Arizona's Week in Weed: Springerville Dispensary Raided, Phoenix Attacks Pot, and More

Arizona has marijuana on the brain — and no wonder: The state has one of the country's biggest medical-marijuana programs, its voters may approve an adult-use legalization initiative at the ballot in November, and it shares a border with one of the world's biggest producers of cannabis.

Here's a roundup of some of last week's biggest news stories related to cannabis and the Grand Canyon State:

* Springerville dispensary raided:

Springerville police raided the Green Farmacy in the small, eastern-Arizona town and seized the shop's supply of medical marijuana, claiming the place was no longer authorized by the state to sell marijuana. The dispensary's been closed since the Wednesday raid.

Internet records show Green Farmacy had been operating at 334 East Main Street in Springerville for about three years. Springerville Police Chief Mike Nuttall tells New Times this morning that the firm's license to sell marijuana with the state Department of Health Services hasn't been valid since November, "and they were very well aware of it being no good."

"Coincidentally," he says with a laugh, the raid came on last week's pot-appreciation day, April 20.

No one was arrested, but police still are working on the investigative report that will be sent to the Apache County Attorney's Office for possible prosecution.

DHS officials didn't immediately reply to a message seeking confirmation of that.

It's either the first state-authorized (or previously state-authorized) dispensary to be raided, or one of the first. The bust shows how the legal-marijuana industry remains fraught with danger for entrepreneurs: The penalty for an invalid business license could be far worse than a business owner might face for an expired liquor license, for example. Without the protection of Arizona's 2010 medical-marijuana law, the sale, production and possession of marijuana reverts back to the state's draconian felony-prohibition laws.

A long Facebook post on the dispensary's site by an employee explains that when owner Carsten Loelke opened the YiLo Superstore in Phoenix recently, "he transferred the Dispensary license to the Phoenix store and made our business a delivery hub of this new store so that he could continue to service this area." 

She's referring to Tempe's Aarch Club, which allows patients to pick up medicine delivered from Arizona Grass Roots, a licensed dispensary in Mayer.

Such deliveries are something of a gray area right now, because the state DHS hasn't addressed them in its official medical-marijuana rule book. With the Aarch Club, bona-fide patients place an order that isn't available for a few hours, since in theory it has to be driven 80 miles from Mayer.

Tom Dean, a lawyer and expert on Arizona's medical-marijuana law, is providing some legal answers for Green Farmacy's principals but hasn't yet taken them on as a client. He says Loelke's operating license was transferred to the Phoenix location, but DHS never officially revoked the Springerville license. It would have expired in a few months, Deans says, but in the meantime it apparently remained valid.

DHS officials need "to clarify the extent to which dispensaries can do deliveries" in other areas around the state, and also clarify when a previous license becomes invalid once a dispensary moves.

Under the 2010 law and subsequent rules by the DHS, dispensaries had to stay in the same location they opened for three years, but then could move anywhere in the state that would have them. With the program maturing, several dispensaries have moved or plan to move to areas with more potential customers. The state recently announced it would be issuing more dispensary licenses, which appears to be a tactic to avoid large swaths of the state being open to home cultivation by patients. The law currently doesn't allow patients to grow marijuana if they're within 25 miles of an operating dispensary.

The Springerville bust had some patients in the cannabis community wondering whether the fact that Springerville no longer has an operating dispensary means that they can start growing marijuana in their homes.

The closure of Green Farmacy could mean patients in the area now may grow marijuana, Chief Nuttall says. But he points out that two new dispensaries are preparing to open on Main Street in Springerville — meaning it may be a really short growing window.

New Times left a message for Carsten Loelke but hasn't yet heard back.

"I'm not against medical marijuana," says Chief Nuttall, adding that the business "helps our town."

Shutting down Springerville's dispensary, even if warranted, has a negative side for the area, he says: "I feel sorry for the patients who actually need it."

UPDATE 3:45 p.m.: Springerville just released the police report for the April 20 raid — it shows that a Tucson dispensary owner who was thinking of expanding his business tipped off cops to Green Farmacy's allegedly invalid dispensary license.

The day before the raid, police received word that Green Farmacy didn't have a valid license, according to the report authored by Springerville Police Sergeant Ellis Hicks.

Hicks wrote that he met with a woman who had epilepsy and had purchased a 240-milligram YiLo candy bar from Green Farmacy – “and it wasn't listed as a valid dispensary.” She said that after “finding out” the dispensary wasn't authorized to sell the products, went to police.

Hicks interviewed the unidentified Tucson dispensary owner, who told him he'd driven to Springerville “because he was interested in expanding his business.”

The man explained that he knew Green Farmacy had transferred the license to Phoenix last year and was interested in purchasing the building it was in. But when he talked to the property owner, the man explained to Sergeant Hicks, he learned that Green Farmacy was still renting the place.

It sounds like the dispensary owner ran his own investigation on Green Farmacy. The woman he was with bought the candy bar, then the owner checked Arizona Department of Health Services records and saw the patient's records hadn't been updated to show the purchase. The records also showed the dispensary's license wasn't valid, the owner told Hicks. The pair turned the records over to Hicks.

The cop then interviewed the building owner, who wasn't named in the report.

“The owner of the building… advised me he was renting the building to Carston [sic] Loelke and he was worried about his operating the Green Farmacy illegally and didn't want to get into trouble,” the report states. “I advised Mr. … that he could only get into trouble if he knew this was happening and still rented it to Carston Loelke.”

The DHS chief of special licenses was consulted, and she told Hicks that Green Farmacy wasn't listed as being a licensed dispensary. The operating license had been transferred to the firm's Phoenix location, at which point the old one would have been turned in and a new one issued, “making the old license invalid.”

That was all she could say without a search warrant, she told him.

Hicks visited the dispensary himself that afternoon, met manager Elizabeth Jetton, and photocopied the operating license hanging on the wall, which itself was a photocopy, his report says.

The raid by Springerville police and members of an Apache County task force occurred just before six p.m. on April 20. Two customers inside were checked for warrants and released.

Chief Nuttall told New Times the customers, two women he estimated to be in their early 20s, “were crying” as they asked if they could still pick up their medicine. Nuttall told them they could not.

“Can we get our money back?” he said they asked him. He declined that request, too, telling them they'd have to speak to the dispensary about that.

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