A lawsuit that could have changed how and who the state issues “social equity” marijuana dispensary licenses to has been dismissed, clearing the way for the Arizona health department to begin the dispersal process.
Judge Randall Warner of Maricopa County Superior Court issued the ruling Monday just days after hearing arguments the Arizona Department of Health Services had created a system where large cannabis companies could effectively assure themselves of one of the 26 soon-to-be issued licenses.
“The court’s role is limited to deciding whether the agency acted within the scope of the directive,” Warner wrote in his decision, referring to the rules laid out for a social equity program in the language of Proposition 207, which also legalized adult-use marijuana in the state. “To hold otherwise would require the court to usurp DHS’s role and decide for itself how best to design and implement a social equity ownership program.”
Passed as part of the Proposition 207 recreational marijuana measure, the “social equity ownership” program sets aside 26 licenses for “people from communities disproportionately impacted by the enforcement of previous marijuana laws.”
Plaintiffs in the case, the Greater Phoenix Urban League and Acre 41, challenged the departments handling of the process on four grounds, but all essentially argued AZDHS rules do not comply with the voters’ directive laid out in the language of Proposition 207.
The rules, they argued, essentially fly in the face of the spirit of a program meant to help “people from communities disproportionately impacted by the enforcement of previous marijuana laws.”
As evidence, they pointed to the immediate transferability of the licenses, which are expected to fetch tens of millions of dollars on the open market, and the applicant pool of more than 1,500 for the 26 licenses.
Nearly half of those applications are linked either primarily or in part to three, large multistate cannabis companies.
“While the plaintiffs and those who supported the litigation vehemently disagree with the court’s ruling, they will obviously respect the court’s decision,” said a press release for Acre 41, a collection of black female entrepreneurs focused on expanding access to Arizona’s burgeoning marijuana industry.
While the group would not say whether it would appeal the ruling, Celestia Rodriguez, a principal in Acre 41, alluded to other challenges aimed at specific multistate operators and painted the setback as part of a larger struggle against cannabis prohibition and social injustice.
“People of color have very rarely been able to get justice in the courts because we know the system is rigged. We will continue to try nevertheless,” she said.
A spokesperson for AZDHS would not comment on the ruling but issued a statement saying the department “is continuing to process applications and will issue licenses according to the timeframes established by rule.”
The department gave no indication of a timetable or a date for the random drawing to pick the recipients of the special licenses.
