Cannabis Bills Show Conflict in Industry, Growing Acceptance Among Arizona Lawmakers

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Arizona lawmakers continue to grapple with the implications of legal cannabis.

And then there were two.

That's how many marijuana bills have survived the 2022 legislative session.

One bill would allocate funds from the Smart and Safe Arizona Fund to tribal police and fire departments, university police and the Arizona Department of Public Safety. The other, a strike-everything amendment mirroring a failed senate bill, poses major changes to Arizona’s marijuana licensing process.

All marijuana bills introduced in 2022 bring the legislatures’ developing relationship with the cannabis business into focus. But continuing debate on changes to licensing show the legislative moves in Arizona’s marijuana market continue to remain internal and hotly contested.

Bills looking to heighten regulation and decrease sentencing largely failed early in the process, with many failing to grab a committee assignment or see a vote. The bills that did gain traction often saw mixed opinion from those within the broader cannabis industry.

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The Arizona State Capitol in Phoenix.
Sean Holstege

Living legislation

Senate Bill 1324

Prime Sponsor: State Senator Thomas Shope, R-Coolidge

Status: Passed Senate 27-1

SB 1324 would add joint powers authority, tribal police and fire departments, university police departments and DPS to the list of entities receiving a share of the 31.4 percent of the Smart and Safe Arizona Fund. The fund's money is generated from marijuana excise tax and licensing fees.

The bill saw dissent from members in the House Military Affairs and Public Safety Committee. State Representative Melody Hernandez, D-Tempe, voted no, and said she heard opposition from stakeholders regarding a recent amendment by State Representative Kevin Payne, R-Peoria, adding DPS.

House Bill 2050

Prime Sponsor: Representative Justin Wilmeth R-Phoenix

Status: Passed Senate Appropriations 9-1

HB 2050 originally required the Arizona Department of Administration to post a report on the Telecommunication Fund on its website.

But a strike-everything amendment, which passed the Senate Appropriations Committee on March 29, requires the Department of Health Services to allocate nonprofit medical dispensary licenses in counties without a medical dispensary or in areas where they are more than 25 miles apart.

It also allows any recreational license holders to apply for a nonprofit medical certificate, which would essentially allow any dispensary to sell to both medical and recreational customers.

Rural medical marijuana patients continue to be a point of concern in Arizona. 

In previous reporting by Phoenix New Times, Americans for Safe Access, a Washington, D.C.-based patient advocacy group, gave Arizona a C-minus grade when it comes to patient access. The group noted that co-located dispensaries often create more obstacles for patients, such as higher prices, longer lines, and limited product availability.

The amendment is a near-mirror image of failed Senate Bill 1402.

The Arizona Dispensaries Association is opposed to the amendment.

Lauren Niehaus, director of government relations at Trulieve and a board member of the ADA, said the association wants license authority left with the Department of Health Services.

“There can be negative policy consequences. There’s nothing to prevent the statute from changing or others from attempting to seek more licenses via statute,” Niehaus said.

Copperstate Farms, a member of the ADA, echoed the sentiment.

“We didn't feel there was any reason to change the process that exists,” said Ryan Hurley, general counsel for Copperstate Farms. “So that's fundamentally why we were against it.”

Arizona NORML has remained neutral on the bill throughout talks with other stakeholders. Jon Udell, politics director there, hopes lawmakers can get to a place where the legislation is “promoting the greater good” for the industry.

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The Mint vault
Courtesy of The Mint Cannabis Facebook page

Further attempts at industry regulation fail

Other lawmakers have different ideas about what’s best for marijuana. This legislative session saw attempts to regulate advertising, sales, products, and medical qualifications of the cannabis industry.

Senate Bill 1402

Prime Sponsor: State Senator David Gowan, R-Sierra Vista

Status: Passed Senate as amended 23-4; transmitted to House, no action

SB 1402 would provide new licensing opportunities for nonprofit medical dispensaries in counties where a nonprofit medical dispensary does not exist, or in an area where they are more than 25 miles apart. It also allows recreational dispensaries to apply for nonprofit medical certificates.

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Arizona State Senator David Gowan.
Arizona Senate

SB 1402 is still alive in a sense as it takes on the form of the strike-everything amendment to HB 2050.

Arizona NORML supported the bill and the ADA was neutral, citing the need to work on amendments to the language.

Senate Bill 1715

Prime Sponsor: State Senator David Gowan, R-Sierra Vista

Status: Passed Senate as amended 27-1; transmitted to House, no action

SB 1715 sought to prohibit the sale of hemp-derived versions of THC, namely Delta-8, now sold in head shops, gas stations, and convenience stores. 

The legislation defines “hemp-derived manufactured psychotropic cannabinoids” as any cannabinoid derived from hemp and altered by a chemical reaction that changes the molecular structure to contain psychotropic properties.

It excludes the class of cannabinoids from the definitions of industrial hemp, usable marijuana, marijuana concentrate, marijuana products, and marijuana.

The legislation saw support from dispensaries and the Arizona Public Health Association but dissent from the Arizona Smoke Free Business Alliance, a legislative group working on behalf of vape business owners, and businesses manufacturing hemp-derived THC.

Those supporting the bill cited public health concerns. Opponents said it would wipe out a legally operating part of the market and threaten competition in the market. 

Daniel Slosburg, co-founder and CEO of Delta 8 Oils, spoke to the Senate Appropriations Committee and said the bill would put his company out of business, despite its adherence to regulations and testing requirements.

House Bill 2082

Prime Sponsor: Representative Joanne Osborne, R-Yuma

Status: Passed House Health and Human Services Committee 6-3, Rules 5-3; objected from House Consent Calendar

HB 2082 outlines constraints on advertising, sales, and promotions for dispensaries. The bill would make it illegal to market products to individuals under 21 and advertise within one mile of any public or private schools, and within 1,000 feet of any child care center, church, public park, or public schools.

It would also bar companies from sponsoring any athletic, musical, artistic, or other social or cultural event unless all participants are over 21. And finally, it would prohibit dispensaries from providing free samples of marijuana or marijuana products for on-site use or selling to someone who is obviously intoxicated.

The bill saw support from medical associations and pushback from dispensaries.

House Bill 2828

Prime Sponsor: Speaker of the House Rusty Bowers, R-Phoenix

Status: Not assigned to committee

HB 2828 proposes the creation of the Department of Marijuana Regulation, which would effectively replace the Department of Health Services in monitoring and regulating the marijuana industry.

House Bill 2260

Prime Sponsor: Representative Diego Espinoza, D-Phoenix

Status: Not assigned to committee

HB 2260 would list autism spectrum disorder as a qualifying medical condition for a medical marijuana card.

The bill saw opposition from the Arizona Psychiatric Society.

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Arizona House Speaker Rusty Bowers
Gage Skidmore via CC 2.0

Efforts to change sentencing laws stall

There were also bids to decrease sentencing for marijuana-related charges. The legislation either failed to go to committee or was assigned to a committee but not brought forward for a vote.

Senate Bill 1615

Prime Sponsor: State Senator Christine Marsh, D-Phoenix

Status: Assigned to House Judiciary and Rules, but no vote

SB 1615 would reclassify a drug paraphernalia violation from a class 6 felony to a lesser misdemeanor.

House Bill 2736

Prime Sponsor: Representative Melody Hernandez, D-Tempe

Status: Assigned to House Judiciary and Rules, no vote

HB 2736 would change penalties for drug offenses, in many cases lowering possession charges from a felony to a misdemeanor. It would reduce the penalty for possessing over 4 pounds of marijuana without intent to sell from a class 4 felony to a class 2 misdemeanor and amend the drug free school zone clause to only extend to people intentionally possessing or using drugs in a school zone.

House Bill 2007

Prime Sponsor: Representative Melody Hernandez, D-Tempe

Status: Not assigned to committee

HB 2007 would give school administrators the option to refer students in violation of drug-free school zones to appropriate at-risk programs instead mandating that alleged violations be reported to an officer.

House Bill 2548

Prime Sponsor: Representative Steve Kaiser, R-Phoenix

Status: Assigned to House Judiciary and Rules, no vote

HB 2548 would decrease the number of hours required in a community restitution program from 240 hours to 24 for offenders convicted of having less than 2 pounds of marijuana without intent to sell.

House Bill 2792

Prime Sponsor: Representative Pamela Powers Hannley, D-Tucson 

Status: Not assigned to committee

HB 2792 would make it so a landlord could not terminate a tenant’s rental agreement because the tenant uses marijuana.

Looking ahead

The number of marijuana-related bills introduced this session pales in comparison to when recreational legalization first took hold in 2020, though bills continue to pop up each session.

Niehaus said the one change she’s noted is the shift toward acceptance among legislators.

“A lot of legislators, even if they aren't pro cannabis, they are pro rule of law,” Niehaus said. “What is legal in the state of Arizona, they're seeking to uphold, maybe make the program better, but not interfere with what 60 plus percent of the state of Arizona decided they wanted.”

As for the upcoming session, Niehaus predicted issues of consumer safety, such as cannabis substitutes and testing regulations, will be at the forefront in the coming months, but said many issues related to cannabis often bolt out of the blue.

“We're an extremely young industry in the grand scheme of things,” Niehaus said. “We don't always know what is coming up next.”