Investors who want to operate marijuana dispensaries in Arizona filed two separate lawsuits in Maricopa County Superior Court on June 14 seeking orders directing the state to follow its own rules and start reviewing pot shop applications.
The Arizona Department of Health Services is required to conduct the reviews by the Arizona Medical Marijuana Act, approved by voters in 2010, and by its own rules.
ADHS was expected begin taking dispensary permit applications June 1. In May, ADHS Director Will Humble ordered a halt to the department’s review of dispensary applications on the advice of Arizona Attorney General Tom Horne.
Three dispensaries that submitted applications despite Humble’s order were rejected, according to ADHS.
Horne filed suit in May asking a federal judge to decide whether state workers break federal drug laws when lawfully carrying out the state act. Are they facilitating the sale or possession of marijuana? The case is under review.
Horne’s lawsuit could have the unintended consequence of proliferating home-grow operations, at least in the short term, something law enforcement hoped to avoid by the speedy approval of dispensaries.
In the absence of dispensaries, the law allows cardholders to grow their own medical marijuana in a secure, discreet shelter that cannot be accessed, seen or smelled by neighbors or passersby.
In the Verde Valley, close to 100 medical marijuana cardholders could choose to continuously grow as many as 12 plants each until a dispensary finally opens its doors in the area, according to ADHS records.
However, home-grow operations are prohibited within 25 miles of a dispensary. Furthermore, certificates to receive medical marijuana and permission to home grow are limited to an annual term, Cottonwood City Attorney Steve Horton said.
This means patients who live within 25 miles of Cottonwood will be denied permission to home grow at certificate renewal time after a dispensary starts operations in the city.
Likewise, ADHS rules forbid more than 126 dispensaries to operate statewide. The rules allow ADHS to scatter geographic locations where dispensaries will be permitted, minimizing the number of legal home-grow operations possible in the state.
Once a dispensary goes into operation, home grow legally fades away. Medical marijuana transactions become centralized and more transparent, more easily subject to observation and inspection, with less potential for abuse, Yavapai County Deputy Attorney Jack Fields said.
Despite this, dispensaries are on hold until the state’s lawsuit for declaratory relief is resolved, Humble announced.
“The governor and I, with the advice of attorneys, decided not to continue with full implementation of the act until we receive clarification about whether it’s legal from the federal court,” Humble stated in a press release. “We’ve suspended the implementation of dispensary portions of the law and aren’t currently accepting any applications.”
At least nine potential dispensaries and one dispensary and cultivation operation are scouting locations in Cottonwood, according to city records.
Dispensary investors argue the state is not free to ignore its own laws. Further, they argue the state’s delay will ultimately cost the budding industry millions of dollars, according to court records.
Delaying the issue of dispensary permits was expected because ADHS rules on dispensaries are not yet final. Even without Horne’s lawsuit, the first dispensaries were not expected to come on line until September at the earliest, Fields said.
Meanwhile, ADHS continues to certify cardholders to grow and use medical marijuana, more than 5,000 statewide so far.
The sale of marijuana is always a federal crime, even when dispensed for medical purposes in compliance with state law, Horton said.
Just because the state chooses not to enforce the law as it applies to medical marijuana, selling and possessing narcotics is still a felony under federal law, he said.
“It remains to be seen whether federal prosecutors will prosecute [patients, dispensaries, cultivators],” Horton said.
