A lawsuit working its way through the Arizona court system is challenging Arizona Department of Health Services’ denial of four dispensary licenses in rural Arizona counties, as a Phoenix-based company attempts to fill empty spaces in the cannabis landscape and increase patient access where there currently is none.
The lawsuit pits four LLCs—Joshua Tree, Cactus Wren, Saguaro and Desert Tortoise health centers—against AZDHS, challenging the denial of applications for dispensary licenses in Apache, Greenlee, La Paz and Santa Cruz counties.
The initial complaint was filed in July 2020 and alleges that AZDHS denied the applications despite a ruling by the Arizona Supreme Court stating the Arizona Medical Marijuana Act “requires that ADHS issue registration certificates, and necessarily open the application process, under two distinct circumstances: (1) if the allocation of dispensary certificates is below the one-in-ten ratio [of dispensaries to pharmacies] or (2) a county does not have a dispensary.”
According to the AMMA rules put in place in 2010, the number of medical dispensaries cannot exceed 10% of the number of pharmacies—think CVS or Walgreens—in the state, but may exceed that number to ensure every county has at least one.
ARS 36-2804(C) states, “the department may issue nonprofit medical marijuana dispensary registration certificates in excess of this limit if necessary to ensure that the department issues at least one nonprofit medical marijuana dispensary registration certificate in each county in which an application has been approved.”
On Jan. 12, 2021, Maricopa Superior Court Judge Joseph Mikitish ruled against AZDHS’ motion to dismiss the complaint. In its answer, AZDHS admitted that there are no dispensaries in the four counties, and that since at least 2017—the last time there was an assessment—there has been less than one dispensary for every 10 pharmacies.
The LLC that filed the lawsuit is controlled by Mason