If Proposition 203 passes (the Arizona Medical Marijuana Act), one of our key decisions will be how to set up some kind of selection process for approving marijuana dispensary applications. The Act states that the number of Cannabis dispensaries will be limited to 10% of the number of pharmacies in the state. As of right now, that would cap the number of dispensary licenses at around 124. Experiences in other states suggest that we can expect to receive far more than 124 applications… meaning that we need to think ahead about how we’d select the successful applicants from all of the folks who send in complete applications.
There are probably a number of ways to do it, but 3 come to mind right away. We could, for example:
- Use some kind of first-come first-served process and simply approve the first 124 complete dispensary applications;
- Place the complete applications in a pool and have some kind of random drawing on a particular date; or
- Evaluate the complete applications using some kind of objective criteria (such as the professional quality of their business model, security plan, customer validation and inventory system etc) and select the best applications from the stack for approval.
Method 3 is probably the best because we’d be able to select the best of the qualified applicants, but it would also be far more labor intensive than methods 1 or 2. Method 3 would also be more challenging in terms of ensuring transparency etc. An interesting twist on method 3 would be to send the completed (and blindfolded) applications to a 3rd party (e.g. a consulting law firm) and ask them to score the applications for us.
We’d also need to think about how to distribute the licenses geographically. The Act states that each county is entitled to at least 1 dispensary, however we might also consider allocating potential license “quotas” on a “per capita” basis by county across the state. Anyway, we’ll know next week whether we need to deal with any of the things I’ve written about over the last few weeks.
Kudos to you. You are on the right track in creating a selection process upon which to judge potential dispensary operators. Option # 3 is by far the best option. I have visited many dispensaries throughout California and Colorado. Some of them look like pawnshops. Some of them are very professional. A simple first come-first served process or a random lottery only ensures that we have poorly run and undercapitalized dispensaries. It is very important that we have quality operators running these dispensaries so we don’t have the same problems as California and Colorado.
I have the application that was used for one California city as well as the application that was used for a state. I think both of these would be a good starting point in creating Arizona’s application process. I will be happy to provide these to you upon request. Just email me, and I’ll send them over.
Thank you for taking this issue seriously. The state is well served by your efforts.
As far as the applicants, a manual review process is the only way to go. When you combine former dispensary owners from California and Colorado, there are hundreds and hundreds that have been forced to cease operations and will seek refuge here. I would require a minimum residency for consideration to avoid these unfavorable types. With the laws being so easy going in these other states, it is very difficult to be forced out so I would refrain from allowing these unsavory drug dealers in our state.
A related concern is quality control of products to be dispensed. I work for a CLIA certified biomedical research laboratory. The question has come up as to whether we might offer analytical services to potential dispensaries. We have the equipment (e.g. GC/MS analytical equipment) and expert staff who could deliver these services. I read over the text of the proposition and saw no provision for this. However, delivery of products with known potency, acceptable levels of pesticide and lack of mold contamination should be a matter of concern for reputable providers. I hope the Department will consider allowing such services in the public interest in the event that the initiative passes..
The only option that will hopefully keep the shady head shops with a quasi-legal dope peddler and quack in the back out of our State is the 3rd option! Each county could be broken into population percentages and licenses simply distributed appropriately. Then some effort should be paid to matching population densities (towns and Cities) with dispensaries for patient convenience.
I have read every piece of legislation from all the States that have medical marijuana. There are a few States with legislation close enough to our 203 to require very little modification in order to implement nearly turnkey. I suggest setting up fundamental criteria (security, confidentiality, business plan, horticulture, etc.), establishing a points based judging system and judging and scoring each area(town/ Cities) applications one at a time. This will take a scoring panel of 3 or 5 people more than a couple days, but you will have transparency and it will be streamlined and easy for anyone to see why some places scored higher than others.
I do agree there could be potential for bribery and such and protecting AZDHS from allegations of that needs to be a concern. Lawyers are not the pillars of honesty that would leave me comfortable in regards to this either! I also hope the out of State interests have some form of cap as well, especially in this economy what a shame it would be to have most of the economic boon from this being sent directly out of State!
I’m looking forward to the public meetings!
Of course, if the dispensaries are too-regulated it will turn off customers who, sad to say, won’t have much trouble locating cheaper, less strict “sources” in the community.
There needs to be ease of access balanced with accountability, otherwise the dispensaries will be a joke.
In my opinion option 3 may seem like the logical and best method for selection, but seeing as there is a time restraint to make this available to the public it may not be the best option for the situation.
Option 2 for a random drawing could result in people creating multiple company’s under different names or partners creating several company’s to create better odds at getting a license even though they intend to only run one dispensary. This option just seems like it could be manipulated.
Option 1 seems to fit the requirements for
this situation; fast, impartial, and cost effective.
Good Morning Will,
After reading your blog, I’m not sure how you can do anything other than Option #1.
Here’s the logic:
While option #3 seems preferrable, if the law passes next week, the AZDHS will only have 120 days to implement it before the law would default to AZDHS having to accept all applications. I’m not sure there is enough time to analyze each application and pick the best 124 based on other qualifications …since attempting to do so could lead to the exact opposite affect if the selection process exceeds 120 days and the flood gates open.
Option #2 seems like it could lead to clustering in certain cities since it would involve a lottery system. This wouldn’t best serve Arizona’s patients, and trying to separate into individual lotto drawings for each city will result in a 3-4x increase in the number of applications that would need to be sorted by AZDHS before the drawings could occur since potential owners would likely submit multiple applications to get in as many drawings as possible…again this takes time and you’ve only got 120 days. Of course this process could be done electronically, but don’t you already have your hands full with creating the patient registration and verification systems to implement the law???
Option #1 seems the only logical choice given the time and resource constraints.
Yes, some dispensaries will fail, but failure is inevitable for every population, no matter what industry their corporation is in, as will be the same no matter which option the AZDHS chooses because a dispesnary could start out adequately funded, but make a poor business decision, such as expanding their non profit before their cash flow can support it and end up cratering it, and at this point, how they looked on paper from the start would make no difference.
I strongly feel that anything other than option #3 would be a great disservice to the citizens of the state. If you truly want to avoid the problems that have plagued other states then you must begin by at least trying to deal with only those people who have the means and professionalism to do more than scratch out an application. If the organization cannot prove sufficient reserves of cash to exist while their initial crop is being grown, or are not able to employ sufficient personnel to insure the security of clients, or the 100% compliance with requirements. I would strongly suggest that organizations that have been in existence longer be given more serious consideration as well. a whole slew of new non-profits will be created just to take advantage of this prop passing, it just makes sense to align with those organizations that have been around longer and have more experience operating as a non profit and performing their essential functions.
With all due respect Mr. Humble, the right way to go about the selection process for the medical marijuana dispensary applications is to set a specific criteria and then approve on a first come first serve basis. You are in the position to create the criteria for the application process within the boundaries of the proposal as you see fit, not to compare applications. That system would create a bias standard and cause a lot of problems. Obviously there is the issue of making sure the regions are all covered, spreading the dispensaries out evenly. I believe that having a bias system of application selection is unethical and might leave an opening for the Department of Health to justify providing the inventory for the dispensaries as facilitated in the proposal. This would take away from all the small business created by this market that would greatly stimulate the immediate economy. Dispensaries and growers are perfectly capable of providing safe quality inventory for patients and does not need the assistance from any governed organization. I only make this statement because Will Humble expressed this as an option in one of his prior blog’s. Back to subject, the criteria needs to be created and then the applications need to processed as they are received, easy peezy.
These and many other questions will need to be answered and dealt with after the passing of Proposition 203. I am happy to see that you are being proactive and considering all options. I think you can leave a legacy for AZ and be a model for other states that are comtemplating medical marijuana initiatives in 2012. I think we can work together to create a model dispensary system, and a standard of rules and regulations from ADHS, that will be imitated around the country. I hope that we have a dispensary system that keeps the jobs, and income in the state of AZ, prevents large businesses from outside AZ that will be difficult to regulate and control, and has a fair and equitable licensing system. Although I realize you personally do not agree with Prop 203, it is apparent that you take your duties seriously and want to create fair regulations, and I thank you for that.
Very good. I think #3 is likely the best option, as well.
Another thought: license applications are going to be flooding in from people in the “canna-business” in other medical marijuana states, especially California and Colorado. These people will have very deep pockets and perhaps some valuable experience operating these dispensaries, which are arguably a very unique business model.
Of course much state and city tax revenue will be generated and collected from these businesses, but do we really want the salaries paid to dispensary directors and employees to go to people from other states? I just wonder if there is some way to “level the playing field” so that established residents and community members who call Arizona home are able to compete with the out-of-state business interests who will surely use their wealth to scoop up as many licenses as possible. i.e. by paying multiple people to apply for licenses under varying business names, etc.
Respectfully and for you consideration Mr. Humble:
Going with option 3 means the Department would be taking on the role of the free market and deciding what a successful dispensary should be from the business model to location to look and feel of the store front. As the Director has stated the Department has neither the staff or resources to do this and it is a problem.
The Department doesn’t have the resources to do all it wants to because the People of AZ don’t want you to. The law specifically states the funding you get from applications is supposed to be sufficient to run the program. Designing a complicated evaluation process including hiring outside lawyers to review and score applications for hundreds of dollars per hour, which you know will exceed the funding you get, is probably breaking the law or at least going against the sprit of how it is written. How do you intend to pay for it?
The simple solution to the problem you perceive is to not over-regulate. Set minimum standard for the protection of the people as stated in the law (security, diversion avoidance, inventory tracking) and let the free market and a random lottery to give out registrations decide the rest.
A random drawing from minimally qualified applications seems to be the only option the Department can afford given your finding restrictions. Department oversight and law enforcement will deal with bad actors and the free market will take care of the rest of your perceived problems.
Please… if this passes, establish a roster of Certified “card holders” and a reporting system like the Board of pharmacy has for CSPMP reporting. Patients who have legitimate medical issues would be glad to have their doctors able to see that they are on the approved list and other drug seeking or diverting cardholders would be discouraged from participation/abuse by this system. If this is a pharmaceutical, give us the tools to manage it…
ADHS has not, nor will it, issue any dispensary licenses unless voters approve Prop 203. If approved by voters, there will be at least 4 months of work to set up a system before applications can be accepted and considered. At that point, ADHS will consider all applications equally and issue licenses.
(content removed by editor) I’ve already commented on the fact that the cheesy Californian style marketing for those who got ahead of themselves may have actually cost the sick and dying in our state from having safe access at all. This is about Medical Marijuana and I have faith that if it passes, those who only desire to be barely legal drug dealers will be “weeded” out by Mr humble and our AZDHS!
I don’t imagine AZDHS is hoping for the added workload, but for those of us with dying loved ones, let’s hope they get the chance to show us what they can do with this.
i think it would be a spectacular idea if a couple things were taken into consideration when the licenses are handed out…1- the main person is an Arizona resident. this will help keep the revenue in AZ where it belongs and 2- how aout giving priority to people actually suffering with some of these conditions who want to open a dispensary- they have a vested interest in medicinal marijuana and are not in ot for the money only…it’s for them- let them be at the forefront of the industry in AZ
Hey There Directorsblog,
I take your point, Colorado is one of the states in the US that have legalized the use of medical marijuana. Countless researches have proven the beneficial effects of marijuana in the treatment of chronic grave diseases such as cancer, brain tumors, muscle sclerosis, Alzheimer’s disease and HIV/AIDS. The drug is proven to decrease intraocular pressure thus can be used as an adjuvant in the treatment for glaucoma; gastrointestinal as well as respiratory diseases. The drug is popular as a psychoactive agent having a stimulant and hallucinogenic effect. However, this drug causes physical and psychological dependence and causes a life-threatening effect once taken in very large amounts.
All the Best