Arizona’s Social Equity Cannabis Program Takes Shape

Policymakers in Arizona unveiled rules last week for a social equity cannabis program aimed at giving communities most affected by pot prohibition opportunities in the state’s newly regulated recreational cannabis market.

The Arizona Daily Star reported that the state’s Department of Health Services issued the final draft of its report on the social equity ownership program last Thursday. 

According to the Daily Star, the “major changes” issued by the department include “clearing up language around the transferability of a social equity license,” by barring “applicants from entering into prior agreements with larger retailers to sell or take over an applicant’s license.”

The Department of Health Services also voted to lower the initial application fee to $4,000 from $5,000, according to the Daily Star.

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,” according to the state’s Department of Health Services.

“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,” the department stated. “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 program is born out of Proposition 207, which was passed by Arizona voters last year and legalized recreational marijuana use for adults in the state. Proposition 207 also contained a requirement for 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.”

Twenty-six licenses will be issued through the program, and the department said it will begin accepting applications in December. 

Applicants must satisfied all of the requirements for the program, which include the following: the application “must list each individual who is a principal officer or board member of the applying entity”; “[no] one can be a principal officer or board member on more than two applications”; “each principal officer or board member must attest that they do not have an excluded felony offense”; “at least 51% ownership of the applying entity must belong to principal officer(s) or board member(s) who have documentation of completing a Department required training course and who meet at least 3 out of the 4 social equity eligibility requirements”; and “documentation must be provided confirming that these individuals cannot be removed from their positions without their written consent or a court order.”

In addition to the social equity ownership program, the state’s new marijuana law also includes a remedy for individuals previously busted for cannabis.

In August, the the Superior Court of Arizona in Maricopa County said that “an average of 650 people a week are filing petitions with the Superior Court of Arizona in Maricopa County to have felony marijuana-related convictions wiped off their records.”

The county explained that, under Proposition 207, “residents may petition the court to have their marijuana conviction expunged.” 

“Since filing started in July 2021, the Superior Court of Arizona in Maricopa County has granted 3,643 petitions for expungement,” the court released in a statement. “If a court grants a request to expunge a marijuana-related criminal charge, the case file and law enforcement records will be sealed, the conviction and sentence will be vacated along with any outstanding court debt imposed in connection with the expunged charge, and the defendant’s civil rights will be restored as to the marijuana-related charges.”