Arizona’s Cannabis Social Equity Program Applicants Face Major Obstacle

When she was in high school, Arianna Muñoz was charged with possession of narcotics because she was carrying a vape cartridge and a gram of wax concentrate. Despite being a medical marijuana cardholder in 2019, once Muñoz set foot outside a dispensary, she was illegally in possession of narcotics. “That’s the way the laws were written,” said Muñoz, who hired a lawyer, wore an ankle monitor, and served probation for more than two years.

Arizona law allows you to possess up to 5g of concentrate with no penalty, fine, or jail sentence.

Muñoz’s story is like countless others from people who were hurt by the war on drugs. She is one of the 1,500 applicants who filed for the 26 Arizona social equity adult-use dispensary licenses. The licenses are due to be issued in an Arizona Department of Health Services random drawing on Friday.

These remaining licenses were designed to serve as reparations to those like Muñoz, the 22-year-old director of special projects at the Marijuana Industry Trade Association. Licenses are estimated to be worth anywhere from $8 million to $15 million, and Muñoz hopes to be one of the lucky 26 to cash in.

“I wake up and the first thing I do is check the AZ DHS website to see if any updates are coming out because it is honestly news that could change my life,” said Muñoz, who already is trying to plan where to establish her dispensary if she becomes a lottery winner. The AZDHS has set a time limit of 18 months for social equity licensees to apply to be able to operate a marijuana dispensary.

But a major obstacle stands in the way of potential social equity license holders like Muñoz, in the form of city zoning.

The city of Tucson did not announce the upcoming lottery for social equity licenses last year. However, it delayed the development and zoning of proper zoning to accommodate the incoming social equity licensees until March. Tucson Mayor Regina Romero and the city council met to begin the lengthy process of amending the city’s Unified Development Code (UDC).

According to Tucson’s Planning and Development Services Department, the UDC amendment process will take about six months. The UDC amendment will be followed by a period between 90 and 180 days to create a special exception process. This will determine the location of social equity license holders in Tucson.

This time is a waste of the 18 months available for social equity licensees in order to locate a suitable location and apply to be approved to operate.

“Our zoning code only allows that dual-use, not standalone adult-use dispensaries,”Koren Manning is the planning administrator for Tucson.

She explained that the special acceptance process includes neighborhood meetings and at least one public meeting to address traffic congestion and other factors such as crowd control.

“We got that direction just a couple of weeks ago,”Manning said this in reference to the March mayor-council meeting that initiated the code amendment process. “At this point, we haven’t yet begun our stakeholder engagement.”

This is a crucial part of developing a special exemption land-use proposal. It involves discussions with potential neighbors as well as industry leaders like the Marijuana Industry Trade Association or Arizona NORML.

“I think it’s unfortunate that there are so many pretenders who purport to be advocates of social equity applicants who are going out of their way to make life as difficult as they possibly can for the true bonafide social equity applicants and submitted applicants,” said Jon Udell, political director of Arizona NORML and co-chair of Rose Law Group’s cannabis department.

“Tucson is one of the more progressive cities in the state of Arizona and they seem poised to have some of the worst zoning rules out there with this special exception process that’s creating a bunch of extra hoops for social equity applicants to jump through,”Udell said.

Arizona is a difficult state to obtain proper zoning. Many cities and towns have passed ordinances that make it easier.Dispensaries are prohibited To open a shop within their borders.

But delaying a lengthy process that will knowingly affect incoming dispensary owners raises questions about the city’s motives.

“I can’t figure out why Tucson is so inept at best, and, at worst, are they in some way working with some of my friends in the industry to keep the competition out? If they are, I’m going to find out,”Demitri downing, founder of MITA, was a former lobbyist.

Tucson may be slowing down the zoning process to social equity license holders. This could prevent many licensees looking to Arizona’s 2nd city to open retail establishments. It also keeps competition at bay and, in turn, props up marijuana prices where there are few places to purchase it.

Marijuana dispensary chain Verilife A survey was ordered in 2020Each state was ranked by the number of dispensaries per 100,000 inhabitants. Oregon (16.5) and Oklahoma (15.6) had the highest numbers of dispensaries. Texas and West Virginia were the states with the lowest number of dispensaries per 100,000 people.

Arizona had 1.4 dispensaries per 100,00 residents.

Statista is a German consumer data company. Last May, data released This showed that Colorado had more than six times as many dispensaries as Arizona at the end of 2020.

“Really, it’s totally counterproductive but that’s not incredibly surprising because we all know the real motives are to cement their local monopoly on the market and their regional oligopoly on a statewide basis,”Udell.

Udell and Downing see Tucson’s actions to be damaging for potential social equity dispensary license holders. They act as barriers to entry into a town that promotes progressive value.

It’s important to note that states like Colorado dice up dispensary licenses to serve as manufacturing, transportation, or cultivation-specific licenses, compared to Arizona, where a single license encompasses everything. Udell stated that Colorado has multiple levels of dispensary licenses. “there are a lot more ways to get into the industry and, as a result, a lot more competition, and a lot more competition leads to a lot lower prices.”

Manning was not able to comment on delays in zoning discussions. “We’re a busy city and we’re just working on these things as we are directed to,”She said. “That aspect and the timing with the state process, I really haven’t been involved in.”

When Muñoz found out about the zoning delays in Tucson, she began to rethink her plans to set up shop there.

“When I had seen in the news that they were actually creating this special exemption process and they weren’t even allowed in the city in time, that totally killed my option of looking in that area,” Muñoz said. “They said some phrase like, ‘We’re seeing what the other cities are doing and creating it based off that.’”

Muñoz decided to do her own research, calling major cities and towns to understand their zoning ordinances in each jurisdiction. She kept a spreadsheet, and began calling various city planners throughout the state.

Muñoz found that many of her inquiries were left unanswered or left her asking further questions. She discovered that Tempe does not require special zoning for adult-use dispensaries. Chandler, however, does not allow them. She also discovered that Flagstaff was, like Tucson in Arizona, putting off creating a process. The program will be discussed on April 12th, following Friday’s social equity licensing drawing.

According to the Phoenix Planning and Development Department, Phoenix does not allow adult-use dispensaries that are independent of a medical marijuana dispensary.

“We’re all really focused on Tucson because they’re the ones making news right now, but there’s going to be a lot of eggs to crack across the entire state to get 26 dispensaries open,”Udell said.

“Would you risk going to Tucson?”Ask Downing. “Hell no. You’re going to find a jurisdiction that has favorable zoning.” He’s astonished at the city’s poor timing and thinks the 26 new adult-use license holders should have the same — if not better — zoning than existing dual-use license holders.

Downing’s opinion is shared by others, who say that adult-use dispensaries are less of a “dispensary”One that is both medicinal and adult-friendly.

“You’d think those people who favor cannabis, favor patient access, more locations, favor social equity licenses, would give them the same zoning opportunities, if not more favorable. You’d think that would happen,”Downing said.

He hopes that Tucson will consider calling a special session to speed up the process, but he isn’t optimistic. Tucson may also decide to have a more complex structure for social-equity license holders, depending on the outcome from the UDC Amendment and special exception process. This could be done in 18 months.

“We are experts in doing that, finding those and running those through planning and zoning meetings to get those approvals,”Doug Cole, a spokesperson of Copperstate Farms, said this in November in an interview with AZ Mirror.

Copperstate Farms, which owns Sol Flower dispensaries throughout the state, is supporting 110 applicants for the social-equity program. Even with the size and expertise that Cole’s company packs, “that is going to be a sprint to get that done in 18 months,”He said.

If a company like Copperstate Farms — one of the largest greenhouse cannabis producers in the country with more than 150 employees and an estimated $1 million in sales per year — sprints to the finish line in 18 months, imagine how individuals raising enough money for a chance to own a license will fare.

“There’s a lot of folks out there that are just ignoring all those people who spend lots of time and, some of them, lots of money to get in the lottery at a chance of improving their lives,”Udell said.

Udell is optimistic that Tucson will hold a stakeholder meeting in order to determine the best way forward regarding zoning. Udell, representing AZ NORML, will be at the stakeholder meeting as well as Downing, who will be representing MITA.

“Hopefully, the right arguments will persuade the right calls and arrive at a set of zoning rules that really are good for the state of Arizona,”Udell stated that “not just for wealthy people that own dispensaries already.”

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