Arizona Introduces Social Equity Classes for Cannabis Businesses
Written by on August 21, 2021
For some prospective marijuana dispensary owners in Arizona, class is now in session. Social equity class, that is.
It is a provision included in the ballot measure that voters in the state last year legalized recreational pot use for adults. The measure, Proposition 207, called on the state to “promote the ownership and operation of marijuana establishments and marijuana testing facilities by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws.”
What that means in practice: Arizona’s Department of Health Services will award 26 dispensary licenses to individuals from those communities particularly affected by long standing anti-pot laws.
The department, which is overseeing the implementation of the new recreational marijuana program, will accept applications for those licenses from December 1 until December 14, and a random lottery will determine who is awarded the licenses.
As part of the application process, the department is requiring those applicants to participate in classes “to ensure that social equity applicants are prepared for the application process and the challenges of running a marijuana business.”
According to the department, the classes will be taught by industry experts, and “will include two days of content and education focused on a number of aspects of operating an adult-use marijuana business, including legal requirements, business practices, regulatory compliance, and fundraising, as well as marketing and strategic growth.”
“The social equity ownership program is intended to promote the ownership and operation of licensed Marijuana Establishments by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws,” the Department of Health Services said.
“Social equity license holders will be required to comply with all statutes and rules that govern Adult-Use Marijuana Establishment licenses, including obtaining approval to operate before opening their retail location. Additionally, social equity license holders will be required to develop and implement policies to document how the Marijuana Establishment will provide a benefit to one or more communities disproportionately affected by the enforcement of Arizona’s previous marijuana laws.”
The social equity program in Arizona is just one example of states legalizing marijuana and recognizing the communities that have long been harmed the most by prohibition. In Nevada, where pot has been legal since 2017, lawmakers recently agreed to permit cannabis consumption lounges so long as at least half of the first 20 licenses for the establishments are awarded to social equity applicants.
But Arizona’s social equity efforts have drawn some critics who say the program could be ripe for exploitation, given the lack of restrictions imposed on transferring the licenses.
Applicants for Arizona’s social equity marijuana program must meet three of the four criteria, per the state’s Department of Health Services: have a household income of “less than 400 percent of the federal poverty level in at least three of the previous five years”; “has been adversely affected by enforcement of previous marijuana laws” because he or she is “eligible for and has petitioned for expungement” or was “convicted in Arizona of a federal or state law related to marijuana, and does not have an excluded felony offense”; has “been adversely affected by enforcement of previous marijuana laws, because the individual is related to another individual who was convicted in Arizona of a federal or state law related to marijuana”; and has “a physical address, and has lived for at least three of the previous five years at the address, in a community that has been identified by the Department as being disproportionately affected by the enforcement of Arizona’s previous marijuana laws.”
The eligibility requirements were established by the department in June, and the random selection is expected to take place in the spring of next year.
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