Cannabis Connections: Medical Marijuana Businesses That Use Management Firms

At least 13 medical marijuana businesses in Arkansas have contracts with cannabis management companies, according to state records obtained by Arkansas Business through a Freedom of Information Act request.

Two companies have deals to manage four dispensaries each.

Four dispensaries operating under the Enlightened Dispensary brand work with Pure Health Products LLC, owned by Revolution Cannabis of Chicago. Two dispensaries in Texarkana and outlets in Monticello and Van Buren have deals with Good Day Farm Retail Management, led by Little Rock entrepreneur Ryan Herget.

Pure Health Products manages Enlightened dispensaries in Arkadelphia, Clarksville, Heber Springs and Morrilton.

Many of the dispensary owners and management executives who signed the agreements are well known in Arkansas’ business world, including Dr. Regina Thurmond of Fayetteville, 55% owner of the dispensary in Heber Springs, and Scott Lancaster, former general counsel to Bad Boy Mowers of Batesville, who’s a 31.25% owner of the Superfarm dispensary in Texarkana.

Cannabis Management Companies in Arkansas

Kane Whitt, a co-manager of management company Organix LLC, which is running the dispensary in Clinton, is a brokerage associate at Moses Tucker Partners in Bentonville and a partner with Storm Nolan and Chris Whitt in CSK Hotels of Fort Smith.

Information about management fees and compensation was redacted on many of the contracts Arkansas Business examined, but some agreements spelled them out. Management deals for Enlightened dispensaries in Clarksville, Morrilton and Heber Springs call for a fixed monthly management fee of $10,000 plus 40% of the accrual basis net cash flow from operations or sale of the business or rights associated with it, less any monthly management fees paid. The Arkadelphia dispensary contract calls for 40% of net cash flow but doesn’t include the $10,000 monthly fee.

Service fee details were also available in documents involving the Hash & Co. dispensary in Pine Bluff, the Arkansas Natural Products dispensary in Clinton, and the Body & Mind dispensary in West Memphis.

The Pine Bluff contract calls for the dispensary to pay the management company, Four M Win LLC, 25% of total revenues minus the licensed company’s total direct expenses as defined in the agreement. The dispensary company, Pine Bluff Agriceuticals, would retain the remaining 75%.

The Arkansas Natural Products deal will pay the management company, Organix, a fee equal to the dispensary’s total revenues minus its total direct expenses. Arkansas Natural Products’ licensee, Tammy Denham, is co-manager of Organix with Whitt.

The Body & Mind agreement calls for the dispensary company, Comprehensive Care Group LLC, to pay the management company, Nevada Medical Group LLC of Las Vegas, 66.67% of monthly net profits. The 33.33% remainder would be paid to CCG.

H/T: www.arkansasbusiness.com

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