When Arizona issued 26 new licenses for marijuana shops last month in a high-stakes lottery to fulfill a “social equity” component of marijuana legalization, the winners assumed their opportunity could be worth millions.
But zoning issues in Phoenix and Tucson could make those licenses worth much less, and may even result in some winners losing their licenses because they can’t use them by a state-imposed deadline.
While officials in Phoenix never explicitly blocked the new shops the way Gilbert and several other Valley cities like Scottsdale and Surprise have, the zoning rules will have that effect, at least for now.
The issue in Phoenix is that social equity licenses only allow recreational sales to people 21 and older, not medical sales, which are taxed and licensed differently. In Phoenix, existing zoning rules only account for dispensaries that sell medical marijuana.
“The city of Phoenix does not allow a standalone recreational marijuana dispensary,” Phoenix Zoning Administrator Tricia Gomes said in an interview with The Arizona Republic on Tuesday. “It must be an accessory to a medical marijuana dispensary.”
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The language in Proposition 207, the 2020 marijuana legalization ballot measure, called for issuing the new licenses to people “from communities disproportionately impacted by the enforcement of previous marijuana laws.”
The criteria to apply for social equity licenses included having a minor marijuana conviction or family member with a marijuana conviction, as well as income guidelines and having lived in one of the ZIP codes the state identified as disproportionately affected by marijuana enforcement.
Phoenix officials said they are reviewing the rules and plan to discuss the issue with the City Council.
Tucson officials are reviewing zoning rules for the new social equity licenses, effectively delaying their launch in that city.
Social equity license winners could look to rural communities, but many of those areas already are going to see new marijuana shops thanks to additional rural licenses the state issued last year. And most licensees likely would prefer to open in the major cities.
The zoning issues create additional problems for would-be marijuana shop operators because under state rules, the winners from last month’s lottery are required to have their retail locations open within 18 months of obtaining their dispensary license, or risk losing it.
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