Arkansas dispensary winners

01/08/2019

1) The Consortium – Bold Team, NSWE, Osage and DMCC – was given / gave itself at least 10
retail licenses covering the most populated and strategic areas in Arkansas. With the
competitive advantage of cultivation facility + retail, the Consortium should squeeze out the
remaining dispensaries
Bold Team — NSWE in
— Arkansas.
Osage — DMCC network
Retail footprint (10 at least)

Osage
Newcomb
Valentine

Sears Sears
Willett
Langley
Ross
Sears

Sears

2) 2017 lobbying clients and the politically well-connected were rewarded another 8 retail
licenses.

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3) Public Consulting Group was used as a front.

Compare PCG’s bid of less than $100,000 to review 200 applications – the equivalent of only
$500 per application review – to Florida budgeting $18,400 per application review, or nearly
40x more.

Arkansas marijuana recap:

Costs:
• 1,200 Arkansans submitted 325 applications for cultivation facilities and dispensaries
• Avg. 1,000 pages per application
• Avg. development cost per application was $150,000
o That’s a total of $50 million spent largely on out-of-state consultants
• Avg. time cost per application was 6 months
• The state also collected $3 million in non-refundable application fees

Winners:
• Avg. cultivation facility value: $25 million
• Avg. dispensary value: $8 million
• Total marijuana license value handed out by government: $400 million

Example: Take the Arkansas assets of Harvest Health and Recreation (CSE:HARV) via Oklahoman
Warren Ross’ Natural State Wellness Enterprise. Harvest’s Arkansas assets – 1 cultivation
facility and 1 dispensary – are projected to generate 3-4% of total Harvest revenue over the
next couple of years (and $11 million in EBITDA in 2020). With a pre-IPO valuation of $1.25
billion, Natural State Wellness Enterprise was valued at $40 to $50 million.

It’s no wonder that Asa is warning Arkansas patients – nearly 7,000 now – against going to
Oklahoma to purchase affordable medical marijuana that is available now. Asa & co. received
hundreds of thousands in campaign contributions and millions in concealed incentives to
protect these Arkansas license valuations and guarantee returns on investment.

Chronology:
November 2016 – Present (26 months and counting)

1. Unsealed documents from former Sen. Jon Woods’ federal corruption trial reveal text
messages in which an FBI special agent “laughs out loud” at Travis Story’s appointment
to the Medical Marijuana Commission.

2. Commission fails to adopt rules preventing conflicts of interest and economic interest in
violation of Amendment 98.

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 3. Cultivation facility winners announced.

4. Commissioners used three types of scoring sheets. Commissioner Roman gave two
groups scores in the 90’s with the next highest score in the 70’s and a median score of
57. Identical content was scored differently except in the case of #3 Natural State
Wellness, which tied for third and fourth place while competing for economic
development incentives from Jefferson and Jackson counties (“economic development”
is Harvest’s memo, see Maryland).

5. Commissioner Story is the attorney for the owners of #4 Osage Creek, Mary and Jay
Trulove. Story knew they applied and gave them his second highest score.

6. Certain scores were submitted late by Commissioners, and some scores were adjusted
after submission. Commissioner Story submitted Abraham Carpenter’s application
scores late. Carpenter’s application was later disqualified after a secondary review
despite Section A errors by #3 NSWE, #5 DMCC and #6 RVP. Commissioner Henry-
Tillman’s scores for #5 DMCC and #6 RVP were improved after initial submission to
ABC.1

7. All five cultivation facility winners failed to reach minimum qualifications in their
applications (and that’s only looking at redacted versions).

8. Hank Wilkins IV took $100,000 in bribes disguised as church donations. The former
Jefferson County Judge took bribes from Preferred Family Healthcare lobbyist Rusty
Cranford disguised as donations to Wilkins’ church. Wilkins’ son is listed as a 17% owner
of #3 NSWE. William Young’s 31% ownership gave #3 NSWE maximum racial diversity
bonus points despite William Young considering himself “White” in his ASP background
check.

9. At a Rotary Club meeting, Dustin McDaniel of #3 NSWE suggested the Commission

should have used an outside consultant to evaluate applications. It was unclear at the
time why McDaniel seemed to be undermining his own winning score.

10. Circuit Court Judge Wendell Griffin rules marijuana license award process
unconstitutional.

11. Unsealed legislative working papers show that former Sen. Jon Woods attempted to
direct marijuana tax money to Ecclesia College.

12. House Speaker Jeremy Gilliam resigns. Gilliam appointed Stephen Carroll and Travis
Story to the Medical Marijuana Commission.

1Commissioner Henry-Tillman curiously asked about whether diversity would be considered at the February 2018
AMMC meeting, suggesting she knew that Carpenter’s score had been removed before scores were announced.

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13. Supreme Court reverses Circuit Court ruling. The Circuit Court lacked subject-matter
jurisdiction because the plaintiffs had not been issued denial letters. Chief Justice Kemp
urged the Commission to review its rules and cure deficiencies.

13. An unsealed Supreme Court hearing letter reveals that Commissioner Roman
approached the state and accused Natural State Agronomics (Ken Shollmier) of
attempting to bribe him. Roman said he did not accept the bribe, however Roman gave
#53 Natural State Agronomics his second highest score while other commissioners
scored it between 37th and 77th out of 82 qualified applications. The FBI appears to be
investigating this allegation.

14. Ethics complaint against Commissioner Travis Story rejected because marijuana
licensing is not procurement.

15. #5 DMCC stole large and important sections of its application from #45 Courageous Ann
(the Polks) via former head of the ABC Mike Langley.

16. State issues cultivation licenses without formal meeting as soon as Circuit Court
injunction lifted.

17. Commission blocks appeal process by voting against issuing denial letters for 2 years.

18. 15 protest letters are being “investigated” by ABC Enforcement head and
Governor appointee Boyce Hamlet.

19. Commission allows for partial reimbursement of $15,000 cultivation facility application
fee if application is withdrawn from future licensing consideration.

20. #3 NSWE and #5 DMCC facilities are within 3,000 feet of ASU-Newport in violation of the
constitution.

21. Rep. Bob Ballinger’s senate campaign launched by marijuana applicant money.
Campaign contributions show link between #2 Bold Team and #4 Osage Creek via
lobbyist Chase Dugger (JCD Consulting), who is also a lobbyist for Preferred Family
Healthcare. JCD Consulting also the largest payee of Ricky Hill’s senate campaign. Ricky
Hill outraised his opponent 20-fold.

22. Donors to Rep. Bob Ballinger’s campaign received top scores from Commissioner Story,
who is Ballinger’s law partner.

23. Commission “outsources” dispensary evaluation process.

24. Public Consulting Group bid comes in at less than $100,000, avoiding review by the
Legislative Council.

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25. Two-month delay in finalizing contract with PCG. Scoring pushed back until after
November elections.

26. DFA spokesperson Scott Hardin in September 2018 tells THV11 that many dispensaries
have already begun construction (see next page) and were just waiting on their “piece
of paper” license.

27. Commissioner Henry-Tillman asks the Attorney’s General Office to replace the ABC in
providing legal counsel to the Commission.

28. Secret video of discussion between Commissioner Roman and Ken Shollmier leaked to
media. Commissioner Roman misses subsequent Commission meetings. Of note, two of
Roman’s relatives applied for marijuana licenses.

29. #5 DMCC requests a change in ownership, relating to John Newcomb’s (McAlister’s Deli)
ownership through Kennemore and Balbir. Also see A Team Partners, LLC via Application
#198, Question 8.

30. #5 DMCC reveals at Commission meeting that they were researching architects and
marijuana production partners before license awards (they did not have these figured
out as part of application submission).

31. #5 DMCC requests location change; #3 NSWE does not. 9 out of 10 cultivation facility
applicants in Newport were on John Conner’s land (JMMJ Investments, Inc.)

32. Commissioner Miller resigns from Commission. He had asked PCG about its low bid.

33. Abraham Carpenter sues the Commission.

34. AG Rutledge opines that a court would rule that ASU-Newport isn’t a “school” in the
context of marijuana licensing. High schoolers also attend ASU-Newport.

35. Dispensary scores come out via FOIA request. Sears family win 3 dispensaries (4 when
you include Adam Harrison) and said they had no affiliation to one another in their
Section A forms.

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Dispensary addresses:

Did any of the dispensaries that had already begun construction happen to win licenses? Hmm.
Several Section A addresses were not redacted. Here are the unredacted addresses for winning
dispensaries. Please go take a look in person:

1/8/19
Definite winners
Projected winners
(Based on applicants -- with multiple applications using same entity -- having to choose one location)
(via Section A forms)
App # Company Who ZONE Zone Rank Overall Rank Score Dispensary Address
277 Native Green, LLC ? 5 5 23 373.56 14910 Arch Street, Little Rock, AR 72206
281 Native Green, LLC 6 2 14 381.39 26225 Highway 167, Hensley, AR 72065
21 Green Springs Medical, LLC Louis Cella* 6 1 7 394.06 3261 Central Ave, Hot Springs, AR 71913
121 Valentine Holdings, LLC DMCC 1 2 3 402.11 3390 Martin Luther King Blvd, Fayetteville, AR 72704
245 Noah's Ark, LLC ? 8 2 25 371.22 3995 Mt. Holly Rd, El Dorado, AR 71730
53 River Valley Sales, LLC Storm Nolan 4 6 87 334.50 4320 Industrial Drive, Fort Smith, AR 72916
143 Grassroots OpCo AR, LLC ? 8 1 10 387.28 4423 East Broad Street, Texarkana, AR 71854
247 Noah's Ark, LLC 3 8 33 368.50 4818 East Highland Street, Jonesboro, AR 72401
145 GrassRoots OpCo AR, LLC 5 2 12 384.78 705 East 2nd Street, Ward, AR 72176
133 Valentine Holdings, LLC DMCC 4 1 6 396.72 941 Rogers Ave, Fort Smith, AR 72901

(note: Green Springs Medical, LLC address via Principal Address in SoS)

Final note:

Thank you to all researchers and whistleblowers who have helped expose this corruption.

To rejected applicants: please pool resources and take legal action.

To patients: organize to fight for access to medicine in competitive neighboring markets like
Oklahoma and soon Missouri. Even when the Arkansas oligopoly starts dispensing marijuana,
prices will be unaffordable. A reminder to non-patients: this is uninsurable medicine.