Medical Marijuana

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The Department of Health Services Director Will Humble provides an update on Arizona’s implementation of its voter-approved medical marijuana program.

Ted Simons: Good evening. Welcome to "Arizona Horizon." I'm Ted Simons. The first convictions are in involving the U.S. Justice Department's botched gun running program "Fast and Furious." Two men admitted to being part of a smuggling ring to provide guns for the Sinaloa drug cartel. The face of the Phoenix Police Department's Silent Witness Program says he will run against Maricopa County Sheriff Joe Arpaio. Paul Penzone is running as a democrat. He is a retired police sergeant and he filed paperwork to former exploratory committee for the sheriff's race. Penzone cited uninvestigated sex crimes in the northwest valley as an example for the department's need for a professional leadership.

Ted Simons: Well, recent court action on medical marijuana appears to have cleared the way for dispensaries to start distributing medical marijuana in near future. This very department of health services is responsible for coming up with rules to implement the law. Joining us is DHS Director Will Humble with some breaking news on all this. And I love saying breaking news because you really do have new information.

Will Humble: Yeah, well, there's been a couple of court cases that have come out in the last few days. We have been looking for the options that we have. We have just decided not to appeal any of those cases, so we're going to press ahead with the dispensary part of the rules. We're looking at taking applications in, say, April.
Ted Simons: Umm Hmm…
Will Humble: And, we'll have a little review period. So we expect to award the first licenses probably mid June.

Ted Simons: So applications April? Licenses mid June?

Will Humble: Right.

Ted Simons: Last we heard the governor saying - applications okay, but I'm not ready for licenses yet.

Will Humble: Well, see the issue was there was this one outstanding case in superior court which was actually resolved last week. The judge gave us a series of opinions basically orders regarding the rules that we had established for selecting successful dispensary applicants. So many of those things were struck down. What we need to do now is really look at that judge's ruling, rework our rules, which we can do pretty quickly, and set those new criteria, which basically eliminates many of the selection criteria that were in the original version of the rules.

Ted Simons: Can you tell us why the decision not to go ahead and challenge?

Will Humble: Well, I think it's just sort of -- I think let me say this. There are a number of outstanding issues around medical marijuana. Clearly it's against federal law. I mean it's sort of the cloud this whole program has over it. I mean, the governor has tried to resolve those questions with the federal government. That case was dismissed. So I think we're at the point where we start looking at the state law. We had an outstanding case in superior court challenging our selection criteria for the dispensaries. The judge struck those things down. It's at the end of the line where there's really no reasonable -- nothing else reasonable to do except proceed.

Ted Simons: Some of these requirements struck down from now on you can't require the three-year residency, you can't require three years of income taxes, you can't require no government debts, parking tickets, child support. You can't say if you had personal or professional or proper, corporate bankruptcy, that wouldn't disallow you. That's a lot of stuff now swept away.

Will Humble: Right. What we tried to do in the original rules were to put some selection criteria in place so we would whittle down the field of candidates in a particular zone, say we had several people that wanted to run a dispensary in the same part of town. Original rules sort of set a course that would whittle that field down to one or two applicants. The way it's going to be now we have to remove those criteria from our rules. We'll still have a couple left, but by and large it will be more random selection at the end rather than this sort of meritocracy, if you will.

Ted Simons: Sounds like a lottery.

Will Humble: Basically yes.
Ted Simons: Basically yes.
Ted Simons: With all these requirements removed are we going to see a trampling of folks excited? Or not quite so simple?

Will Humble: There are some people that are excited about it, but it's not as easy as you might think to get one of these dispensary licenses. We have a lot of criteria that we're going to look for throughout the rest of the process. Set aside the selection criteria, the business plan, inventory control system, et cetera, et cetera. There's a lot of capital and know-how that goes into these to begin with. The second piece is folks need to get their local jurisdiction to sign off on the zoning, and that's not easy either. There's lots of properties around town, but many of the cities have put some zoning restrictions in for these dispensaries and there may not be that many properties to rent or buy.

Ted Simons: There still, we can talk about the chilling effect of folks who own these properties, we don't want any part of it. Nothing on our land that involves this.

Will Humble: That goes back to the issue of federal law. Bottom line, this whole thing is against federal law. There's some risk inherent in leasing or renting a property to a person who plans on a dispensary at that location because it's against federal law. All those cancellation factors put together sort of -- I think that we may not see as many applicants as initially we thought.

Ted Simons: And you still need a certain financial requirement, correct, in terms of was it $150,000?

Will Humble: There was one piece that survived. The selection criteria that we had included. That is the 150,000 in start-up capital. Now, it is not required, you don't have to have $150,000 in start-up capital, but if you have two applicants in the same part of town and you can only award one license, we're going to look at that financial criteria and the person who is able to establish they have that capital will get the award.

Ted Simons: What about now that residency is gone, what about folks coming in from California or New York or something like this and they have $3 million of start-up capital and I only have 150,000. Once you're past the 150 everything is even Steven?

Will Humble: That's right. Everything is even Steven.

Ted Simons: So the lottery then still exists?

Will Humble: oh, it will. Yes.

Ted Simons: So the bottom line, we are going to see medical marijuana dispensaries.

Will Humble: Right. My best guess is that we would be awarding those initial licenses in mid June. We could potentially have if someone was ready to go, had their business plan and everything ready, we could see some dispensaries in, say, mid-July, early August.

Ted Simons: Mid-July, early August. Ok. Last question. I.D. cards are still being issued. I know there are some 18,000 cards or something like that?
Will Humble: 18,000, yeah.
Ted Simons: Where are the concentrations of most of these id's?

Will Humble: The conventional wisdom at the beginning was that they would all be around the universities. Fact is, if you look at the maps, it's interesting. Say here in the valley we have a lot of qualified patients from Surprise, North Scottsdale, then qualified patients in the East Valley, Mesa, Chandler. Those parts of town. It wasn't lie at least I thought would be this big cluster by the universities. It turned out to be sort of the periphery of town.

Ted Simons: Age groups?

Will Humble: Still the same as it's been since the very beginning. It's pretty encouraging; we have more people over 40 than under 30. So as you age, Ted, like you and I, you're more likely to have a debilitating medical condition. It's a sign of a relatively medical marijuana program as opposed to a recreational one, skewed to that under age 30 group.

Ted Simons: Alright, good stuff. Thanks a lot for joining us.

Will Humble: Thanks.

Will Humble:Director, Department of Health Services;

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