Arizona Medical Marijuana Dispensaries Unduly Burdened by State Rules, Judge Says

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Another favorable court ruling for the Arizona Medical Marijuana Act means that would-be dispensaries have much more time to set up operations.

Maricopa Superior Court Judge Randall Warner's July 29 ruling, released Wednesday, stops the state from denying dispensary approvals because of failure to meet a set deadline.

See also: - Arizona Medical Marijuana Law Is Constitutional, County Judge Finds In a hempseed shell, the court order means that several planned dispensary companies won't be shut out of the game, and that the state's qualified patients will have no shortage of places to buy their medicine.

Ninety-eight dispensary companies were selected in last year's lottery drawing for one of the state's pre-approved geographic locations for the businesses. (State law limits the number of dispensaries to 10 percent of the number of pharmacies in Arizona).

Those companies were supposed to have obtained their state registration certificates no later than one year after the August 7, 2012, drawing or lose their chance to re-apply for that location.

If not for Warner's ruling, the deadline would put a kink in the plans of several would-be dispensaries. About 70 dispensaries have approval to operate as of today, says Will Humble, director of the Arizona Department of Health Services.

Humble says most of the stragglers have been held up in the zoning processes of various cities or experienced difficulties with landlord agreements.

The case, brought by Total Health & Wellness and other Medbox-affiliated dispensary companies, hinged on language in the 2010 law that required the DHS to create regulatory rules for the new industry, but not ones that placed an "undue burden" on the dispensaries' ability to operate.

While Arizona voters approved the medical-marijuana law, some politicians and bureaucrats have done their best to derail or delay it. That obstinance caused delays for the Medbox-affiliated clients, represented by Phoenix lawyer Paul Conant, as well as for other companies who weren't party to the lawsuit.

The problem wasn't a "failing" of DHS or its rules, he says.

"But at the time the regulations were made . . . there were certain things that couldn't be foreseen," Conant says. "There was a flaw in the regulations in that they didn't allow a diligent dispensary operator to go back and say, 'I need more time and here's the reasons.' It's not a failing of the agency."

Judge Warner found that the state's rules, combined with other factors, did lead to an "undue burden" on some planned dispensaries. He wrote:

"Predictably, the implementation of medical marijuana in Arizona has met resistance. There have been legal challenges, political challenges, and a reluctance or unwillingness on the part of many public officials and property owners to facilitate or participate in the distribution of medical marijuana. Some communities have been more receptive to dispensaries than others. Some have friendlier zoning requirements than others. Many dispensaries are now open, while others have struggled."

While it's not clear whether intentional roadblocks by officials, market forces or "just plain bad luck" resulted in delays, the judge surmised, there's no question that many obstacles existed. But state rules do not allow for the consideration of legitimate factors that can cause delay -- thus creating the type of undue burden prohibited in the state medical-marijuana law, he stated.

Humble wrote in a blog post Wednesday that the ruling -- which applies to all prospective dispensary operators -- means the DHS will "accept renewal requests for all the current dispensaries in the state, whether they're open or not."

In other words, every would-be dispensary operator that won the right to operate in one of the state's preset geographic areas, (called CHAAs, to get technical on you), would have another year to get their act together. But as the judge directed, the state needs to create new rules that accommodate, to some extent, any dispensaries that are tardy in trying to obtain their yearly renewal paperwork.

Humble says his agency will try to come up with objective criteria -- "and I underline the word 'objective,'" he says -- for determining the validity of excuses for being late. Such reasons will need to be well-evidenced, he adds.

So, the dispensaries won't simply be able to claim the dog ate their paperwork? we ask.

"You'll have to bring in the sheet of paper with the saliva so we can test the DNA," he says with a laugh.

The dispensaries being jerked around by municipalities or landlords should find it easy, we should think, to prove their cases to the state.

One thing the ruling does not affect is the pending lawsuit by White Mountain Health Center, which sued Maricopa County in a bid to obtain zoning approval for a planned Sun City dispensary. County Attorney Bill Montgomery, an outspoken opponent to the voter-approved law, has appealed a Superior Court ruling from December that paved the way for dispensaries. Montgomery hopes the state Court of Appeals will overturn the AMMA based on the idea that the federal government should reign supreme.

We asked Montgomery to comment on Judge Warner's ruling, noting that it took a seemingly pro-voter stance that runs contrary to Montgomery's wishes. For instance, Warner's ruling states, "Having approved the Act, and having established a public policy that marijuana should be available for legitimate medical purposes, the public's interest is in having dispensaries open throughout the State."

Montgomery declined comment.

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