Marijuana

Marijuana Dispensary Loan for $500,000 Doesn't Need to be Paid Back, Judge Rules, Because Pot is Illegal Under Federal Law

A $500,000 loan to a Colorado company intended for a medical-marijuana facility doesn't have to be paid back because pot is illegal under federal law, a county judge has ruled.

The bombshell ruling, (tip of the hat to lawyer Richard Keyt's medical-marijuana blog), has major implications for the budding dispensary industry in Arizona. Applications for dispensaries are set to be accepted this month, and state-authorized, medical-pot retail and grow centers are expected to open by late summer.

Although this isn't a precedent-setting ruling that other judges must consider, the basic concept of the April 17 ruling is a wake-up call for lenders and investors.

As Keyt wrote in his blog, if this goes to an appeals court and is upheld, "any contract that has a purpose related to Arizona medical marijuana may be unenforceable and not worth the paper it is written on!"

In reading the ruling by Maricopa County Superior Court Judge Michael McVey, it's easy to see how Keyt came to that conclusion.

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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.
Contact: Ray Stern