“This is a program, as it is currently written, is designed to fail.”
By Jerod MacDonald-Evoy, Arizona Mirror
When Arizona voters approved the recreational use of marijuana in 2020, the new law included provisions designed to give the people most harmed by the war on drugs the chance of a lifetime: a chance, a coveted license to operate a pharmacy.
Now final licenses for the sale of marijuana in Arizona are slated to go through the Social Justice Program, which aims to redress the wrongs caused by the disproportionate police surveillance of marijuana crimes. They are easily worth millions of dollars – maybe tens of millions – and the system is designed to encourage people who were once arrested for petty marijuana crimes to sell cannabis.
However, some proponents say that bureaucratic hurdles, corporate greed, and a rapidly consolidating marijuana market will drive these profits straight into the hands of large companies that restrict competition and capitalize on the billions of dollars that are sold Cannabis to be earned in Arizona.
“This is a program that, as it is currently written, is doomed to fail,” attorney Julie Gunnigle told the Arizona Mirror. Until recently, Gunnigle worked for Arizona’s Chapter of NORML, an organization promoting marijuana law reform in the United States.
The Social Justice Program, as spelled out in Proposition 207, the vote voted by voters in 2020 to legalize recreational marijuana, aims to empower minority communities – those historically hardest hit by the war on drugs give to apply for 26 pharmacy licenses.
But potential social justice pharmacy owners are limited by both the voter-approved move and the rules passed by the Arizona Department of Health last month. Applicants must meet three of four criteria:
- Having a low-level marijuana conviction – one that got wiped out if it was a crime
- Have a family member with low levels of marijuana belief
- Live in one of 87 zip codes that ADHD has identified as “disproportionate to enforcement of previous marijuana laws in Arizona”.
- Earn less than 400 percent of the federal poverty line; for a family of four, that would be a maximum household income of $ 106,000
And anyone who wishes to enter the lottery to win a social justice license must pay a non-refundable registration fee of $ 5,000 after attending two separate two-day training courses. The deadline for completing these courses was Wednesday, about five weeks after the ADHD rules were announced.
Applications are accepted until December 1st.
Placement of applicants for social justice in partnerships with large companies
For Gunnigle, the exorbitant application fee is such a high hurdle that potential applicants are almost forced to turn to major players in the Arizona cannabis industry for help.
The established marijuana sector is keen to find applicants for social justice. Houses in the qualified zip codes were littered with mail and door hangers from large cannabis companies combed the state for qualified individuals.
Along the highways in Phoenix, billboards of large marijuana dispensaries and growers advertise their intention to help eligible applicants through the process.
Some have even set up sites like YourBrightHorizon.com, which were set up by Copperstate Farms, one of the largest marijuana growers in the country with 40 acres outside of Snowflake, Arizona.
“The general public knowledge of the program is fairly low,” said Doug Cole, a spokesman for Copperstate Farms. “We help applicants to be successful and to be successful under the social justice program.”
Copperstate has helped set up free discharge clinics across the state – one of the eligibility criteria for applicants – alongside groups like NORML to find qualified applicants, and often provides financial incentives of up to $ 500 for individuals who qualify and one Recommend friend who also qualifies.
“These licenses are worth $ 10 to 15 million before the ink dries,” said Tom Dean, a cannabis lawyer.
Copperstate itself recently acquired a pharmacy license in Phoenix for $ 15 million in cash, and established marijuana dispensaries have sold for more than $ 20 million. Arizona pharmacies have reported sales of more than $ 50 million each month, save for one since March, and the state is well on its way to seeing retail sales of $ 1 billion in its first year of recreational marijuana surpass. Wall Street analysts predict sales will soar to more than $ 2 billion in just a few years.
Not only are these the last 26 licenses issued in Arizona, but their owners can sell them – which the other previous licenses don’t allow – which makes them even more valuable. Dean guided applicants through the process, saying that multi-state operators, investor groups, and industry groups have expressed an interest in submitting as many applications as possible.
Allowing social justice licenses to be treated like a commodity is a bad thing, Gunnigle said, because it makes it easy for corporate interests to “play” the system and make all the profits that are meant to support those who were oppressed by the oppressed system.
“Essentially, you’ve really created a 26-person lottery program,” Gunnigle said, saying the people who get those licenses are likely to be overwhelmed with requests about the licenses, and likely selling them to the same groups that are currently operating are most of the pharmacies in the country.
The rules technically require that social justice licenses be sold to another person or company that meets the ADHD requirements. But Dean said that nothing can stop an incumbent cannabis company from closing a deal with an applicant who has not been licensed and “just creating a subsidiary that matches it” so they can buy the license.
It doesn’t work alone, says the cannabis industry
While critics say the system is designed to give large corporations an undeserved way to benefit from licenses that seek to redress a historical wrong, companies like Copperstate Farms say social equity license holders will not succeed if they do not team up with experienced partners.
Although marijuana is legal in Arizona and other states, it is still classified as a List I controlled substance under federal law. A critical effect is that many financial institutions refrain from lending or taking money from institutions that make their living from marijuana for fear of being punished by the federal government. That makes it difficult to get seed capital to open a pharmacy – which can cost up to $ 2 million – for a would-be social justice licensee. And all of this within 18 months of receiving the ADHD license.
“The cannabis industry is a highly regulated business and requires a lot of permits and upfront capital,” said Cole, spokesman for Copperstate Farms.
Getting just the correct zoning is often difficult in Arizona because many cities and towns have ordinances that prohibit pharmacies within their city limits.
“We’re experts at finding these and taking them through planning and zoning meetings to get these permits,” said Cole. And even with the expertise that his company brings, “it will be a sprint to do it in 18 months.”
For Gunnigle, however, the program is unlikely to achieve its goal of helping people harmed by the war on drugs. Likewise, Dean said it would be unfortunate if the social justice license came completely under the control of the big players in the industry.
“It’s supposed to be something that should be a fixture in the Arizona industry,” he said. “There should be a balance in the industry [to stop] Consolidation. “
But some marijuana industry insiders see it a little differently.
“You don’t see people flossing and selling in mom and pop stores, do you?” Demitri Downing, CEO and founder of the Arizona Marijuana Industry Trade Association, said. “These are nostalgic-romantic feelings to feel good.”
Downing said the presence of outside groups is good for applicants as it gives them the freedom to choose their partners and get the help they need – as well as the freedom to sell their license directly for large sums of money.
“Whether they turn around and sell it or not is irrelevant – they benefit either way,” Downing said. “You are a member of our community and you will be rewarded.”
This story was first published by Arizona Mirror.
Non-partisan Senators from Pennsylvania announce law to grow medical marijuana at home
Marijuana Moment is made possible with the support of the readers. If you rely on our cannabis journalism to keep up to date, please consider making a monthly Patreon Pledge.