Bill to Create New Department of Marijuana Regulation Misses Major Deadline

A new bill sponsored by Arizona Speaker of the House Russell "Rusty" Bowers that aims to put in place a new department of marijuana regulation has stalled without a hearing. That has raised questions about why it was even introduced.

The Mesa Republican lawmaker introduced House Bill 2828 on January 10, stating the new department of marijuana regulation would take over all “authority, powers, duties, and responsibilities of the department of health services relating to the regulation of marijuana.”

The way the bill reads, Bowers is attempting to reshuffle pot regulation and remove it from the hands of the Arizona Department of Health Services. So far, it hasn't even left the gate.

While it is intended to go into effect next year, the bill has already missed the deadline for its first reading, preventing access to being assigned a committee, a necessary step in the lengthy process for a bill to become law.

Bowers has been vocal in his disapproval of the use of recreational marijuana in Arizona. In 2016, he opposed Proposition 205, which failed to legalize marijuana for adult-use in Arizona but ultimately passed in 2020 under Prop 207, which Bowers also opposed. He also sponsored the House Concurrent Resolution 2045, which sought to reduce the potency of marijuana sold throughout the state. The bill directed DHS to study the relationship between marijuana, schizophrenia, and violent behavior with money gathered from the voter-approved medical marijuana fund. Bowers also sponsored and cosponsored bills to add marijuana product warning labels for the health of pregnant women or their unborn children.

"Rusty Bowers has been a very hardhearted legislator when it comes to caring about the way that marijuana has improved the lives of people,” Mikel Weisser, a former marijuana activist for the Arizona chapter of the National Organization for the Reform of Marijuana Laws in Arizona (NORML), wrote on azmarijuana.com in 2020. He has since died.

The last day for the House to consider any bill was February 18. And according to House Rule 9F “all House bills shall be considered by committees prior to the Saturday of the week in which the 60th day (March 10) from the beginning of each regular session falls."

Because of its late introduction, special permission from the Rules Committee must be granted for HB 2828 to move forward.

It’s unclear at this point how the bill will proceed.

"One of the big problems, when someone comes up with a bill on their own, is the massive amount of unintended consequences when just one person comes up with an idea and says, ‘Let's roll with it,’" explains Jon Udell, Political Director at NORML and a co-chair of Rose Law Group's cannabis department.

Udell, who opposes Bowers’ legislation, said he has no knowledge of a stakeholder meeting occurring to discuss the bill.

Few understand why the bill is on the table for discussion except for Bowers, who has not responded to requests for comment. But Udell and Arizona NORML Executive Director Mike Robinette believe it has to do with the perceived coziness between the Arizona Department of Health Services and the marijuana industry.

"I like that there are people out there that are concerned about the perceived chumminess between the department and the people that it is regulating," Udell said.

Industry capture, better known as regulatory capture, occurs when a regulatory agency is dominated by special interest groups that it regulates rather than the interest of the public. It has historically been present in banking, with the most prominent example being the 2008 financial crisis, which resulted in massive government bailouts of U.S. banks that were "too big to fail."

“I think it's curious when you try to solve the supposed problem of industry capture by taking all the regulators and giving them a new title to a new department,” Udell said. “So far it does nothing and it leads consumers into thinking that something serious has changed.”

The bill also states that all staff members currently employed by the DHS relating to the regulation of marijuana will be automatically transferred into the new department of marijuana regulation.

"To the extent there is a problem with regulatory capture, you don't solve it by giving a new name to the same group of officials who are currently regulating the industry," Udell said.

The two believe that the most effective way to root out any possible regulatory capture is to clean house.

Aside from the bill's intention, Robinette and Udell’s main concern is the lack of input from those within the industry, including the Arizona Dispensaries Association, the Marijuana Industry Trade Association, and patient advocacy groups like NORML. From Robinette's perspective, the first questions when introducing legislature should be, "How much stakeholder influence and how much stakeholder process occurs prior to a bill being dropped in the legislature?"

Udell agreed, saying, "I regret that they didn't proceed through stakeholder meetings that don't do anything to actually solve the problem that they say they care about."

Demitri Downing, founder of the Marijuana Industry Trade Association in Arizona (MITA AZ), said it’s an unnecessary move on the part of the legislature. “If it were me, I would leave it with DHS because they’ve done an excellent job," said Demitri. "They’ve been unbelievably responsive and fair in my experience in the last 10 years.”

While some feel the state health department should be left untouched, others believe the department has been too chummy with the industry. David Wisniewski, founder of Safer Arizona Cannabis Legalization Political Action Committee, contends that product safety is where the industry could beef up its regulation.

"Historically, the Department of Health Services has been a little bit too kind to the industry by not enforcing certain safety standards that they should have been enforcing," Wisniewski said.

As of mid-January, DHS had inspected more than 90 retail sites, according to state documents released to Phoenix New Times in a formal public records request. Inspections revealed problems ranging from banal violations such as the shape of gummies to more serious health concerns, such as the presence of salmonella in certain products.

A final source of complexity in the bill is the timeline. If created, the new department of marijuana regulation would take effect by the beginning of 2023, but is scheduled to terminate on July 1, 2030.

The reasoning behind making the new agency temporary remains unclear.

"If they really wanted to make this major transfer, wouldn’t they do it into perpetuity instead?" questions Robinette. "It really doesn’t do anything other than call the department a new name and then revert it back to the old name in about seven or eight years."

The Arizona Department of Health Services was not able to comment on any pending or ongoing legislation.