Arizona regulators granted licenses to the social equity business of cannabis last week, selecting 26 lucky winners from a sweepstakes pool of nearly 1,200 applicants. Arizona’s health services offices selected their office winners Friday after a judge completed a challenge to the state’s program to grant licenses to recreational cannabis dispensaries to applicants negatively affected by the war on drugs.
State officials and applicants crowded into the Health Department’s Phoenix office Friday as winning applicants were randomly selected using the Smartplay International State Lottery Program. The process has been operated and audited by Henry & Horne LLP to ensure the security of the selection lottery. Selected applicants will now begin the process of opening licensed cannabis dispensaries for adults.
Legalization of property rights
Proposition 207, the historic voter initiative to legalize recreational cannabis that Arizona voters passed in 2020, included provisions to “promote the ownership and operation of marijuana establishments and marijuana testing facilities by members of communities disproportionately affected by enforcement of previous marijuana laws.” Applicant Ariana Munoz told reporters before the lottery that the social justice program has the potential to change her life.
“It will create wealth for generations for me and my family. It will give me more opportunities to set up other business ventures,” Munoz saidWho was not selected in the Friday lottery. “I’ve always wanted to be a brand owner and dispensary owner and this was the perfect time.”
Arizona’s legalization initiative included provisions to license recreational cannabis businesses to existing medical dispensaries in the state, which began selling cannabis products to adults in January 2021. But social equity retailers will not be able to sell cannabis for medicinal purposes.
“Support. 207 Arizona’s medical marijuana law has never been amended, so the reason medical licenses currently established can be co-located is because they already existed,” Sam Richard explained, executive director of the Arizona Clinics Association. “The only new licenses created in Show 207 were Adult Use and Entertainment licenses.”
John O’Dell, director of policy for the Arizona chapter of the National Marijuana Law Reform Organization, said a bill to fix the problem is dead in the state legislature.
At the moment there is no realistic way forward for a ‘legislative solution’, Odell said.
Arizona The judge denies the legal challenge
On Wednesday, Maricopa County Superior Court Judge James Smith ruled against three social applicants who filed a legal case to delay Friday’s lottery. Paul Conant, the lead attorney for the plaintiffs, said Social Justice licenses should not be granted before the Health Department conducts background checks on applicants. He said the process could lead to unqualified applicants being selected.
“This is a one-time deal in Arizona,” conant argued at a meeting on Wednesday. Granting licenses only to applicants who do not qualify for later revocation “would be unfair to all other people who applied, paid their $4,000 application fee, or otherwise went through the process of trying to qualify.”
But the judge dismissed the argument and refused to issue an injunction to block Friday’s lottery.
“The Court found that the administration correctly exercised the authority expressly given to it by Proposition 207, used appropriate procedures, and used its discretion when deciding whether to make a draw before or after the completion of checks,” Smith wrote in a ruling quoted by the State Department. Phoenix New Times.
Other challenges to the Arizona Cannabis Social Justice Program that focused on business ownership details. Under the regulations, eligible individuals must own 51% of the social equity business, giving large corporations and multi-country operators an opportunity to partner with applicants to work under the program. Business owners are also allowed to sell their licenses to businesses not owned by social equity applicants. Critics posit that the program’s rules fail to achieve its social justice goals.
Since Arizona’s recreational cannabis regulations include a maximum number of adult dispensaries the state can license, Social Justice licenses granted last week will be the last to be granted for the foreseeable future.