Marijuana Dispensary Entrepreneurs Denied Corporate Status for Now; Wait for Election, Corporation Commission Says

  Eager entrepreneurs who want to get moving on their marijuana dispensary business have been denied corporate status by the Arizona Corporation Commission.

Rebecca Wilder, spokeswoman for the commission, tells New Times that at least three would-be dispensary companies have recently been sent form letters informing them they're just too early.

Selling marijuana to qualified medical patients may be legal if voters approve Proposition 203 in the November 2 election, but it hasn't happened yet.

Which means -- duh -- selling pot is still illegal.

"We're not going to approve you doing something illegal," Wilder says.

That seemed odd to us, since anyone can form their own corporation easily in Arizona -- even for no reason at all other than vanity, or to avoid photo enforcement tickets.

But if the corporation commission knows the corporation is being set up to facilitate an illegal business, it won't process the application, Wilder says. In this case, the intended use of the businesses is obvious, she adds.

Polls show that Proposition 203 has an excellent chance of passing. If voters approve it, would-be business owners would no longer be restricted by the commission, says the letter, which is signed by the ACC's director of corporations, Jeff Grant,

Dear Sir or Madam:

We have received either Articles of Incorporation or Articles of Organization for an entity with a name and/or a stated purpose or character of business that indicates the entity is being formed to conduct activities involving the dispensing or use of medical marijuana. The dispensing and use of medical marijuana are not currently legal activities in the state of Arizona. Corporations and limited liability companies can be formed to conduct only lawful business activities.

We understand that there is a proposition on the ballot for the election in November that, if passed, will make the dispensing or use of medical marijuana legal. We will hold your document in a "pending" status until the effective date of the proposition, which is by gubernatorial proclamation typically issued in mid-December. If the proposition passes and becomes effective, your document will be examined at that time for compliance with all statutory filing requirements.

If the ballot proposition fails, your submission will be rejected.




Trade name reservations are a different story -- the commission isn't messing with those. In other words, you could reserve the name "Marijuana, Inc.," (at least, you could before Steve Poirot of Tempe did it), even though you can't actually form a corporation under that name.

Online records show that at least 71 applications for name reservations or corporations are on file that use the word "marijuana" in their name. Another 16 use the name "cannabis."

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.