Dispensaries wary of fully legalizing marijuana in Arizona

Medical-marijuana dispensary operators are apprehensive about plans by a powerful marijuana-advocacy group to campaign for full legalization of the drug in Arizona. The Marijuana Policy Project, a Washington, D.C.-based organization that advocates marijuana legalization and regulation, is a former ally of the dispensary owners, having played a key financial and public-relations role in passage of the state law that created the burgeoning medical-marijuana program.

Bolstered by the Obama administration’s announcement that it will not challenge such laws, the group intends to pursue full legalization in Arizona through a voter initiative in 2016 and in nine other states over the next two election cycles. The initiative will be modeled on a program in Colorado, which has legalized marijuana for recreational use.

But the group may have a tough time selling their plan to the state’s medical-marijuana dispensary operators, who are capitalizing on the growing market, have invested thousands of dollars to get up and running and say they favor the status quo — a system in which doctors must recommend cannabis for medical purposes. The program allows certain businesses and individuals to grow marijuana in large quantities, but home growers are fading away as dispensaries open across the state.

Uneasiness among some dispensary operators highlights the divide between medical-marijuana advocates and recreational proponents — a split that could complicate any effort to further loosen Arizona’s marijuana laws.

“I’m not so sure that, at this stage, we would be for immediate legalization,” Bill Myer, co-owner of Arizona Organix in Glendale, told The Arizona Republic. “We’ve still got some issues to work through with the laws we currently have. The program is still in it’s infancy.

“I think Arizona should probably digest what’s going on here before we move forward with what’s going on in Washington and Colorado. Is it going to be a great program, or is it going to be a problem? We don’t know that.”

Myer and some other dispensary operators said they are concerned about their financial investments and question how legalizing recreational use, which could increase the number of dispensaries, would impact their bottom line. Other operators said they favor increased access to marijuana for adults but are remaining neutral on full legalization until they see initiative language from the Marijuana Policy Project.

“There’s significant financial investments involved,” Myer said. “Dispensaries may not be able to recoup before other people are made available to do the same things with very little capital investments. It’s absolutely our concern.”

Arizona is among 20 states and the District of Columbia that allow marijuana use for medicinal or recreational reasons. Arizona voters approved the use of medicinal marijuana in 2010 for conditions such as chronic pain and cancer, but the program didn’t gain momentum until last year, when dispensaries began to open.

Nearly 40,000 people participate in the program, and the state Department of Health Services, which oversees the program, has limited the number of dispensaries to 126 statewide. Sixty-eight dispensaries were operating as of last week.

Already, there is a grass-roots effort, called Safer Arizona, led by Dennis Bohlke of north Phoenix, to legalize marijuana for recreational use in Arizona.

The Safer Arizona initiative is also modeled after Colorado’s law, and Bohlke said organizers have gathered at least 8,000 of the 259,213 valid signatures needed by July 3 to qualify for the November 2014 ballot. Bohlke said he has no major financial backing to fund signature gathering.

Any efforts to further loosen Arizona’s marijuana laws will be opposed by law enforcement, said Maricopa County Attorney Bill Montgomery, who has led a legal and public-relations battle against legalization. He said opponents will not be caught flat-footed as they were with the 2010 medical-marijuana measure.

“We will not wait to get involved like we did with (Proposition) 203,” he said.

“I don’t think we have had an honest discussion of what … the true impact of marijuana is on our society.”

He said recent studies have found that chronic pot use by youths can affect IQs and hurt the nation’s ability to compete in the global market.

“When it comes to alcohol and tobacco, we’ve legalized those substances and we’ve shot ourselves in each foot,” he said. “And we’ve run out of feet — so, we’ve shot ourselves in the head.”

If the Marijuana Policy Project succeeds with its proposed initiative, Arizona’s pot industry will explode, just as it has in Colorado.

Last year, Colorado voters built on the state’s medical-marijuana law and approved an amendment to its state Constitution to regulate marijuana like alcohol — for adults 21 years and older to buy.

Marijuana dispensaries must register with the state and, under rules released last week by the Colorado Department of Revenue, are required to track inventory through a state online program and keep the drug in child-resistant containers. They also cannot advertise to people younger than 21.

Colorado’s recreational-pot shops are expected to start opening in January. Existing dispensaries “in good standing” can apply for retail marijuana-business licenses, and state law mandates that for the first nine months, only existing medical-marijuana shops can apply for recreational-sales licenses.

Christian Sederberg, an attorney specializing in marijuana law who campaigned for full legalization in Colorado, said medical-marijuana dispensary owners there were also apprehensive about legalizing recreational use. He said most of the trepidation focused on how the federal government would react, as well as the financial impact on existing medical-marijuana dispensaries.

“That was definitely an undertone of what was happening here,” Sederberg said.

He said full-legalization proponents spent a lot of time reaching out to dispensary owners to discuss the benefits of recreational use, attending networking events to make their case and writing and talking about the issue on the radio and in print media.

“We spent a lot of time talking about how this would be a net benefit for all of Colorado, including medical-marijuana businesses,” he said.

Marijuana Policy Project Communications Director Mason Tvert ran Colorado’s legalization initiative last year.

He said medical-cannabis dispensary operators, for the most part, eventually supported recreational use, although some worried about losing business to new competitors. Tvert called that argument “absurd” and said that, ultimately, dispensaries supported the effort.

“For someone to support the continued criminalization for adults for marijuana because they don’t want to potentially face competition from other businesses in a broader market is selfish and really counterproductive,” Tvert said, adding that “most businesses were either neutral or supportive.”

“And now that the law has passed, many of the medical-marijuana businesses are very pleased because they recognize the legitimacy that it lends to their products,” Tvert added.

Dr. Edward Kirk, an Arizona dentist whose family owns two dispensaries, in Wickenburg and Quartzsite, thinks pot should strictly be treated as medicine, but he doesn’t worry about losing his hold on the market to other dispensaries that could crop up if the initiative passes.

“I already see people have borderline abused the medical end of what’s out there,” he said. “For full legalization — I don’t think that’s a good idea at this point here. It needs to remain medical.”

Murray Stein, managing partner for Tucson’s Green Halo dispensary, doesn’t have a strong opinion on full legalization but stressed the need to maintain a medical component and state regulation.

“I don’t personally think that full legalization will impact our model,” he said, adding that with 40,000 patients and 68 dispensaries, the market is underserved. “This is a very powerful product. It’s a drug you don’t fool around with. It needs to be properly regulated.”

Marketing and political consultant Jason Rose, who represents a handful of dispensaries called the Regulated Dispensaries of Arizona Association, said those dispensaries are talking with the Marijuana Policy Project about their proposal.

Although declining to discuss the details of those conversations, Rose said: “It’s fair to say that there is concern — significant concern — as to what the (initiative) language looks like. The question is: How would one (dispensary) transition from a program that exists today into a more liberal environment, and what is that structure? You have a system that is working in Arizona, and how would the dispensaries be impacted? That’s a topic of discussion among us and MPP.”

Thai Nguyen, who operates the Herbal Wellness Center in west Phoenix, said that he is anxious about how a recreational-marijuana program would affect established dispensaries and that he will withhold support until the Marijuana Policy Project releases language on how the program would be structured in Arizona.

The public’s support for legalizing marijuana is at an all-time high, according to a national survey of 1,501 people earlier this year by the Pew Research Center. In that survey, 52 percent said marijuana should be legal, while 45 percent said it should not. Pew said support for legalizing pot has risen 11 points since 2010.

Andrew Myers, who ran Arizona’s 2010 medical-marijuana campaign and was paid by the Marijuana Policy Project, said the group’s strategy of trying to create national momentum around the full-legalization effort in 2016 could lead to passage in Arizona.

The key challenge, he said, will be funding the campaign in Arizona and other states where the group is pursuing initiatives. “Of the lists of states that they’re approaching, Arizona is among the least likely to succeed,” Myers said. “Arizona is going to be dependent on a lot of resources.”

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