Today is the day that Arizona’s medical marijuana law becomes effective. As of today, doctors can issue certifications to patients and patients can apply for their patient cards. Because there are no medical marijuana dispensaries at this time and will not be for until the fall, patients who receive a medical marijuana patient card from Arizona Department of Health Services will be able to legally grow up to twelve marijuana plants. Although a patient with a DHS card may grow and use medical marijuana in Arizona legally under Arizona law, the growing and possession of marijuana remains a violation of federal criminal law.
“Since the application for a medical marijuana card is electronic, anyone hoping to apply in person or by phone with the Arizona Department of Health Services will be turned away. . . . Patients first will have to do about a half-hour of data entry with things like their age, address and medical condition. They’ll then have to attach documents to their applications that include a photograph of themselves, a photo ID, and a signed doctor’s ‘attestation’ that the patient needs medical marijuana and will not give or sell it to anyone else.”
Arizona Republic: “”Medical-marijuana-dispensary applicants are having trouble securing lease agreements for suitable dispensary sites, Phoenix-area commercial-real-estate brokers and observers say. The challenge is twofold, they say: State-imposed restrictions limit the locations and types of real estate in which a dispensary can operate, and many commercial-property owners don’t want marijuana-dispensary tenants.”
I attended the forum sponsored by the Arizona Medical Marijuana Association and the Marijuana Policy Project in Phoenix on April 5, 2011. Will Humble spoke for about 30 minutes then answered questions for about 30 minutes. Here are my notes from the Director’s presentation:
- The final rules published by the Arizona Department of Health Services on March 28, 2011, are not the actual final rules. The actual final rules will be the rules that DHS submits to the Arizona Secretary of State on April 14, 2011. DHS intends to make some changes to the March 28, 2011, version of the rules.
- The final rules will probably require that dispensary license applicants obtain a “comfort” letter from the landlord of the site where the dispensary’s address listed on the application. Mr. Humble did not use the phrase “comfort” letter. That is my characterization of what he said, which was the applicant must attach to the application something in writing from the owner of the site where the dispensary will operate that the owner is ok with the applicant using the owner’s address on the application.
- Rather than merely requiring the applicant to affirm that the zoning of the prospective dispensary site is “groovy,” the applicant will be required to get something in writing from the city that the proposed site is in accordance with city zoning, i.e., it is properly zoned and not too close to a prohibited structure or area.
- The March 28, 2011, rules will be modified, but DHS does not intend to make substantive changes. I submit that the two preceding items, especially the second are substantive changes to the rules.
- Patient and dispensary applications will be submitted online. DHS’ goal is to reduce DHS costs.
- There is no advantage in submitting a dispensary application early.
- DHS will review dispensary license applications in July and August. He predicted that there will more applications for licenses in highly populated CHAAs and fewer applications in low populated CHAAs.
- A dispensary in Ajo that is in a low populated CHAA could have a big grow operation and sell marijuana to other dispensaries.
- After a dispensary has been operating for three years, it can move any where in the state subject to proper zoning.
- Dispensary licenses in CHAAs that are located in tribal land will be issued in 2012.
- A dispensary can move any where within its approved CHAA during its first three years, subject to zoning.
- If there are multiple dispensary license applicants who meet all five levels of review in a CHAA, the dispensary registration certificate will be awarded by a lottery conducted by the Arizona Lottery Commission.
- Level five review consists of the applicants providing a letter from a bank that says that the applicant has $150,000 of available capital. DHS doesn’t care if the available capital is cash in the bank or a line or credit or the ability to borrow $150,000, but it must say that the applicant (not an owner, officer or board member) has the money. A questioner asked if it would be ok to remove the cash from the bank that day after the bank issued the letter. Mr. Humble was stumped. He had not thought of that and the March 28, 2011, version of the rules would not prohibit the removal.
- Concerning the quality of the dispensary applications: DHS will take into consideration and look to see if the required documents are submitted and appear to be comprehensive, but will not evaluate them for quality. Not sure what he meant.
- The security and inventory control policies and procedures must show that the applicant will be able to prevent the diversion of marijuana from its intended and state lawful use.
- When asked if the applicant for a dispensary license will be notified if its application is defective and be given a chance to correct any defects, Mr. Humble said he doesn’t know yet. He said that if the total number of applications for a dispensary license is relatively low, DHS will probably notice applicants of defects and give them a cure period, but will not do so if there are too many applications. He did not give any indication of when the number of applications would be too many to give defect notices and cure periods.
- He mentioned that the business plan should include references to the Arizona medical marijuana statutes and the DHS rules where appropriate.
- As DHS receives applications for dispensary licenses, it will post the location on its CHAA maps. He did not say what other information would be made available to the public.
- Subject to applicable zoning requirements, a dispensary agent of a dispensary can deliver marijuana to its patients anywhere in Arizona as long as the agent remains with the marijuana at all times and complies with the DHS delivery rules.
- It is ok to have multiple dispensary applications for the same site.
- If a person or group of people who own one or more entities that apply for multiple dispensary licenses in multiple CHAAs were to win more thann one license, DHS expects and demands that a dispensary be opened in each CHAA. Not sure how DHS would enforce this. Would it try to terminate all of the licenses if the group failed to open or operate one of the dispensaries?
- A medical director of a dispensary cannot write certifications for any patient. Another doctor in the medical director’s medical group can write certifications, but the medical director must disclose that fact to DHS.
- I asked Mr. Humble this question: Can a for profit corporation get a dispensary license if it has one or more shareholders who own less than 20 percent of the shares and who are not officers or directors of the corporation if these shareholders do not meet the eligibility criteria including they are not residents of Arizona. He said yes.
Caution: What Mr. Humble says is not the official position of the DHS and may or may not actually be implemented by DHS. His comments are enlightening, but it is the official acts of DHS such as the rules that have legal significance.
Alan Sobol and his Arizona Association of Dispensary Professionals are demanding that there be an investigation of Will Humble and the Arizona Department of Health Services with respect to their implementation of Arizona’s medical marijuana laws. In a blog post Mr. Sobol makes various allegations about Will Humble and concludes:
“The people of Arizona are initialed to a fair and impartial administration of the program. Mr. Humble’s actions demand a through external investigation. The implementation of the Dispensary Application process should be delayed until such time as the rules and their development process can be reviewed by outside counsel. We respectfully request that your office conduct a full investigation into this matter.”
Toke of the Town: “An overwhelming number of studies exist to firmly support cannabis as all-purpose medicine and very possibly a strong candidate as a cure for cancer as was originally reported by the National Cancer Institute. There has never been a single documented primary human fatality from overdosing on cannabis in its natural form in any amount. How’s that for safety!”
Arizona Daily Sun: “When Thomas Dean was in high school, he watched his friends get in trouble for smoking marijuana and didn’t see any reason for it. Some were expelled from school, while others ended up in juvenile detention. As he got older, Dean became passionate about reform, and in college he got involved with the National Organization for the Reform of Marijuana Laws. Those experiences steered him toward a life spent challenging the status quo on marijuana law.”
Arizona Republic: “Those who choose to use, grow or sell marijuana under Arizona’s ‘medical’ marijuana law might not care that they are violating federal law. On the other hand, Arizona Department of Health Services employees who implement these laws very well might care that they are violating federal law, but they are faced with a dilemma.” This story was written by Carolyn Short, chairwoman of an anti-Proposition 203 campaign and Ed Gogek, a Prescott psychiatrist who specializes in addictions.
The story links to a “legal memorandum” that states:
“Based on our review of Arizona and federal statutes and case law, (1) Arizona citizens who use, possess, cultivate or distribute marijuana, or facilitate such use, possession, cultivation or distribution, including Department of Health Services (“Department”) and other State employees or agents, acting in accordance with the provisions of the Act, could be subject to federal prosecution under the CSA [Controlled Substances Act]; and (2) the Act [Arizona's medical marijuana laws] is preempted by the CSA and thus is null and void.”
Before the “final” Arizona Department of Health Services rules issued on March 28, 2011, I prepared Bylaws for Arizona limited liability companies, for profit corporations and nonprofit corporations that intend to apply for a license to own and operate an Arizona medical marijuana dispensary. I have not been able to “finalized” my Bylaws because I have been waiting for the “final” version of the DHS rules to be set in concrete. I want to modify my Bylaws only one more time so I am waiting patently for DHS to “finalize” the rules.
You will notice that I have put “final” and “finalize” in quotes. I did that because despite DHS’ statements that the March 28, 2011, version of the rules was the final version, the rules have not yet been “finalized.” I attended a forum last Tuesday at which DHS Director Will Humble announced two important facts about the March 28, 2011, version of the rules.
- The rules will not be final until DHS delivers them to the Arizona Secretary of State on or before April 14, 2011.
- DHS intends to make changes to the March 28, 2011, version of the rules before submitting the rules to the Arizona Secretary of State.
Note to KEYTLaw Dispensary Clients & People Who Purchased Dispensary Bylaws Online in Our Store
My goal is to review the final final version of the rules delivered to the Arizona Secretary of State this coming weekend and modify the Bylaws as necessary to comply with the final rules. You should anticipate that my “final” version of the Bylaws will be available beginning on April 18, 2011.
If you are an owner of a not for profit LLC or corporation that I formed to own and operate an Arizona medical marijuana dispensary, you should have gotten an email message from me that I sent to you three days ago. In that message, I asked that the contact for your company send the following information to me so I can prepare the Bylaws for your company:
- Names of all members of the board of directors of the company
- Name of the President (must be one of the managers if the company is an LLC – can only have one President)
- Name of the Secretary (can be the same as the President)
- Name(s) of any Vice Presidents (optional officers)
- Name of the Treasurer (optional officer)
If I formed your company, make sure that your contact person sends an email message to me asap with the above information.
See “All Arizona Medical Marijuana Dispensaries Must Have Bylaws.”
Arizona Republic: “Gayle Palms says she has a team of legal and medical experts, a business plan and the $150,000 Arizona requires to open a medical-marijuana dispensary. She knew it would be a challenge to win one of about 125 certificates for a facility that the state is expected to issue this year. But what Palms didn’t expect were challenges from her own community – and the absence of a local landlord willing to rent to her.”
Arizona Republic: “After a marathon meeting Tuesday night, the Paradise Valley Planning Commission unanimously decided that it needs more information before it can allow the Town Council to review the first special-use permit application to dispense medical marijuana. A small but vocal group’s main concerns during the 5 1/2-hour meeting were security and applicant Mountain View Medical Center’s proximity to a residential area near Tatum and Shea boulevards.”
Arizona Republic: “Two groups competing to become Gilbert’s first medical-marijuana dispensary unveiled their plans to the Planning Commission this week and both could get a use-permit early next month. Sonoran Star Remedies and Beleaf, Inc. hope to set up in Gilbert’s northwestern corridor, where most of the town’s industrial parks are. Gilbert prohibits dispensaries outside of industrial districts.”
As regular readers of this blog may recall, I recently posted an article entitled “Can the Medical Director of an Arizona Medical Marijuana Dispensary also Write Certifications for Qualifying Patients? Good Question.” Well, I spoke with Don Herrington, Asst. Director of ADHS, today and. according to him, the answer is NO.
At issue was the changed language of R9-17-313.E in the final rules which seemed to indicate that a medical director could write certifications for qualifying patients as long as the patient did not obtain the marijuana from the dispensary with which the director was associated:
“A medical director for a dispensary shall not provide a written certification for medical marijuana for a qualifying patient obtaining medical marijuana from the dispensary.”
While Mr. Herrington acknowledged that the wording in the foregoing rule might well be interpreted to allow medical directors to write certifications, he informed me that it was still DHS’s intention that medical directors not do so for any patients no matter which dispensary they used. Apparently DHS is concerned about a conflict of interest occurring, the logic of which escapes me. He said that DHS may publish a clarification of the rule before the end of the year.
Mr. Herrington did add that physicians who eventually become dispensary medical directors may write certifications up until the time when their medical directorship becomes active, which is presumably when the dispensary opens its doors for business.
In my opinion, this rule is unfair to both medical directors and their patients. Medical directorships are part time positions, and many, if not most, medical directors are also involved in direct patient care. This rule, as interpreted by DHS, deprives medical directors who are also clinicians from writing certifications for their patients who have conditions which may benefit from medical marijuana. It would also require the patients of medical directors in private practice who qualify for medical marijuana to go elsewhere for written certifications.
Jason E. Gittman, MD, FCCP
East Valley Tribune: “Arizona’s first medical marijuana will sprout from the ground this fall, but the industry around the drug is already yielding lots of something else green: Money.”
KTAR radio: “As Arizona’s medical marijuana program moves toward a launching point, the challenge is to keep it ‘medical.’ Dr. Will Humble, director of the Arizona Department of Health Services, said it would not take much to turn the legal program, approved by voters last November, into a recreational pot program.”
Arizona Republic: “A week after the Arizona Department of Health Services released its final rules for the voter-approved medical marijuana program, a Phoenix man is seeking city permission to build Chandler’s first marijuana-growing operation. William Myer and his Arizona Organix wants a permit to cultivate marijuana in an industrial park building at 6730 W. Chicago St.”
North County Times: “Two years ago, James Stacy operated a martial arts studio in Vista. Then he opened a medical marijuana dispensary in the same building. Within 10 weeks, he landed in federal jail. Stacy fought federal criminal charges, lost, and now, with a felony drug conviction, is without a full-time job or significant income. But along the way, he said, he found a new calling: activism.”
Eastern Arizona Courier: “Arizonans now know what steps they must take before legally growing, selling or using medical marijuana, according to Arizona state laws.”
Laura Nelson, M.D.. Chief Medical Officer, Arizona Department of Health Services, and Will Humble, Director, Arizona Department of Health Services posted an “Open Letter to Arizona Physicians on Medical Marijuana” on Mr. Humble’s blog. The text begins:
“Thank you for your interest in the effective implementation of the AZ Medical Marijuana Act. We realize that many Arizona physicians may not yet feel comfortable with or fully informed about medicinal marijuana. It is likely that some of your patients will have questions for you about medical marijuana or even request a certification from you. Given your established relationships with your patients, you are in the best position to determine if medical marijuana is likely to be beneficial for them. To assist you, we have reviewed numerous articles and sources of information about the medical use of marijuana.”
Associated Press: “Willis is not only packing a concealed handgun permit in her wallet, she also has a medical marijuana card. That combination has led the local sheriff to try to take her gun permit away. She is part of what is considered the first major court case in the country to consider whether guns and marijuana can legally mix.”
Recordnet.com: “Dispensaries run into difficulties dealing with financial institutions. Stockton and other local government agencies in California require medical marijuana dispensaries to promptly deposit cash into bank accounts. The federal government, meanwhile, is putting pressure on financial institutions to make that more difficult. Medical marijuana dispensaries throughout the state have been getting letters in recent months from their banks telling them their accounts are frozen or closed.”
The final Arizona Department of Health Services final Arizona medical marijuana rules are a big pain to read and review. We’ve made it much easier for people to find individual rules and read just that one rule. Each rule on our website also links to any rule or statute referenced within the rule. Do yourself a favor – when you want to read a specific DHS rule move your mouse over the menu heading at the top of the page that says “Rules Table of Contents” then move down to select Article 1, 2 or 3. When your mouse hovers over an Article the individual rules within each Article are displayed. Move your mouse to the right and down then click on the rule you want to read.
Today I got an email from email@example.com. The message said
“Seeking a cultivation and product solution to meet the needs of your dispensary? Then attend the Medical Marijuana Industry Forums this week, hosted by the Marijuana Policy Project and the Arizona Medical Marijuana Association, and sponsored by [deleted]. . . . attendees will have the opportunity to meet with AzMMA Partners who can help contribute to the business plan, DHS application, and actual operation of dispensaries. Partners providing insurance, employee benefits, product testing, banking and credit card payment services, security, and more.”
The message concluded with this statement,
“The Arizona Medical Marijuana Association is a non-profit, membership-based, professional association that seeks to advance interests of Arizona’s medical marijuana profession and the patients it serves.”
On Saturday I got another email message from the same sender that started “Need banking services for your dispensary?” and then proceeded to peddle its banking partner. I am confused. Is the AzMMA a “non-profit, membership-based, professional association that seeks to advance interests of Arizona’s medical marijuana profession,” a sales and marketing organization or is it even a legal entity recognized by the State of Arizona?
One thing is certain – the AzMMA is not is a legally created Arizona corporation or a nonprofit professional association. Although Joe Yuhas either reserved the name “Arizona Medical Marijuana Association” or filed Articles of Incorporation for an entity with that name on March 8, 2011, to date no corporation has been formed in Arizona with that name. Nor has an entity with that name formed outside Arizona registered to do business in Arizona. I just checked the Arizona Corporation Commission’s website and it shows that the Arizona Corporation Commission is working on Articles of Incorporation filed on March 22, 2011, and that it’s time to review documents filed on an expedited basis is five business days. Check the ACC’s corporate status website for yourself and see if you can find an entity formed in Arizona or registered to do business in Arizona under the name “Arizona Medical Marijuana Association.”
The AzMMA’s emails and its website claim it is a “professional association.” It’s website even claims that is was formed in 2010 shortly after the passage of Proposition 203. Technically, even if it were an ACC approved corporation the AzMMA could not be a professional association under Arizona law. The terms “professional association” and “professional corporation” under Arizona’s statutory law refer to a specific type of corporation formed pursuant to Arizona Revised Statutes Section 10-2201 et seq. Section 10-2211.A, states:
“a corporation may elect professional corporation status under section 10-2210 solely for the purpose of rendering professional services, including services ancillary to them, and solely within a single profession.”
Arizona’s professional corporation statutes only allow certain professionals such as doctors, lawyers, Realtors, and accountants to form an Arizona professional association and the corporation’s activities are limited to practicing the profession through its licensed professionals. I have no idea why the AzMMA wants to be or claims to be a “professional association.”
Another thing I noticed is that the AzMMA is very stealthy. When it sent letters to the Arizona Department of Health Services commenting on the proposed rules, the AzMMA had a graphical logo and its name on the letterhead, but no address or phone number. The AzMMA’s website does not have an address or a phone number or even a name of anybody associated with the organization. Why the secrecy? Why can’t the public know where to find the AzMMA and who its leaders are?
For some baffling reason the AzMMA seems to be the media’s go-to quote-machine whenever something happens related to Arizona medical marijuana. For example, the Phoenix New Times, the Arizona Capitol Times and the Daily Courier all called Andrew Myers of the “Arizona Medical Marijuana Association” for comments when DHS released the final rules on March 28, 2011. Perhaps the story writers should do a little investigative journalism and find out more about the secretive and not quite able to incorporation AzMMA. You would think that a reporter would do a little fact checking before writing a story and quoting a person who claims to be part of a nonprofit association that in reality is not a validly existing Arizona entity.
Tomorrow and the next day the Arizona Medical Marijuana Association and the Marijuana Policy Project are sponsoring a four hour forum with six speakers who will talk about Arizona’s medical marijuana laws. Will Humble is one of the speakers. Why is Will Humble providing his name and the authority of Arizona Department of Health Services in assisting the AzMMA to make a buck? The price of admission is $300. Not bad for a self-proclaimed “nonprofit association.” The sign-up page for the forum is on the Marijuana Policy Project’s website. It says, “If your company wants to sponsor this pair of events for $5,000, please email MPP at RobKampia@mpp.org.” Again, not too shabby for a “nonprofit association.”
Besides the AzMMA, there are four sponsors (4 x $5,000 – $20,000) for the event:
It appears that the forum may be a way for MPP to raise money for its own use. One of MPP’s stated purposes is to “Change state laws to reduce or eliminate penalties for the medical and non-medical use of marijuana.” Whether or not you agree with MPP’s purpose, it just doesn’t seem right for Will Humble and ADHS to assist MPP and AzMMA or any organization to raise money for their private purposes.
Question for Mr. Humble: If another fledgling Arizona medical marijuana industry association (there are a lot of these outfits vying to become the industry’s support organization) were to ask you to speak, would you speak for 30 – 60 minutes so it could charge sponsors $5,000 and attendees $300? If not, why do it for the secretive AzMMA?
Thanks to all who helped this website set a new monthly record for visitors in one month. Last month (March of 2011) was our third month on the net and we had 21,421 visitors.
Arizona Republic editorial: “The Arizona Republic opposed the medical-marijuana law because such measures in other states have led to widespread abuse. There may be a way to prevent that from happening here, and it’s a goal worth pursuing.”
As an experienced MD clinician who is a strong believer in the right of patients to obtain medical marijuana if it may provide relief for their specific medical condition, I was interested in serving as a medical director for a non-profit that will be successful in obtaining a license to operate a dispensary from DHS later this year. In addition, I was also looking forward to be able to write certifications for qualifying patients. However, the language set forth in R9-17-312.E in the second (1/31) draft rules explicitly prohibited a medical director from providing certifications to any qualifying patients:
“A medical director shall not establish a physician-patient relationship or provide a written certification for medical marijuana for a qualifying patient.”
I suppose DHS felt there might be a conflict of interest if a medical director also provided certifications to patients. Perhaps the agency was concerned that a director might be tempted to act unprofessionally and provide a certification to an unqualified patient in order to drum up business for the dispensary for which he or she was associated – a very unlikely scenario.
So, you can imagine my delight when I read the final rules that seemed to do away with this unnecessary prohibition. The corresponding rule, R9-17-313.E, no longer states that a medical director cannot have a physician-patient relationship nor provide certifications for any patients qualifying for marijuana as in the prior draft. The current rule appears to just prohibit the medical director from writing certifications for qualifying patients who would obtain marijuana from “the dispensary” for which he or she serves as director:
“A medical director for a dispensary shall not provide a written certification for medical marijuana for a qualifying patient obtaining medical marijuana from the dispensary”
But my delight soon turned to confusion when I read this specific answer to one of the FAQ’s on the DHS website:
“What will a dispensary’s medical director do? The duties of a dispensary’s medical director include developing information and training for dispensary agents and customers. A medical director is not permitted by the rules to provide written certifications for medical marijuana.”
Any reasonable interpretation of R-9-17-313.E would conclude that the phrase ”the dispensary” means the dispensary for which the medical director works. For the FAQ to be accurate, the phrase “the dispensary” in the rule would have to mean any dispensary in Arizona. If, indeed, this were the intention of DHS, then why would it change the language in the second draft rule which was so clear about such a prohibition and left no room for interpretation?
Clearly, this is a matter that needs to be clarified for those physicians, like myself, who would like to serve as a dispensary medical director and also provide written certifications for qualifying patients.
Jason E. Gittman, MD
Ray Stern, Phoenix New Times: “The final rules for medical marijuana are too tough on patients and may encourage a lawsuit, says one Valley doctor. Edgard Suter, an East Valley nuclear medicine physician who has been an outspoken advocate for medical marijuana, decried an addition to the draft rules that requires doctors to state the underlying condition causing “chronic or severe pain.” He already was unhappy that state officials plan to monitor the recommendations that physicians make and turn in prolific recommendation writers to medical boards for possible discipline.”
Ray Stern, Phoenix New Times: “If you ever smoke or use marijuana, it’s time to see the doctor. The Arizona Medical Marijuana Act is the law of the land, and now the state Department of Health Services has provided a map to legal immunity for anyone interested in possessing pot. The final rules from the DHS spell out exactly need to be done to obtain a recommendation from a doctor for a state medical-marijuana card.”
The American Independent: “Last November, medical marijuana advocates launched the National Cannabis Industry Association (NCIA), a lobbying organization dedicated to representing the interests of the medical marijuana industry on the federal level. Today marks NCIA’s first official ‘congressional lobbying day,’ during which representatives of the organization are meeting with members of Congress to argue for the protection of medical marijuana interests. To kick off the day, NCIA held a press conference this morning that included presentations by medical marijuana dispensary owners, cannabis researchers and U.S. Representative Jared Polis (D-Colo.), an avowed supporter of medical marijuana rights.
See “Congressman Calls For an End to the War on Weed.”