The authors of the Smart and Safe Arizona Act (aka Adult Use Marijuana) included an opportunity for persons “ from communities disproportionately impacted by the enforcement of previous marijuana laws” to be able to compete for 26 new licenses to own and operate a “marijuana establishment”.

The statutory language that the voters approved was very open-ended and gives wide discretion to ADHS to decide how to allocate those licenses including developing the specific criteria. A couple of weeks ago the ADHS released their initial draft rules fleshing out what criteria they will use to decide who qualifies to apply for these new coveted licenses. After a brief comment period, they released a new draft set of rules yesterday, with a comment period that ends on Monday.

In a nutshell, the newest draft rules set forth the criteria for who qualifies to apply for the licenses. Applicants must be a resident of Arizona for 3 of the last 5 years and meet 3 of the following 5 criteria:

  1. Had a household income in at least 3 of the previous 5 years less than 400% of the federal (HHS) poverty level;

  2. Convicted of and eligible for expungement of eligible for possession of marijuana conviction under A.R.S 36-2862 (less than 2.5 oz of Cannabis);

  3. Have a spouse, surviving spouse, parent, child, sibling or legal guardian who was convicted of a violation of federal or state laws related to marijuana or marijuana paraphernalia;

  4. Have lived for at least 3 of the last 5 years in a “community that has been disproportionately affected by the enforcement of Arizona’s previous marijuana laws” (These criteria are still being developed and will be added in a subsequent iteration of the rules prior to September 1, 2021); and/or

  5. Completed an ADHS approved educational training course.

Principal officers & board member applicants cannot have had an “A.R.S. § 36-2801 felony offense (with some exceptions – see the PowerPoint) and must be eligible for a Level I fingerprint clearance card under A.R.S. § 41-1758.07.

Additionally, applicants must show that principal officers and board members cannot be removed from their position without the written consent of the principal officer or board member or a court order for removal of the principal officer or board member.

No principal officer or board member can be a principal officer or board member on any other marijuana establishment license application.

Applications would be accepted during the first 2 weeks of this December and would be awarded by the end of the year.

The comment period ends Monday and the agency will release the final rules by June 1. The ADHS Draft Rules for Social Equity are posted and comments are being accepted through Monday, May 24, 2021. Here’s a link to the Online Survey.

The Marijuana Industry Trade Association will be holding a webinar this afternoon from 3-5pm to explain the latest draft regulations. It’s free and you can join here.