Governor Brewer lost her Federal suit to stop Prop 203, and she had decided not to appeal.  In turn, this has prompted DHS to lift its moratorium on accepting dispensary applications.  

 Per DHS Director, Will Humble’s blog, DHS is expecting to start accepting dispensary applications in April.  However, due to a significant victory in the Compassion First v. Arizona case, the application qualifications and rules that DHS published last year are going to change significantly.  Per Director Humble, DHS is working at fever pace to amend the regulations to conform to the Superior Court ruling. 

 Amongst the changes coming to the dispensary application process include: 

• Removal of the 3 year Arizona residency requirement;
• Removal of the requirement that an applicant never filed for bankruptcy (personal or corporate);
• Removal of the requirement that the applicant have submitted their past 3 year Arizona tax returns;
• Removal of the requirement that the applicant be current on child support.

 You can read Director Humble’s blog here.  The blog also has a link to the Compassion First v. Arizona decision. 

 As a result of the Compassion First v. Arizona decision, there are two issues of which you need to be aware.  First, we don’t know if any of the parties to the Compassion First v. Arizona case intend to appeal.  If they do, it may result in a further delay to DHS accepting applications and/or may result in post-application lawsuits pitting the non-winners of dispensary certificates against the winners and DHS.  Second, the removal of the residency requirements means no hometown advantage and a probable influx of out-of-state players vying for dispensaries.  This may also result in DHS abolishing or altering its plans to hold a lottery to award certificates in CHAAS that produce multiple qualified applicants.

Smith & Craven is keeping its finger on the pulse of these issues and remains available to assist you and your referrals with all stages of the application process, including real estate, zoning, corporate formality, and regulatory compliance.  We also provide litigation services, appeals, and can provide on-going legal counseling for dispensaries and their owners.

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