Dispensary Finish Line?

July 26th, 2013 by Will Humble Leave a reply »

We’ve issued 61 medical marijuana dispensary operating licenses so far with only 2 weeks left on the 52 week time-clock.  We have 21 more inspections scheduled between now and August 6, which is the deadline for Registration Certificate holders to get their Approval to Operate License so they can renew their Certificate (a 1-year timeframe).   The biggest hang up with the remaining certificate holders seems to be their city occupancy approval (we don’t give operating licenses without a certificate of occupancy from their local jurisdiction). 

I was a witness in court a couple of times last week testifying in a case in which the Plaintiffs argue that our requirement that Registration Certificate holders (the lottery winners) get their Approval to Operate within 1 year is unreasonable.  Under our regulations, the Approval to Operate is required in order to renew a Registration Certificate.  Of course, there’s more to the lawsuit than that- but that’s a core issue.  

We’re awaiting the Superior Court Judge’s ruling in the next week or so.  We expect the ruling to provide some clarity about whether and how we’ll proceed when it comes to renewing Registration Certificates.  The decision may also influence the timeline for the “second round” issuance of Certificates.

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9 comments

  1. James says:

    What a joke this lawsuit is! Everyone entered the lottery and knew the rules of the game! I heard the second day of this hearing and I have never heard so many excuses from unqualified applicants in my life.

    These applicants had to have submitted documentation claiming that they had a location AND zoning approval in order to get in the lottery, but as they testified, they really had nothing! Due to the lawsuits before the rules were even announced, they had more than enough time to identify the difficult CHAA’s and where they could breeze through. They chose the tough CHAA’s because they thought they would have less competition and now they cry foul. NOT ONE of these applicants had the kahunas of (name removed) to file a lawsuit against the zoning jurisdiction!..instead they seek an extension from DHS at the 11th hour. How unfair!

    When the woman from Mesa – who was awarded 2 certificates by the way- testified on the stand that “I was busy being a stay at home mom and really wasn’t paying attention” or when witness after witness claimed, “I did nothing because of (name removed)”, I thought I would have fallen off of my chair. (FACT CHECK! That Mesa group really didn’t have the money they claimed they had to get open so that took several months!)

    What about the doctors, lawyers, business people, patient advocates like myself and truly qualified people who spent over $100,000++ and secured irrevocable LOI’s, made sure they had real money in the bank, paid leases on empty buildings for more than a year to secure their locations or went through the actual use permit process, not once, but twice, while the governor’s lawsuit was pending — but didn’t have the infamous lotto ball pull in their favor? They spent just as much time, money and resources as these applicants and wouldn’t have thrown away the opportunity!

    DHS supposedly “qualified” everyone to permit them to enter the lottery, when they really had nothing! Some of these applicants paid thousands to “consultants” who didn’t help them find a location or money, but now they blame it on DHS. DHS MUST do this better the next round or the rules lose all credibility!

    What about not allowing a change in location, which would force applicants to identify LEGITIMATE sites, not just pay a landlord a few thousand bucks to use a location that he/she never intends to rent or sell? What about making sure applicants’ expenditures come from THE BANK ACCOUNT they claimed they controlled at the time of the application? What about requiring that applicants take DEFINITIVE legal action in X amount of time once they’re denied a use permit (Why on earth can’t a licensee open in ONE YEAR in Maryvale, which is in the city of Phoenix and had 9 other applicants with plenty of available sites? Seriously???) You could even require certificate holders show proof of an actual use permit within 5 months after award of the certificate so that they are on track.

    Finally, PLEASE, PLEASE, PLEASE provide a formal process so that when a DHS employee gives an irrational response or one that is not grounded in fact or the rules or just common sense to escalate the issue to a superior? Would Springerville certificate holders really have been plaintiffs if that had happened?

    Director Humble, this is a learning experience for all of us. I applaud you for the quality job you and your team have done to date. However, we need to learn from our mistakes. I truly hope that DHS will consider these loopholes in the next round and truly identify qualified applicants! Otherwise the program which you worked so hard to implement…the rules, and your department’s integrity… have ZERO credibility!

    • Will Humble says:

      One of our best practices is to continually evaluate our performance so we can identify ways to improve. Whether it’s a Hotwash following a pandemic (H1N1) or follwing a wildfire response or implementing a new menu under our WIC program- we are continually evaluating our performance and looking for ways to improve.

      Medical Marijuana is no exception. Following Year 1 of our dispensary program we will look for ways to improve the execution of the program and make improvements where we can.

      You have some good points.

  2. James says:

    PS. I heard this at the hearing, but couldn’t believe it. Is it really true that DHS has all of these deadlines, but there is NO deadline for a date to actually open?

    Some of these dispensaries won’t actually OPEN until the end of the year! How could that be???

    • Will Humble says:

      The Arizona Medical Marijuana Act offers no legal protection to dispensaries for possession or cultivation of marijuana until they actually have an approval to operate (ATO). Opening on day one poses the chicken and the egg question: how can I be open for business if I’m not approved to have inventory beforehand?

      For that reason, we have allowed dispensaries some time between getting their ATO and actually opening their doors for business. However, for the purposes of the 25 mile rule, we don’t count the dispensary as an “operating dispensary” until they actually begin business..

      • James says:

        Caregivers have been growing medicine for two years (legally) in the state and have plenty of meds for donations. “some time” is fair, but what is some time?

        Do you require that certificate holders actually start cultivating if you are giving them time to acquire meds? The people put on the “dog and pony show” to get their ATO and now aren’t opening because there’s no set time to open. Once again, another loophole that isn’t being addressed.

        I hope that DHS sees that it can’t create these rules in a fishbowl. You need to meet with and talk to people who know the industry, work in the industry and can provide some valuable input to make the program better. If it doesn’t, Round 2 applicants will be suing a year from now claiming it didn’t have enough time to open.

        Has DHS considered taking a page from the FBI playbook? It uses bank robbers to help solve bank robberies; who else could better help make the AMMA better?

  3. Thomas Riccardo says:

    Many of the Applicants who won their licenses in the lottery are not adequately skilled in business and also do not have the proper amount of resources to finish opening their dispensary operations. They were given 1 year and they knew the rules of the game but were not able to pull it off. Why have so many dispensaries opened if the state rules are an obstruction to opening dispensary operations? Every business has obstacles to overcome and so either the business owner finds a way to solve everyday problems and navigate around obstacles that may or may not be present or they don’t open it’s that simple. The State should not be breaking their own rules for people who did not have the adequate resources or skills to open a dispensary. Its not proper business practice or governmental practice to extend the time frame while others have invested much money, time and skills into the process and have succeeded in opening and for potential future dispensary owners who deserve the chance to have a license but did not win the lottery.

  4. I agreed with you. Actually we can make these arguments in the court.

  5. Richard says:

    I am having trouble tracking down a full, official definition of an “operating dispensary”. Might you enlighten me?

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