How will Arizona’s Marijuana Dispensaries Operate?

• The ADHS can issue one medical marijuana dispensary registration certificate for every ten pharmacy permits issued by the Arizona State Board of Pharmacy.
• A medical marijuana dispensary must register with ADHS and operate on a nonprofit basis. The dispensary will be allowed to be reimbursed for expenses acquired during operation.
• State law and established rules require a registered dispensary to follow specific instructions for verification requirements, record keeping, and security during operation of the dispensary.
• Marijuana can be cultivated only in an enclosed and locked facility at the dispensary.
• A dispensary can obtain medical marijuana from a registered qualifying patient, or designated caregiver, if the patient or caregiver is not paid for the marijuana.
• A dispensary can also acquire medical marijuana from other registered nonprofit dispensaries.

When Can I Apply for a Dispensary License?

Applications may be made to the ADHS from  June 1 to June 30, 2011.

Who can open a Dispensary?

The ADHS rules for opening a marijuana dispensary require that an individual be a resident for a minimum of three consecutive years before the date of application. Residents must also be over the age of 21, in order to be considered on an application for a dispensary registration certificate.

Each principal and board member must pass a criminal background check. Any felony offense will disqualify the person’s application. Other conditions may also affect an individual obtaining a registration certificate for a marijuana dispensary.

When will dispensary certificates be awarded by the ADHS?

Initial dispensary registration certificates are expected to be allocated in August, 2011.

How will dispensary registration certificates be awarded?

The ADHS has created geographic units in Arizona, referred to as CHAA (Community Health Analysis Area). The Arizona map indicates 126 CHAA units. If just one complete application is received for a dispensary in a CHAA, that candidate will be given the marijuana dispensary registration certificate. If more than one complete application is received by the Department, an evaluation process will be used to assign one certificate for a marijuana dispensary in that unit.

After applying for a dispensary certificate, can the address in the application be changed before the dispensary begins operating?

Yes. The address in the application may be changed before the dispensary begins operating if the $5,000 fee is paid, and the new address still complies with local zoning.

Is my $5,000 application fee refundable?

The application fee is not refundable in full. One exception to returning a portion of the fee is if the application is complete and the applicant is not assigned a registration certificate, the applicant will be reimbursed $1,000 of the $5,000 fee. If the applicant withdraws the application, the $5,000 fee will not be refunded.

If my application is incomplete because I forgot to fill out or submit something, is the fee refundable?

In the case of an incomplete application for any reason, the applicant will receive a Notice of Deficiency and a request to submit the missing items within ten days. If the Department does not receive the missing items within the time allowed, the application is considered withdrawn and the fee is not refundable.

Do I need a certificate of occupancy from my city in order to apply?

In the initial application, a certificate of occupancy is not necessary. If the city where the dispensary will be located, awards a certificate of occupancy, or other documentation to the dispensary applicant, copies of all documents will be necessary in order to operate the dispensary.

When do I need to get a “special use permit“?

If the local authorities issue a certificate or other documentation authorizing the use of a building as a dispensary, a special use permit or conditional use permit, must be issued by local authorities before submitting an application for approval to operate a dispensary.

How many dispensary registration certificates will one entity be able to obtain?

One dispensary registration certificate is allowed for a principal officer or board member in a single CHAA (Community Health Analysis Area). No more than five dispensary registration certificates will be allowed for locations in different CHAAs.

How many dispensaries will be allowed to open in AZ?

As of March 2011, the ADHS expects to issue between 120 to 126 dispensary registration certificates. The actual number will be determined based on how many pharmacies are in operation in the State of Arizona.

How will dispensaries be distributed throughout Arizona?

Initial dispensary registration certificates will be allocated by the ADHS based on the number of CHAAs throughout the state.

What is a CHAA and why is the Department using them to allocate dispensaries?

CHAA is the Community Health Analysis Area which was established by ADHS for use by public health programs. The geographic areas are based on population throughout Arizona. The Department is using the 126 CHAA units in an effort to spread dispensaries all over Arizona, based on population.

What are the requirements for dispensary application?

Individuals applying for dispensary registration certificate must be:

• Arizona resident for a minimum of three consecutive years before the date of registration
• Over the age of 21
• Pass a criminal background check

What else might be considered by ADHS?

While not required, the following may be taken into account by ADHS if there is more than one qualified application for a specific CHAA:

• Delinquent on federal, state or local taxes, child support, student loans, unpaid judgment, or bankruptcy
• Everyone with a 20% financial interest in the dispensary is an applicant or board member
• Access to $150K in startup capital.

Is there a priority for the information?

ADHS will evaluate competing applications with the criteria by the order listed in the rules.

Can a dispensary operate in one CHAA and have its cultivation site in another CHAA?

Yes. The dispensary must operate in the CHAA unit where the registration certificate was issued, however, the cultivation site may be in a different CHAA.

Can a dispensary change the location of the dispensary?

A dispensary may move during the first three years after getting a registry certificate, however, the new location must be within the same CHAA that the registration certificate was issued. After three years, a dispensary may move into a different CHAA. In either circumstance, an application for a change in location is required, and a change of location fee of $2500.

Is a dispensary in a rural area of Arizona required to remain in the CHAA for which the dispensary registration certificate was issued?

A rural dispensary must remain in the CHAA for the first three years where the registration certificate was issued. After three years, the dispensary in a rural CHAA may move to another CHAA, if the new site complies with local zoning requirements.

If I’m awarded a dispensary certificate, can I start operating right away?

After obtaining a dispensary registration certificate dispensary agents must apply for approval to operate, before the certificate expires within sixty days. Approval typically take about two weeks.

What happens if I obtain a dispensary registration certificate and am not able to complete construction and begin operations before my dispensary registration certificate expires?

If the dispensary registration certificate expires, the person issued that certificate may be permanently disqualified from applying again.

Is a dispensary registration certificate transferable?

No. A dispensary cannot be transfer or re-assign a dispensary registration certificate.

How will dispensary licenses be awarded in future years?

As of May,2012 the Department will evaluate the number of operating dispensaries and the number of dispensaries allowed by ADHS, and will follow explicit rules if additional dispensary certificates are to be allowed.

How should a dispensary obtain its original stock?

According to the Arizona Medical Marijuana Act, a dispensary may get marijuana from a registered qualified patient or designated caregiver, as long as neither is compensated for the marijuana. A dispensary also may obtain marijuana from other registered nonprofit dispensaries.

Can I get my inventory from the street?

The law limits where a dispensary may obtain marijuana. The limitations do not permit  getting marijuana inventory from the street. The law only allows a dispensary to get their inventory from other registered nonprofit dispensaries, or from a registered qualifying patient (or designated caregiver) as long as neither is  compensated for the marijuana.

Is there a limit to how much medical marijuana a dispensary can have or grow?

Specifically, the Arizona Medical Marijuana Act and the ADHS has not set rules regarding the amount of medical marijuana a dispensary may possess or cultivate. It is recommend that dispensary agents consult with an attorney regarding Federal laws and regulations.

If I don’t want to have a cultivation site as part of my dispensary, can I buy medical marijuana from another dispensary?

Yes, a dispensary must follow certain rules when acquiring medical marijuana from another dispensary, qualifying patient, or designated caregiver.

What methods will a dispensary use to prevent unauthorized distribution of marijuana?

A portion of the application for a registration certificate requires a description of security measures and inventory control features the dispensary will use. The Department requires restricted access to the dispensary, electronic monitoring, and protection against intrusion. A designated agent is assigned the job of verifying that the individual is a qualifying registered patient with a valid identification card.

How will medical marijuana be transported from the cultivation site to the dispensary, or from the dispensary to qualifying patients who cannot drive?

The ADHS has set strict rules for the transportation of medical marijuana.  Those rules include:

• Transport vehicle may not display any marijuana identification and no visible paraphernalia or marijuana.
• Before transporting the marijuana, a dispensary agent must submit a trip plan to include the anticipated route, how much is being transported, and the time of departure.
• During transport, the dispensary agent must have a copy of the trip plan, and a means of communicating with the dispensary.
• When the trip is complete, the dispensary agent must enter the end time of the trip and changes, if any to the trip plan.
• If the marijuana is delivered to a qualifying patient, the agent must verify the patient’s certification and comply with requirements for recordkeeping.

What services must a dispensary provide?

• The dispensary must be open and available to qualifying patients and designated caregivers a minimum of thirty hours per week.
• The dispensary must provide educational materials for qualifying patients and designated caregivers.
• Educational materials must include information available for the consideration of the therapeutic or pain relieving benefit of marijuana for the patient’s debilitating medical condition.

What services may a dispensary provide?

• Dispensaries may cultivate marijuana for the dispensary’s inventory, or sell to other dispensaries.
• Dispensaries may transport medical marijuana and related paraphernalia.
• Dispensaries may prepare, sell, or distribute edible food products containing marijuana.
• Dispensaries may prepare, sell, or distribute non-edible marijuana products.
• Dispensaries may sell or provide marijuana paraphernalia.
• Dispensaries may sell or provide  supplies related to medical marijuana use to qualifying patients and designated caregivers.
• Dispensaries may deliver medical marijuana to qualified patients and designated caregivers.
• Dispensaries may provide other patient support and related services to qualifying patients and designated caregivers.

Can a dispensary sell candy and brownies that have marijuana in them?

Dispensaries must follow specific rules to sell edible marijuana food products.

How can a dispensary obtain edible food products containing marijuana?

A dispensary may obtain edible marijuana food products in one of two ways: 1) from another dispensary, or 2) prepare the edible food products within the dispensary. In order to prepare food products, the dispensary must have a permit, issued according to state requirements, from the local health department.

Will the Department be inspecting dispensaries?

The ADHS will do a compliance inspection before issuing an approval to operate the dispensary, and the cultivation site, if there is one. Periodically after opening, the Department will do inspections to ensure that the dispensaries (and cultivation sites), are complying with state law and ADHS regulations. The Department may also inspect facilities in response to a complaint.

Who is a dispensary agent and what do they do?

A dispensary agent may be  an employee or volunteer, a board member or principal officer of a dispensary. Anyone who is responsible for duties in a dispensary is a dispensary agent.

Why does a dispensary agent need to be fingerprinted?

Arizona law requires all dispensary agents to be fingerprinted as part of the application process. The fingerprints may be used in conducting a criminal records check before the applicant can be considered a qualified dispensary agent.

If I already have a fingerprint clearance card from another job, why do I need to submit another fingerprint card to be a dispensary agent or Designated Caregiver?

Dispensary Agents and Designated Caregivers must submit a fingerprint card in order to check for specific excluded felonies in compliance with the Arizona Medical Marijuana Act. The list of offenses from the Arizona Act or a registry identification card is not the same as for any other job requirement. The only exception to having a fingerprint clearance card for a Dispensary Agent or Designated Caregiver is if you had submitted fingerprints as part of another application to the medical marijuana program within the last six months.

Will there be medical oversight at a dispensary?

Yes. Medical oversight must be an Arizona physician in the position of Medical Director for the dispensary. The acting Medical Director may not provide certification to qualify a patient for medical marijuana.

Can someone who is a physician become a medical director if he/she holds an Arizona medical license but also has a medical license and works in another state?

The requirements for a Medical Director include that the physician must be an Arizona-licensed physician  who is either on-site or in the area and able to be contacted if his presence at the dispensary is needed.

What will a dispensary’s Medical Director do?

The duties of a dispensary’s Medical Director will include providing supervision to dispensary staff and clients. The Medical Director is responsible for providing information and training to staff and clients, but may not provide certifications to qualify a patient for medical marijuana.

What security will a dispensary need to provide?

A dispensary is required to comply with the specific security requirements as indicated by the ADHS regulations. These include having security equipment to prevent unauthorized entrance to limited access areas, video surveillance cameras, exterior lighting, and inventory control.

How much will it cost to apply for a dispensary registration certificate?

The fees required for a dispensary and a dispensary agent include:

• $5,000 for an initial dispensary registration certificate.
• $1,000 for a renewal dispensary registration certificate.
• $2,500 to change the location of a dispensary or cultivation facility.
• $500 for a registry identification card or renewal for a dispensary agent.