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na-West Helena, said the dispensary has accommodated this difference by offering some strains at lower prices. “Patients were complaining that dispensary prices were really high and that there were alternatives,” Stuart said. “They knew of alternatives, illegally, where they could acquire medicine for cheaper. So, of course we can’t have that here at our facility. We don’t want to be competing with people buying it illegally.” Though none of the four dispensary owners and employees interviewed for this story provided specific wholesale prices for medical marijuana products purchased from the state’s cultivators, all were sympathetic to the costs of doing business experienced by cultivators. Ross Mash, a consultant for Red River Remedy in Texarkana, said he believes the cultivators are “trying their hardest to provide pricing that’s realistic.” Dispensaries must also take into consideration the fact that they’re taxed differently from other retail businesses. Because the cultivation and sale of marijuana is still federally illegal under the Controlled Substances Act, dispensaries are subject to Section 280E of the U.S. Internal Revenue Code, which forbids businesses from deducting business expenses from any gross income earned through the sale of controlled substances. This means dispensaries are taxed on their gross revenue and thus have a smaller profit margin than other retailers who can deduct the cost of business from their tax debt. “If we spend $10 paying our employees’ wages, the IRS says no, you don’t get to deduct that, that’s just part of your profits, and you’re going to be taxed on that,” Rahman said. “That affects how we price things because it’s just one more thing that becomes part of our pricing: We have to account for the tax consequences.” Dispensaries can offer discounts through a Compassionate Care Plan, in which dispensaries must state exactly who is able to receive a discount — such as seniors, veterans or customers who live below a certain income level — how much the discount is, and the requirements cardholders must meet to qualify for such discounts. Dispensaries can only offer these specific discounts if they included a Compassionate Care Plan in their original licensing application. Scott Hardin, spokesman for the Department of Finance and Administration, said each of the state’s 32 licensed dispensaries included compassionate care plans in their applications. Lisa Murphy, CEO of Fiddler’s Green in Mountain Home, said “about 75 percent” of the decision about a product’s price is made based on “how much we pay for it from the cultivators,” and the other 25 percent of the decision is based on when the largest customer population is in the dispensary. Like many other dispensaries, Fiddler’s Green regularly hosts a “weekend celebration” where prices for specific products — a certain strain of flower or a particular type of edible gummies — are lowered for a specified day or weekend. “Typically an ounce [of marijuana flower] is $400, but on Friday and Saturday, we always pick a strain and offer it to the public for $199,” Murphy said. “That way, the people who really can’t afford to buy all the expensive products can always know
