Medical marijuana

A group of would-be medical marijuana dispensary operators have filed a lawsuit against the state of Arizona in an effort to force the state to issue dispensary licenses.

Scottsdale-based Rose Law Group filed the complaint for special action in Maricopa County Superior Court on Tuesday (June 14) on behalf of Serenity Arizona, Inc. and Medzona Group, Inc., both non-profit organizations intent on entering the state's nascent medical marijuana industry.

In their claim, the plaintiffs argue that the Arizona Department of Health Services, the agency tasked with regulating medical marijuana, has improperly refused to perform its duties as mandated under the Arizona Medical Marijuana Act.

"The law is not being implemented as the voters mandated," Ryan Hurley said, an attorney with the Rose Law Group representing the plaintiffs.

Among the claims, the plaintiffs contend that in not issuing licenses the department has failed to perform its non-discretionary duties, acted without legal authority and made arbitrary determinations.

The plaintiffs' attempted to submit applications to the Department of Health Services for purposes of registering as non-profit medical marijuana dispensaries, as required under the voter-approved medical marijuana act. The applications were rejected and left unprocessed, the plaintiffs contend.

Department officials directed Inside Tucson Business to an entry on Arizona Department of Health Services Director Will Humble's blog from June 14 for comment on the case.

"We've suspended the implementation of dispensary portions of the law and aren't currently accepting any applications," Humble wrote. He noted that three groups have been turned down for dispensary certificates.

He also notes that the department has approved more than 5,000 patient cards and 126 caregiver cards.

Copies of the rejection letters the health services department sent to the plaintiffs say the applications were not submitted using department-provided formats. The letter goes on to say, however, that the department has not yet created a formal application or standardized a process for applicants to submit documents.

"Because of the governor's request for a declaratory judgment from a federal court regarding the legality of the Act, the Department has not provided a format for the nonprofit medical marijuana dispensary registration certificate application," Humble wrote.

Last month, Arizona Gov. Jan Brewer and Attorney General Tom Horne made the request of the U.S. Supreme Court. Brewer and Horne have said they made the request out of concern that state employees could face federal charges for their part in regulating medical marijuana, which remains illegal under federal law.

Hurley said the assertion that state employees face legal risks was erroneous.

"Their stated justification was supposedly generated from the letter from (U.S. Attorney for the District of Arizona Dennis K.) Burke, but it didn't even mention anything about state employees," Hurely said.

Prior to that request, Burke wrote a letter to Humble reminding of the federal government's position on marijuana and warning that compliance with the Arizona Medical Marijuana Act would not protect drug traffickers and accomplices from federal prosecution.

Burke has since said publicly that state employees would not be at risk.

Hurley said there likely would not be further movement on the case until at least July. In the meantime, he said, his clients remain in legal limbo and could face considerable financial losses.

"Some of them have outstanding leases that are scheduled to close," Hurely said, adding that his clients had intended to be operational by now.

He said the delays also are of concern to patients who suffer from the ailments that the act allows medical marijuana as a treatment.

"We're tired of seeing cancer patients having to go to alleys to get medicine," Hurely said.

A second suit also was filed on June 14, this one in Arizona Appeals Court. Its plaintiffs, also a group of would-be medical marijuana dispensaries, have similarly requested that the state commence the issuance of dispensary certificates.

Contact reporter Patrick McNamara at pmcnamara@azbiz.gov or (520) 295-4259.