REGISTRATION TARDY FOR BALLOT COMMITTEE

Group Filed Months After Receiving $172,000 for Medical Marijuana Measure

A committee promoting a proposed medical marijuana ballot measure
registered with the Arkansas Ethics Commission several months after the
committee received a $172,000 contribution from a billionaire in Cleveland,
Ohio.

On June 11, the Arkansas Coalition for Compassionate Care registered with
the Ethics Commission as a ballot question committee and filed monthly
reports for the period from Sept. 1, 2003, through May 31.

The reports showed that billionaire Peter B. Lewis of Cleveland contributed
$172,000 to the coalition on Oct. 15, 2003.

Lewis, chairman of the board for The Progressive Corp., an insurance
company, has made financial contributions to groups promoting similar
ballot measures in several other states.

In turn, the coalition gave $175,000 to the Alliance for Reform of Drug
Policy in Arkansas on Nov. 10, 2003. The drug policy alliance and Lewis
then contributed $175,200 and $161,000, respectively, to a separate ballot
question committee -- called the Arkansas Alliance for Medical Marijuana --
according to the Arkansas Alliance for Medical Marijuana's reports on file
at the Arkansas Ethics Commission.

Neal Levine, director of state policies for the Washington D.C.- based
Marijuana Policy Project, which formed the Arkansas Coalition for
Compassionate Care, said the coalition originally didn't register as a
ballot question committee based on the advice of a few attorneys. However,
that changed when an internal audit raised "a few flags" regarding
compliance with Arkansas' laws.

Attorneys subsequently advised the coalition it needed to register as a
ballot question committee in Arkansas, resulting in the coalition
contacting the Arkansas Ethics Commission, Levine said.

"Since we came to them and brought it to their attention, they said there
is no penalty," Levine said Monday in a telephone interview. "We have filed
and fully disclosed everything at this point."

Levine said the money was transferred between the alliances so it could be
forwarded to the group actually pushing the proposed ballot measure in
Arkansas. The Alliance for Reform of Drug Policy is involved in other
issues, while the Arkansas Alliance for Medical Marijuana is only working
on the Arkansas ballot measure.

"It isn't like we were trying to hide anything," Levine said.

Graham Sloan, director of the Arkansas Ethics Commission, said Glen Hooks
of Little Rock -- a consultant for the Marijuana Policy Project --
contacted him on June 10 about whether the coalition was required to
register and file reports as a ballot question committee.

He said Hooks informed him that the coalition made a $175,000 contribution
to another ballot question committee and the contribution was more than 2
percent of the coalition's annual revenues, operating expenses or funds.

Hooks also advised Sloan that the coalition made expenditures for the
purpose of expressly advocating qualification, passage or defeat of the
proposed ballot measure in question, Sloan said.

In a letter to Hooks dated June 11, Sloan concluded that the coalition had
triggered the registration and reporting requirements applicable to ballot
question committees under Arkansas Code Annotated 7-9-402.

Under ACA 7-9-404, a ballot question committee is required to file a
statement of organization with the ethics commission within 15 days after
the committee is formed, he said.

On Monday, Sloan said that the commission's staff agreed not to pursue
sanctions against the Coalition for Compassionate Care because it
registered and filed the required reports.

"If somebody else files [a complaint], they are fair game," Sloan said. If
a complaint is filed, the commission could issue a public letter of
caution, warning or reprimand and levy a fine ranging from $25 to $1,000,
he said.

Chloe Crater, a spokesman for the Arkansas Alliance for Medical Marijuana,
declined to disclose how many people have signed the group's petition for
its proposed ballot measure.

Crater said Monday that she's confident that enough signatures will be
gathered to qualify the proposal for the Nov. 2 general election ballot.

The alliance needs to submit to the secretary of state's office a petition
containing at least 64,456 signatures of Arkansas registered voters by July 2.

On March 12, Attorney General Mike Beebe approved the popular name of "The
Arkansas Medical Marijuana Act" and its ballot title, which allowed the
alliance to start collecting signatures. The group hired The Southwest
Group of Las Vegas to collect signatures.

As of May 31, the Arkansas Alliance for Medical Marijuana reported
contributions of $338,557, expenses of $216,775 and cash on hand of $121,786.

The Arkansas Coalition for Compassionate Care reported contributions of
$172,270, expenses of $203,285 and a deficit of $31,015 as of May 31.