ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
VETOED
AMENDED
marijuana; inspections; license renewal
(NOW: marijuana; inspections; licensing; financial ownership)
Purpose
Authorizes the Department of Health Services (DHS) to inspect a nonprofit medical marijuana dispensary (dispensary) during normal business hours. Establishes renewal dates for dual licensees. Contains requirements for enactment for initiatives and referendums (Proposition 105).
Background
In 2010, Arizona voters approved the Arizona Medical Marijuana Act to establish a regulatory system, overseen by DHS, that allows a dispensary to dispense a permissible amount of medical marijuana to a qualifying patient or the qualifying patient's designated caregiver.
Dispensaries must register with DHS and obtain a dispensary registration certificate by submitting to DHS: 1) an application that includes the dispensary's physical address, including the physical address of any additional cultivation sites and the name, address and birthdate of each dispensary principal officer, board member and agent; 2) application fees; 3) the dispensary's operating procedures, including procedures to ensure accurate recordkeeping and adequate security measures; and 4) a sworn statement certifying that the dispensary is in compliance with zoning restrictions, if applicable (A.R.S. § 36-2804; A.A.C. R9-17-304).
All cultivation of marijuana must take place in an enclosed, locked facility at a dispensary's physical address that can be accessed only by dispensary agents associated with the dispensary. Dispensaries are subject to DHS inspection upon reasonable notice (A.R.S. § 36-2806).
According to statute, licenses issued by DHS for marijuana establishments and marijuana testing facilities are valid for a period of two years, and a dual license is permitted to be obtained for a marijuana establishment and a dispensary. These licensees are required to comply with the rules outlined for marijuana establishments (A.R.S. § 36-2854).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Eliminates the requirement that DHS provide reasonable notice of inspection to a dispensary and allows DHS to visit and inspect a dispensary as necessary during regular business hours to determine compliance with the Arizona Medical Marijuana Act and DHS rules.
2. Directs DHS to make at least one unannounced visit annually to each dispensary.
3. Establishes the initial renewal date for both a dual licensee’s marijuana establishment license and dispensary registration to be the earlier date of:
a) the marijuana establishment license renewal; or
b) the dispensary registration renewal.
4. Requires DHS to adopt rules that prohibit a marijuana testing facility from having any direct or indirect familial relationship with, or financial ownership interest in, a marijuana establishment, business entity or management company.
5. Makes technical changes.
6. Requires for enactment the affirmative vote of at least three-fourths of the members of each house of the Legislature (Proposition 105).
7. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Directs DHS to adopt rules that prohibit a marijuana testing facility from having any familial or financial relationship with or interest in a marijuana establishment or business entity.
Amendments Adopted by Committee of the Whole
1. Prohibits a medical marijuana testing facility from having a financial ownership interest in, rather than a financial relationship with, a marijuana establishment or other related business entity.
2. Makes technical changes.
Governor's Veto Message
The Governor indicates in his veto message that his priority at this time is the FY 2022 state budget.
House Action Senate Action
HHS 2/15/21 DP 9-0-0-0 HHS 3/17/21 DPA 8-0-0
3rd Read 3/4/21 60-0-0 3rd Read 4/20/21 28-0-2
Final Read 5/26/21 56-3-1
Vetoed by the Governor 5/28/21
Prepared by Senate Research
June 3, 2021
CRS/kja