New state rules for marijuana 'social equity' licensing good step, advocates say

The latest draft of the state’s rules governing the distribution of “social equity ownership” licenses needed to own a marijuana dispensary was released by the Arizona Department of Health Services last week, giving some clarity to rules critics had called purposefully vague.

“These new set of rules do appear to quite possibly close the loophole relative to previous drafts, where it seemed like it could be quite possible that a single individual could sponsor an unlimited number of applications,” said Mike Robinette, executive director of the Southern Arizona branch of the National Organization for the Reform of Marijuana Laws, or NORML.

The rule change makes clear anyone listed as a principal officer, board member or person entitled to 10% or more of the profits of the applying entity can now only include their name on two applications for one of the 26 social equity licenses.

Passed as part of Proposition 207, which made adult-use recreational marijuana legal in Arizona, the “social equity ownership” program sets aside 26 licenses for “people from communities disproportionately impacted by the enforcement of previous marijuana laws.”

Those applications can be submitted Dec. 1-14, and the drawing for the licenses is still to be announced but is set to take place in early 2022, according to Tom Salow, branch chief for the Arizona Department of Health Services.

Julie Gunnigle, director of politics for the Arizona NORML, issued a news release praising the state health department for listening to critics and echoed Robinette on preserving the spirit of a program passed by voters last November.

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“We are thrilled that the department is listening to stakeholder feedback and community comments and has limited the ability of a small number of individuals to flood the social equity lottery with applications for the purposes of reselling the license,” she said. Reselling the license could be very profitable for the owner of the license.

Still, the new draft rules are not final.

Robinette noted advocates and industry insiders are still waiting to see how AZDHS wrestles with the most nebulous part of the rules: how to define a “community that has been disproportionately affected by the enforcement of Arizona’s previous marijuana laws.”

“Our understanding was that would be in early September,” he said. “But then these rules just drop … it wasn’t in that. So we’re still hoping, fingers crossed, into later September.”

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