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Arizonans Deciphering the Business Of Medical Marijuana

(FBN UPDATE.  Beginning April 14th, Arizonans will be able to begin the process for growing marijuana.  State Health Director Will Humble is announcing the applications are available at his agency’s website.  Patients will need to be certified by their physicians as candidates for medicinal marijuana use, before applying for permission to acquire it.  Dispensaries are expected to begin selling marijuana in September; until then, people with marijuana cards who meet specifications spelled out by the Arizona Department of Health Services.)

Unraveling the rules that will govern the operation of medical marijuana dispensation in Flagstaff is no easy task. And while locals voted overwhelmingly in favor of Prop 202, there is still much confusion about exactly how the system will operate. Arizona’s Department of Health Services (DHS) has the unenviable task of drawing up the rules around an industry that has a certain degree of stigma, at least from some sections of the community.

The DHS is allocating certificates for one Medical Marijuana Dispensary (MMD) within each of its designated Community Health Analysis Areas, or CHAAs, small population-based geographic units used by Public Health programs. Of the 124 CHAAs statewide, Flagstaff has three – west, east and county, meaning that there will be up to three dispensaries operating in the city and adjacent county. Dispensaries will be allowed in two zones: Highway-Commercial (C-3-E), including the major commercial corridors of S Milton, Route 66 and Fourth Street, plus urban-commercial (UC), e.g. the Woodlands Drive area.

Thomas Dean, who represents several Flagstaff groups interested in obtaining MMD licenses, expects the new outlets to provide a valuable boost to the city’s economy, particularly if they are located at sites within the designated zoning that currently have a lot of vacant property. Dean predicts that dispensary business will be brisk, partly due to a lack of competition. Marijuana vending will certainly generate tax revenue – as it is not legally a prescription drug, it will be subject to sales tax. Dean also envisions positive knock on effects for associated businesses such as restaurants and coffee shops, which he expects will open nearby to serve dispensary patients.

Getting dispensary businesses up and running is unlikely to be straightforward. Security is a major concern, with fears that premises could become hot spots for crime. Security at outlets in Arizona will at least be stricter than in California, with requirements including reinforced walls and an elaborate system of security cameras – all monitored both by DHS and law enforcement. Licensees will also have to deal with a time lag of up to four months between dispensaries opening and the first legal harvests coming on stream, meaning that customers may find shelves poorly stocked when outlets initially open. However, the City Council’s decision to allow premises larger than 3,000 square feet will help businesses reduce start-up costs by enabling retail and growing operations on the same site. Not only will this give economies of scale in staffing and property leasing and reduce transportation costs, but it is supported by Flagstaff Police Department as it will reduce remote growing operations and restocking deliveries. For Joe Galli at Flagstaff Chamber of Commerce, the major concern is ensuring adequate employer education on the law regarding employees. Since card holding dispensary employees won‘t be discriminated against for a positive test for marijuana, Galli wants to ensure that employers are not left liable.

The dispensing operation itself is likely to run on a type of patient debit card that shows a record of the registered patient’s treatment history and prescription use. To register, patients will require a written recommendation from a doctor stating that they have one of the conditions recognized by DHS as being helped by medical marijuana. Unlike California, where qualifying illnesses are somewhat vague, in Arizona, the list of medical conditions is more tightly restricted to around 14 chronic disabilities and ailments (including cancer, glaucoma, HIV, AIDS and Hepatitis C). More of a gray area is the registration of so-called home “caregivers.” Anyone proving they have no felony offense and passing a fingerprint test will be able to deliver medical marijuana to as many as five patients who are unable to collect it themselves. The new rules will allow patients to grow marijuana at home – but only if they live more than 25 miles from a licensed dispensary. Licensed caregivers will also be allowed to grow up to 12 plants per patient – but again, only for those patients living beyond the prescribed distance from an outlet.

Perhaps the most contentious issue of all is the DHS’s planned method of allocating dispensary licenses. After preliminary vetting, application selection will proceed on a random basis. Many potential dispensary owners are dismayed that a quality of service provision will not be taken into consideration. Spokeswoman Laura Oxley is one of the DHS staff grappling with finalizing the rules due for publication on March 28. “We didn’t ask for this” she said, “we were given it by the voters, but we’re doing our best.” According to Oxley, random selection is seen as the best way to give smaller, locally run dispensary applicants a good chance of obtaining a license, even though she admits it will not necessarily result in selection of those best able to deliver service. Cynics point out that random selection will certainly be the simplest system to administer – and will allow the DHS to avoid potential lawsuits from unsuccessful applicants.

Despite the obstacles, former Flagstaff gallery owner David Grandon is one local businessman who remains upbeat about the possibility of opening a dispensary. With his newly formed company, Grassroots MMD, Grandon envisions dispensing organically grown product in an “infusion center,” providing a suite of complementary therapies, such as naturopathic medicine, acupuncture, massage and counseling. He wants to educate patients in the alternative of edible marijuana – “I don’t want to encourage seriously unwell people to take up smoking,” he said, and plans to include a kitchen and bakery in his dispensary, should his application be successful. His vision is that dispensaries will integrate calmly into the local trading scene, benefitting the community not just commercially, but socially and medically.

“I think this is an opportunity for Flagstaff to become a national good example of how this trade can be run well and responsibly – and to be part of something potentially historic,” he said.

With patient registration applications opening in early April, license applications taking place in May and the first dispensaries potentially opening sometime in August, time will


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