Thursday, February 2, 2012

ADHS Avoids Groundhog Day By Signaling Dispensaries By Summer

Happy Groundhog Day!  The 1993 movie bearing that name is a favorite.  Arizoneout has something of that same, deja vu feeling that Bill Murray had, because the last post was an admission of error on a prediction, and this post starts with the same confession.

When Arizona Department of Health Services (ADHS) Director Will Humble said the dispensary application process might be further delayed by a pending lawsuit challenging his agencyʼs regulations implementing the Arizona Medical Marijuana Act (AMMA), even after the State's federal lawsuit was dismissed, Arizoneout predicted the dispensaries' legal limbo would extend for many months.

Wrong, wrong.

Under the headline "Dispensaries in AZ this Summer?", Humble's blog on January 25 announced the goal to begin accepting dispensary applications by April. Of 2012.  Humble further said that dispensaries could be operating by July or August.  That would be a year behind schedule, sure, but much faster than Arizoneout thought possible.

What appeared to be a persistent logjam cleared so quickly only because of a decisive and well-reasoned opinion issued a week earlier by Judge J. Richard Gama of the Superior Court for Maricopa County.   Judge Gama spent 22 years as a civil trial lawyer before being appointed to the court in 2000.  He has handled family and juvenile court dockets, but has had a civil docket since 2007.

The case was brought by would-be dispensary applicants who were not eligible to apply for a license because of regulations issued by ADHS.  The agency tried to get the case dismissed on procedural grounds, by arguing that it had complied with the AMMA by issuing regulations on the voter-adopted timetable, even though it had stopped implementing them back in May 2011. 

Judge Gama was having none of that, labeling the State's argument "disingenuous." He ruled that the specific statutory language giving any citizen the right to sue to compel ADHS to implement the dispensary system if it failed to do so within 120 days gave him mandatory jurisdiction over the case.  He added, "it would be a Pyrrhic victory for the voters were the Court to conclude otherwise."

That strong language was followed by an even stronger ruling.  He threw out regulations hinging eligibility to apply for a dispensary license on being an Arizona resident and submitting a personal state income tax return for the previous three years, never filing for corporate or personal bankruptcy, and being current on child support, taxes and penalties, judgment debts to the government, and government subsidized student loans.

The AMMA itself specifies those persons who may be considered for dispensary licenses, and the list of exclusions is short:  no felons, no one whose dispensary certificate has been revoked, and no one under 21.  ADHS claimed authority to impose the other exclusions based on language in the AMMA authorizing regulations to protect against diversion and theft, and setting a cap on the total number of dispensaries. 

Judge Gama was direct in his rejection of those arguments, saying ADHS could not "bootstrap substantive regulations of who may apply" onto its duty to regulatie dispensaries for the purpose of theft and diversion prevention. 

Judge Gama let stand other regulations as "supplementary rules" to protect against theft and diversion that prohibited absentee ownership of 20% or more of a dispensary, and required proof either of ownership of the proposed site or the landlord's consent to use of the site as a dispensary.

The fact that Humble announced within a week of the ruling that his teams were "dotting the i's and crossing the t's" on revised regulations to comply with the ruling and to begin accepting applications immediately is a strong signal that the State does not plan to appeal Judge Gama's decision or to pursue any other legal remedies.  Having lost two cases, the State apparently does not want to prolong its Groundhog Day on medical marijuana.

The case is important for reasons beyond its practical effect of clearing the roadblock and letting the dispensary licensing program go forward.  It is the first opinion interpreting the AMMA, and it will be cited by the lawyers and judges deciding future AMMA cases.  To disagree with Judge Gama, that future judge is going to have to explain why, which is why it is more often the case that the second judge finds the first judge's opinion to be persuasive precedent.

Compassion First LLC v. State established that officials of the State must carry out the will of the voters as expressed in the AMMA.  Sooner than expected, Arizona will have dispensaries.  That means employers will have more employees lawfully using or possessing marijuana among their workforce.  Smart employers will be prepared by knowing their rights and responsibilities.

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