact statement did not mention funding for Health Department inspection or oversight of individuals who grow their own marijuana, but it did include staff and funding for inspection of caregivers who grow marijuana for other people.
“This underscores what we’ve said before,” Cox said. “These home marijuana gardens are so nebulous there simply is no feasible way the state can regulate and oversee them. Otherwise the cost would probably be much, much higher than this impact statement predicts.”

The Arkansas Department of Health estimates that 45,000 Arkansans will sign up to use marijuana. “About one in every fifty people living in Colorado uses ‘medical’ marijuana,” Cox said. “If you apply those percentages to Arkansas, it isn’t unreasonable to assume the number of users could actually be closer to sixty thousand.”

The impact statement indicated that the cost to taxpayers will rise or fall depending on how much oversight the State Board of Health mandates if the act passes.


Family Council Action Committee is a conservative 501(c)(4) organization based in Little Rock, Arkansas.