Judge Orders Arizona to Implement Medical Marijuana Act, Tosses Out Four Rules for Dispensary Applicants

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Arizona needs to start up the 2010 Medical Marijuana Act as voters intended, but without several of the rules designed to restrict dispensary applicants, a judge has ordered.

Maricopa County Superior Court Judge Richard Gama ruled on the Compassion First, LLC, lawsuit yesterday, noting that voters wanted the Act implemented 120 days after it passed and that "this has not been done."

The reason it wasn't done is that in May, Governor Jan Brewer -- who spoke out against Proposition 203 before voters approved it in November of 2010 -- halted the dispensary portion of the new law at the same time she filed a federal lawsuit against it.

State Attorney General Tom Horne had discussed the concept of such a lawsuit a few months earlier with representatives of the group that had lobbied against Prop 203, Keep AZ Drug Free.

On January 4, U.S. District Judge Susan Bolton tossed out the lawsuit, which had asked the court to decide whether the new law was legal.

Brewer decided on Friday that she wouldn't re-file the lawsuit and that the state Department of Health Services should begin accepting applications for dispensaries once the Compassion First, LLC, lawsuit was resolved.

Gama, in issuing his summary judgment against the state, has now resolved it.

But it will still be a few months before the state's 18,000-plus registered medical marijuana patients can walk into a pot store for their medicine.

Will Humble, director of the DHS, told us last night, (before we learned of the ruling), that the rules his agency came up with to administer the medical marijuana program need to be tweaked, because they contain old dates for the process. For instance, the rules state that DHS will accept applications between June 1 and June 30 of 2011.

The process to change those dates officially, though, will take about six months, Humble said.

After Gama's ruling, however, it's clear the DHS will need to tweak more than the dates.

Gama nixed the rules that require dispensary applicants to:

* Have been an Arizona resident for three years

* Have filed personal income taxes in Arizona for the previous three years

* Have never before filed for personal or corporate bankruptcy

* Not be delinquent on child support, taxes, parking tickets, student loans or other unpaid debts to the government.

Those rules are "onerous and substantively alter the requirements of the Act," Gama wrote in his minute entry. "DHS cannot bootstrap substantive regulations of who may apply..."

But Gama decided several other rules opposed by Compassion First, LLC, are good to go because they help protect against diversion and theft of the marijuana. Those require:

* That an individual with 20 percent or more interest in the dispensary be the applicant or principal officer or board member of the dispensary

* Documentation that the applicants owns or has permission to use the property intended for the dispensary

* An application "to comply with state law." Brewer's spokesman, Matt Benson, tells New Times that the governor will likely comment on the ruling tomorrow after reviewing it with her legal team.

Gerald Gaines, CEO of Compassion First, says his business will consider applying for dispensaries now that the lawsuit has won.

A philanthropist who was one of the founders of Sprint PCS, Gaines is already planning to move forward with three medical-pot cultivation centers in Arizona, with the first scheduled to open in February. Gaines says those facilities will feature dozens of licensed caregivers who will grow and distribute marijuana to qualified patients. Those facilities, he says, will possibly have to close down at some point if a dispensary opens nearby.

The new law states that caregivers and patients can't grow their own pot if a dispensary is located within 25 miles.

It looks as though that billion-dollar industry we wrote about last year, before Brewer's heavy-handed actions, is finally on its way.

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