Arkansas to send reserve funds to UAMS for cancer center, redirect medical marijuana tax

Arkansas will send $100 million in reserve funds over the next two years to the University of Arkansas for Medical Sciences’ pursuit of recognition from the National Cancer Institute, known as NCI designation.

But that doesn’t mean the 4% privilege tax on medical marijuana that had funded the NCI efforts will go away. Instead, state policymakers enacted legislation to extend the tax for at least two more years and dedicate those revenues to food insecurity and public health needs.

State officials hope the $50 million transfers to UAMS in fiscal 2024 and 2025 will further strengthen the institute’s chances for success when it formally requests NCI designation.

“These monies are critical for the pursuit of NCI designation,” said UAMS Vice Chancellor Dr. Michael J. Birrer, the director of the Winthrop P. Rockefeller Cancer Institute. “UAMS was very supportive of the change, which will help with clinical trial accrual and community outreach and engagement — two critical elements for NCI designation.”

As for the marijuana tax revenues that had gone to NCI efforts, they are instead expected to be used over the next two years to help expand the number of medical residencies available in Arkansas for new doctors and to help cover the costs of meals at school for students who qualify for the free-and-reduced-price lunch program, said Sen. Jonathan Dismang, R-Searcy, the sponsor of several bills that facilitated these changes.

The General Assembly reauthorizes the special medical marijuana tax every two years.

Cancer center

UAMS has been steadfastly pursuing recognition from the National Cancer Institute since 2019.

NCI designation is the top status for U.S. cancer centers. While there are 71 such centers in the nation, there are none in Arkansas, Mississippi or Louisiana.

NCI-designated institutions are research-focused and receive a bulk of NCI research funding. UAMS has estimated that NCI recognition would bring $72 million to Arkansas each year and allow Arkansans to receive cancer treatments and screenings closer to home.

Medical marijuana revenues, along with private fundraising, have been funding the effort, which has been on an accelerated course thanks largely to greater-than-expected cannabis sales since the drug hit the legal market in Arkansas in 2019.

However, the $100 million in reserve funds UAMS stands to receive over the next two years will far exceed what was expected to come from cannabis sales.

It also means UAMS officials won’t have to worry about losing medical marijuana as a revenue source every two years or if Arkansans eventually vote to legalize cannabis for recreational use.

Fundraising will continue. As of March, the institution had raised $22 million of its $30 million goal in philanthropic donations.

And as Birrer said, the incoming state funds will continue to go toward the two largest hurdles to NCI-designation — clinical trials and community outreach.

UAMS has about 100 patients participating in clinical trials each year; the National Cancer Institute expects about 250 — a mark Birrer hopes can be attained within a year.

Birrer said last month that community outreach and engagement will be critical. Last year, UAMS launched its patient navigator network, and Birrer said NCI is always looking for what unique programs new sites can bring to the table, noting Arkansas’ niche will be rural cancer care.

UAMS is hopeful it can formally apply for designation within the next two years.

Medical marijuana tax

The 4% excise tax levied on sales of medical marijuana at the wholesale and retail levels is now producing about $16 million annually, Dismang said.

The tax has bothered patients and industry groups because it’s charged in addition to sales tax on a drug that has been considered medication since 2016 in a state where prescription medications are exempt from sales tax.

The state uses the revenue to fund its cannabis regulatory programs; the remaining revenue can then be distributed according to legislative wishes.

Dismang said two main priorities rose to the top of lawmakers’ lists: increasing the number of medical residency slots in the state and helping pay for the meals of students in need.

Expanding graduate medical education programs in the state is expected to cost about $10 million for two years to get the programs “on their feet.”

Next, the cannabis tax dollars will likely go to supplement nutrition programs at public schools. Some students who qualify for federal assistance paying for breakfast and lunch at school are still required to pay a copay. A recently passed bill allows the Arkansas Department of Education to use available federal and state funds to cover those copays if available.

How much will be needed to eliminate the need for copays isn’t clear, but Dismang said it could be up to $6 million.

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