Judge Urges Marijuana
Dispensary Lottery
A photo of some California issued medical marijuana bottles and a marijuana pipe. Image by Adam Guzzon. Refer image by Laurie Avocado and used under terms of a Creative Commons license.
By John Guzzon
Modern Times Magazine
Jan. 20, 2012 — After six months in limbo, it appears litigation concerning the Arizona Medical Marijuana Act has ended, paving the way for licensed dispensaries to be awarded by late summer — probably through a massive lottery — and for operations to commence in the fall.
In early January, U.S. District Judge Susan R. Bolton threw out the federal lawsuit Gov. Jan Brewer and Attorney General Tom Horne had filed that blocked the Arizona medical marijuana dispensary program from proceeding. In her decision, Bolton rejected outright the state’s argument that the program should not be enacted because it would open state employees up to possible federal charges. Bolton cited the fact that 16 other states had implemented similar programs and not one state employee has yet been targeted.
In response to Bolton’s ruling, Gov. Jan Brewer ordered Will Humble, director of the Arizona Department of Health Services, to restart the dispensary application process that had been halted days before it was to begin in the summer of 2011. When Humble announced in his blog last week that it was hoped the restarted application process would be settled by September 2012, he cautioned that a drawn out decision in the Compassion First v. State of Arizona case might cause delays.
Yesterday, however, Maricopa County Judge J. Richard Gama ruled in the Compassion case. His ruling declared that some of the most controversial criteria established for potential dispensary owners were not allowed by the the Act.
Specifically, Gama ruled the ADHS overstepped the authority the Act granted it to create rules by requiring applicants to have been an Arizona residents for three years, that applicants have never filed personal or corporate bankruptcy, that applicant have submitted Arizona personal income tax returns for previous three years, and that applicants are current on court-ordered child support; is not delinquent in paying taxes, interest or penalties to the government; does not have an unpaid judgment to the government; and is not in default on a government-issued student loan.
Gama did rule that some of the rules challenged by Compassion were eligible under the Act’s diversion and theft provision. Gama specifically cited three rules: that individuals with 20 percent or more interest in a dispensary be the applicant or principal officer or board member of dispensary; mandating documentation of ownership of address of dispensary or permission from owner for applicant to operate dispensary at the address; and requiring the application to comply with state law.
“DHS cannot bootstrap substantive regulations of who may apply onto its mandate that it consider such applications in a manner as to protect against diversion and theft. Nor is the Court persuaded that the challenged regulations are authorized by virtue of the 1:10 ratio on NPMMDs to licensed pharmacies,” Gama wrote in his decision. “There are other ways of selecting the “winning” applicant, including random drawing. Indeed, current DHS regulations contemplate use of a random drawing of the “winners” among equal applicants for a particular NPMMD certificate. The Court finds that DHS exceeded its statutory authority in promulgating these challenged regulations, and therefore they are invalid.”
The ADHS will now be able to move forward with a new set of rules which declare when applications will be accepted. Gama pointed to a random drawing — or lottery — being used to select the large number of interested dispensary owners, as is stated in the draft rules for all of those that met all of the requirements. A major factor in ADHS in requiring that applicants be free of bankruptcy, delinquent on court ordered payments, or a state resident was to winnow the field of applicants to be eligible for the lottery.
“With the recent ruling in Maricopa Superior Court, ADHS is analyzing the best way to responsibly begin accepting applications for medical marijuana dispensaries. Last week, the Governor instructed ADHS to proceed with the dispensary portion of the AMMA,” said DHS Director Humble. “One of the stumbling blocks was the pending Compassion First vs. State of Arizona case, which challenged some of ADHS’ rules for prospective dispensary owners. Now that the judge has ruled, ADHS is working to determine the next steps to begin accepting dispensary applications.”
John Guzzon is editor of Modern Times Magazine.
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