On December 17, 2020, the Arizona Department of Health (“Department”) held an open session to comment on proposed state cannabis regulations. In this post, we share some of the participants’ comments and some of the department’s responses. The department stated that the purpose of the meeting was not to answer questions (although they did answer questions in some cases), but only to allow interested parties to comment on the proposed regulations.
Early registrants in counties with fewer than 2 medical pharmacies
There was a heated discussion about early applicants for counties with fewer than two medical marijuana dispensaries (“MMJ”). According to the department, there are currently eight counties in Arizona with fewer than two MMJ dispensaries. The ministry will provide a list of these counties before the early application deadline (which is January 19, 2021). Therefore it should be possible in these countries to acquire a license for use by adults.
Several commentators suggested that given the high registration fee, applicants should be graded and rated. By law, the department will accept applications for early applicants until March 9, 2021. Any company that submits a full and compliant application along with the application fee by March 9, 2021 is entitled to conduct a random selection process for the districts with fewer than 2 MMJ pharmacies (assuming there are more applicants than allocated licenses). .
Of particular note, the application fee (which is currently set at $ 25,000) is non-refundable. Click HERE for more information on applications and royalties. If a company submits a full and compliant application but is not selected as a licensee by the department, that company must re-apply for future subscriptions or open application periods.
The department will also publish an electronic form that municipalities can fill out to confirm the zoning permit. When counting the number of holdings in a county for the purposes of the early filing period, the department stated it was counting only medical marijuana dispensaries (and not growers or other related licensees).
Social Justice Opportunities Program
While several commentators asked about the new Social Equity Opportunity (“SEOP”) program, the department has not yet released these rules and it does not appear to be a priority in the short term as the department pushes to prepare for the early applicants. One commentator suggested that SEOP licensees should only be for Arizona residents, minority groups, and anyone else disenfranchised by previous marijuana laws. The Department will take this comment (and any other comments) into account when updating the proposed regulations.
Residency requirement for owners
Other commentators urged the department to make the Arizona residence mandatory for all owners. However, I pointed out that Arizona residency requirements were untenable because the laws allow public corporations to be licensees (I actually mistakenly said the “proposed rules” instead of the laws). How could the Ministry enforce such a regulation for the open markets? This would be completely contrary to the concept of listed companies and how they work. Among other things, any trade with a non-state owner would have to be stopped in advance. I don’t think that can be operationalized by the public markets or the companies that trade in the markets.
One commentator asked if the rules were modeled on other government rules. The department said the rules should conform to Proposition 207, which is now Arizona law. The rules will be finalized sometime in mid-January 2021. In addition, according to the department, Arizona lawmakers will also have the opportunity to review and comment on the proposed rules.
The department stated that all requests will be in electronic form, but the new requests will not be approved as the rules are not final. However, the department promised to clear the new applications as soon as possible (and apparently before January 19, 2021). The department also noted that future regulations will provide more information about the pharmacy’s operation and administrative requirements. One commenter asked if the department would hold mandatory training for owners and employees as other states require. Two commentators also called for better coordination between the department and the cities.
As we reported (HERE), there are caps on the total number of adult pharmacies in Arizona. This is one pharmacy for every 10 registered pharmacies in Arizona (Find the statutes HERE for the full criteria for the cap). . I asked the department if they had this information, and if so, if they would make it public. I searched for this information but only found one report from 2013 that discusses the total number of pharmacies in Arizona. The department said anyone who wants to know can call the Arizona State Board of Pharmacy.
Final remarks and next steps
The division’s meeting was very informative and any comments made today or online (if timed) will be taken into account by the division as they continue to update the proposed regulations. Anyone interested in obtaining a license for adult use should review the proposed regulations, updated proposed regulations, and any other information provided by the department. If you have any comments on the proposed regulations or the new proposed regulations that will be published in the future, please also take the time to submit such comments to the department.
The department will hold another public comment period in early January 2021, like the one on December 17, 2020. Also, the department will publish a new draft of the proposed regulations in the near future. It was evident that the department is listening carefully to comments from interested parties. It remains to be seen how these comments will affect the next proposed regulations.